Decision to FIRE

[Cowtown2011]

Did anyone FIRE from a high paying job? ($175,000 annual salary per year) Where you concerned that if the market tanked the next year you'd have to go back to work at a much lower pay level?

I gave my notice to work last year but ended up taking another position with the same company because I was nervous about retiring. I'm in my peak earning so having trouble stepping away although I'm regretting my decision to stay on with the company.

[Exflyboy]

Well How big is your stash and what is your annual spend?

The size of the income you have prior to FIRE is completely irrelevant.. If anything it contributes to OMY sysndrome.

I ended up doing a hobby job just cus.. well it was a fun pt job and very well paid..:)

[Cowtown2011]

Our projected spend is about $30,000 and we will have about $800k saved, so it should be enough. 26.7x our spend and we can reduce to $25k if needed. I'm definetily struggling from the one more year syndrome. I keep thinking it would be nice have some extra savings for a larger property or more options in general during FIRE. Maybe taking a part time like you did would help ease my worry. I've always wanted to learn how fix bikes so I could grab a pt job at our local bike shop during the transition.

[MDM]

With a $175K/yr salary, annual spending of $30K, "only" $800K saved, and you being in "peak earning," one might surmise that you have historically been spending much more than that for many years running.

If true, one more year (or more) might be useful while you determine if $30K/yr is palatable. 

[Exflyboy]

Yeah I'd want to be over $1M.. But then again most people think I need psychological help...:)

[pdxbator]

How young are you? 3% of 800,000 is $24000. You may run out of money at the end.

[Financial.Velociraptor]

I FIREd from a low six figures job.  Good money for a guy in his late 30s.  I considered going back to work would probably mean less income (or maybe more if I stuck to contract work?) but more importantly less desirable work.  My escape hatch was actually part time work at a place like Home Depot or such.  Little responsibility, no office or cube, on my feet and stretching my legs.  I knew I was at least "close" and in a market meltdown just a little  more would do the trick.

But the real story is I noticed as my income rose in my 20s, I got happier with each raise.  Up until about 50k/year.  After that, more money made me a *tiny* bit happier but I wasn't sure it compensated for the extra responsibility in my life.  I had a heart to heart with myself and figured out what really mattered to me (which curiously turned out to be NOT money.)  I dedicated myself to frugality and early retirement because I knew I wanted time more than "stuff."  So the thought of going back to less money never bothered me because I knew my work environment and coworkers would be far more important than my salary.  The rest was just ego talking *but I'm an MBA with valuable skills!*  Eff that.  Do what  makes you happy not what your credentials documentation says you should...

[Cowtown2011]

For full disclosure, our financial picture is as follows:

 House (tax assesment) $750k
 Portfolio                      $375k
 Total net worth           $1,125k
 Projected NW by Sept  $1,200k (bonus, etc.)

 Projected investments of approx $950k, so at 4%, is $38,000 per year, so we can save additional funds in theory is only spending $30,000, after we move to a lower cost location from Calgary and purchase a house for $200-250k. I only came upon mmm about a year and a half ago, so our savings would be higher if not for our previously excessive spending habit. Also, I've been working through a fertility issue which has run us about $30k in total cost this last year.

Overall, I've ran the numbers and believe that $30,000 per year is doable. The budget is based on a combination of actual spending and project reductions related to the fertility stuff, etc.

Financial.Velociraptor: As you said, do what makes you happy is likely the key, I've discussed iwth my wife and the plan now is to quit my job once we are pregnant and our additional medical costs go down.

[sandandsun]

asked about selling house but see you plan to... disregard :)

[Jon_Snow]

I walked away from a nice six figure salary too. There were a few moments of thinking "Am I really doing this?". But almost 6 months into it, not a single regret.

This is helped greatly by such events as today's news about my wife. Turns out, her bonus is twice as large as we had anticipated. Her bonus (after tax) is equal to one and a half years of our living expenses. We are pretty stunned, though in a good way. ;) I've mentioned many times that my decision to leave employment forever was a slam dunk. There are many reasons why I HAD to ER...things like this reaffirm that I did the right thing.

For the single people considering such a move, I can imagine the stress would be greater without a still working spouse there to provide some economic reassurance to the partner who is walking away from a career and leaving a TON of money on the table.

[Dr. Doom]

I'm about to leave a low-6 figure job.  I've found that continuing to accumulate no longer makes me happy the way it once did.   

The thing is, I bought my freedom already.  I want to use it now.  Watching the pile continue to grow is no longer nearly as interesting or compelling as the thought of having my life back. 

Re: Your situation.  Listen, OMY hits just about everyone.  I read your asset sheet and expenses and honestly, if I were in your situation, I'd do the extra year but absolutely no more than that.  Set a date and work toward it.  A few things to focus on while you're shaking the final dozen or so months out:

- Make sure your 30K estimated annual spend is real, I'm not sure how much I trust your "doable" word choice ;) Track everything, and continue to project into the future.  Be sure to include things like taxes - not saying you don't already, but not everyone does. 

- Consider periodic large purchases you'll need to make and amortize them (e.g. 5K car every 10 years = extra $500/yr, other irregular but expensive home maintenance costs, etc)

- Think about mental preparation - are you and DW really ready to make the leap?  The way that you phrased the original post me think that you're not entirely comfortable just doing it, for whatever reason.  Point is, it's worth identifying what those reasons really are before leaving your spectacularly paying job.

Also read this MMM article about safety nets, you're sure to find a few useful points to help you think things through.

[MrMoogle]

So $30k is projected, so you're not saving $145k minus taxes.  How much more would you save if you worked one more year?

[Cowtown2011]

Dr.Doom; thanks for the comments. The one area I haven't budgeted for is home maintenance and a replacement car, so I'd say we'd spend $35,000 per year in RE. I'm very ready to retire but like the idea of a cushion which is why I continued to work but reality is setting in and I'm regretting the decision. The revised plan now is to work until my wife is pregnant which will hopefully happen by July. Worse case I tough it out until March 2016 but no later.

Mrmo ogle: I expect to be able to save about 7,500 every two weeks from my net take home pay of $10,000 excluding the portion which is already deducted and contributed to my company's defined contribution plan. This contributes to the OMY sysndrom.

[MrMoogle]

So every 2 and a half months you save a year's expense.  I can see why you'd want to do OMY, you'd save 5.5 years of expenses. 

If you look at the shiller P/E, we're very high right now, and if history holds, a big correction or bear market is going to occur "soon" which is in the next ~3 years.  So I'd be a little conservative if I was looking to RE in the next couple years, but that's just me. 

[MsRichLife]

I'm in a similar situation to you in that I earn a lot (~$200K package) and have the potential to struggle with OMY syndrome. My take home pay is much less than yours though, so either I pay exorbitant taxes etc etc or I've missed something. Your take home pay is $10,000 every two weeks? That seems much higher than $175K per year.

I am also worried about the risk of a significant downturn in the market close to FIRE, so I'm padding the stash as much as I can for the next year or so and then am considering taking on part-time/seasonal consulting work with my employer when I retire, just to keep some money trickling in for the next few years. We have a toddler and we live in a HCOL country, so I'm more risk adverse than many of the members of this forum.

[Cowtown2011]

I messed up my numbers, it's about $10,000 every 4 weeks, so $5,000 every two weeks. Top marginal rate here is 39%, plus EI and CPP and pension contribution, so net of approx $5,000 every two weeks.

My thoughts are very similar to yours, want to pad the stach as much as possible as I'm concerned about a market downtown in the first year of FIRE. We have a young child and hope to have another, so I'm really risk adverse, so much so that I'm looking at the permananet portfolio as an AA option.

[MsRichLife]

I'm also looking at something like the Permanent Portfolio too! How old are you now?

[Cowtown2011]

I'm 36 and turning 37 in the fall so I need my Stach to hold up for the long term. I've been spending lots of time researching different asset allocations in order to put the odds in our favour. I'd agree that markets are due for a correction based on how many years we are into this bull market but as I've learned, no can predict if and when things will correct. That is why I like the PP, it produces a more stable portfolio over time but does give up some returns.

[Jon_Snow]

Wow, Cowtown...retiring THAT early with kids. No small feat...

Speaking of Cowtown, I bet things are a little stressful in Calgary right now with the oil price plunge. Yikes.

[FFA]

I'm in this situation too. Last day of work tomorrow. I think basically the result has been over accumulating to avoid regret about ditching the highly paid job too early (which may be substituted by the regret of working too long). We did OMY, but only once. I'm glad we took the extra year, partly for the additional stash safety margin and partly for the extra time to mentally prepare/adjust.

[MsRichLife]

I'm 37, so it seems we are in very similar situations. The stash has to last for a very long time. There are many, many risks that I think are worth mitigating by OMY of a high salary.

[mxt0133]

I can understand everyone's hesitation about walking away from a great salary and falling into the OMY syndrome.  But if you are in a position to be commanding such a high salary the probability of you to be able to get something close to that is very high even if you take a 2-3 year sabbatical.  Unless you move to a completely different job market that doesn't support that salary.  Seriously they don't give people 200k a year because they are not in demand or easily replaceable. 

So if the market tanks for a year or two go get a job any job, and no it will probably not be a job at Wal-Mart if you were making low six figures before. 

I am a few years from FIRE, like 6-8 years away, but I intend to change careers or go part time in 3-4 years.  I have young children and want to be able to spend more time with them now rather than later.  I also know that working and earning money on a part-time basis will be good for my mental health. 

I see so many possibilities in FIRE or semi-FIRE for employment.  I mean if my 20 year old self straight out of college that didn't know how to tie a tie can get a job, I think my FIREd ass can get one aswell.  I admit I might have my rainbows and unicorn glasses on.  Even during the great recession I have been able to get a job offer every year that is very close to my current salary and make it a point to know what my current market rate is every year.

[dragoncar]

I can understand everyone's hesitation about walking away from a great salary and falling into the OMY syndrome.  But if you are in a position to be commanding such a high salary the probability of you to be able to get something close to that is very high even if you take a 2-3 year sabbatical.  Unless you move to a completely different job market that doesn't support that salary.  Seriously they don't give people 200k a year because they are not in demand or easily replaceable. 

I really want this to be true.  Of course, if I had quit in 2007 and wanted to go back to work in 2009, it would have been a lot harder than to just keep working OMY and cover my safety margin.  My industry was laying people off then, but less likely to get laid off than land a new job (and I survived layoffs).

[MsRichLife]

I can understand everyone's hesitation about walking away from a great salary and falling into the OMY syndrome.  But if you are in a position to be commanding such a high salary the probability of you to be able to get something close to that is very high even if you take a 2-3 year sabbatical.  Unless you move to a completely different job market that doesn't support that salary.  Seriously they don't give people 200k a year because they are not in demand or easily replaceable. 

I'm moving to a completely different job market where a full-time job would be lucky to pay a fifth of what I'm earning now. If the worst happened,  I do not want to go and work a full-time job for a pittance. I'm prepared to do OMY now while the going is good to mitigate that risk. Also, if I stick with working part-time/seasonal projects with my current employer after I leave, I can make more money working one day a week than I could working full-time in my new locality. It's a small price to pay for that little bit of security that seems prudent with a young child.

[Cowtown2011]

Has anyone determined what an appropriate safety margin is? I was thinking 35x my annual expenses, so for me about $1,050,000 in investable assets, which is an implied withdrawal rate of 2.9%.

Also, based on the comments above, I'm definetely worrying a bit too much on whether I can find reasonable paying work again. My close friends think I'm crazy to even consider this but they don't have a great understanding of what FIRE is.

[Jon_Snow]

Has anyone determined what an appropriate safety margin is? I was thinking 35x my annual expenses, so for me about $1,050,000 in investable assets, which is an implied withdrawal rate of 2.9%.

Also, based on the comments above, I'm definetely worrying a bit too much on whether I can find reasonable paying work again. My close friends think I'm crazy to even consider this but they don't have a great understanding of what FIRE is.

35x seems okay, especially since you could work again if need be. Add into the mix kids, your young age...definitely smart to aim higher than the standard 25x...

I pulled the plug at around 50x, because I quite simply had ZERO intention of working again...and I am so risk averse I really preferred to have considerable "buffer" funds. Better to have saved too much than too little...

[NumberCruncher]

Is there something you could do part time or full time that you've always wanted to explore? http://forum.mrmoneymustache.com/ask-a-mustachian/fun-retirement-jobs/?topicseen

I'm not FI or FIRE yet >.>  but I'm planning on making a drastic career change to something I've always wanted to try when we're FI (25x annual expenses). I can reasonably expect to be able to pay for living expenses from the reliable but minimal income, so our investments can just coast. My SO might do something like make mobile apps or games for fun that may or may not prove profitable as well. The worst time for the market to tank is in the first years of retirement, so this is our way of being conservative while still getting out of high paying but unsatisfying work.

If you work doing something you love that can pay even a quarter of your living expenses, it means very little risk. Say you make $10k/year (after tax) doing something awesome part time: You only need to withdraw $25k/year now, meaning a 3.1% withdrawal rate on a $800k stash. If you play around with this: http://www.cfiresim.com/input.php, you'll find that's quite conservative (99% success rate with more or less default values, and 100% if you show flexible spending, i.e. not always spending $35k/year).

[Ozstache]

I'm moving to a completely different job market where a full-time job would be lucky to pay a fifth of what I'm earning now. If the worst happened,  I do not want to go and work a full-time job for a pittance. I'm prepared to do OMY now while the going is good to mitigate that risk. Also, if I stick with working part-time/seasonal projects with my current employer after I leave, I can make more money working one day a week than I could working full-time in my new locality. It's a small price to pay for that little bit of security that seems prudent with a young child.

Although I haven't had call to need it (yet), keeping ties with my previous employer, like you propose, was a significant destroyer of OMY syndrome for me. It basically gives me a 5 year re-employment lifeline at my previous pay grade with no obligation to do any work, after which they automatically drop me off their reserve employment list.

[MsRichLife]

I'm moving to a completely different job market where a full-time job would be lucky to pay a fifth of what I'm earning now. If the worst happened,  I do not want to go and work a full-time job for a pittance. I'm prepared to do OMY now while the going is good to mitigate that risk. Also, if I stick with working part-time/seasonal projects with my current employer after I leave, I can make more money working one day a week than I could working full-time in my new locality. It's a small price to pay for that little bit of security that seems prudent with a young child.

Although I haven't had call to need it (yet), keeping ties with my previous employer, like you propose, was a significant destroyer of OMY syndrome for me. It basically gives me a 5 year re-employment lifeline at my previous pay grade with no obligation to do any work, after which they automatically drop me off their reserve employment list.

I need to learn more about the ins and outs of how it works. I haven't a clue at the moment.

[Ozstache]

I need to learn more about the ins and outs of how it works. I haven't a clue at the moment.

I highly recommend attending a transition seminar this year, where they tell you all about such transition perks.

[earlyFI]

Has anyone determined what an appropriate safety margin is? I was thinking 35x my annual expenses, so for me about $1,050,000 in investable assets, which is an implied withdrawal rate of 2.9%.

Also, based on the comments above, I'm definetely worrying a bit too much on whether I can find reasonable paying work again. My close friends think I'm crazy to even consider this but they don't have a great understanding of what FIRE is.

35x seems okay, especially since you could work again if need be. Add into the mix kids, your young age...definitely smart to aim higher than the standard 25x...

I pulled the plug at around 50x, because I quite simply had ZERO intention of working again...and I am so risk averse I really preferred to have considerable "buffer" funds. Better to have saved too much than too little...

One extra year may pad the stash enough for you to "sleep at night", especially with 2 small children. With 35x saved and being so young, you can probably expect to make more money at some future point, doing something you love or a very part time option that comes along, consulting, etc.

[MMMdude]

How many cpp credits do you have? If you started working around 20 and maxed out each year, you would get approx 5000 per year in todays dollars in cpp at 65.  Then of course oas on top of that.  Same goes for your wife. This is a long way from now but it does help reduce your swr. I agree with others 25x is abit light for your age.

[Exhale]

My two cents:
1) Live on your FIRE budget for OMY to know for sure what you and your family really will spend.
2) Psychologically prepare for your transition (e.g., friends outside of work, etc.).

[MMMdude]

The other  - doesn't sound like you have your expenses truly dialed down.  I have tracked every penny the last eight years so i know exactly what we spend.  You mention 30K, then changed it to 35K for auto/home costs.  It's the non recurring costs you really have to figure out - no they don't happen every year but they exist.  I actually live in Alberta too and I think you are light at $5K per year on house/auto.  Getting anyone to do anything at your house is costly ($100 just to get in the door), so unless you are handy figure at least 1% of your house value for recurring maintenance.  I'm not sure what type of house you plan to buy for 200k in calgary.  What about traveling costs?

[mamagoose]

I would continue working until the kid is born, and enjoy any paid FMLA leave if your company offers it. Then just don't return :)

[forummm]

Make sure you include the cost of health insurance (including the baby) into your calculations. And I echo other's suggestions that you make sure you can live on $50k for an extended period of time before you actually pull the rip cord.

[Cougar]

 i would wait if i were you.

you are right that there will be another serious mkt correction and it will happen within the next 3 years. considering your salaryand your age, if i were you; i'd keep piling it up and wait for the correction. it usually is less than a year once it starts. when it rebounds, if you still feel in good shape; then go.

but thats if i were you, i got kicked in the teeth in the last correction; i could go fire now; but not if i get kicked in the teeth again; so i got my fire date at 24 months; should know if i sidesteeped it by then.

[tooqk4u22]

For full disclosure, our financial picture is as follows:

 House (tax assesment) $750k
 Portfolio                      $375k
 Total net worth           $1,125k
 Projected NW by Sept  $1,200k (bonus, etc.)

 Projected investments of approx $950k, so at 4%, is $38,000 per year, so we can save additional funds in theory is only spending $30,000, after we move to a lower cost location from Calgary and purchase a house for $200-250k. I only came upon mmm about a year and a half ago, so our savings would be higher if not for our previously excessive spending habit. Also, I've been working through a fertility issue which has run us about $30k in total cost this last year.

Overall, I've ran the numbers and believe that $30,000 per year is doable. The budget is based on a combination of actual spending and project reductions related to the fertility stuff, etc.

Financial.Velociraptor: As you said, do what makes you happy is likely the key, I've discussed iwth my wife and the plan now is to quit my job once we are pregnant and our additional medical costs go down.

This one post says that you are not ready nor in a position to FIRE as you don't have a handle on your expenses (plus the other mentionables noted by others) and you don't yet have actual investable assets.  You should definitely do an analysis on the TRUE value of your home and what you would clear after transaction costs and taxes - also demand for your house may be negatively impacted by the oil slump right now. 

If I were you I would sell the house and rent for a period of time so you can actually lock in your investable assets, and work for a bit more so until you are comfortable with your expenses, asset allocation, and actually identify a place to move to.

People always are negative about OMY syndrome but I think with a high income it skews the view a bit - I mean OMY to accumlate an extra $15k who cares but for $100K why not (unless you really hate it). 

[Exflyboy]

Better to have too much buffer than be 75 and broke!

Like Jon Snow I have a ridiculously large buffer (about 75 times basic expenses) if we continue being in the rental business, on top of that we have pensions kicking in next year. Yes I know its WAY more than we need, but it seems a lot easier to figure out how to spend a lot more if we have to..:)

[Bateaux]

We have household income of about 180k to 200k depending on overtime and bonus.  We have 3 more year syndrome.  1.3m investments and debt free.  We plan to spend 50k to 60k in retirement.  We'll need 1.5m to 2m to feed that at a safe withdrawal rate.  We plan to do lots of traveling is why we need that income level.  The Fire Calculator says we need 1.8m to draw 60k for 40 years at 0% failure.  We could dump some paid off real estate for 300k or more.  We'd be homeless but I'm thinking of dumping all assets and jumping off in a year instead.  We have FU money but not FI yet.

[dude]

I do have some concerns about leaving my 6-figure job -- pretty stress-free, easy job at that.  But if I stick around any longer than I have to, I'm working at a pretty steep discount, because I have a pension which will replace around 45% of my salary initially, dropping to 39% after 7 years.  That 45% translates to about 79% of my pre-retirement expenses/spending (and 69% when it drops to 39%).  So I'd be working pretty much at an 80% discount (not taking into account additional cash to the stash, matching funds, additional SS wages).  I've made the determination that my time is worth much more than that, so I'm going to turn my back on that salary.  Though I must say, it's not written in stone -- if the market shits the bed or some other catastrophe occurs prior to my planned exit date, then you can bet your bippy I'm going to hang on to this gig a while longer!  I'm grateful to have that flexibility.

[ash7962]

Better to have too much buffer than be 75 and broke!

Like Jon Snow I have a ridiculously large buffer (about 75 times basic expenses) if we continue being in the rental business, on top of that we have pensions kicking in next year. Yes I know its WAY more than we need, but it seems a lot easier to figure out how to spend a lot more if we have to..:)

I find it hard to believe that someone who FIRE'd would get to 75 and just realize they were broke (assuming they FIRE with enough stash for a 4% withdrawal rate or less).  I think if you keep an eye on your stash, and if you can be a little flexible with your withdrawal rate then you should never be in the situation where your stash isn't enough.  I feel a worst case scenario is that at some point you realize that with the way you're going your stash won't make it another X years, so you make adjustments (withdraw less or find a part time job).  ExFlyBoy, you created another thread where someone posted this article: http://www.gocurrycracker.com/the-worst-retirement-ever/.  I think the article lists some pretty good examples for what you can do if shit starts hitting the fan post retirement which made me feel a lot better about the "what if" scenarios.  Not saying that people shouldn't have safety margins, but I do think some people worry too much about running out of money... Of course, decide based on whatever gives you the piece of mind that is necessary to be happy.

[BBub]

Glad to find this thread.. I've had similar feelings when running projections of my own...

DW & I make $250k/yr gross.  I'm 30 and she's 27.  (This income is somewhat recent.  We started around $32k and $45k, respectively.  Found MMM about 2 yrs ago, had some debt, so current stash numbers aren't as high as they could be)

Current investments are low $200's.  I figure at our current rate of stashing approx $135k/yr with decent returns we'll hit the FIRE target of $1.25m and a paid off house around age 35.  Monthly spend is $3k/mo ex mortgage. [Yes, my numbers check out: 250k*75% = $187.5 after tax;  187.5 -16.5 mtg - 36k living = $135k savings.]   SWR will be 3% on $1.25m to generate our $36k annually.  Reaching the FIRE target in 5-6 yrs assumes no more increases in income between now & then.  We just keep earning and stashing at current levels, and the returns are 7-9%.

But we'd be leaving cash cow jobs difficult to easily replace - especially if we fell out of the workforce for decades.  I could get back here, maybe, but it would take years of grinding it out.  Furthermore, we could realistically be making well above $250 in 5 yrs.

Now, to really heat up the convo, assume we went 5MY.  Yes, five.  Retirement is now at my age 40 instead of 35, but we would double our stash in those 5 yrs from 1.25 to 2.5M, assuming a 7% return and $135/yr additions.  Now we really have zero worries.  We can spend our $3k or more, educate kids, dip in for extra travel, etc.  Our stache could be cut in half by the mkts & we wouldn't be at risk.  And we still get to FIRE by 40.

It opens up a whole line of questioning about "enough", but the alternative would be to run low on funds in our 40's, 50's, 60's or later and have to go back to work or scurry to figure something out.

Hopefully between now & then I can see the light, stop being a wuss, find a way to generate more passive income.  I dunno.  These are just some thoughts that I've had on the subject.  Get it while the gettin' is good then pull the plug worry-free.  It's a sensitive subject & I have never posted this before for fear of major retribution from this crowd.  But I'm all ears to hearing the alternatives.  Although, respectfully, I'd be more open to feedback from other high-income, low expense posters who can actually relate to the opportunity cost at play.  Easy for someone making lower income to judge high incomers for succumbing to OMY, but if presented with the real opportunity post FI to work for several additional yrs for literally millions - how would you respond?  Think about that honestly.  I wish I had the courage/character to say the money would no longer matter, but I'm not sure I've yet reached that stage of enlightment.

[Financial.Velociraptor]

Glad to find this thread.. I've had similar feelings when running projections of my own...

DW & I make $250k/yr gross.  I'm 30 and she's 27.  (This income is somewhat recent.  We started around $32k and $45k, respectively.  Found MMM about 2 yrs ago, had some debt, so current stash numbers aren't as high as they could be)

Current investments are low $200's.  I figure at our current rate of stashing approx $135k/yr with decent returns we'll hit the FIRE target of $1.25m and a paid off house around age 35.  Monthly spend is $3k/mo ex mortgage. [Yes, my numbers check out: 250k*75% = $187.5 after tax;  187.5 -16.5 mtg - 36k living = $135k savings.]   SWR will be 3% on $1.25m to generate our $36k annually.  Reaching the FIRE target in 5-6 yrs assumes no more increases in income between now & then.  We just keep earning and stashing at current levels, and the returns are 7-9%.

But we'd be leaving cash cow jobs difficult to easily replace - especially if we fell out of the workforce for decades.  I could get back here, maybe, but it would take years of grinding it out.  Furthermore, we could realistically be making well above $250 in 5 yrs.

Now, to really heat up the convo, assume we went 5MY.  Yes, five.  Retirement is now at my age 40 instead of 35, but we would double our stash in those 5 yrs from 1.25 to 2.5M, assuming a 7% return and $135/yr additions.  Now we really have zero worries.  We can spend our $3k or more, educate kids, dip in for extra travel, etc.  Our stache could be cut in half by the mkts & we wouldn't be at risk.  And we still get to FIRE by 40.

It opens up a whole line of questioning about "enough", but the alternative would be to run low on funds in our 40's, 50's, 60's or later and have to go back to work or scurry to figure something out.

Hopefully between now & then I can see the light, stop being a wuss, find a way to generate more passive income.  I dunno.  These are just some thoughts that I've had on the subject.  Get it while the gettin' is good then pull the plug worry-free.  It's a sensitive subject & I have never posted this before for fear of major retribution from this crowd.  But I'm all ears to hearing the alternatives.  Although, respectfully, I'd be more open to feedback from other high-income, low expense posters who can actually relate to the opportunity cost at play.  Easy for someone making lower income to judge high incomers for succumbing to OMY, but if presented with the real opportunity post FI to work for several additional yrs for literally millions - how would you respond?  Think about that honestly.  I wish I had the courage/character to say the money would no longer matter, but I'm not sure I've yet reached that stage of enlightment.

BBub, I was making low six figures as a single with no kids.  Not quite as well off as you but then again cost of living in Houston is low (my 1900 sq.ft. 4 bed 2 bath goes for about 105k in the current market.)  I saved about 60%.  Retired at 40 with a much smaller stash than that as I got a late start.  You've already discovered the money isn't that important you, else you'd be spending it.  Your behavior makes it clear what you really value is security and freedom.  The 5MY thing is likewise driven by your core value of [security].  Can you see it when you look at yourself from 10k feet?

My step away decision had more to quality of life at the office than economics.  I ended up with a new supervisor, new department, and new role.  It was capital "B" boring.  Turns out, if you have FI money; once you realize you wouldn't do your current job for free, it is a small mental leap to not doing it for money either.  Even if you are conservatively looking at leaving literal millions in compensation on the table with a normalish 55 (earliest pension collection date) early retirement.  You get cozy with the concept of "enough" pretty fast...

[Jon_Snow]

Wow, BBub...didn't know you were raking it in like that. Full disclosure: my wife and I were also grossing 250k-ish in the years leading up to my ultimate FIRE...we were stashing it away at an incredible rate, and with the stock market performance since 2009 - a recipe for FIRE (and we are extremely frugal of course) if there ever was one.

I've mentioned it before, but I see a lot of my own situation in yours - except, and I may be wrong on this, you might be having kids at some point?

If I were you, and your job isn't a soul destroying one like I had, I'd say working longer isn't a terrible idea at all...

[brooklynguy]

Hopefully between now & then I can see the light, stop being a wuss, find a way to generate more passive income.  I dunno.  These are just some thoughts that I've had on the subject.  Get it while the gettin' is good then pull the plug worry-free.  It's a sensitive subject & I have never posted this before for fear of major retribution from this crowd.  But I'm all ears to hearing the alternatives.  Although, respectfully, I'd be more open to feedback from other high-income, low expense posters who can actually relate to the opportunity cost at play.  Easy for someone making lower income to judge high incomers for succumbing to OMY, but if presented with the real opportunity post FI to work for several additional yrs for literally millions - how would you respond?  Think about that honestly.  I wish I had the courage/character to say the money would no longer matter, but I'm not sure I've yet reached that stage of enlightment.

BBub, I make approximately the same amount as your combined income (my wife stopped working when we had our first kid six years ago), and my non-mortgage expenses are about 20% lower than yours (but I'm guessing my mortgage expense is much higher, since my house is astronomically expensive by national standards).  Your post reminds me of sol's "OMY strikes the rich the hardest" thread.  I'm targeting FIRE in a few years with a higher SWR than you are planning (but also with a sizable funded 529-plan college fund for my two kids).  I think Raptor's response is spot-on, except, if you're anything like me, the seduction of OMY lies not in the promise of additional spending money (since we've already internalized the concept of "enough") but in the attraction of additional safety margin, vast quantities of which can be purchased in exchange for relatively little time.  I think the key to avoiding that slippery slope is translating the concept of "enough" (in the sense we usually use that term) to your desired level of safety -- the layers upon layers of safety margin built into most of our retirement plans make them ridiculously safe, well past the point of false precision and certainly safe "enough."  So, once we attain "enough" safety, why strive for more?  Put in its proper perspective, the opportunity cost of pulling the plug once you attain "enough" is precisely zero, because those millions you are giving up are worth nothing to you.

[Daisy]

Hopefully between now & then I can see the light, stop being a wuss, find a way to generate more passive income.  I dunno.  These are just some thoughts that I've had on the subject.  Get it while the gettin' is good then pull the plug worry-free.  It's a sensitive subject & I have never posted this before for fear of major retribution from this crowd.  But I'm all ears to hearing the alternatives.  Although, respectfully, I'd be more open to feedback from other high-income, low expense posters who can actually relate to the opportunity cost at play.  Easy for someone making lower income to judge high incomers for succumbing to OMY, but if presented with the real opportunity post FI to work for several additional yrs for literally millions - how would you respond?  Think about that honestly.  I wish I had the courage/character to say the money would no longer matter, but I'm not sure I've yet reached that stage of enlightment.

BBub, I make approximately the same amount as your combined income (my wife stopped working when we had our first kid six years ago), and my non-mortgage expenses are about 20% lower than yours (but I'm guessing my mortgage expense is much higher, since my house is astronomically expensive by national standards).  Your post reminds me of sol's "OMY strikes the rich the hardest" thread.  I'm targeting FIRE in a few years with a higher SWR than you are planning (but also with a sizable funded 529-plan college fund for my two kids).  I think Raptor's response is spot-on, except, if you're anything like me, the seduction of OMY lies not in the promise of additional spending money (since we've already internalized the concept of "enough") but in the attraction of additional safety margin, vast quantities of which can be purchased in exchange for relatively little time.  I think the key to avoiding that slippery slope is translating the concept of "enough" (in the sense we usually use that term) to your desired level of safety -- the layers upon layers of safety margin built into most of our retirement plans make them ridiculously safe, well past the point of false precision and certainly safe "enough."  So, once we attain "enough" safety, why strive for more?  Put in its proper perspective, the opportunity cost of pulling the plug once you attain "enough" is precisely zero, because those millions you are giving up are worth nothing to you.

I'm in this camp. A higher income means you are walking away from something that is providing you some measure of financial success. Another benefit is seeing your net worth go up at a slow and steady pace. With a small income, one more year just doesn't have as much benefit as with a higher income.

I'm single so I am not in the $250k per household range. Being single, it also takes me a little longer to save up for FI than I would if I was married with a frugally minded spouse. Oh well...

Being single also means I want that added layer of security as I currently don't have someone else's backup salary as a safety cushion.

My main worry is not that I wouldn't be able to meet a 4% SWR at a certain stash level, but rather that I may incur some unexpected expenses in the future that made my projected expense level in FIRE incorrect. So I add buffer to what I expect to spend during FIRE and use that buffered amount as the expense level needed to base a 4% SWR on.

I make too much money and am not totally miserable (but the BS bucket is filling fast), that I am OK with slugging it out a while longer and creating this safety buffer for myself.

[dude]

Glad to find this thread.. I've had similar feelings when running projections of my own...

DW & I make $250k/yr gross.  I'm 30 and she's 27.  (This income is somewhat recent.  We started around $32k and $45k, respectively.  Found MMM about 2 yrs ago, had some debt, so current stash numbers aren't as high as they could be)

Current investments are low $200's.  I figure at our current rate of stashing approx $135k/yr with decent returns we'll hit the FIRE target of $1.25m and a paid off house around age 35.  Monthly spend is $3k/mo ex mortgage. [Yes, my numbers check out: 250k*75% = $187.5 after tax;  187.5 -16.5 mtg - 36k living = $135k savings.]   SWR will be 3% on $1.25m to generate our $36k annually.  Reaching the FIRE target in 5-6 yrs assumes no more increases in income between now & then.  We just keep earning and stashing at current levels, and the returns are 7-9%.

But we'd be leaving cash cow jobs difficult to easily replace - especially if we fell out of the workforce for decades.  I could get back here, maybe, but it would take years of grinding it out.  Furthermore, we could realistically be making well above $250 in 5 yrs.

Now, to really heat up the convo, assume we went 5MY.  Yes, five.  Retirement is now at my age 40 instead of 35, but we would double our stash in those 5 yrs from 1.25 to 2.5M, assuming a 7% return and $135/yr additions.  Now we really have zero worries.  We can spend our $3k or more, educate kids, dip in for extra travel, etc.  Our stache could be cut in half by the mkts & we wouldn't be at risk.  And we still get to FIRE by 40.

It opens up a whole line of questioning about "enough", but the alternative would be to run low on funds in our 40's, 50's, 60's or later and have to go back to work or scurry to figure something out.

Hopefully between now & then I can see the light, stop being a wuss, find a way to generate more passive income.  I dunno.  These are just some thoughts that I've had on the subject.  Get it while the gettin' is good then pull the plug worry-free.  It's a sensitive subject & I have never posted this before for fear of major retribution from this crowd.  But I'm all ears to hearing the alternatives.  Although, respectfully, I'd be more open to feedback from other high-income, low expense posters who can actually relate to the opportunity cost at play.  Easy for someone making lower income to judge high incomers for succumbing to OMY, but if presented with the real opportunity post FI to work for several additional yrs for literally millions - how would you respond?  Think about that honestly.  I wish I had the courage/character to say the money would no longer matter, but I'm not sure I've yet reached that stage of enlightment.

Can totally relate.  We're @ $230K combined.  Saving is not nearly as high --  @$64K (no incl. pension contribution, SS, home equity, etc.), but doesn't have to be because of the pension, plus current stash is @$700K.  I'm 4 years away from the pension, which alone could sustain a FIRE lifestyle for most on this board (@$69K for first 7 years, then $58K + COLAs after that), but we aren't super frugal.  Travel eats up a lot of our discretionary income, and I'm not going to scale back on it because we're saving plenty regardless, and I could drop dead tomorrow -- you gotta live for now, too, not just the future.  But shit yes, if I didn't have the security of the pension to fall back on, I'd work those extra years for the $5M, assuming the job wasn't crazy stressful and health-damaging. 40 is still young as hell to retire!  But that's my personality.  I chose my line of work in the first place because I valued job and retirement security over the big bucks, so yeah, I'd go for the greater security all things being equal.

[BBub]

All: Wow thank you for the wonderful, thoughtful responses.

Financial Velociraptor: Your analysis is spot on - it's all about the safety.  I don't think we'd spend meaningfully more than we do now even if we had infinite money.  But the downside would affect us if the money dried up. Basically, we can't really go up from here - we are in a great place.  But we could fall hard if we lost enough, or whatever.  That's what I fear.  And it's not really for me because I could figure it out.  I supported myself through adolescence by cutting yards & stocking vending machines.  I could do that & be fine, but I feel a duty to protect my wife and future family.  Your story makes sense.  Once you became FI things at work weren't just awesome, and you had the ability to try something different for a while or permanently.   And the money didn't matter all that much at that point.  When you put it that way, it just doesn't seem like such a big deal.  Thanks, that definitely helps put things in perspective.

Jon Snow: I figured you guys were pulling down a similar amount.  You mentioned previously your savings numbers looked almost identical to mine, and I know our spending is in the same ballpark (mostly frugal with the occasional splurge on spoiling DW, fishing tackle or camping gear).  We do have plans for kids, so that plays into the safety concern.  Yeah, my job is at times quite exhilerating and other times it can cause immense stress - sometimes good, sometimes bad.  Like any job it has some mundane and boring paperwork type admin that I don't particularly enjoy.  But mostly I enjoy it, it just takes up way too much time.  I suppose once FI I could scale back a bit, but that's TBD.  My partners & I have always had a pretty hardcore growth mentality which has led to our success thus far.  Not sure how well received a downshift plan would be, but I may be able to work something out.  Something to consider.

BrooklynGuy: Nice work on optimizing the spending down.  When kids come I also plan to frontload 529's, so once that's settled I may have a little more security.  Looking at an uncertain future & trying to imagine how it will play out can be a bit challenging - the mind can wander into bright or dark places, so it's good to hear from others actually on the same path.  Trading time for safety is the bargain - exactly.  I definitely have reached contentment with spending, and I don't value money for it's purchasing power.  It's all about the security.  Maybe when I am further away from broke & closer to FI I'll experience an attitude shift.  It's something I'll be consciously working on.

Daisy: I hear you.  Unexpected expenses are part of it too.  Medical, hurricane, family probs, whatever.. Fearing the unknowable is no way to live life, but failing to consider and plan for a worst case is quite foolish.  So it comes down to determining an appropriate safety margin then getting there, then letting go.  Maybe?  Maybe you & I should be able to let go sooner though.  Kind of silly to worry about these things when many ppl are starving right now.  But the worry happens and it's real, or you & I wouldn't be on this thread!  Glad you are here, because it seems like we both have a bit to learn from each other and the wise folks around these parts.

I could drop dead tomorrow -- you gotta live for now, too, not just the future.

Dude: ^This.  I deeply enjoy our life now.  We also travel a decent amount, and I've been mindfully trying to focus on the present for the past 6 months or so.  It has helped so much.  But I'm still a planner/calculator/projector at heart.  I often experience an internal conflict when attempting to balance these dichotomous pursuits.  But yes, the job can be crazy stressful at times but not always.  I think I can find a somewhat healthy balance there.  We'll see how it shakes out!


 

[Daisy]

All: Wow thank you for the wonderful, thoughtful responses.

Financial Velociraptor: Your analysis is spot on - it's all about the safety.  I don't think we'd spend meaningfully more than we do now even if we had infinite money.  But the downside would affect us if the money dried up. Basically, we can't really go up from here - we are in a great place.  But we could fall hard if we lost enough, or whatever.  That's what I fear.  And it's not really for me because I could figure it out.  I supported myself through adolescence by cutting yards & stocking vending machines.  I could do that & be fine, but I feel a duty to protect my wife and future family.  Your story makes sense.  Once you became FI things at work weren't just awesome, and you had the ability to try something different for a while or permanently.   And the money didn't matter all that much at that point.  When you put it that way, it just doesn't seem like such a big deal.  Thanks, that definitely helps put things in perspective.

Jon Snow: I figured you guys were pulling down a similar amount.  You mentioned previously your savings numbers looked almost identical to mine, and I know our spending is in the same ballpark (mostly frugal with the occasional splurge on spoiling DW, fishing tackle or camping gear).  We do have plans for kids, so that plays into the safety concern.  Yeah, my job is at times quite exhilerating and other times it can cause immense stress - sometimes good, sometimes bad.  Like any job it has some mundane and boring paperwork type admin that I don't particularly enjoy.  But mostly I enjoy it, it just takes up way too much time.  I suppose once FI I could scale back a bit, but that's TBD.  My partners & I have always had a pretty hardcore growth mentality which has led to our success thus far.  Not sure how well received a downshift plan would be, but I may be able to work something out.  Something to consider.

BrooklynGuy: Nice work on optimizing the spending down.  When kids come I also plan to frontload 529's, so once that's settled I may have a little more security.  Looking at an uncertain future & trying to imagine how it will play out can be a bit challenging - the mind can wander into bright or dark places, so it's good to hear from others actually on the same path.  Trading time for safety is the bargain - exactly.  I definitely have reached contentment with spending, and I don't value money for it's purchasing power.  It's all about the security.  Maybe when I am further away from broke & closer to FI I'll experience an attitude shift.  It's something I'll be consciously working on.

Daisy: I hear you.  Unexpected expenses are part of it too.  Medical, hurricane, family probs, whatever.. Fearing the unknowable is no way to live life, but failing to consider and plan for a worst case is quite foolish.  So it comes down to determining an appropriate safety margin then getting there, then letting go.  Maybe?  Maybe you & I should be able to let go sooner though.  Kind of silly to worry about these things when many ppl are starving right now.  But the worry happens and it's real, or you & I wouldn't be on this thread!  Glad you are here, because it seems like we both have a bit to learn from each other and the wise folks around these parts.

I could drop dead tomorrow -- you gotta live for now, too, not just the future.

Dude: ^This.  I deeply enjoy our life now.  We also travel a decent amount, and I've been mindfully trying to focus on the present for the past 6 months or so.  It has helped so much.  But I'm still a planner/calculator/projector at heart.  I often experience an internal conflict when attempting to balance these dichotomous pursuits.  But yes, the job can be crazy stressful at times but not always.  I think I can find a somewhat healthy balance there.  We'll see how it shakes out!


 

I feel my current 4% SWR based on the stash is just on the edge of my regular expenses. I guess I am working for my $10k buffer. I made some poor investments in the recent past that I've now tried to change based on reading about index investing and such. So I do think I am one that qualifies for OMY-itis. Plus, I'm in the middle of a project at work that should take me to the end of the year. I'm hoping the numbers look good then. But I'm not going to give up a good salary just to meet a certain FIRE time goal. I am really close though.

I just have this feeling that my BS bucket will keep filling up slowly as it has and at some point I'm going to have a really good FU story.