$2.5 million sounds like a lot but after taxes it will not get you an above average home in a VHCOL area. We are cruising some open houses in Seattle this weekend and things look grim under $2 million.
This is just factually incorrect. Per Zillow the median home value in Seattle is
$913k. You can quibble over whether they tend to overestimate or underestimate the value of individual homes, but I guarantee their median isn't off by a factor of two. I think you need to recalibrate your internal notion of what an "average" home really looks like, because you're turning your nose up at ones that are more than twice the median value.
Looking at homes that sold for well under $2 million this month...
There's this
beautifully renovated Capitol Hill home with four bedrooms and a large kitchen, sold for $1.56 million.
There's a
3,700 square foot West Seattle home with a view, wine cellar, and palatial master bathroom, sold for $1.575 million.
There's a
five-bedroom Phinney Ridge home, recently renovated, sold for $1.43 million.
There's a
39th-floor condo in Belltown that sold for $1.575 million.
All of these seem just gorgeous to me. If you think such homes are "grim" I might suggest you examine the amount of hedonic adaptation you have allowed to infiltrate your life.
But anyway...every one of these homes are more expensive (and all but the condo are well larger) than the OP says they want to retire to, so what else are they going to do with all the money?
You point out two options: stay three years for $2.5 million, or quit now and get nothing. Is there no middle ground? I assume from your compensation that you're not easily replaceable. Seems like there should be some room to negotiate your ideal exit. Something like telling your boss you'd like to retire in the next year. In consideration for staying on until your replacement is selected and up to speed you'd ask for X% of your stock to vest upon your exit. Maybe finagle a board seat afterward if that's something that would allow you to continue bringing value to the company? Or just quit tomorrow. You have plenty.
This is a high stakes game. That may work, or may not. Issue is once you have shown colors and want out, this can go in any direction, especially as a lot of money is at stake. Imo, best strategy is to make yourself redundant, which triggers severance. Big events like acquistions, restructures or major strategic redirections are great opportunities to force yourself out as a CXO. If I see that path, I will take it, however, that will not trigger full RSU payout. More likely 50%. But that’s life.
Sure, nothing is without risk. However you still haven't said what you would actually do with the extra money. You want a <$1 million house, leaving >$4.5 million for all the other non-housing stuff in your life. That's roughly $500/day at a 4% SWR. You want to do some travel, and it's easy to spend $500/day on that if you're really determined to take monthly first-class plane trips around the ocean to stay in five-star hotels while you're there, but it's also really easy
not to spend that much. So I think step 1 is to identify what material difference that extra $2.5 million would make in your actual retirement lifestyle. If the answer is "not much" because you already have enough to do the things you want to do, you go into that high-stakes transition negotiation from a position of strength. Your alternative to a negotiated agreement (immediate retirement) still looks pretty good, so all you have to lose is a pile of money you probably never will need.
Also look forward three years: your stock vests and your board offers you another set of RSUs to retain you for another few years. Do you take it or do you leave at that time? You're finding it hard to walk away from $2.5 million over the next three years because that is admittedly an insane amount of money, but do a good job and you could easily get a similar deal in the future. At what point do you say enough is enough?
