Late to the Party - Last Minute Retirement Planning

[adiggs]

After going over everything exhaustively, checking for some glaring oversight on my part, over the next few days I'll notify the boss of my imminent retirement.

Does anyone else get butterflies in their stomach as the moment of transition from contemplation to action unfolds?

Yes.

Both leading up to the conversation about retirement, and then leading up to the actual retirement day.

The Monday after retirement was kind of odd - more like a vacation day without an ending date than retirement.


Don't worry - you'll get over it!

 

[adiggs]

What happens if you’re wrong and TSLA doesn’t grow/appreciate? What if we have another recession? You could be unemployed and unemployable just because of your age. As a hedge, I would offer to work 50% time or work from home, to assist with the transition and help “train” your replacement. I did that for 3+ years and it greatly reduced my stress level. It also put everyone on notice that I was on the way out and didn’t have to take on any “crap” tasks. I was able to focus on the tasks that I enjoyed. It worked out ok, not perfect. Sometime in the middle, more work came in that couldn’t be deferred, and management hadn’t hired enough staff as a replacement (yes, more than one person is often needed to replace an out-going retiree). Thus, I offered to temporarily go back to full time to help offset the extra work. It was definitely tough, and after a year I went back to half time, but put them on notice that there wouldn’t be a “next” time. No matter where I’ve worked, management is always slow to hire, usually 1-2 years behind, because they don’t want to expend the extra resources (money, benefits, equipment, space, training) until absolutely the last moment.

My version of this was 3 month notice that then got extended by 2 weeks and then 1 more week. And then no more.

I've worked with somebody that dropped down to 3 day/week work schedule for a couple of years, and then finally retired. That seemed to work well for him.

 

[2daMoon]

Can you wait until April?

I hope I'm wrong, but I have this idea TSLA will come under selling pressure after the one year anniversary of the Corona Dip. Share holders who bought after the dip will start to to realize gains at the Long Term tax rate. I'm no master of the market, and I'm probably wrong, but if I was in your place I'd wait a little bit longer just to see if that pressure happens.

I'm flexible. Giving notice now is as much about getting a feel for how much I'll be missed as anything. My suspicion is I could easily find myself persuaded to stick around until they can conjure a Plan B.

 

[Mengy]

Very interesting thread. As someone strongly considering "retiring" this year as well this has been a thoughtful read.

 

[2daMoon]

Being in the midst of the Big Chill of 2021 combined with TSLA's Q1 Post-S&P Correction, I'm holding off on making the retirement announcement until after the bosses again have power to their homes, can drive to work, and IT services are no longer in crisis mode.

Maybe by then the SP will have made a turn back to a more norminal trajectory.

 

[2daMoon]

When the perfect storm brings a perfect storm ...

Had to go into work today to bring things back online after the effects on the network of rolling blackouts, and, as chance would have it both bosses showed up as well.

I took the opportunity to pull them aside and broke the news about my retirement.

Counting down the days ...

 

[2daMoon]

For any who haven't found it, take a look at the FireCalc.com site. I found it invaluable as a second opinion to compare results from the spreadsheet I cooked up. I ran both the spreadsheet and FireCalc using different sets of variables to generate a variety of scenarios, all of them based upon very conservative portfolio gains. (be sure to notice the several tabs in FireCalc where changes can be made)

The final analysis on the spreadsheet calculated account balances into the future based upon:

• taking up to no more than $30K in margin this year and each of the 2 following years
  
• the portfolio earns a flat 10% annual gain for each of the following 3 years (living off margin loan and Social Security)
• TSLA gains can then accumulate without selling shares to live on for up to three additional years if desired
  
• from year 4 to year 19, the balance uses a random annual gain of between 4% and 6% for the next 15 years (age 80)
• from year 4 to year 11, $30K each distributions are taken from the IRA and Invest accounts to supplement Social Security
  
• from year 12 to year 19, what's left of the IRA is only tapped for play money, distributions are taken from Invest (30K) and Roth(15K), plus Social Security

Obviously, these are what most TMC TSLA HODLers would consider "lowball" estimates for TSLA growth. At this stage of calculation I wanted to downplay gains to assure me I could retire today based upon these gain and distribution levels. It was meant to show a poor growth scenario.

Once I ran the same figures in FireCalc the resulting graphs showed all lines calculated against historical data each remaining comfortably above the Red line.

The addition of 30K from a margin loan up front for 3 years was crucial for demonstrating a safe retirement this year.

Because total margin borrowed in year 1 will be less than 15% (of 25% offered) from the IBKR account it seems to indicate quite a bit of wiggle room left to prevent any margin call situation arising.

I'm hoping the SP gains will be better than 10% going forward. If the SP performs well this year and next I may be able to begin distributions earlier, or, have more margin bucks to access from IBKR's 25% limit on an account made up of 99% TSLA and then I could continue to dip from this well in order to preserve the shares for further growth.

 

[2daMoon]

Thanks to a combined effort between myself and Mr. Murphy I get to test my spreadsheet today putting in the numbers as the SP dives for 700. The formulas still show the plan as good for the next 18 years or so, only based upon today's numbers and the conservative gain percentages.

Gotta love that Murphy, such a kidder. Trying to get my goat. Clearly, he doesn't know I'm a HODLer and this just looks like a reset back a few weeks to the beginning of the year. Tesla Fundamentals are rockin' and demand for their wares is outstripping supply.

​

 

[Featsbeyond50]

Thanks to a combined effort between myself and Mr. Murphy I get to test my spreadsheet today putting in the numbers as the SP dives for 700. The formulas still show the plan as good for the next 18 years or so, only based upon today's numbers and the conservative gain percentages.

Gotta love that Murphy, such a kidder. Trying to get my goat. Clearly, he doesn't know I'm a HODLer and this just looks like a reset back a few weeks to the beginning of the year. Tesla Fundamentals are rockin' and demand for their wares is outstripping supply.

​

That guy Murphy is renowned for his impeccable timing.

 

[2daMoon]

Fortunately, I have a sense of humor when it comes to life. Doubly so regarding the market. Otherwise, I might be fretting inconsolably after HODLing TSLA the past few weeks.

Still, I know the foundation and prospects for TSLA are sound and this presents an opportunity to see what else I might get into to expand what I have so I can buy more chairs.

Things are always more interesting, and life so much more rewarding, when I have complex problems to solve for. I wouldn't want to get all comfy and complacent now, would I?

 

[MP3Mike]

For those that are looking to use a line of credit as part of their plan E*TRADE has a promotion of 0.5% discount off the rate spread if you open a line of credit with them before May 14th. E*TRADE Line of Credit

If you already have a line of credit with them you can likely negotiate the 0.5% reduction.

 

[2daMoon]

As I am routinely checking my spreadsheet that, among other things, projects future gains based upon selected annual gain percentages it has been a struggle not to dial in the actual percentages we have seen so far.

I have Ranges A, B, and C that can be put in a column for each future year.
Typically, a random choice:

A = between 30 and 45 percent
B = between 15 and 30 percent
C = between 8 and 15 percent

Over a 25 year timeline I tend to select A, usually in the column for the next 2 to 4 years, then B for the following 2 to 4 years, and C for the remaining years. The gain percentages are intentionally conservative as a CYA measure.

Now for the tricky bit...

Naturally, I'm going to change the A and B ranges every now and then to conservatively reflect closer to last year's gains for A (70-80%) and (25-40%) for B. You know, just to see what maintaining higher gains might look like. This produces results that, though seemingly plausible, grow to numbers that are challenging to accept as actually possible. (thank you Elon!)

Granted, when I then look back to 2020 gains, the 2021 gains look to be significantly under-performing.

I simply cannot comfortably use for planning the results these ranges generate. I haven't even begun shopping for islands with mountains, or anything. At least I have a little time for that.

The numbers blow me away. Even if I roll back to A being only two more years and B the following two years with C for the rest it is still fantastic. Too fantastic for a fellow who has lived a frugal life. That is, someone who played enough throughout their lifetime to have pretty much earned about what I have spent along the way. Let's just say that I am totally unprepared for abundance. But, I'll deal with it like I have many other seemingly insurmountable problems I have faced over the years.

What I'm getting at is that I've been suddenly thrust into an environment where in another year or so I'll be planning my first home build/purchase, and buying new Teslas (plural), and trying to figure out how to spend my time and those gains. I have no heirs and this means I'll need to work extra hard finding good causes to support as this boon will be more than I have any reasonable chance of spending in my lifetime. (frugal habits die hard)

Anyway, it seemed like a good time to update this thread and I hope it encourages others to work out the numbers, accumulate TSLA and HODL until you reach the level of gains that suit you.

Best wishes to the long-term investors and many thanks to all in the TMC Investment threads for keeping the light at the end of the tunnel burning brightly!