When to retire?

[mswlogo]

When to retire? Sources that I accept suggest to have 25-30X at a minimum where X is the amount of money needed each year beyond fixed sources such as social security. This requires knowing what X is. I would suggest folks track their budget, can serve as a feedback loop. This morning I am adding up receipts for the month to get an idea of where the money went.

Next one needs to make a plan on how to withdraw funds, by this I mean what method to use to pull money out. Fixed percentages get thrown around a lot, something like 3 or 4%. I spent some time reading on each of these and decided on a variable percentage withdrawal method, VPW. Basically there are charts that suggest how much to pull out each year based upon ages and equity percentages. In good times they amount will be large, in bad times it will be less. In order to not panic or suffer during bad times we aimed to have 2 yrs expenses saved in an emergency fund. Now, in good years that fund will grow, in bad years we can eat from it if need be.

Retirement withdrawal methods: Withdrawal methods - Bogleheads

Planning for taxes is important. We have converted some to Roths this year, what great luck to have done so.

While we are well read and understand such things, we do check in with a fiduciary professional once a year.

So my plan, suggested for you:
1. Know your expenses. Save 25X at least.
2. Research and plan on a withdrawal method.
3. Consider how to minimize taxes.

You add up receipts? I just look at Quicken.

 

[MABMAB]

FYI the guy that created the 4% rule recently updated the rule to 5% or 20X

Time to rethink your retirement — the '4% rule' just changed

So if you follow that guy consider what he wrote. I have no idea about it.
One cant really just say 4 or 5% and be knowledgeable, one must take a serious study, kind of like investing in TSLA

 

[OrthoSurg]

It appears that there are several investors here that have been able to retire at a young age. I'm considering selling some of my TSLA and retiring this year, at 50, from my surgical practice. I can probably continue to work a few days a month as an assistant surgeon to keep my feet wet, without having to worry about answering patient calls anymore. I have plenty of hobbies to keep me busy (I think). I'm curious to hear what experiences different people have had with early retirement. My thought is life is short, and you can't get time back. You also can't rely on your, and your spouse's, good health to continue. So if you can retire and do something different you enjoy more, why not?

Did you retire yet?
I have been into surgical practice for 5 years now.
Already reached my retirement goals with my TSLA,
Calls are still manageable with my kids because in orthopaedics, I can concentrate my cases during the following day and don’t have to go during the night and destroy my sleep for the next week.
With Covid I work 2 times a week in clinics and OR, one day at the office as consultant for worker’s compensated msk injuries.

I managed to have twice the money I intended to have before retiring, however when is it too fast?
I guess when my kids are all above 18 and I can go bike around the world my wife and I will stop but as for now, there is a limit of road cycling, mountain biking and skiing I can do a week without injuring myself :X

 

[CHGolferJim]

Did you retire yet?
I have been into surgical practice for 5 years now.
Already reached my retirement goals with my TSLA,
Calls are still manageable with my kids because in orthopaedics, I can concentrate my cases during the following day and don’t have to go during the night and destroy my sleep for the next week.
With Covid I work 2 times a week in clinics and OR, one day at the office as consultant for worker’s compensated msk injuries.

I managed to have twice the money I intended to have before retiring, however when is it too fast?
I guess when my kids are all above 18 and I can go bike around the world my wife and I will stop but as for now, there is a limit of road cycling, mountain biking and skiing I can do a week without injuring myself :X

For anyone considering retirement with children under the ages of 18, you will be smart and feel much better if you establish separate college funds ($250k pp) beyond your 25x expenses number.

 

[Featsbeyond50]

FYI the guy that created the 4% rule recently updated the rule to 5% or 20X

Time to rethink your retirement — the '4% rule' just changed

**** YEAH!
(lol - can we say that here?)

 

[Featsbeyond50]

**** YEAH!
(lol - can we say that here?)

I guess my question is answered.

The 4% rule actually lines up exactly based on my expenses and estimated social security so I'm going to stick with that, but it's good to hear that might be conservative.

 

[Featsbeyond50]

How do you guys come to your TSLA share price number for retirement?

My calculation is 1000 would be my minimum number but I'd be crazy to retire when we hit that. I would want to wait a year or two to make sure the price stays firmly above that. I also figure working another year would pay for both a Cyber Truck and a Y. Two more months covers FSD (which I'd only get if I thought my cars could be part time members of a robo crew). Basically, for me, a year or two past my "number" for security and maybe to indulge a little bit.

 

[Johan]

How do you guys come to your TSLA share price number for retirement?

My calculation is 1000 would be my minimum number but I'd be crazy to retire when we hit that. I would want to wait a year or two to make sure the price stays firmly above that. I also figure working another year would pay for both a Cyber Truck and a Y. Two more months covers FSD (which I'd only get if I thought my cars could be part time members of a robo crew). Basically, for me, a year or two past my "number" for security and maybe to indulge a little bit.

There's no generic answer for that. Some very basic questions are of course how many TSLA do you own, how old are you, how capital intensive is your life style? (Don't answer those here but think about it).

It's super interesting to read all of your discussion here. I'm only 40 years old, living in Norway where the tax system is very different, still have young children, newly divorced and had to buy myself a new house and depart with 50% of my (our) TSLA holdings (in the divorce that is, and hold no grudge because I know it secures my children financially), but most of all still enjoying my job... but this definately makes think about a long term plan that will allow me to jump of the hamster wheel way before 67 or 70 years of age (which is the typical age to retire here) and life comfortably.

 

[Christine69420]

I did have a number for both share price and count. I have been doing a detailed personal accounting for years so I knew what I needed. Then I added a reasonable amount for my retirement wants.

I addition I wanted the MA(200) to reach 250. That number was more in the wild arz guess category but my reasoning was that it would be a reasonable floor for share price reversals.

 

[Featsbeyond50]

I did have a number for both share price and count. I have been doing a detailed personal accounting for years so I knew what I needed. Then I added a reasonable amount for my retirement wants.

I addition I wanted the MA(200) to reach 250. That number was more in the wild arz guess category but my reasoning was that it would be a reasonable floor for share price reversals.

Ah, moving average would be useful. 1100 MA might be about right for me. 1000 is a wild arz guess for me too. As we get closer I'll get more serious about calculating expenses and how they'll change in retirement. Congratulations on blowing past your number.

 

[MABMAB]

For new wealth, a moving average of total savings or share price equivalent is a good idea. I wanted the 200 day average price to be above my "number" before quitting work.

In other words, if one wanted to have 1/2 Million to retire, dont quit on the first day you have it. Wait until your account balance has been that amount for a while.

 

[ReddyLeaf]

Something not mentioned here but getting a new job after 50 is nearly impossible (age discrimination is real, though against the law). If you retire early, make darn sure on your finances. If you’re self-employed or plan to continue part-time, that’s a different story. Even for non-physical jobs, there are numerous reasons to hire younger people.

 

[Featsbeyond50]

Something not mentioned here but getting a new job after 50 is nearly impossible (age discrimination is real, though against the law). If you retire early, make darn sure on your finances. If you’re self-employed or plan to continue part-time, that’s a different story. Even for non-physical jobs, there are numerous reasons to hire younger people.

After 22 years with the same employer I made a job change at 54. My old job became a hostile work environment and I had to make the change. This job, I'm having trouble seeing it last so I'm kind of in a race between reaching retirement and senior management deciding to scrap the business unit. Losing this job would be a double whammy for me. Number 1, hard to get hired after 50 and two, my wife will kill me if I make the family move again.

 

[adiggs]

I guess my question is answered.

The 4% rule actually lines up exactly based on my expenses and estimated social security so I'm going to stick with that, but it's good to hear that might be conservative.

I use the 4% rule as a thumb to the wind that maybe it's time to have conversation(s) with family and financial planners. I wouldn't use it as a specific plan for how to do things.

If nothing else in my case, about 1/2 of our portfolio is in retirement accounts, and those aren't accessible for another 8 years. Living on the remaining 1/2 by selling it down, and then switching to the retirement accounts later would be ... tough ... for us. Continuing to work for a paycheck would be tougher for me though, so a specific plan is needed (and I've got one).

 

[adiggs]

but most of all still enjoying my job

Hallelujah!

The way I think about this - the point isn't retirement per se. Rather, at least for me, it's about achieving financial independence. A state of being in which I can choose to work that job I love and get paid to do it.

Or be a bum, ski all winter, surf all summer. Or be a couch potato and play video games 16 hours a day. Or volunteer my time and do social purpose work. Or get involved in local politics. Or .. or ... or ...


It's about choices. Though my personal first choice is to stop working for that paycheck

 

[Causalien]

When to retire really depends on your job. Let me tell you one truth: early retirement is boring after a while.
If you have a job that fulfills your sense of worth and doesn't deteriorate your health, consider dialing back the working hours to around 2~3 days a week.

That said, there are several stages to the retirement strategy.

The first stage is when 5% fixed income from your fund can generate the average salary where you live. But this is just sustenance living. It's up to you if you want to do this. This is best paired with keeping your job full time but dialing back on the overtime as it allows you to continue to build wealth. To get to the next stage, either only check out half, or continue to be fully invested while working but take out about 10% per year to add to your fixed income

The next stage is when your fixed income is generating the average salary where you live and you have enough from investment to buy your dream home for the current you. Whether it is with a family, with a partner or without. It is advisable at this stage to invest time into finding a general counsel, a good accountant and a good financial planner to offload some of the problems you'll encounter.

Then comes the next stage where 5% fixed income generation brings you up to the top 1% based solely from the income perspective. This is a new stage for the FIRE ppl called FATFIRE. You can basically do whatever you want. This, I think is true retirement. It is advisable to diversify your income into multiple different sources here. At this point, it is more important to not lose this lifestyle than it is to jump to the next level. Once everything is setup, you can start giving back to society with your success. Whether it is to help others or start your own company.

The final stage, when your 5% fixed income is > 1mil per year (this should put you in the top 1% everywhere in the world). When you get more money than sense. Do whatever you want, but be aware of the 3 ways to lose it all. Not being able to get out of the drug binge, divorce and lifestyle inflation. Lifestyle inflation should be mitigated by everything setup in the previous stages and unless you start buying several multimillion dollar houses and a football team, the chance of lifestyle inflation being the cause of your demise should be slim. The other two.... nobody can prepare for it as they deal with emotions and you don't really know who you are until you become free to do everything.

 

[Spacep0d]

Something not mentioned here but getting a new job after 50 is nearly impossible (age discrimination is real, though against the law). If you retire early, make darn sure on your finances. If you’re self-employed or plan to continue part-time, that’s a different story. Even for non-physical jobs, there are numerous reasons to hire younger people.

I'm 52 and in the video game business (3D artist) and an AR/VR developer. I can attest to age-discrimination being real, especially in my industry. So many young people want to do what I do and will accept almost any salary to get a foot in the door. Experience helps a whole lot, but it's so much cheaper to hire someone fresh out of college making a third or half what I make, and we're in a global economy now. We're not just competing against local developers but anyone with an email account and a portfolio in the U.S. (and the world, in some cases). Outsourcing is a real thread, along with the libraries of existing models sold on the cheap.

Then again, a minority of companies value experience and will pay for that. Thankfully I'm in a good place now and have no plans to leave, and I love what I do so it hardly feels like work (even when I'm crunching). I'm investing aggressively into TSLA along with index funds as a safeguard in the event that I find myself looking for a job at 55+ or whatever the case may be. This assumes I don't have some health issue which reduces my ability to work later. I cannot assume I'll be as healthy later given my family history. Investing has never made so much sense to me, and I feel a particular urgency in this regard (no, not that kind of urgency due to old age....yet).

For those of you who have a nest egg already or have made sound investments, that freedom is invaluable! Love reading some of your stories and insights here.

 

[vikings123]

When to retire really depends on your job. Let me tell you one truth: early retirement is boring after a while.
If you have a job that fulfills your sense of worth and doesn't deteriorate your health, consider dialing back the working hours to around 2~3 days a week.

I honestly struggle with this particular aspect of retirement. What exactly will I do when I’m retired. Until I find the purpose I’m just going to continue to work. I’m still in my 40s with two kids with 529 plans in place for both.

I have a really good consulting job that keeps throwing interesting challenges at me on a daily basis so I’m focused on that. While it can be grueling it is definitely very exciting stuff but I’m also interested in getting more serious about investing/trading in general. My kids are both very young so the only thing that is in favor of getting into a semi-retirement mode is spending more time with family and kids.

Anybody here can share insights if you went to more of a semi-retirement mode and how that worked out for you?

 

[Christine69420]

Let me tell you one truth: early retirement is boring after a while.

It may be one truth - but not The Truth.

Unless you by "a while" talk several decades. I know several people who retired early and love it. Some are very active and others love to have nothing planned. I haven't been retired for that long but I doubt I'll get much bored. I'm definitely not more bored now than when I worked.

 

[MABMAB]

I've been busier the past three months of not working then I ever imagined I would be. I am well rested, energetic, enthused each am. I am eating well, exercise regularly. The $$$ stuff sure has worked out better than expected. I have lots to do, when and as I want. More planned.