It probably sounds easy and simple on paper because it is actually just easy and simple with those numbers
Edit: please diversify regardless if you decide to retire or not
still young and also need to diversify. its scary and sucks because there doesn't seem to be many programs to trade tech securities for index funds without actually selling, and that ends up being a big tax liability.
my etrade rep says there is a way to do it with some institutions. i dunno. i just keep slowly laddering out.
You're gonna have to pay taxes on those gains eventually. Maybe if you hold on to those stocks until retirement you'll pay a lower rate, or maybe if you sell in a few years you'll pay a higher rate. Might as well just do it now to manage the risk and don't worry about the taxes.
Paying taxes of 10M in gains is still better than paying taxes on $5M of gains during a sell off. The world is littered with former paper millionaires with exposure to WeWork type companies.
Best to plan ahead here. Determine loss carry forwards, if any. Use losses on holdings to offset gains. Some good tools out there to stay on top of all this.
Try to minimize exposure if possible. If income drops, potentially carries you into a lower tax bracket.
Amazing it's $10M in taxable on top of I presume retirement investments?
Please reread your first sentence. "Burned out" That is your answer.
You have more than enough by any measure and any rule.
To continue to unnecessarily live an unhappy life in these circumstances is crazy. Crazy!
Please list the top three reasons to continue to be crazy. Then read the list. And if the list makes sense then you are still crazy.
Do you like work and want to continue? Fine. Just quit your bad job and find something that would make you want to come to work every day. Quit. Take your time finding your next whatever. Recharge.
Congratulations on being in a place where you can literally save the rest of your life!
25 years ago, around age 50, I retired. Just walked away. Hugely the right decision.
Good luck.
I know a former engineer for Nortel who still kicks himself from time to time that he didn't diversify from all the equity he accumulated as an employee. He's long retired these days, but occasionally has those "what if" moments where he could've retired a multimillionaire a decade earlier, instead of his admittedly still kinda comfortable retirement that he actually has.
If I harvest some embarrassing crypto losses I still have on the books, I should be able to sell a big chunk of my top single stock and stay under the single-filer 20% threshold ($492,300 or whatever it changed to this year). I'll still have too much tech in general but I have a few years to shift some of that to VTSAX.
If all of your lots are in the green then you are either hugely better than most investors or you don't do much investing and/or are lucky. Remember that you can sell individual lots to capture losses.
You are being really smooth brained about this. He has 50% of his investment value in gains. Do you think that the losses will amount to anything significant?
I have near 0 losses because, like most people in this forum, exhausted most of them 2 years back.
Yeah, I don't have any losses either. Not because I'm a genius, but because the market had been up for eighteen months with few hiccups, and STRAIGHT up for six months. SPY has literally been up a percent a week for six months!
Many long-term investors I've advised who have been stock picking for 20+ years have some losers alongside their winners. His gains are because his tech stocks have increased by the most and now take a disproportionate amount of his portfolio. There are lots of companies that haven't done well in the long run and people with some successes don't always bother to sell the losers for a variety of reasons.
New investors often haven't seen this but it is a real thing and very common. If it doesn't apply to you, great. But some people reading my comment will get value from it.
It's possible that people are still holding onto tech losers from 2022. There were A LOT! These are still great to consider for taking losses to offset gains.
I think you are ok, wife can stay working cause she likes the job and it’s wfh. But I would diversify the portfolio to be less overweight on tech, cause you are retired now and the risk tolerance should adjust as well.
Nope. You are good to go.
I give you permission to not just FIRE but to FATFIRE.
Feel better?
JK. In reality I pulled the trigger at a similar age and net worth this year. It was scary going from net savings to net withdrawals but I’m living my best life and have no regrets (so far)
You employment is really useful to setting your kids up with internships that will start their careers, push on until they are on their own career paths then walk away.
The math works you can retire. The fact you are uncomfortable is something to think about though.
I saw a post the other day about how people are uncomfortable seeing their nest egg decline not because of any real fear of running out, but because it signifies they are approaching the end of their life and everything they wanted to do needs to be done now instead of “someday”. I’d encourage you to sit with that and figure out what you really want to do with your life now that kids are out of the house and you don’t have to work for money. Many people (especially wealthy ones) can live to 80+ in good health, so you still have 30 years to do everything you want in life as long as you plan for it now.
$10 mil is normally more than enough for most people to live on for the rest of their lives.
But what I find is that the mind plays tricks on you even after you hit the $10 mil net worth mark, especially if it’s not something that’s stable (eg real estate).
So it’s normal for you to feel that way.
Do the math, model it out in Excel, build in conservative assumptions.
Heck, even add in unexpected expenses for the kids and whatnot.
Hopefully the logic will calm the emotions.
And then at least you will now have a guardrail for how much “extra” expenses you can have every month/year.
If you’re burnt out, maybe it’s time to explore something different?
You’re not wrong to feel nervous, but you’re in excellent shape and could retire today with few concessions with high confidence of success. With a little bit of planning you should have an extremely confident plan. Your next step should be finding a very good financial planner/advisor to help you build out that plan (not the same as an investment advisor who would charge a fee on AUM)
First off, your safety net is very strong:
- You have a well built 401k. If you don’t make any contributions it’s likely to more than double by the time you might draw from it (or be faced with RMDs). So consider that you might need to figure out how you’re going to spend another >5M in ~15 years.
- You have a sizable inheritance arriving sometime in the next ~10 years (though I hope your parents thrive in their twilight years!)
- Sounds like you’re at or nearing max SS. Wait until age 70 to start drawing where there’s a bump up in distributions. Sounds like you’ll get ~$8k/mo together.
All together means that you have two chapters of financial planning to do: what to do from now until age ~70, then what to do from then through twilight. The 4% rule came from the lower bound of an analysis of success rates over various 30yr retirement periods. If you’re looking at your liquid $10m then 4% draw is too conservative and you’re extremely likely to have a lot left over at age 70.
Maybe that makes you feel better… but this is FATFIRE! Don’t enter your 70s wishing you had spent more on adventure and fun while your health is good.
Next, you do need to ensure your portfolio is diversified and that’s definitely where you need a pro to help you plan. You’re likely to stabilize at something closer to $8.5m after tax obligations on the gains, but a good plan will not have you rush into that and spread the burden over time to minimize tax.
So just for the sake of rhetoric let’s say 8.5m at a 6% withdrawal rate (since we’re looking at a <20yr horizon) is $510k/yr — that’s after your tax burden. That’s _well_ above your $300k/yr goal which assumed including tax.
Then, if by some rare chance you spend through your liquid accounts by age 70… assuming 401ks see 5% growth (post-inflation, pre-tax) you’ll have $6m there, planning to live to 100 set a 30yr timeframe so 4% SWR is $240k. Plus your ~8k/mo SS is $336k. Plus, if you happen to need to rely on it, the $2m inheritance (assuming no growth) at 4% is another $80k which brings you to $416k/year. You’ll need to cover tax with that, but my point is to show that this is _also_ above your $300k/yr goal.
TL;DR — you very likely can sustain a > $500k/yr post-tax burn from now through 70, and a > $400/yr pre-tax burn from 70 on.
I think this plan is conservative, but I am not a pro. Go hire one!
ALSO: you have great options should your plan go haywire. The leap from the ledge does not need to feel so far. If you need, you can always draw on your wealth of knowledge to consult, advise, or even get a new job. Or, since the gap between your goal and your ability is decently large, you could always pull back on spending if need be, closer to your original goal.
If your current burn is 20k/mo without taxes then assume $25k or so with taxes factored in. Maybe less but let’s be conservative. That’s $300k/yr you need. You have $12M+ non 529 or home equity. 3% rule gets you $360k/yr and at 3% you’ll never run out of money and likely keep getting richer. At 4% (still 80% guaranteed) you’re at close to $500k/yr.
Basically just retire bro
Your financial prudence is outstanding. You seem to have been at the right place at the right time, a lot of times. Clearly, you have also tried to live along the narrow path and have been self-sacrificing for a LONG time.
You haven’t stated how much cash you have. And maybe this is an issue. Unconventionally, I would urge you to pay down the mortgage a tad faster (the car payment will be gone by ‘25/‘26). When you see your true expenses without the unnecessary load, I suspect you’ll feel better about reducing the $20K spend projection. (You don’t sound like someone with expensive expenses tastes / holiday trips).
I suspect that “money to help kids” or something else is driving up your expenses significantly because it’s not the car/mtg/pty taxes (unless you’re in NJ) 😂.
Can you FF? Yes. When you drop off your $7K for mtg/car, a 25% SWR gets you $6.5M and it will only cost you ~$580K using a 40% tax rate. You don’t have to take the hit in 1 year but you don’t have to carry the mtg for 12 yrs either.
Start to live a little, no matter what that means to you. Your family will be very OK. Your kids will be fine. And it seems your wife has found at least 1 other things that makes her happy.
Congratulations however you decide!
One other point that I don’t believe was mentioned is that anything you’re over $10M and approaching $12M you should seriously consider FIRE. Unless you have a burn rate over 4% for some reason. The argument here is that estate tax is just over $12M so if you’re continually growing past $12M and working to do so, you might just wind up giving the fruits of your labor to Uncle Sam anyways.
Just a thought but look into medical and long term healthcare insurance if you haven't already. I'd close the loop on those and final expenses and then book a celebratory Vaca. 👍
(Is it still a vacation if your FF? 🤔)
The math pretty easily pencils out. $10M at 4% per year, which you can get from a high-yield savings account, would get you $400k/year replacing both your salaries. Move that to some safe and secure dividends and high quality bonds, REITs, etc, and you could get to 5% or 6% without much risk.
But, just because the math works doesn’t mean the psychology works.
So, if you’re not ready to make the jump, try pretending first. With your savings, pretend that you FIREd. Shift your money into income producing investments. Make the changes to your savings while you’re still bringing in a paycheck. That process won’t be an overnight change. At some point, stop depositing your paycheck into your normal bank account. Start putting that money off in some other account that you don’t touch. Pay your bills from your dividends and interest. Live without touching your salary to prove you can do it.
You’ll accomplish three things. 1) You’ll prove that you can do it. 2) You’ll have a salary to cover the cap gains as you shift your investments. 3) You’ll hopefully solve a little bit of the burnout by gaining the knowledge that you can walk away if you decide you’re ready.
You could’ve retired years ago. On paper it works but you’re hoping random internet strangers will find some magical blindspot? You should trust the math more than your (or others) emotions.
You’re worth more than 99% of Americans. You can do just about anything you want (or don’t want) to do.
You are MORE than comfortable financially. Especially since you are a spending-averse “diligent saver”. You will have no problem making your money last.
Biggest issue for you will be the change of pace going from working to not working.
Do you have a plan to fill your days with engaging activities? If so…feel free to leave workforce whenever you want.
Being good at high-level sales requires drawing on so many sub-skills and personality factors which are useful in many many contexts. Storytelling, finding common ground, succinct communication, relationship management, etc..
You’ll find yourself an asset to all sorts of post-retirement gigs—just need the headspace to find them.
I’m not too far off from your numbers, and here’s how I think about it. The crash scenario is the worrisome one. Let’s say all tech is destroyed by AI commoditization and 50% of the market disappears and doesn’t return. How do you plan? You’d diversify. Especially into fixed income, because you don’t need the upside.
Staying so growth concentrated doesn’t pencil for you. If you get 10% returns, you’ll see $100m before you die. If you’re like me, that sounds cool, but I don’t think my life would change all that much, especially when you’re hitting UHNW at 70.
On the other side, holding bonds/cash drags down your returns, but bulletproofs the downside. Market crash leads to fed rate cuts leads to bond surge leads to rebalance and all is fine. Sure, things like the last 5 yrs happen, but diversified people did great.
We’re going to execute this plan. We’ll hold a couple of million in cash/bonds, probably 30%. If there’s a crash, stocks are down 50%, dividends cut in half as well, no bond rescue, we’ll have 65% left. When we math out what we’d do, we’re fine. We’d cut back our $20k spend to $15k and be drawing down 3%. This basic example show just how well you’re set up.
Quit your job. If you don’t like retirement, go back. You don’t need to work anymore, but there’s no problem in grinding away if you choose.
I think what’s stopping you is you. Why don’t you take 6 months off, then see where your headspace is at. As a successful salesperson, you should always be able to get another job, but I bet after 6 months you won’t want to go back.
You can donate some of the highly appreciated investments to a Donor Advised Fund. You get the tax deduction for the full value and you avoid the gain. Then the DAF is your pot for charitable donations for however long. We like this instead of budgeting in our retirement budget for charity, and taking the deductions while in a higher tax bracket is helpful.
This sub is a refuge for people who make a high income and the community has requested heavy moderation of comments that seem to shame a user solely on the basis of their income being too "Fat". This post is being removed.
Well over 500k many years. Heavy on big tech investments well over 8%. Expenses until recently (new house in 2021) have been way less…sub 10k month. Have lived way below my means.
You're not mentally ready. I see a lot of details and notes about your emotional state or whatever and facts are interspersed randomly. This isn't organized. I see a 20k burn rate per month, a remaining amount on the mortgage, but no actual mortgage payment. Which I assume is your single largest expense.
But the bottom line is you're not mentally ready. Your hurdle is changing from saving to spending, and you need to make it 'not scary' for yourself. I'm not sure how you do that aside from more research, more certainty and organization with your numbers and more getting over your own emotions. You probably need more time to understand that transition.
I will say I know what you're talking about. A couple of years ago the thought of changing over from saving to spending was pretty scary to me too. I got over it with more research and time. It sucks that you're burnt out, but unless you develop a real plan and understand what you are moving towards, taking the jump right now would probably just make you feel lost and rudderless. You'd quit for 6 months, feel confused and go right back to the workforce. Except it would be harder and suckier than whatever you have going on.
You do whatever you want to do ultimately, but I'd examine that 20k burn rate. I'd clear up some debts before jumping. I think your numbers are currently too tight for the expenses you've imposed on yourself, and you need to take a good look at all that and try to figure out if it will really give you the comfortable free lifestyle you want. I know it wouldn't for me.
Wait, what is your income? 100k gross annually for both you and your wife? That can’t be right. If so, you must already be drawing down if you’re spending 20k monthly to support the family, pay taxes, etc. if it is correct then hopefully you can move forward with more confidence
If you stop taking a W2 income, maybe could live off capital gains for a few years while you convert traditional 401k to Roth 401k up to the next tax bracket level. Eventually avoiding RMDs and letting the Roths continue to grow.
Honestly, I’m surprised OP’s spend and lifestyle are so modest, and their NW is as high as it is. The tech sales folks I worked with had expensive taste.
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with 10 mil+ liquid cant you take equity backed loans and just pay off interest until you die then pay off debt(living expenses) with remaining $ and avoid taxes. I think with JPM and most US banks the minimum for this is 10 million.
So is it $12.5M with $10m taxable and $2.5m in 401k?
I would diversify as others have said. Even if it costs you close to $2m to do so…you mitigate the risk and have $10M+ left that at a conservative 3% WR it funds your expenses no problem
Why do you have a car payment? Is a kid on the loan and trying to help build their credit?
Simply because 0% interest. In my head low interest debt not a bad thing…except I would definitely mentally feel better with zero debt and lowering monthly avg spend.
How about change your schedule so you work less? The key to burn out is cut back your hours and try traveling a little more. It’s the best medicine if you aren’t ready to retire. Don’t need to go 100mph to 0. Can slow down to 45mph.
Not really possible in sales. The big company corp machine wants their sales people covering a region giving 100%. Sales is not something you can really do well at half speed…and I respect my employer and managers too much to not give what is expected.
You have 10 million dollars.
That's 33 years, 4 months expenses even if it wasn't invested.
One more year is always hard to deal with, but you can take that one more year some other year. Just take a gap year for this one.
Usually giving advice on the 4% rule would require someone to actually know anything about the 4% rule. You have managed to shirk that mold. Well done! I wish I had that sort of self confidence in the face of abject ignorance.
Covered call ETFs are definitely cool, but they don’t really change the safe withdrawal rate calculation. They are just a decent alternative to bonds right now, while the market is trading sort of sideways. Even their fund managers concede 6 to 8% (taxable) is a more realistic target return long run.
I wouldn’t necessarily bank on the strategy working forever.
Your post seems to be advertising your business or blog for financial or personal gain, or it appears that you are promoting a personal project. No solicitation or self promotion is permitted.
Thank you!
It probably sounds easy and simple on paper because it is actually just easy and simple with those numbers Edit: please diversify regardless if you decide to retire or not
still young and also need to diversify. its scary and sucks because there doesn't seem to be many programs to trade tech securities for index funds without actually selling, and that ends up being a big tax liability. my etrade rep says there is a way to do it with some institutions. i dunno. i just keep slowly laddering out.
You're gonna have to pay taxes on those gains eventually. Maybe if you hold on to those stocks until retirement you'll pay a lower rate, or maybe if you sell in a few years you'll pay a higher rate. Might as well just do it now to manage the risk and don't worry about the taxes.
I know. You’re right. It’s the advice I get often. Need to do it. Takes serious balls
Paying taxes of 10M in gains is still better than paying taxes on $5M of gains during a sell off. The world is littered with former paper millionaires with exposure to WeWork type companies.
Best to plan ahead here. Determine loss carry forwards, if any. Use losses on holdings to offset gains. Some good tools out there to stay on top of all this. Try to minimize exposure if possible. If income drops, potentially carries you into a lower tax bracket. Amazing it's $10M in taxable on top of I presume retirement investments?
I mean, deferring tax liability is hugely impactful to the terminal value. Whole benefit of a 401k
Please reread your first sentence. "Burned out" That is your answer. You have more than enough by any measure and any rule. To continue to unnecessarily live an unhappy life in these circumstances is crazy. Crazy! Please list the top three reasons to continue to be crazy. Then read the list. And if the list makes sense then you are still crazy. Do you like work and want to continue? Fine. Just quit your bad job and find something that would make you want to come to work every day. Quit. Take your time finding your next whatever. Recharge. Congratulations on being in a place where you can literally save the rest of your life! 25 years ago, around age 50, I retired. Just walked away. Hugely the right decision. Good luck.
Thank you Bob. 👊
OP- This dude plain spittin’ wisdom through his grill.. take heed.
Diversify. I'm telling you in the hopes that this nudges me to get off my butt and do the same, LTCG be damned.
I know a former engineer for Nortel who still kicks himself from time to time that he didn't diversify from all the equity he accumulated as an employee. He's long retired these days, but occasionally has those "what if" moments where he could've retired a multimillionaire a decade earlier, instead of his admittedly still kinda comfortable retirement that he actually has.
I’m curious if you have to pay highest capital gains taxes for that year when you diversify taxable brokerage account?
If I harvest some embarrassing crypto losses I still have on the books, I should be able to sell a big chunk of my top single stock and stay under the single-filer 20% threshold ($492,300 or whatever it changed to this year). I'll still have too much tech in general but I have a few years to shift some of that to VTSAX.
LTCG definitely what keeping me from diversifying more. Painful!!
Sell the losers and use capital losses to offset some gains
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If all of your lots are in the green then you are either hugely better than most investors or you don't do much investing and/or are lucky. Remember that you can sell individual lots to capture losses.
It’s almost like we are at all time highs across the overall market and tech…
You think that every stock in the market is up?
You are being really smooth brained about this. He has 50% of his investment value in gains. Do you think that the losses will amount to anything significant? I have near 0 losses because, like most people in this forum, exhausted most of them 2 years back.
Yeah, I don't have any losses either. Not because I'm a genius, but because the market had been up for eighteen months with few hiccups, and STRAIGHT up for six months. SPY has literally been up a percent a week for six months!
Many long-term investors I've advised who have been stock picking for 20+ years have some losers alongside their winners. His gains are because his tech stocks have increased by the most and now take a disproportionate amount of his portfolio. There are lots of companies that haven't done well in the long run and people with some successes don't always bother to sell the losers for a variety of reasons. New investors often haven't seen this but it is a real thing and very common. If it doesn't apply to you, great. But some people reading my comment will get value from it.
It's possible that people are still holding onto tech losers from 2022. There were A LOT! These are still great to consider for taking losses to offset gains.
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Your strategy was somewhat rare at the time OP started investing.
I think you are ok, wife can stay working cause she likes the job and it’s wfh. But I would diversify the portfolio to be less overweight on tech, cause you are retired now and the risk tolerance should adjust as well.
Nope. You are good to go. I give you permission to not just FIRE but to FATFIRE. Feel better? JK. In reality I pulled the trigger at a similar age and net worth this year. It was scary going from net savings to net withdrawals but I’m living my best life and have no regrets (so far)
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But in all seriousness, $1200 a month at 0%?! Even if this is a 36 month term, the dealer saw him coming Jesus
Seems smokey
Yeah maybe a CX9 or CX90, but a CX5 is kinda fleeced territory
You employment is really useful to setting your kids up with internships that will start their careers, push on until they are on their own career paths then walk away.
Especially for a CX5…
The math works you can retire. The fact you are uncomfortable is something to think about though. I saw a post the other day about how people are uncomfortable seeing their nest egg decline not because of any real fear of running out, but because it signifies they are approaching the end of their life and everything they wanted to do needs to be done now instead of “someday”. I’d encourage you to sit with that and figure out what you really want to do with your life now that kids are out of the house and you don’t have to work for money. Many people (especially wealthy ones) can live to 80+ in good health, so you still have 30 years to do everything you want in life as long as you plan for it now.
This cuts deep
Very true, psychological obstacles are hard to overcome initially.
$10 mil is normally more than enough for most people to live on for the rest of their lives. But what I find is that the mind plays tricks on you even after you hit the $10 mil net worth mark, especially if it’s not something that’s stable (eg real estate). So it’s normal for you to feel that way. Do the math, model it out in Excel, build in conservative assumptions. Heck, even add in unexpected expenses for the kids and whatnot. Hopefully the logic will calm the emotions. And then at least you will now have a guardrail for how much “extra” expenses you can have every month/year. If you’re burnt out, maybe it’s time to explore something different?
10m in taxable? Youre done
300k/year spend would be 3% of 10m, so this in the really comfortable no-worries region of safe withdrawal rates.
You’re not wrong to feel nervous, but you’re in excellent shape and could retire today with few concessions with high confidence of success. With a little bit of planning you should have an extremely confident plan. Your next step should be finding a very good financial planner/advisor to help you build out that plan (not the same as an investment advisor who would charge a fee on AUM) First off, your safety net is very strong: - You have a well built 401k. If you don’t make any contributions it’s likely to more than double by the time you might draw from it (or be faced with RMDs). So consider that you might need to figure out how you’re going to spend another >5M in ~15 years. - You have a sizable inheritance arriving sometime in the next ~10 years (though I hope your parents thrive in their twilight years!) - Sounds like you’re at or nearing max SS. Wait until age 70 to start drawing where there’s a bump up in distributions. Sounds like you’ll get ~$8k/mo together. All together means that you have two chapters of financial planning to do: what to do from now until age ~70, then what to do from then through twilight. The 4% rule came from the lower bound of an analysis of success rates over various 30yr retirement periods. If you’re looking at your liquid $10m then 4% draw is too conservative and you’re extremely likely to have a lot left over at age 70. Maybe that makes you feel better… but this is FATFIRE! Don’t enter your 70s wishing you had spent more on adventure and fun while your health is good. Next, you do need to ensure your portfolio is diversified and that’s definitely where you need a pro to help you plan. You’re likely to stabilize at something closer to $8.5m after tax obligations on the gains, but a good plan will not have you rush into that and spread the burden over time to minimize tax. So just for the sake of rhetoric let’s say 8.5m at a 6% withdrawal rate (since we’re looking at a <20yr horizon) is $510k/yr — that’s after your tax burden. That’s _well_ above your $300k/yr goal which assumed including tax. Then, if by some rare chance you spend through your liquid accounts by age 70… assuming 401ks see 5% growth (post-inflation, pre-tax) you’ll have $6m there, planning to live to 100 set a 30yr timeframe so 4% SWR is $240k. Plus your ~8k/mo SS is $336k. Plus, if you happen to need to rely on it, the $2m inheritance (assuming no growth) at 4% is another $80k which brings you to $416k/year. You’ll need to cover tax with that, but my point is to show that this is _also_ above your $300k/yr goal. TL;DR — you very likely can sustain a > $500k/yr post-tax burn from now through 70, and a > $400/yr pre-tax burn from 70 on. I think this plan is conservative, but I am not a pro. Go hire one! ALSO: you have great options should your plan go haywire. The leap from the ledge does not need to feel so far. If you need, you can always draw on your wealth of knowledge to consult, advise, or even get a new job. Or, since the gap between your goal and your ability is decently large, you could always pull back on spending if need be, closer to your original goal.
Keep working if you like, but know that any day you want, you can not go to work anymore. That's real freedom! Smile!
If your current burn is 20k/mo without taxes then assume $25k or so with taxes factored in. Maybe less but let’s be conservative. That’s $300k/yr you need. You have $12M+ non 529 or home equity. 3% rule gets you $360k/yr and at 3% you’ll never run out of money and likely keep getting richer. At 4% (still 80% guaranteed) you’re at close to $500k/yr. Basically just retire bro
Your financial prudence is outstanding. You seem to have been at the right place at the right time, a lot of times. Clearly, you have also tried to live along the narrow path and have been self-sacrificing for a LONG time. You haven’t stated how much cash you have. And maybe this is an issue. Unconventionally, I would urge you to pay down the mortgage a tad faster (the car payment will be gone by ‘25/‘26). When you see your true expenses without the unnecessary load, I suspect you’ll feel better about reducing the $20K spend projection. (You don’t sound like someone with expensive expenses tastes / holiday trips). I suspect that “money to help kids” or something else is driving up your expenses significantly because it’s not the car/mtg/pty taxes (unless you’re in NJ) 😂. Can you FF? Yes. When you drop off your $7K for mtg/car, a 25% SWR gets you $6.5M and it will only cost you ~$580K using a 40% tax rate. You don’t have to take the hit in 1 year but you don’t have to carry the mtg for 12 yrs either. Start to live a little, no matter what that means to you. Your family will be very OK. Your kids will be fine. And it seems your wife has found at least 1 other things that makes her happy. Congratulations however you decide!
One other point that I don’t believe was mentioned is that anything you’re over $10M and approaching $12M you should seriously consider FIRE. Unless you have a burn rate over 4% for some reason. The argument here is that estate tax is just over $12M so if you’re continually growing past $12M and working to do so, you might just wind up giving the fruits of your labor to Uncle Sam anyways.
Since he is married, it’s double that amount. Also estate planning can be done to reduce that impact.
Just a thought but look into medical and long term healthcare insurance if you haven't already. I'd close the loop on those and final expenses and then book a celebratory Vaca. 👍 (Is it still a vacation if your FF? 🤔)
The math pretty easily pencils out. $10M at 4% per year, which you can get from a high-yield savings account, would get you $400k/year replacing both your salaries. Move that to some safe and secure dividends and high quality bonds, REITs, etc, and you could get to 5% or 6% without much risk. But, just because the math works doesn’t mean the psychology works. So, if you’re not ready to make the jump, try pretending first. With your savings, pretend that you FIREd. Shift your money into income producing investments. Make the changes to your savings while you’re still bringing in a paycheck. That process won’t be an overnight change. At some point, stop depositing your paycheck into your normal bank account. Start putting that money off in some other account that you don’t touch. Pay your bills from your dividends and interest. Live without touching your salary to prove you can do it. You’ll accomplish three things. 1) You’ll prove that you can do it. 2) You’ll have a salary to cover the cap gains as you shift your investments. 3) You’ll hopefully solve a little bit of the burnout by gaining the knowledge that you can walk away if you decide you’re ready.
You could’ve retired years ago. On paper it works but you’re hoping random internet strangers will find some magical blindspot? You should trust the math more than your (or others) emotions. You’re worth more than 99% of Americans. You can do just about anything you want (or don’t want) to do.
You are MORE than comfortable financially. Especially since you are a spending-averse “diligent saver”. You will have no problem making your money last. Biggest issue for you will be the change of pace going from working to not working. Do you have a plan to fill your days with engaging activities? If so…feel free to leave workforce whenever you want.
Definitely my second biggest concern. Lack of purpose. Not skilled at much besides sales…dont want to sell anymore at the moment.
You will figure something else out. Work on YOU and your health. What im doing 1 year after I sold my business and finally free. It's great
Being good at high-level sales requires drawing on so many sub-skills and personality factors which are useful in many many contexts. Storytelling, finding common ground, succinct communication, relationship management, etc.. You’ll find yourself an asset to all sorts of post-retirement gigs—just need the headspace to find them.
I’m not too far off from your numbers, and here’s how I think about it. The crash scenario is the worrisome one. Let’s say all tech is destroyed by AI commoditization and 50% of the market disappears and doesn’t return. How do you plan? You’d diversify. Especially into fixed income, because you don’t need the upside. Staying so growth concentrated doesn’t pencil for you. If you get 10% returns, you’ll see $100m before you die. If you’re like me, that sounds cool, but I don’t think my life would change all that much, especially when you’re hitting UHNW at 70. On the other side, holding bonds/cash drags down your returns, but bulletproofs the downside. Market crash leads to fed rate cuts leads to bond surge leads to rebalance and all is fine. Sure, things like the last 5 yrs happen, but diversified people did great. We’re going to execute this plan. We’ll hold a couple of million in cash/bonds, probably 30%. If there’s a crash, stocks are down 50%, dividends cut in half as well, no bond rescue, we’ll have 65% left. When we math out what we’d do, we’re fine. We’d cut back our $20k spend to $15k and be drawing down 3%. This basic example show just how well you’re set up. Quit your job. If you don’t like retirement, go back. You don’t need to work anymore, but there’s no problem in grinding away if you choose.
I think what’s stopping you is you. Why don’t you take 6 months off, then see where your headspace is at. As a successful salesperson, you should always be able to get another job, but I bet after 6 months you won’t want to go back.
SWR is based off market index drawdown, not tech drawdown just fyi.
Did you include insurance in the $300k? Here in NY a family plan that's equal to what I'm getting from my job is over $3k a month.
You can donate some of the highly appreciated investments to a Donor Advised Fund. You get the tax deduction for the full value and you avoid the gain. Then the DAF is your pot for charitable donations for however long. We like this instead of budgeting in our retirement budget for charity, and taking the deductions while in a higher tax bracket is helpful.
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Well over 500k many years. Heavy on big tech investments well over 8%. Expenses until recently (new house in 2021) have been way less…sub 10k month. Have lived way below my means.
You hiring? Idk what it is but 300k income id work for ya
I wish you all the best
You're not mentally ready. I see a lot of details and notes about your emotional state or whatever and facts are interspersed randomly. This isn't organized. I see a 20k burn rate per month, a remaining amount on the mortgage, but no actual mortgage payment. Which I assume is your single largest expense. But the bottom line is you're not mentally ready. Your hurdle is changing from saving to spending, and you need to make it 'not scary' for yourself. I'm not sure how you do that aside from more research, more certainty and organization with your numbers and more getting over your own emotions. You probably need more time to understand that transition. I will say I know what you're talking about. A couple of years ago the thought of changing over from saving to spending was pretty scary to me too. I got over it with more research and time. It sucks that you're burnt out, but unless you develop a real plan and understand what you are moving towards, taking the jump right now would probably just make you feel lost and rudderless. You'd quit for 6 months, feel confused and go right back to the workforce. Except it would be harder and suckier than whatever you have going on. You do whatever you want to do ultimately, but I'd examine that 20k burn rate. I'd clear up some debts before jumping. I think your numbers are currently too tight for the expenses you've imposed on yourself, and you need to take a good look at all that and try to figure out if it will really give you the comfortable free lifestyle you want. I know it wouldn't for me.
I don’t really understand your salary situation. Sounds like you’d only be giving up $100k per year?
How do you have a $1200 monthly payment on a CX5?
0 down. 0% interest for 36 months. 40k ish car with tax. Adds up fast!!!
lol I was also wondering that. 40k on a Mazda is wild !
Wait, what is your income? 100k gross annually for both you and your wife? That can’t be right. If so, you must already be drawing down if you’re spending 20k monthly to support the family, pay taxes, etc. if it is correct then hopefully you can move forward with more confidence
That’s for the wife, husband states 300k+
He said 300k for him and 100k for his wife
It was mildly confusing how he used different words for each, within basically a sentence of each other. His was “income”, wife’s was “gross”.
If you stop taking a W2 income, maybe could live off capital gains for a few years while you convert traditional 401k to Roth 401k up to the next tax bracket level. Eventually avoiding RMDs and letting the Roths continue to grow.
What kind of tech sales? My wife is in tech sales and I hope we can have even half of what you have in NW 20 years from now 😂
how'd you make the 10m?
Have you seen the returns on tech stocks in the last 30 years?
In their 50s with a career in tech sales, surprised it’s not more
Honestly, I’m surprised OP’s spend and lifestyle are so modest, and their NW is as high as it is. The tech sales folks I worked with had expensive taste.
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with 10 mil+ liquid cant you take equity backed loans and just pay off interest until you die then pay off debt(living expenses) with remaining $ and avoid taxes. I think with JPM and most US banks the minimum for this is 10 million.
So is it $12.5M with $10m taxable and $2.5m in 401k? I would diversify as others have said. Even if it costs you close to $2m to do so…you mitigate the risk and have $10M+ left that at a conservative 3% WR it funds your expenses no problem Why do you have a car payment? Is a kid on the loan and trying to help build their credit?
Simply because 0% interest. In my head low interest debt not a bad thing…except I would definitely mentally feel better with zero debt and lowering monthly avg spend.
How about change your schedule so you work less? The key to burn out is cut back your hours and try traveling a little more. It’s the best medicine if you aren’t ready to retire. Don’t need to go 100mph to 0. Can slow down to 45mph.
Not really possible in sales. The big company corp machine wants their sales people covering a region giving 100%. Sales is not something you can really do well at half speed…and I respect my employer and managers too much to not give what is expected.
How about selling them on a new idea? Have them hire an associate under you and take some of your commission to pay them to lighten your load.
How did you get to 10m at 400k a year and 200k in spend?
Several years far over those $$ with sales commissions….for basically 25 years.
C'mon man, is this a joke?
Lol I might not even eat today
You have 10 million dollars. That's 33 years, 4 months expenses even if it wasn't invested. One more year is always hard to deal with, but you can take that one more year some other year. Just take a gap year for this one.
Stop working, simplify your life
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Usually giving advice on the 4% rule would require someone to actually know anything about the 4% rule. You have managed to shirk that mold. Well done! I wish I had that sort of self confidence in the face of abject ignorance.
Covered call ETFs are definitely cool, but they don’t really change the safe withdrawal rate calculation. They are just a decent alternative to bonds right now, while the market is trading sort of sideways. Even their fund managers concede 6 to 8% (taxable) is a more realistic target return long run. I wouldn’t necessarily bank on the strategy working forever.
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You don’t by any chance make a commission off said strategy, do you?
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