Done being an employee (by choice)

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Me too, fellow PE but won’t make 55. That’s almost too long to not be in management. Seems the “doers” age out when their hourly rate goes too high compared to fresh grads.
I am in a unique position that does not involve consulting/billing rates any longer, so that helps. However I did say 'by' 55, so it could be sooner as long as chit doesn't hit the fan. 😆

I'm probably considered a Boglehead/F.I.R.E. hybrid, although not a staunch follower of either movement. Started using similar tactics long before I heard of either.

Oh, and I don't plan to quit working, just find something else to do that's easier on the cranium.
 
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I am not an active Boglehead and too old for FIRE but I always lived below my means, I just learned a lot from my dad and decided to go the conservative route versus the gambling route. A gambler will always tell you about their winnings but rarely about their losses. I have some stocks that my dad convinced me to buy with paper route money. I think I bought the GTE (former phone company) shares for about the same price I bought a 10 speed Schwinn bike when I was 15. I still have both, the Schwinn isnt worth much but the Verizon shares are worth 20K.

I must admit I do not mind Vanguard PFS managing my investments. The cost is cheap and the return is well above the cost. The market and the news goes up and down but I dont worry about it. My rule is anything under 10% decline is just "noise"
 
Well it took longer than I expected, but I am now officially retired. The projects I was supporting as a contractor since January both ran long. One got running in early summer but its got a major component that was designed incorrectly, it took months to realize it and it will be sometime next year before its fixed. The other project just ran long. Its finally passed its performance tests in October but still has a lot of punch list times left. Both projects are way over budget, so they decided not to pay us to support them anymore. I really dont mind.

No doubt if I wanted to continue working I could, but not in the mood and dont need the money. No major plans yet but lots of home projects that got delayed plus my broken ankle seems to be healed up so lots more chances to go play in the woods.
 
Well my work was making it so hard on us older employees that I took my commuted value of my pension and left at 56 years.i wanted to work till 63 but looking back I'm glad I left.company wanted all the long terms out as the replacements they hired were at half the wages with fewer benefits.
 
Good to hear that you are healing well. Now don't break anything else and enjoy retirement!
 
Great thread, peakbagger. Congratulations on completion of one phase, and good luck on whatever the next brings.

I'm in a somewhat-similar situation to you, in more ways than I care to explain here, and it's been both exciting and a little daunting to figure out what's next.

I'll second all the financial advice you gave in subsequent posts. We have always placed investment and zero debt above all else, and this has served us well, saving us enormously in the long run. I'm a little surprised you were eligible to contribute to a Roth IRA, due to the low maximum allowable income limits, but perhaps you were re-converting from a new standard IRA each year. I did that once, but didn't keep up with it, there were easier mechanisms available for my situation.

Young folks, if you're not maximizing your allowable 401k and IRA contributions, then stop buying new chit and get on it. If you say you can't afford it, you are wrong, change your lifestyle accordingly. I lived much poorer than my friends and associates thru my 20's and 30's, so that I could enjoy financial independence by my 40's, and I'm glad I did this. Now they're all wondering how I can afford to walk away from full-time employment in my late 40's, while some of them will be slaving to save for retirement starting too late, or even worse... paying off debt they racked up while young.

If you're not at least maximizing any available company match on your 401k, you are throwing away free money... money which will grow faster than you can earn.
 
Thanks, I was clearing the home office of 15 plus years of accumulated paper copies from projects that were incredibly handy to have when I needed them but now go to the sorted mixed office recycling bin and found the disbursement letter from the bank that was holding my "Payment Reserve Fund" which was their name for an IRA in August of 1987. The total lump sum distribution was $3,055.87. It got invested in a Rowe Price Capital Reserve fund, a very conservative mutual fund with a blend of stocks and bonds, its the same acount number and I have done nothing with it except let it sit there for 35 years. The same $3K is now worth $115K even with a down market. I think I paid around 14K for my long gone Pontiac Fiero about that time. so about 20% of what my car was worth. Use the same math and I would be looking into Ferrari territory 575K now ;).

I think the greatest gift to a kid in college is give them a Roth IRA and then once they are working make them match it so they get in the habit. Do that for several years and the account is on autopilot, no worries about if SS will still be around as 35 or 40 years of growth will make it into a pretty darn good retirement. If they want to buy a house they can even raid the Roth principle for a down payment as what they put in it has no penalties or taxes for withdrawal. With ETFs the initial Roth investment can be real low. The same can be done with folks under 18 as long as they are earning the amount of the Roth contribution.

I am conservative investor, except for some old phone company stock I bought with paper route profits and some Berkshire B, it is all in a relatively conservative collection of mutual funds and ETFs managed by Vanguard. Sure, I missed out on the big profits on high flyers but I also missed out on the big losses and hindsight is 20/20. If I play it right I will not even have to worry about RMD as much of my funds are in Roth's.

I was right on the edge of Roth 401K contributions as a single person some years. I did a big Roth conversion one year where I could spread the taxes over two years (a one time thing) it was a very down market and I got close to the low to do the rollover and that one transaction made a big difference in my Roth balances.

I have always tried to live for less than the paycheck, the only loans were for cars long ago and they got paid off early. I paid my mortgage off in less than half its term by making additional payments towards principal. Once the debts are paid off, its surprising how much can be invested. BTW, my dad in the 1950s was taking a financial course and did a presentation on how SS was unstainable in the long term. I grew up in the seventies and most financial folks on the news were telling us that SS would be gone and not to plan for it. I didnt and could live without it as I dont plan to file until 70.

Now the tough part, becoming a spender instead of a saver now that I am retired.
 
Great thread, peakbagger. Congratulations on completion of one phase, and good luck on whatever the next brings.

I'm in a somewhat-similar situation to you, in more ways than I care to explain here, and it's been both exciting and a little daunting to figure out what's next.

I'll second all the financial advice you gave in subsequent posts. We have always placed investment and zero debt above all else, and this has served us well, saving us enormously in the long run. I'm a little surprised you were eligible to contribute to a Roth IRA, due to the low maximum allowable income limits, but perhaps you were re-converting from a new standard IRA each year. I did that once, but didn't keep up with it, there were easier mechanisms available for my situation.

Young folks, if you're not maximizing your allowable 401k and IRA contributions, then stop buying new chit and get on it. If you say you can't afford it, you are wrong, change your lifestyle accordingly. I lived much poorer than my friends and associates thru my 20's and 30's, so that I could enjoy financial independence by my 40's, and I'm glad I did this. Now they're all wondering how I can afford to walk away from full-time employment in my late 40's, while some of them will be slaving to save for retirement starting too late, or even worse... paying off debt they racked up while young.

If you're not at least maximizing any available company match on your 401k, you are throwing away free money... money which will grow faster than you can earn.
This is something I have thought about a fair amount. Being in my 20's, $26,500 post tax (roth 401K and roth IRA) per person would be a quite tough to achieve between my wife and I, but I suppose it could be done with a fairly significant change.... Exceeding employer match is quite easy for both of us and I have adopted a 1% per year contribution increase up to 20%, but that may go higher if I don't meet contribution cutoff first. Perhaps I need to work out some numbers and make 2% work. House renovations make this a little more tough. Hopefully this doesn't put me too far behind.
 
Just put all your raises to the retirement savings. It'll go quick. You are already used to the higher cost of living the month before you get your raise, so it's not a sudden belt tightening, but a gradual one over the year. You essentially live on equal money, and tighten the budget thru inflation, with all the additional income going to the savings.
 
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I am of the opposite opinion. Work is underrated imo. The challenges it brings to my brain, the usefulness of what I do to others, the social contacts, the being forced to prioritize how personal time is spent because of having less time to BS around, etc etc. It's good for me.
 
I am of the opposite opinion. Work is underrated imo. The challenges it brings to my brain, the usefulness of what I do to others, the social contacts, the being forced to prioritize how personal time is spent because of having less time to BS around, etc etc. It's good for me.
Agreed...humans need purpose...sitting around waiting on mail money doesn't cut it...
 
I'm in my 40's also and I have friends that have zero saved for retirement. I've asked them what they plan on living on when they retire. The resounding answer is "I'll work until I'm dead". Every time you turn around they are buying the latest and greatest gadget. They probably spend more money in gadgets on a monthly basis than what my mortgage payment is. And then you ask a few months later about XYZ gadget and they've moved onto something else. I understand the importance of having a hobbies but I don't get the unneeded consumerism of today. I did go a little overboard on my OWB project but I figured Uncle Joe is giving me 26% back, why not.

Without a spouse I couldn't retire in my 40's or 50's if I wanted to. Health care costs would just eat me alive. I'll probably have to wait until I'm in my 60's to give up working a full time job with benefits. I'll probably stick with my semi-part time job at my farm until I physically can't or don't want to do it. It's nice to get outside and get away from a computer.

I think the greatest gift to a kid in college is give them a Roth IRA and then once they are working make them match it so they get in the habit. Do that for several years and the account is on autopilot, no worries about if SS will still be around as 35 or 40 years of growth will make it into a pretty darn good retirement.
This is great idea. I'll have to look into this for my daughter. I'm a firm believer in set and forget it, or paying a professional to actively manage the account.
 
Thanks, I was clearing the home office of 15 plus years of accumulated paper copies from projects that were incredibly handy to have when I needed them but now go to the sorted mixed office recycling bin and found the disbursement letter from the bank that was holding my "Payment Reserve Fund" which was their name for an IRA in August of 1987. The total lump sum distribution was $3,055.87. It got invested in a Rowe Price Capital Reserve fund, a very conservative mutual fund with a blend of stocks and bonds, its the same acount number and I have done nothing with it except let it sit there for 35 years. The same $3K is now worth $115K even with a down market. I think I paid around 14K for my long gone Pontiac Fiero about that time. so about 20% of what my car was worth. Use the same math and I would be looking into Ferrari territory 575K now ;).

I think the greatest gift to a kid in college is give them a Roth IRA and then once they are working make them match it so they get in the habit. Do that for several years and the account is on autopilot, no worries about if SS will still be around as 35 or 40 years of growth will make it into a pretty darn good retirement. If they want to buy a house they can even raid the Roth principle for a down payment as what they put in it has no penalties or taxes for withdrawal. With ETFs the initial Roth investment can be real low. The same can be done with folks under 18 as long as they are earning the amount of the Roth contribution.

I am conservative investor, except for some old phone company stock I bought with paper route profits and some Berkshire B, it is all in a relatively conservative collection of mutual funds and ETFs managed by Vanguard. Sure, I missed out on the big profits on high flyers but I also missed out on the big losses and hindsight is 20/20. If I play it right I will not even have to worry about RMD as much of my funds are in Roth's.

I was right on the edge of Roth 401K contributions as a single person some years. I did a big Roth conversion one year where I could spread the taxes over two years (a one time thing) it was a very down market and I got close to the low to do the rollover and that one transaction made a big difference in my Roth balances.

I have always tried to live for less than the paycheck, the only loans were for cars long ago and they got paid off early. I paid my mortgage off in less than half its term by making additional payments towards principal. Once the debts are paid off, its surprising how much can be invested. BTW, my dad in the 1950s was taking a financial course and did a presentation on how SS was unstainable in the long term. I grew up in the seventies and most financial folks on the news were telling us that SS would be gone and not to plan for it. I didnt and could live without it as I dont plan to file until 70.

Now the tough part, becoming a spender instead of a saver now that I am retired.
PB, congrats on making it to retirement. I literally followed your same playbook since I was about 15. I read your two recommended books when I was in my mid 20's, and they resonated clearly with me at the time.

Two things,

Vanguard PAS is one of Vanguard's most profitable businesses. I don't believe the actual PAS corporation is operating at cost, as thier funds operate. It's a recurring fee that someone with an engineering background can easily avoid. It also goes against Jack Bogle's teachings to pay for this (it way more than doubles the cost of using the funds alone). The only real value they provide is performance reporting, and discipline, if you get jumpy during deep bear markets.

The second thing is SS. Start taking that as soon as you are eligible. It's a mistake to wait until you are a miserable, invalid, geriatric, at great risk of dying and getting either nothing, or falling far short of the years it takes to break even, if you wait. The government loves when people wait, and they play on folks fears and bias toward self preservation and ignorance of the actuarial tables. Live and spend when you are young enough to enjoy it. The end of life crap is totally miserable whether you are getting a little higher payout for a couple of years, or not.

I used to do this stuff for a living, and these are the insights I gained over 20 yrs in the business. Then I retired when I was 45.
 
Live and spend when you are young enough to enjoy it. The end of life crap is totally miserable whether you are getting a little higher payout for a couple of years, or not.
As with all things, I think there's a balance. My mother spent her 60's and 70's traveling the world, but could only do so by having NOT spent it all when she was young. She has friends who couldn't afford to do anything in retirement, their loss. Things are busy enough in younger life for most folks, building a career and a family, that at least for me, any lack of toys and travel is barely missed.

There's also always the concern of what you're leaving behind for your family in your absence, me coming from two generations of men who both passed very young (ages 26 and 48). If the new sports car or power boat I skip today helps my kids afford college or other start in life down the road, whether I'm here to enjoy it or not, I'll consider it a good decision. I'm not without toys or enjoyment, but I moderate them to a relatively small fraction of my income.
 
Agreed...humans need purpose...sitting around waiting on mail money doesn't cut it...
Working your brain doesn't have to be for the man. There are plenty of challenges at the community and non-profit level that can use your talent.
 
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Working your brain doesn't have to be for the man. There are plenty of challenges at the community and non-profit level that can use your talent.
Absolutely
 
Congrats on retirement peakbagger. Your advice on paying ahead on mortgage is spot on. The wife and I live alot more (poorly) than alot of or friends of same age. (Late 20s to late 30s) but we pay out cars in cash. And are on track to hopefully pay off mortgage in 10yrs. We hope to be able to start a homestead that is paid for by our 50s. Congrats again
 
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Congrats on retirement peakbagger. Your advice on paying ahead on mortgage is spot on. The wife and I live alot more (poorly) than alot of or friends of same age. (Late 20s to late 30s) but we pay out cars in cash. And are on track to hopefully pay off mortgage in 10yrs. We hope to be able to start a homestead that is paid for by our 50s. Congrats again
This is a good plan, and will give you a lot of flexibility in life, not having to worry about this. I have paid off each of the houses I've owned in about 10 years, and believe that if everyone chose their home based on what they could afford to pay off in that time, our country would be in a much better place in many other respects. It meant driving beater cars when friends were rushing out to take on payments on new vehicles, but it was a short-term pain for a long-term gain. The difference in rates alone on a 15 vs. 30 year mortgage can save you enormously, even before stepping up the payment plan on your own, to finish in 10 years.
 
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BTW, I have brought it up before and will do so again, pick up the book "The Millionaire Next Door" and read it. Its getting a bit dated with some content, but the fundamentals are still right on. Folks who live beyond their means are rarely going to get ahead in the long run. Live below your means starting out and get investments going, then let the power of compounding do its thing.

The current FIRE movement has taken it to the extreme and is probably overhyped and overboard (like everything else on the internet) and unobtainable except for high earners and childless couples but look at some of the basics and it comes down to live dirt cheap when young and invest the rest, then let the investments get to the point where they can retire or do something they like with pay not being important. In most cases they include active real estate investments and that is something I did not do. I am not advocating that extreme approach, but it sure beats the party young and hope to die early before the bills catch up approach.
 
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BTW, I have brought it up before and will do so again, pick up the book "The Millionaire Next Door" and read it. Its getting a bit dated with some content, but the fundamentals are still right on. Folks who live beyond their means are rarely going to get ahead in the long run. Live below your means starting out and get investments going, then let the power of compounding do its thing.

The current FIRE movement has taken it to the extreme and is probably overhyped and overboard (like everything else on the internet) and unobtainable except for high earners and childless couples but look at some of the basics and it comes down to live dirt cheap when young and invest the rest, then let the investments get to the point where they can retire or do something they like with pay not being important. In most cases they include active real estate investments and that is something I did not do. I am not advocating that extreme approach, but it sure beats the party young and hope to die early before the bills catch up approach.
I would also recommend "Your Money or Your Life" by Joel Dominguez and Vicki Robin. It is about transforming your relationship with money. This should be essential for high school senior reading. Another good book is The Seven Laws of Money by Michael Phillips.
 
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I wish that investing and making my money work for me was half as interesting as my profession, or even talking about wood stoves. But for me, it's not. Different strokes for different folks, I guess.

So, for the rest of you, find a good financial advisor. I have three, with one managing more than half our total assets, and rely on them to make better decisions with my money than I ever will have the energy to do on my own. Sure, they're costing me a little money, but not nearly as much as my performance might lag theirs in trying to DIY a portfolio of this size. It also frees up time for me to fight the oil man by playing lumberjack evenings and weekends, and although I've not tallied that against their costs, I'm probably putting a good dent in their costs to me, at my rate of wood consumption.
 
I wish that investing and making my money work for me was half as interesting as my profession, or even talking about wood stoves. But for me, it's not. Different strokes for different folks, I guess.

So, for the rest of you, find a good financial advisor. I have three, with one managing more than half our total assets, and rely on them to make better decisions with my money than I ever will have the energy to do on my own. Sure, they're costing me a little money, but not nearly as much as my performance might lag theirs in trying to DIY a portfolio of this size. It also frees up time for me to fight the oil man by playing lumberjack evenings and weekends, and although I've not tallied that against their costs, I'm probably putting a good dent in their costs to me, at my rate of wood consumption.
Compare your financial advisors performance, net of fees, to the closest asset allocation set forth in Vanguard's series of Life strategy funds (they all use index funds and rebalance using cash flows). Better yet, ask them to do it and watch their reaction. 5 years isn't quite enough, 10 years is, in most environments, and at 20 years and longer, it's glaringly obvious.

The chances that they are earning thier fees and adding value above that, is so low as to be statistically insignificant over most time periods, gets worse the longer you do it.

Jack Bogle called advisors "croupiers", and he rightly said that anything you pay them, goes against your returns, compounds, and collectively, thier returns will be that much less than the markets. His quote "You get what you don't pay for" in the context of advisor fees, is exactly right, and indisputable. All outperformance to an appropriately indexed benchmark, at an individual level , is temporary and transitory, and purely based on luck, rather than skill.

It doesn't require you to be in any way interested in investing. It only requires a little research to confirm what I've said, and to make a decision that will add to your long term wealth in ways that are hard for folks to comprehend, over the length of time relevant to individuals.

Your humble bragging doesn't look good here, and your recommendation for people to follow in your costly miscalculation is doing no one any service.

Do yourself a favor, read a copy of Charles Ellis' "Winning the Losers Game". When you get done with that, if you keep paying advisors so much of your hard earned money, well, you know what they say...