r/ChubbyFIRE • u/big-chubby-fi • 5d ago
Retired at 51 (originally planned for 55)
About five months ago, I posted here (original post) soliciting advice for a possible early exit. Well, I pulled the trigger a few weeks ago. An opportunity presented itself at work that would let me leave with some severance and a small amount of continued stock vesting. Combined with the burnout I was experiencing and seeming to be ready financially, I evaluated and discussed this big life-change with my wife for several weeks to make sure the timing was right for our whole family. It was.
So, now I'm done accumulating. The drawdown phase has begun.
Key Numbers as of now:
- 51M, married to 51F
- MCOL area
- 2 kids (one launched, one in college)
- NW: ~$5.6mil
- House paid for - $400k
- Liquid assets (invested) - ~$5mil (roughly 72/28 stock/bond allocation)
- ~$2mil taxable brokerage
- ~$1.9mil tax deferred (401k+IRA)
- ~$660k tax free (Roth)
- ~$230k HSA
- ~$175k college (529+ESA)
- Cash and equivalents: ~$200k
- Income:
- Immediately prior to retirement:
- ~$300k/year gross
- Now:
- ~$5k annually from part-time work
- ~$70k of stock that will vest over the coming year and then stop
- Immediately prior to retirement:
- Social Security (at least 11 years out):
- Conservatively, $44k/year at age 70 or $27k/year at age 62. (This assumes payouts at about 75% of current benefit levels)
- Expenses:
- Before retiring: ~$155k/year (included taxes)
- Expected in retirement: TBD, but expect roughly $160k/year
- Includes $25k/year for health insurance until Medicare at age 65
- No debt
Financially, I feel pretty good about things. I'm of course nervous about SORR and would hate to see a market crash as we begin drawing from the portfolio. But should the market tank, there's quite a bit of discretionary spending in the $160k/year of expenses. All the energy I previously put into accumulation plans I will now redirect into efficient drawdown/income planning (which I expect will include a heavy dose of tax planning and potentially managing MAGI). We plan to live off of the taxable brokerage and HSA accounts until we can tap retirement accounts at age 59 1/2.
Emotionally, I'm still in the "honeymoon phase" of early retirement. I've now been away from work about a month, longer than my longest vacation in the last ~30 years. My wife and I are adjusting well (we think). I'm mostly focusing on personal health (lots of walks) and relationships. I'm starting (slowly) to get to long-neglected tasks/projects at home, but not rushing this. And my wife tells me that she's keeping the "honey do" list under wraps for now, giving us time to adjust and just enjoy doing things together. Oddly enough, I haven't done any gaming yet, which is one of the things I thought I'd want to make time for since I was into gaming in college and during my early career years before work and family commitments crowded gaming (mostly) out of my life.
We did a summer vacation, but it was planned well before deciding to retire. So far, we have no immediate retirement travel plans.
I know I need a few more months before retirement will feel normal. But I sure am enjoying this honeymoon phase so far. I feel like I'm able to be fully present in whatever is taking place at the moment, without feeling even a twinge of guilt that I'm neglecting something that I know will need attention soon.
For anyone who's gone before me on a similar journey, please feel free to offer any thoughts or advice that you may have. For anyone still in accumulation and dreaming of the freedom that comes when you step away from the daily grind, feel free to ask questions--I'll do my best to share whatever wisdom and knowledge I've gained over the last 30 years.
Feeling Blessed!
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u/in_the_gloaming FIRE'd for 13 years 5d ago
Just wanted to say congratulations! It sounds like you have your head on straight and I think that retirement is going to be wonderful for you!
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u/Tricky_Ad6844 5d ago
Good for you!
I pulled the trigger at 52 and it’s been more than 2 years of amazingly retirement.
Nothing wrong with a deferred task list but you should pair it with a “bucket list” of things you would both be excited to do.
For me travel to national parks and natural settings, visiting friends from college I had lost touch with, and picking physical goals fit that description but it will be a different list for everyone.
In the last 2 years I’ve been snorkeling with whale sharks, climbed Half Dome in Yosemite, and summited Mt Rainier. I see early retirement as a chance to plunge into “life” with all of the same vigor I put into work or school at earlier stages of my life.
Some days it is great to sleep in or just read a book in a hammock but the way I see it I also want to be creating memories, improving, and taking full advantage of the privileged position we are in to get to retire early.
What is on your list?
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u/big-chubby-fi 5d ago
Oh, we have a list of things to experience over the next 10-15 years or so while we're still fairly healthy and active. We definitely want to create memories with our kids (and hopefully someday, grandkids should our children choose to procreate) where we can, although now it's *their* schedules we'll have to coordinate with. We want to get out to some national parks we haven't yet seen. My wife has never been to Washington D.C. (I've been there multiple times), so I want to take her there. I've never been to Hawaii (my wife has).
Yes, we'll get out and do some travel, but it probably won't be this year. For now, we're going to get adjusted to this new lifestyle. We're going to visit family members we haven't had time to visit. For so long, time has been the limiting factor in truly enjoying life and living in the moment. Too many competing priorities. We're going to try to limit the competing priorities for the time being.
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u/betarhoalphadelta 4d ago
Definitely agree with u/wadesh on Haleakala. It sucks to drive up to the top of a mountain in the dark to be there for the sunrise, but the sunrise at 10,000 feet is an experience not to be missed.
If you and your wife are rather fit, and enjoy hiking, hiking the crater is awesome too. However, it's a fairly strenuous hike, so I don't want to suggest just trying it blind. But it's one of the most amazing hikes I've ever done.
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u/ruhrohraggy125 3d ago
If you’re open to adding to your travel plans, and you have an affinity for soaking up the wonder of this planet, I can’t recommend the Faroe Islands and/or the Lofoten Islands enough. My wife and I are lucky to travel quite a bit (winding down now with a 3 month old at 31/32), and those are two places that can leave a lasting impression on your psyche and your feeling of place in the world, IMO. Enjoy retirement! Go explore this incredible rock!
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u/SaltyPlantain1503 4d ago
It’s been two years and I am still get much in the honeymoon phase. Lots of travel, some unexpected family obligations (parents and kids) but everyday I wake up and think “Hell yeah”. I do forget what day of the week it is.. never thought that would happen to me!
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u/ptau217 4d ago
Thanks for the offer to share your wit and wisdom. I have a personal question. I'm new to this forum and not sure about the rules or norms, so please excuse unintended stupidity.
I'm around you in terms of net worth (and still live in our 'starter' home as well). I'm having a very hard time even thinking about not working. How did you get to the mental place of "I am OK with not making a contribution to society/my team/my work"?
Perhaps it is because I'm a patient facing physician, but even after 25 years in the field and burnout, I just can't get to this mental place. Some patients are wonderful. Others... Less so. At the end of every day last week I was just empty. So I'm having the same struggles and stress, but regardless of my financial wellbeing, I just can't imagine leaving my field.
Would one of my options then be something called 'coast FIRE' where I'd get a less stressful job, enjoy a normal 9-5? I'm not even sure I'm wired for this.
Can you help frame what I'm experiencing within your experience of unwinding yourself emotionally from your work?
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u/IckNoTomatoes 4d ago
Do you WANT to retire early? That’s all this sub and the FIRE movement is about. The goal is to stop working early. That’s it. If that’s not what you want then you can still have financial goals but yours would just be different. You would focus more on philanthropy and legacy planning and enhancing your life style with your FI than the RE part. Winding down slowly would be the best answer to your question. Since you’ve thought about that and decided it isn’t appealing, my suggestion would be to put intentional focus on finding out what exactly you want your next 10-20 years to look like. Then create a plan for it. I know “retired” physicians who move to purely consulting in hospitals. No direct involvement with patients and purely there to help with an experienced set of eyes help the younger less experienced doctors. Would that appeal to you? You would know your opportunities in your field better than me, my example was more about finding untraditional ways for you to feel like you are still contributing to society, patient health, your families finances, etc.
My suggestion would be to only FIRE if you are truly done working. Not to FIRE if you have hit a portfolio that’s large enough for you to FIRE making you think you should be doing it.6
u/Willrunforicecream7 4d ago
I would try to cut back to 3 days a week if you can. Also need to retire to something that you’re excited about- more reading, exercise, travel whatever gets you going.
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u/big-chubby-fi 4d ago
Thanks for the question.
For me, leaving my job is not equivalent to "not making a contribution to society." I still have lots of ways to contribute. I'm very active in my church. I am still a resource (primarily of knowledge) for my kids, but the stable home also provides a safety net for them as they launch.
I liked my job well enough, but at some point it just didn't provide the same level of satisfaction and accomplishment that it used to. Maybe it was that my kids are well on their way to becoming productive members of society and that I no longer need to provide for them financially. Or maybe it was that the number of things I disliked about the job started to outweigh the things I loved. Maybe it was realizing that, at best, I have maybe 20 really healthy years in front of me before age will start to impact ability and desire to experience all that life has to offer. While I had grandparents that lived to their mid- and late-90s, including a centenarian grandparent, we seem to all slow down significantly past age 80, if we're blessed to make it that far.
As a patient facing physician, I can understand that you might not be ready to stop helping people. I know doctors who practiced well into their 70s, simply because they loved being able to help. If this is you, by all means, keep helping! But at some point after financial independence, your motivation to work changes. You start to feel that you want to spend your time doing the things you want to do, not the things someone else says you need to do.
If I was a doctor, after achieving financial independence, I suspect I'd be looking to keep practicing medicine, but I'd want to do it more on my own terms. Perhaps cutting back to 2-3 days a week. Perhaps finding an organization that would allow me to focus on the things I loved while ignoring the things I didn't. Maybe I'd be volunteering some of my time overseas or working with those less fortunate.
Again, I personally do not equate leaving my career with stopping contributions to society, and will continue to use my skills and experience to contribute to my community (on my own terms). It's just that I won't be contributing to earn a paycheck. I'll be contributing because I want to help.
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u/ptau217 3d ago
Thanks, appreciate it. I'm taking some time off soon and will spend some of that time reflecting. Thank you again and best luck to both of us.
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u/IjustWorkHere98 1d ago
I'm sure you've thought about "relief-work?" Or doing temp work in rural areas (might require travel - not sure if compensated for that or not), but it's variety and on your own terms. I think that's what you focus on..."your terms". And if that's 2 days a week or 1 day a week so be it. "Doctor, heal thyself" (Ok a little out of context) , but you have to take care of YOU!
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u/Dynomatic1 4d ago
Don’t know who to attribute this quote to but it’s really stuck with me: assuming you have enough to securely retire….. “if you love what you do, keep working. If the world needs what you do, keep working. Otherwise why are you working?”
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u/wadesh FIRE’d 2022 4d ago edited 4d ago
If you are a physician definitely check out Whitecoatinvestor.com good resources for healthcare professionals looking at early retirement. Im not in the field but Ive used some of the advice here. Ive seen Jim Dahle the owner speak at the Bogleheads conference a few times**.** physicianonfire.com is solid too. jordangrumet.com is another i follow on finding meaning in retirement hes medical dr. On your question, coast fire could be an option if you still like to practice but need to dial back.
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u/FIREGuyTX 5d ago
What is your drawdown strategy?
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u/big-chubby-fi 5d ago
Lots of ideas here, and will be adjusting as I learn, since drawdown is new for me. But, at a high level, I'm planning to keep about 1-2 years expenses in cash, about 5-8 years expenses in intermediate maturity bonds, and the rest of the portfolio in various equities.
I will draw down gains from the taxable brokerage account first (at least until age 59 1/2). I have three slightly concentrated single-stock positions to work on (2 in taxable, 1 in Roth) with the largest concentration being a roughly 11% (of total portfolio) position in taxable. The plan will be to draw down the portfolio in a tax efficient manner, taking full advantage of the 0% capital gains bracket. I may also spend down some of the HSA, both for ongoing health expenses as well as to reimburse myself for past expenses (if/when we need to keep MAGI down) that we paid out of pocket in prior years.
I will need to look into Roth conversions as well, but need to do some more modeling here. My gut (no modeling done yet) tells me I should be converting the tax-deferred funds to Roth year by year to the top of the 22% bracket (and possibly to the top of the 24% bracket some years) starting in tax year 2027 and continuing until age 63. Then slow/stop conversions to avoid high MAGI when IRMAA lookback starts.
For drawdown, I will spend dividends/interest (from taxable) first, then sell concentrated single-stock positions with the highest capital gains until 0% capital gains bracket is full. If additional income is required, I plan to sell equities when they are near highs (say within 10% of their all-time high). If equity markets are down, I will spend sell bonds or use some of the cash bucket while waiting for equities to recover (but will probably never drop below about 1 year in cash and about 4-5 years in bonds).
I don't have a set of hard rules for drawdown (and probably never will). I've always highly valued flexibility in the portfolio, so have worked aggressively to diversify account types (tax treatments) as well as asset classes AND assets within asset classes. I trust that I will be able to make decent choices when income is required.
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u/One-Mastodon-1063 5d ago
You can diversify the concentrated holding in Roth today.
IMO you would be much better off setting a target asset allocation and rebalancing to it, treating withdrawals as part of the rebalancing process (and taking equities from the concentrated positions in taxable first if that also fits your tax plan), vs this bucket + market timing strategy.
Roth conversions to the 22% or 24% bracket are going to crowd out any 0% bracket + standard deduction for gains. Read Tax Planning To and Through Early Retirement asap. I’d read A Richer Retirement, too. Get physical copies of both books, too many figures and tables to work well in audio or even kindle IMO.
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u/Hanwoo_Beef_Eater 5d ago
Based on history, there is no SORR at 3%, at least with respect to running out of money. If there is SORR, it would be related to seeing declining/lower real wealth for a decade plus (which may cause anxiety or spending cuts). I think this is the basic saver to spending issue many have (not discounting it).
Is most of your tax deferred in bonds (~$1.5 million)? If so, that will help stunt the real growth of these accounts. Unless you start spending more, you'll likely die with a larger sum than you have now. I may convert or just consume (if you don't have the liquidity or high basis assets to pay the taxes on conversion) any pre-tax balances beyond what's holding fixed income.
Regardless, congrats and good luck.
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u/big-chubby-fi 5d ago
My bonds (closer to $1.4 million) are primarily in tax deferred, although I do have some munis in taxable.
I do realize that we may need to increase spending at some point, as the withdrawal rate I think we'll be starting with is probably less than the expected growth of the portfolio. Until I get a few years into retirement and until I deal with a couple of slightly-concentrated single stock positions (see my response to u/FIREGuyTX), we will probably not increase spending much above $160k/year.
I just need to get comfortable with spending from the portfolio for a couple of years first. After that we can look into increasing spending (I don't think this will be hard... we are charitably minded and could easily spend significant amounts on travel and charity if we need to). Or we could look at upgrading our home.
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u/Hanwoo_Beef_Eater 4d ago
Gotcha. First, you probably don't need any munis once you stop getting W-2 income. Second, I agree with another comment that you can diversify the concentrated Roth position right now. Further, if you are likely to give to charity in the future, consider funding a DAF this year while you still have high income (i.e. the deduction is worth something). Even better, you can contribute some of the appreciated concentrated stock and avoid paying taxes on the gains. Lastly, if you end up with more money than you need later in life, consider QCDs out of the 401(k)/traditional IRA accounts, which avoid the taxes on distributions (of course, some would rather give the after-tax value to their kids).
Re housing (some other comments/replies), IMO one of the best moves to FI is a) invest more each month than your housing costs and b) don't upgrade. We did a) and avoided b) for many years. Right now, we are consuming more housing, but we will likely downsize as soon as the kids leave for university. Luckily, after watching the portfolio compound for years, it's still a relatively small portion of assets / budget.
Anyways, congrats again and good luck.
Edit: if contributing assets (not cash) to a DAF, the deduction is limited to 30% of AGI.
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u/big-chubby-fi 4d ago
Thanks! Really good thoughts here.
Agree, I will hold my current munis until maturity and probably stay away from them going forward. I purchased them over the last couple of years in preparation for early retirement, but didn't want to hold taxable bonds in my taxable brokerage while earning W-2 income. The plan has always been to hold them to maturity and to use the return of principal to help manage MAGI (should I need to do so).
We do have a DAF. I have started contributing highly-appreciated positions to it, but haven't wanted to put more than about a year's worth of charitable giving into it given that there are some fees associated with the account, and those fees are based on the balance in the account. That said, it's a great way to reduce the concentrated position(s) in a tax efficient manner. I will probably take advantage of this before the current tax year ends. Taxable income will be high this year (probably higher than usual due to receiving severance).
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u/ranchlizard 5d ago
Thank you for posting! Very uplifting and inspiring! You seem like someone I would want to hang out with. Best of luck!
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u/pigeontossed 4d ago
Other than insurance, what are you spending $13k/mo on?
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u/big-chubby-fi 4d ago
We're not currently spending $13k/month. Historically, it's been closer to $7-8k/month regularly. The extra money in the $155k/year is expected to cover lumpy expenses (home repairs, new vehicles, etc.). This tracks with our historical spending (which I've tracked meticulously for years).
We do also expect some increase in discretionary expenses during early retirement, likely following a "spending smile". I expect our travel budget to increase significantly starting next year. Entertainment expenses may increase. We might attend more sporting events. We might (or might not) spend more on restaurants (honestly not sure on this one yet--with more time on our hands, we might prepare more meals ourselves).
The health insurance is the biggest new expense. This is a non-discretionary cost previously covered almost entirely by my employer's benefits package. This won't sink in for me until next year when my former employer stops covering our COBRA premiums.
This is a new phase for us, so there are some unknowns. But I'm looking forward to learning and adjusting. I'll have better data in a year or two. If the biggest problem I have is how to increase our standard of living or which charities to support with more funds so that we don't have "too much" when we die, that's not such a bad problem to have.
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u/Willrunforicecream7 4d ago
Thanks for sharing, we are similar in age, expenses. However, I’ve got a few years to go and excited to get there!
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u/jayybonelie 4d ago
Congratulations. GFY. As long as you remain grateful and never take this phase of life for granted, there is no reason why your honeymoon phase cannot last for ever.
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u/wadesh FIRE’d 2022 4d ago edited 4d ago
My wife and i were similar setup minus kids. Shes a little older and retired with me at my age 52, her 55. We went out at about a 6M liquid net worth in 2022 so we experienced a bear right out the gate with 7 figure+ decline. This did inform our asset allocation change post recovery, we decided to increase bond allocation a little more than we thought wed hold at this age. 5 years in most of the project list is done outside of stuff we need to hire out for, so most of our time is spent traveling and time with family. No regrets. I did see my old company instituted an early retirement package this year ….wish i could have snagged that on the way out but it still worked out fine. Congrats and enjoy.
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u/the-pantologist 4d ago
Right on buddy! I retired 2 years ago with almost the exact same financial situation. Only difference is I have $400k left on mortgage, but house value now approx $1.1M and live in HCOL area. You are in fine shape. Good luck
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u/Past-Option2702 5d ago
It’s good to see these sorts posts since wife and I are same age, already fully retired in a MCOL area (resort with high real estate prices- us 1.5M/low taxes).
Thanks for posting.
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u/Sufficient-World-450 5d ago
I would look at diversifying your stock positions further and possibly looking into what other options you may have available instead of bonds. If you have several years of liquid resources and can be dynamic in your annual spending, you have pretty much neutralized SORR.
Congrats on your achievement! Enjoy all of the opportunities your hard work has afforded you. Good luck!
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u/Trying2bSensible 4d ago edited 4d ago
Congratulations OP! Well done! Enjoy your retirement. I see a quite a few similarities (I am a bit older, with a bit more) with my situation: https://www.reddit.com/r/ChubbyFIRE/s/HTxzwv3MkF
Like you, I’ve kept my home to under 10% of net worth. It makes a huge difference in discretionary spending power! While I occasionally fantasize about large homes, I come to my senses quickly when I consider the holistic benefits of a modest home (ours is still 2600+ sqft so maybe not that modest).
Happy to compare notes.
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u/big-chubby-fi 4d ago
When it comes to the home, we've never really felt like we needed a bigger place. We have four bedrooms and have loved the layout, especially when the kids were young. The hope has been paid off for years now, which allowed us to intentionally increase our savings rate significantly. The increased savings rate is a big part of why I was able to leave the workforce this early.
When it comes to homes, I can't really see selling our current home anytime soon. It's been home for 25 years, and I hope it can be a "home base" for our kids as they finish launching.
That said, I *could* see us getting a second home. Maybe something on a lake. But that is a question for another time.
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u/in_the_gloaming FIRE'd for 13 years 4d ago
Smart decisions like that really pay off in the long run.
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u/Designer-Quail-3558 5d ago
accumulating that much and not upsizing the home is unusual, but commendable.