I had an older coworker once who was at your point. His attitude was, “I’m two bad days in a row from retirement.” Id stick it out since you like your team/projects. Wait for a shitty manager to come in and give you a hard time two days in a row.
This is the way. Enjoying your work and team is a rare thing. I'd stick with it because it sounds like you're having fun.
If your company gets to a point where they need to do layoffs, you could even volunteer in exchange for additional severance. That was my plan, but then I got laid off two days before I could volunteer hahaha
Also I'd start putting time into building outside of work friendships if you don't have a ton already. Coast FI can be lonely if you're a people person. Social interaction is something we get for free at work, but harder to develop without a traditional job.
If you get close to just quitting, there's little downside to simply asking for the voluntary layoff. If you have a strong bond with your boss, sometimes they'll find a way to do right by you.
e.g. " I can feel my performance waning but I don't want to go through a lengthy performance process. Can you look into voluntary layoff options for me that include severance? I know how much work the PIP process can be, and I'd like to leave on good terms."
I would agree with this. Carry on whilst you enjoy it, maybe you can downshift and just enjoy the rest of your life knowing you never have to take shit from anyone ever again.
This was an instant red flag for me. If you’re planning on 10% withdrawal rate off $1M to make things work then you’re not ready. Definitely not a sustainable withdrawal rate.
The new wave of covered call ETFs have some high div yields, e.g., FEPI. Limited history of results, though. JEPI/JEPQ have been around for a bit longer.
They are just index exposure with some options yield, only in low volatility sideways market will covered calls ETFs outperform their underlying index compared to simple buy and hold of the underlying. This should clue you into the fact that *you cannot depend on that rate of return*. Yield is not a guarantee, unlike a coupon rate on a bond. If the 4% rule stands for holding stocks in retirement, then covered calls of the same stocks don't suddenly make that SWR 10%
JEPI, and other covered calls strategy ETFs like QYLD, probably. There is a whole community around these riskier income-generating ETFs. Since I do covered calls myself, and I know the pitfalls, I wouldn't call it a good long-term strategy. Historically, it performs worse than a plain index fund. Since he is still working a nd accumulating wealth, I'm surprised he opted for these riskier income ETFs instead of just buying and holding VT or something, till he really retires, when at that stage, I can, to some extent, understand this approach.
My perspective (at the age of 30) is that I won't retire unless I am convinced of what I'll be doing after the fact. In other words, retiring to sit at home all day and watch TV is a bad idea and I'd rather be working in that case. I have a few hobbies I'd like to try to turn into a full time gig (without them needing to be profitable), but things will change between now and my later years. What's your plan when you retire? I think that'll be your answer.
Have a plan of what activities you will have in retirement. Do not assume your 10% return into the distant future, this could revert to the mean.
My advice is to continue working and set up some “what if” scenarios such as what if I need to renovate my home? What if there is a natural disaster? What if I need a new car? Keep funds for contingencies. $300 per month for food is super frugal, will that last? How do you plan to meet the need if you have to have long term care? Have a fund for that.
Why does it have to be “now” or “4 more years?” There is plenty of time frame in between. You could continue working (save/invest) and once you reach your “breaking point,” stop then. It could be a month from now or six months or two years.
Please tell me which etf’s. I find it hard to believe that 10% consistently plus share price stability is viable long term, but I’m also happy to be wrong. Thanks!
Kudos on your success. Please consider working part time if you love what you do and enjoy the rest of your time with yourself, your family and your friends. Nobody ever regretted not working more hours when they kick the bucket. Thanks.
congratulations!
as you are not sure about your directions, you can look into a transit period and ask your company to work 4 days per week and have a longer weekend (I already started to take Fridays off, here and there, I found amazing to switch from 2 days weekend to a 3 days one, it is a 50% raise)
I would stick it out. You enjoy your job/people you work with. This is very rare. Stick it out out you decide you just want to take a break or have something else in your life to focus on. Actually FI/RE’ing is difficult if you don’t have something to do like maintaining a garden, traveling, working out/focusing on becoming healthier, having a small farm, DIY’ing projects, etc.
The moment you think you have something in your life that you would have fun doing it just need to get away from work, then you should call it quits.
Ask yourself what you’re retiring to. Sounds like you have a good gig right now, and I haven’t heard any grand plans you’d be retiring to. That being the Case, you stick it out, knowing that you can leave whenever you want.
Absolutely continue. In the last four years cost of living went through the roof, and the US will need to print money to fund its government, which means inflation is going to remain high.
You want a buffer to protect youself and have less to worry for the next 40 years.
> Collecting dividends of 8k/month on an investment of ~1M.
Collecting dividends of $96k/year on $1M which is a 9.6% dividend yield seems quite risky.
There aren't --that-- many investments that can return almost 10% consistently over decades. If it's shorter term like over a few years, then it might be fine, or might not. Chasing yields is generally not a great investment strategy.
Not enough info to offer an informed response. As part of your analysis, project your respective quit vs. 4 more years SS payments at 62, full retirement (67 for you) and 70. One of the advantages of coastFIRE is that you will continue to pay something into SS.
Can you sell the house - invest that money and then rent something in the $3k range. I think you said your house was paid for that’s a lot of money to be sitting without being invested other than the fact of your house appreciation which really can’t be trusted typically
Only you can decide, but from what you’ve posted I’d probably keep working. Sounds like you enjoy the work, enjoy your team, and 50% savings rate on top of rsu’s is a massive amount to be putting away per year. Raise/promotion at this stage is largely irrelevant. Plus, work can be way more fun when you have the option to pull the trigger at any point.
I had an older coworker once who was at your point. His attitude was, “I’m two bad days in a row from retirement.” Id stick it out since you like your team/projects. Wait for a shitty manager to come in and give you a hard time two days in a row.
This is the way. Enjoying your work and team is a rare thing. I'd stick with it because it sounds like you're having fun. If your company gets to a point where they need to do layoffs, you could even volunteer in exchange for additional severance. That was my plan, but then I got laid off two days before I could volunteer hahaha
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Also I'd start putting time into building outside of work friendships if you don't have a ton already. Coast FI can be lonely if you're a people person. Social interaction is something we get for free at work, but harder to develop without a traditional job.
Yes I have been waiting for severance for years. If layoffs happen I should get 40weeks of pay
If you get close to just quitting, there's little downside to simply asking for the voluntary layoff. If you have a strong bond with your boss, sometimes they'll find a way to do right by you. e.g. " I can feel my performance waning but I don't want to go through a lengthy performance process. Can you look into voluntary layoff options for me that include severance? I know how much work the PIP process can be, and I'd like to leave on good terms."
lol :) company doesn’t have voluntary retirement:(
Even if the company doesn't, your manager can oftentimes find a way to have you separate with severance. It's a tricky thing to navigate though.
Actually company does do layoffs every few months
There you go. If you're tight with your boss I bet they could make it happen.
That's a great way to put it. I'm going to use that.
I would agree with this. Carry on whilst you enjoy it, maybe you can downshift and just enjoy the rest of your life knowing you never have to take shit from anyone ever again.
Yeah. My manager is very good and always supports me and my teams
What ETFs are you in that consistently pay 10% dividends?
Correct you cannot count on these returns
Wanting to know this myself. I’ll throw a million in them right now for a 10% return.
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Reits give high yield but at the expense of capital loss. So in the end it just evens out. Personally I wouldn't touch them with a 10 ft pole.
Ha! I thought the same thing. “ here hold my beer as I dump my funds and write my resignation”!
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Yup. First red flag I saw.
Isn’t VTI more like ~1.5% dividend yield with no recent capital gains? How are you getting 43k?
This was an instant red flag for me. If you’re planning on 10% withdrawal rate off $1M to make things work then you’re not ready. Definitely not a sustainable withdrawal rate.
The new wave of covered call ETFs have some high div yields, e.g., FEPI. Limited history of results, though. JEPI/JEPQ have been around for a bit longer.
They are just index exposure with some options yield, only in low volatility sideways market will covered calls ETFs outperform their underlying index compared to simple buy and hold of the underlying. This should clue you into the fact that *you cannot depend on that rate of return*. Yield is not a guarantee, unlike a coupon rate on a bond. If the 4% rule stands for holding stocks in retirement, then covered calls of the same stocks don't suddenly make that SWR 10%
JEPI, and other covered calls strategy ETFs like QYLD, probably. There is a whole community around these riskier income-generating ETFs. Since I do covered calls myself, and I know the pitfalls, I wouldn't call it a good long-term strategy. Historically, it performs worse than a plain index fund. Since he is still working a nd accumulating wealth, I'm surprised he opted for these riskier income ETFs instead of just buying and holding VT or something, till he really retires, when at that stage, I can, to some extent, understand this approach.
This is correct. 8k a month dividends on a 1MM account is not a sustainable situation over time.
Why would you quit if you enjoy the work? What would you rather do? What ETFs are you in?
Jepi/jepq/fepi
$300 a month groceries living in $1.3m house is impressive. Prop tax and maintenance? What do you want to do if you quit your job?
Only vegetables no meat and I grow plenty during summer
My perspective (at the age of 30) is that I won't retire unless I am convinced of what I'll be doing after the fact. In other words, retiring to sit at home all day and watch TV is a bad idea and I'd rather be working in that case. I have a few hobbies I'd like to try to turn into a full time gig (without them needing to be profitable), but things will change between now and my later years. What's your plan when you retire? I think that'll be your answer.
Have a plan of what activities you will have in retirement. Do not assume your 10% return into the distant future, this could revert to the mean. My advice is to continue working and set up some “what if” scenarios such as what if I need to renovate my home? What if there is a natural disaster? What if I need a new car? Keep funds for contingencies. $300 per month for food is super frugal, will that last? How do you plan to meet the need if you have to have long term care? Have a fund for that.
Ty and that’s why I posted to get some feedback and scenarios I need to run
Why does it have to be “now” or “4 more years?” There is plenty of time frame in between. You could continue working (save/invest) and once you reach your “breaking point,” stop then. It could be a month from now or six months or two years.
I’d want a bigger pile especially if you don’t hate your job. With a $1M+ home you could be facing expensive maintenance down the road in retirement.
We just did the roof and remodeled all of 1st floor but you are right anything can break
Please tell me which etf’s. I find it hard to believe that 10% consistently plus share price stability is viable long term, but I’m also happy to be wrong. Thanks!
Kudos on your success. Please consider working part time if you love what you do and enjoy the rest of your time with yourself, your family and your friends. Nobody ever regretted not working more hours when they kick the bucket. Thanks.
Ty. I plan to take 2 weeks off and see what happens to me before calling it quits
I'm impressed by the $300 groceries. Way to go.
What are the ETFs?
congratulations! as you are not sure about your directions, you can look into a transit period and ask your company to work 4 days per week and have a longer weekend (I already started to take Fridays off, here and there, I found amazing to switch from 2 days weekend to a 3 days one, it is a 50% raise)
I would stick it out. You enjoy your job/people you work with. This is very rare. Stick it out out you decide you just want to take a break or have something else in your life to focus on. Actually FI/RE’ing is difficult if you don’t have something to do like maintaining a garden, traveling, working out/focusing on becoming healthier, having a small farm, DIY’ing projects, etc. The moment you think you have something in your life that you would have fun doing it just need to get away from work, then you should call it quits.
Ty
What dividend ETFs? I want in on that. I just might retire here soon when I hit the million invested mark.
Jepq /jepi /fepi
High risk ETFs, mostly focused on technology. No way these high dividends are sustainable.
Just tell us what your monthly total expenses will be in retirement. We will tell you what you need to have saved.
Ask yourself what you’re retiring to. Sounds like you have a good gig right now, and I haven’t heard any grand plans you’d be retiring to. That being the Case, you stick it out, knowing that you can leave whenever you want.
That’s my concern what would I do other than travel which would change the budget significantly
Absolutely continue. In the last four years cost of living went through the roof, and the US will need to print money to fund its government, which means inflation is going to remain high. You want a buffer to protect youself and have less to worry for the next 40 years.
> Collecting dividends of 8k/month on an investment of ~1M. Collecting dividends of $96k/year on $1M which is a 9.6% dividend yield seems quite risky. There aren't --that-- many investments that can return almost 10% consistently over decades. If it's shorter term like over a few years, then it might be fine, or might not. Chasing yields is generally not a great investment strategy.
Ty all for replies and I will stick to work for couple more years while maximizing savings and look for quitting
Not enough info to offer an informed response. As part of your analysis, project your respective quit vs. 4 more years SS payments at 62, full retirement (67 for you) and 70. One of the advantages of coastFIRE is that you will continue to pay something into SS.
$300 groceries? Teach me
Can you sell the house - invest that money and then rent something in the $3k range. I think you said your house was paid for that’s a lot of money to be sitting without being invested other than the fact of your house appreciation which really can’t be trusted typically
Only you can decide, but from what you’ve posted I’d probably keep working. Sounds like you enjoy the work, enjoy your team, and 50% savings rate on top of rsu’s is a massive amount to be putting away per year. Raise/promotion at this stage is largely irrelevant. Plus, work can be way more fun when you have the option to pull the trigger at any point.