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When I was young I thought I would retire early, but kids, college and other life choices were prioritized ahead of retirement savings. Then, as my career progressed, I thought I would work until I die, literally die in my chair. In my late 50s I began to think about retiring when I’m about 70. Now, I am thinking of retiring from my current job (9.5 years tenure, C-level) within 2 years.
Two things matter to me in thinking this through. One is time, and the other is money. Money is the easiest one - it is just math. If I need $90k/year pre-tax income (including a reasonable assumption about medical costs and inflation) and believe I can reliably generate 3% returns on invested funds, I need $3 million saved. That is in addition to non-investment assets like cars, house, and other stuff. So a higher net worth. If I have a house payment built into that number, and can either pay off the house or downsize and eliminate the mortgage, I can lower the requirement. Many possible scenarios, just math.
Now to be more precise, and aggressive, I can think about my portfolio as an annuity. Suppose I plan for 40 more years on the planet (wife and/or me), and want $90k/year to spend. At that same 3% return, but using some of the principal each year, I can get by with a lower initial invested amount, maybe $2.1 million. Change the assumptions, change the target.
So money can be figured out (add in Social Security when optimal, etc). Once the target is attained, retirement is possible.
Time is harder for me. I am not ready to sit in a rocker all day, so my options are (1) another full-time, full stress job but with different challenges, etc, (2) stay where I am (which is good for me but hinders those who would like to progress if I was to leave), (3) volunteer or other community work, or (4) something different like part-time work, interim/consulting work, corporate board service, etc. I’m thinking of things that will keep me engaged and use my core skills, but maybe at a lower level of intensity. And of course if it pays, that can make the money equation easier to solve or provide more cushion.
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