I’ve been thinking about this issue for some time now. And since I had fun digging into my financial independence numbers I thought I’d do a few more math gymnastics to see how much I had “lost” by retiring early.
I had considered this idea a while ago, but what prompted me to finally write about it was a conversation with my mom.
She and my dad have been working on retiring for some time now. They are in no hurry though and things that could be done in days or weeks are taking them months. I’m wondering if they will ever retire.
As we were discussing this, she told me that my dad said he wants to retire but just “can’t give up all the money he’d make” (he owns his own business and has been doing well despite trying to down-shift.)
Almost on instinct I asked her what she thought I gave up when I retired at 52 since I made 5x what my dad makes.
From there it was just a short jump to “I should write about that.” And here we are.
So let’s do some math and see what I’ve given up.
Before we do that, we need to make some assumptions.
Time Frame
The first set of assumptions is probably the easiest: how long would I have worked if I had not retired at 52.
A few choices:
- I could have retired at 60 — my original “early retirement” projection.
- I could have retired at 65 — the “official” retirement age for what seemed like forever.
- I could have retired at 67 — the Social Security full retirement age for someone born after 1960
For the purpose of this exercise I’m going to pick 65.
If I used 60, that’s still early retirement and we’re trying to figure what I would have made if I had not retired early.
If I used 67, it just seems like it’s too old — I would never wait that long to retire.
So 65 it is. Given this we have our answer: I gave up 13 years of income.
Estimated Salary
Now that we know the number of years I missed, we need to project what salary I would have earned during those years.
I’m sure you know this is going to be a relatively high number because:
- I worked hard over the years to grow my income.
- The 50’s are peak earning years for many, especially those in business.
I want to include only salary and likely bonuses — not the value of benefits like 401k matching and health insurance. Otherwise with could go down a huge rabbit-hole with one assumption after another until the whole premise became a joke.
I know my earnings wouldn’t grow at the rate they had up to the point where I retired, so I wanted to pick a single number and use it throughout the entire time. I also wanted to be conservative, if anything. In other words, what I actually “lost” is probably higher than the number we’ll end up with in this exercise.
Given where my salary was when I retired and the sort of jobs I might want to take during the lost 13 years, I ended up selecting $250,000 per year as the cash compensation I gave up. FWIW, my average cash compensation for the last five years I worked averaged just over $300k annually. (BTW, for those wondering why anyone making that salary took so long to retire, remember 1) I didn’t make that much all my working years — it took 28 years to get to that level and 2) while we didn’t spend much, taxes and giving took almost 50% of our earnings).
How Much Would I Have Saved?
The assumptions above mean that the gross amount I gave up was $3.25 million (13 years * $250k).
But how much of this would I have saved?
On the low end, we could use 36% of gross income since that’s what we averaged during my working career.
On the high end, we could use 100% (less taxes) since I make enough from other sources to cover our living expenses. Taxes took an average of 21% of our income while I was working, so this means we could have saved 79% of the total.
So the number is somewhere between these two. I’m going to go with one smack dab in the middle — 58% of the total. We would have probably given some of the 79% away and we would have been a bit looser with our spending, so 58% seems viable.
This means that we would have banked $145k per year or $1.885 million during those 13 years.
How Much is That Worth?
Of course we wouldn’t have literally “banked” that money. We would have invested it.
So the next question is: what is the value of $145k invested at a given percentage rate over 13 years?
This only requires the selection of one new number — the return rate.
In my case, I’ll use 8% as that’s been my go-to assumption return for years.
Now it’s a simple calculation.
$145k invested at 8% return each year ends up being worth $3.1 million at the end of 13 years.
So that’s the answer: I gave up $3.1 million by retiring early.
What Do I Think of That?
There are two main thoughts I have on this:
1. That’s a lot of money!
$3.1 million is nothing to sneeze at. It’s less than my net worth now, but it would still be a nice chunk. Even if I gave it all away, think of the good it could do…
2. It was totally worth it.
There are several reasons it was worth giving up over $3 million:
- I do not need another $3.1 million. It would not change how I live my life very much, if in any way at all. So what’s the point? I’ve already won the game, so I need to quit playing it.
- I probably bought myself some years. They say that money is replaceable and time isn’t, so time is more valuable. But there is one way you can get some time back — you can live longer. What would 13 years of stress from terrible bosses cost me in terms of life? Even if I had the best of bosses and the best of jobs, there’s still a lot of stress. If nothing else, my quality of life would have been lower, probably much lower (less time with family). But not having to work 13 years might add what — an extra 2-3 years to my life? Yes, there are studies that say early retirement can lower life expectancy, but I think those pertain to people who have zero interests. On the opposite end of the spectrum, I believe I heard a wealthy man (I thought it was Warren Buffett but I can’t find the quote) say he’d give everything he owned for just five more years of life. At that level, living an extra two years is worth way more than $3.1 million!!!
- What’s enjoyment worth? Imagine 13 years of life enjoyment in retirement versus 13 years of life enjoyment if I remained working — especially in the last 13 years of my career. What is that life enjoyment worth? What am I going to be able to do that I would miss out on if I was working? (I’ve already got a fairly good list of these things — just read my retirement updates.) Is that worth $3.1 million?
In the end I would say that I “lost” $3.1 million by retiring early. And it was the best $3.1 million I ever spent. 🙂
What’s your take on the issue?
To play the semantic game, you didn’t lose it. Losing something means you had it in the first place. You turned down the opportunity to earn that money, and you are no doubt happier for it 🙂
Interesting post John, I’m in the same boat as Accidental FIRE, you didn’t lose it. Instead of earning more money by working longer, you are now doing something that you enjoy more and have more free time. More time = money too!
If we think about it in terms of the “Your Money or Your Life” idea that we trade life energy for money, and you already figured out that you have enough, then I think there’s no question you made the right choice.
An interesting assemblage of “what if I had done this.” Life, in of itself, can have great value, without applying a cost assumption. I retired at age 38 from the Military. Pursued my dreams with the aid of a loving wife and two children. It is what it is that makes you content with your circumstances and life. You lost imagined wealth, but you gained immensely more.
I’m so in the camp of ‘you earned so much more by retiring early’.
I think about this scenario from time to time. It comes down to the fact that we cannot have it all. The salary and savings would be great. With it, however, comes stress and giving up your freedom. Even though you are financially free, when you are on the clock, your time is not your own. I think you made the best decision based on what you share.
Thought provoking way in which you put out the issue of early retirement.
I am still firmly placed in saying no to early retirement. I like the idea of earning money and working productively to achieve something. Also, as you pointed out, $3.1m is nothing to sneeze at. In some ways, this post has reaffirmed my belief in Financial Independence but no Early Retirement.
Also, on the topic of Warren Buffet, he is famous for having said no upper age limit to retire and still actively works at the age of 87. Personally, I have seen a lot of folks around me directionless and lost with the extra time on hand post retirement. I would rather follow Buffet’s example on retirement 🙂
I work in a complex world of technical software sales… but I always try to break things down in simple terms. This is all that needs to be said and you said it best:
“Financial Independence but no Early Retirement”
It’s that simple to me. I need (or want) to always have a reason to get up everyday- A lavish life of luxury without working in some capacity is an empty life to me anyways. The author is “retired” but he’s “working” and contributing to the world for “fun”- so he’s really not even fully retired!
I love this website but too much focus on “Money” sometimes. Try to do what you love in life, be smart with your money and live a healthy life. Boom. We can all do “better” but at what real “cost”?
You know the site is about “money”, right? How can I have too much focus on it? 🙂
LOL. I understand.. but attaining wealth or money is not the end all. As you stated in this very article, money isn’t the only consideration.
Oh and just so you know…. I wasn’t saying YOU had too much focus on it. Some do. I know people that do.
I did say I love this website too. 😉 I love money too… but in a good way.
Haha! Ok, fair enough.
I actually have a post titled “The ____ Things More Important than Money” on my idea list but I can’t think of anything more important than money.
JUST KIDDING!!! HA! I have a list of several things so far by the inspiration to put them into a post hasn’t hit me yet.
Sounds like it could be a fun article. Friends/family and health would be at the top of my list. But money is up there. Money is a wonderful enabler.
Ebenezer Scrooge even got it right in the end! LOL
I agree that Tech can be a fun lucrative lifestyle. But do you really need to have a salary & a boss in order to get up every day? Like I said before, dying at your desk ain’t a retirement plan.
I think somehow you might have misunderstood my comments. I never said I need a boss…. or even a salary for that matter. Regardless, I guess it’s how you define work. If you enjoy what you do, or if you love what you do why stop?
I have stressful days still in my career but there are lots of things I love. Some careers can be rewarding… I guess it really depends on several factors. Flexibility is a key ingredient.
Retirement to me is being able to do what I want to without consequences….
Glad you are thinking about this. I think your analysis although good is incomplete.
You are missing one critical factor. Besides the $3.1M, you are also losing out on the compound growth of your current monthly cash flow. If you kept working now, you could reinvest your current monthly cash flow (from your rentals and other passive income) and have them exponentially grow your net worth.
IMO, by retiring early one eats his/her financial potential alive by destroying the greatest wealth-building machine on earth: compound growth.
So if you don’t hate your current line of work, why not consider keep your job and watch your net worth grow exponentially.
I don’t think he’s missing that piece. If he kept working, expenses would be coming from his salary rather than his nest egg. So he wouldn’t have made the $3.1 million.
The potential is a lot greater than the $3.1 million though. These are huge high earning years. I retired in my late 30s, have an 8 figure net worth, and I definitely left many times more than that on the table the last 10+ years. But I’ve also had an awesome decade…
Also, one may argue that one doesn’t ‘need the money’ and is content with how much they have. But again, IMHO, that’s selfish thinking.
You may not need the money, but think of how many people you could *help* with that money.
At that point, you are not working for yourself anymore. You are working to *help others*. What a blessing!
I am sure you do philanthropic work. Think of how many lives in Africa and Aisa could be affected with $3.1M. You could set up an endowment that is self-sustaining and improves people’s lives for generations to come.
What legacy to leave behind for your kids and grandkids!
First of all, we gave away 26% of our gross income to charity while I was working. Details here:
https://esimoney.com/spent-17-income/
These days we give roughly 20%, but through a DAF.
Second, we will give a lot to charity when we pass as well. We are currently discussing that as we are re-doing our wills.
Definitely have the right view. I’ll be in the same situation when I part ways with my job at 50-55.
I’ll to part time before that and hope to enjoy the good aspects of my job while ridding myself of the stuff I don’t relish.
That’ll be a hybrid between retiring completely and full time work. I really look forward to that. Ill continue to save in part time work. So it’s really from 50 or 55 that we will miss and it will cost us about what is cost you. I completely think it’ll be worth it.
I think you’ll be able to retire well before 50…if you want.
Interesting perspective. At first the thought of giving up that much money didn’t seem justified but after considering how much more valuable free time is, I absolutely agree with you.
Time > Money
Being fairly young in my working career (mid 20’s), this still isn’t the easiest concept to grasp. After all, everyone my age wants to be The Wolf of Wall Street! Good news though is that each and every year, I get a better understanding of this, and really understand what retirement is all about.
You explain it very well, but it is all about getting to the point where the money you have affords you to live the quality of life you dream of. Once you’re there, your there. No need to get greedy, and waste more of your time in an office 40 hours a week, if you don’t need to anymore!
Great article!
Wonderful insight, and great timing since my wife and I were talking about this very thing this morning. I left the corporate world at the end of last year, and have since started my own thing. Before I left, my thought process was “I’ll just stick this out another 10 years and then be call it a day,” knowing we’d be in very good shape financially.
I must admit that, every now and then, I’ll also think about what I would have been able to earn/save/invest (ESI!) in salary, 401(k) contributions (and matching dollars), HSA investments, and pension over that 10 years. And it’s a pretty good sum of money (although much less than in your case). While I made decent money, the work itself wasn’t fulfilling or meaningful, and there were many days where I really didn’t have much to do at all. I’m not making any money yet (nor am I panicking) in my new venture, but I also love some of the work I’ve done with underprivileged youth this summer. I find it so rewarding and purposeful.
Looking back on it, another decade would have been an eternity. And it’s so easy for us to think only about what we have “given up” by leaving a corporate job. But, in those moments, I force myself to remember all the drama, stress, and boredom that went along with it. I’m so much less stressed and way more happy now, so it has definitely been worth it for me.
And, as Tim Ferriss reminded us in his book (The 4-hour Workweek), retirement doesn’t have to be permanent!
ESI, You have done the right thing! Retire early and enjoy life with your family. I read obits everyday, and see a number of folks who never made it to 62 or 60, for that matter. My cousin married a self made millionaire 9 years ago & they truly enjoy their time together.(Second marriage for both; with adult children). Millionaire had already retired by then, but still kept busy, and in recent years has purchased several acres of farm ground, as that was his first job & favorite thing to do. He farms a few hundred acres now & truly enjoys his time farming, traveling — they travel west for 3-4 weeks every summer in RV, and another 3 trips throughout the year. At 55, they are truly enjoying the best that life has to offer. When I have the opportunity to retire early — however it comes – I’m saying Yes! BTW, my cousins parents both died of massive heart attacks at 56, 61. They never had the opportunity for that time. I’m glad she is able to enjoy her life, kids, and grandchild now.
If you have a job or business you really enjoy with enough flexibility and time off, then it may make sense to keep working longer. But if you have an office job or something else that takes a big commitment, long hours, bad boss and lots of stress, then certainly not worth it to keep going. In that case I’d say to get out and enjoy your life and get away from all your time and energy being controlled by the corporate machine.
Good post. It reinforces your decision to retire early and you’re still happy about it. Congratulations.!
Everyone has a different opinion on finances, so each financial decision is customized to the individual and their circumstances, and as long as you’re happy with your situation/decision … who cares what anyone else thinks about it?
Good post. Rather than compound the $145k per year it would be interesting to see what it would be discounted back to present value. It’s probably around 1-1.5mm. That would be what you were effectively paying for 13 years of extra freedom
Very interesting article. I got into this game late in my life because I had to learn on my own. Based on the calculations I’ve made the earliest I can retire is 62 but I have a job that I call semi-retirement. So i’m happy to work till 62 or even 65. I agree that working those additional years for 3.1 million could have taken its toll on you health, been there done that and actually gained 50 lbs because of stress.
Love it. The utility-value of each dollar earned, after you retired, is far less than each dollar in your already-accumulated Net Worth. You can always make another dollar. But you can’t make another minute.
Plus, you disliked your job. Each minute spent at work, commuting to/from work, thinking about work, etc. would be a minute spent in unpleasant captivity. You’ve certainly earned your freedom!
Staying at a corporation is tough as there are lots of demands and pressures and if you aren’t producing more than you are being paid, you will get the boot pretty quickly. That being said I took another corporate job 3 months ago, moving to the Middle East to assist in the growth of a high profile hospital as part of the senior management team. It’s been a really tough slog but I’ve also learned many things in the process. I’m now practicing gratitude for all I’ve learned and the opportunity that has been given.
As you accumulate more wealth it becomes tougher to have to do the slog for money especially when you have to deal with tough, irrational personalities and self-serving politics. However that’s the nature of many work environments.
I’m a few years younger than you, at 45 so would be leaving a much bigger number on the table. However it’s only a matter of time before I take the leap as well. I thought this year it may happen (like you said if I made it through the year without working then I probably wouldn’t go back), but alas it may be still a short while down the road.
-Mike
You need to retire and come hike Pikes Peak with me before I’m so old you have to carry me up!!!
We are retiring early and since we have ‘hit our number’, I have to realize that if my wife worked another 10 years, we would probably have another $2M saved, but since we will probably have ‘problems’ spending what we do have, it won’t keep me up at night. She is tired of the stress and the work and we have 2 years to go, mainly due to me vesting in my pension. I can’t even say how much I can’t stand my job at this point, but only have 712 days left.
I agree with many of the comments. I think what we are all saying is that no “one size fits all” when it comes to when to retire and you have to judge for yourself what matters most and what works best for you. I’m 60 with a net worth approaching eight figures and I still enjoy a number of work pursuits. What achieving FI allowed me to do was gain more confidence and flexibility to go after opportunities and take more risk with pursuits that truly excite me. I now have the financial freedom not to worry about failure because I no longer have to worry about putting our livelihood in jeopardy and I can truly push the limits toward fully realizing my God-given potential.
Financial freedom does not always need to equate to not working anymore; it can mean doing what you love because it brings joy and fulfillment, and not because you have no other choices.
Great post!
Wow! You, sir, just nailed it right on the head. Well written.
As a society we under value our free time. It’s difficult to put a price on time with family or doing something that you love other than work. Time is finite while more money can always be made. The right balance between money and your own time is personal choice. Makes for interesting discussions to explore everyone’s own “right” balance.
Dying at your desk is not a retirement strategy.
Haha! Love this quote! If I was a financial planner I’d have it in my office.
It should be the motto of your site ESI.
FIRE on the Beach
Aka Millionaire 24
Maybe I’ll use it one day! 🙂
I did a similar calculation and came up with $18 Million in opportunity cost of retiring early at 43 from my anesthesia career. Which I was considering until I did the calculation! 😉
I’m planning to go ahead with this plan, but one thing you’ve left out is how retiring early has allowed you to pursue additional income sources with more vigor, including this site and RSF.
I don’t know that my site will ever be big enough to replace my physician income, but I’ll be able to make a stronger effort with the newfound free time.
Cheers!
-PoF
From the outside it appears your site is well on the way to replacing your income! 🙂
Every day, I’m hustlin!
But I’ve got a long ways to go…
You’re able to justify the $3M in opportunity cost and the biggest reason in my mind is the health aspect. I suppose the net effect is the difference between the $3M you could have earned with the income you’ve earned thru your site and potentially invested along with the intangible of a lot less stress – if you could somehow quantify that 🙂
I say “work like no one else so that you can play like no one else”. I too could have retire early but waited to 65 (now 68). When one looks at the opportunity cost of the years of last income, and ALSO the opportunity cost of taping your dividends/interest/net rental income/retirement savings early is hugh. Plus in my case I was able to substantially increase my social security payment (actually able to delay it to age 70), increased in pension and increase in HSA account, it was a no brainer. Plus it allowed my wife to retire at 52.
Of course I loved my work. Stayed with my last company for 38 years thus had lots of vacation time (6 weeks, 12 holidays) in which to play/travel. Able to work travel to interesting places and take my wife ad spend extra weekends (Las Vegas, Chicago, Orlando, New Orleans, Mexico City, etc). Those extra years of work, savings, increased pension/SS and not having to tap retirement funds allows us to do luxury travel. In fact now on a Baltic Sea cruise for 10 days (6 star ship and first class air at $28k). Our travel budget in retirement is over $100k per year. Thus “playing like no one else” in retirement.
M21 here. I don’t think I have the stomach to do the calculation. I’m turning 57 next month and I’ve made my mind up that I’m pulling the plug next Feb. I enjoy my job and I’m at the top of my field and in peak earning years for sure. However, there is extensive travel and stress involved. With our NW at ~$3MM, I really feel like it’s time to step back and do a re-boot for the back half of life. Plus my wife enjoys her job and plans to remain working for another 5 years or so which adds cushion to the stash. I know I’ll be walking away from over $1MM but as many have said here, you can’t buy another minute of life. In any event, actually doing the math might make me reconsider OMY. I think it’s best for my long term health to step away.
Time – Money – Time – Money – Time
The struggle is real for me.
Although I was nervous, I retired at 57, traveled to China 6 times the next year to consult with Chinese educators and had plenty of time to think and reflect on my next steps in life.
Here’s what I chose to do :
After China, I took a job (still employed too) in a completely different field that offered me more money, more flexibility over my schedule and a chance to travel well long before I call it quits at 65. I’m 63 now. It’s been refreshing!!!
On December 31, 2020, my wife and I plan to retire for good —. I’ll be 65 and she’ll be 62. From now until then, we plan to continue to learn how to be the best grandparents and parents to our older adult sons (who are both working,) —- we plan to learn how to give back in unique ways and we plan to learn how to experience travel differently too.
My work is not driving me any longer and hopefully, the future will allow me TIME to continue to learn how to live well without driving in others lanes.
Great post for me —— I’m glad I retired at 57, took some time off, and I’m glad I took this challenge —— now, I’m really ready to retire.
1st retirement- age 57
2nd retirement- age 65
3rd retirement- age 108 —— headed to heaven
I like to plan ahead so living to 108 works for me.
When we retire in 2020, with some luck, we could have a Net-Worth of around $4 million ——- mostly done by working as educators——
Life is good, but the struggle is real.
Time – Money – Time – Money – Time
To me most highly successful will have this question, but to me the real focus is question of retiring early is will it cause your brain to turn into fig newton. Over the years you developed your brain into a power tool that you nurtured and sharpened. What will happen to it if you don’t aggressively use it. At this stage of your career is not just the money but the interesting responsibilities your get assigned.
As I think of my own situation, I balance the unbelievably cool things I am successfully doing verses the lost time. I compare the stress verses the fulfillment. Being FIRE allows the decision to be made, actually making the decision and passing on the opportunity to do special things for my company and my team is the challenge.
I think most in the FIRE community who seek to retire from the W2 at an earlier than usual age aren’t turning their brains off and sitting on a beach all day or watching netflix. They’re just focusing their brains on something completely different.
ESI has his blog and Rockstar as a business. I’ve semi-retired in my 40’s and have started 2 businesses. I don’t see a risk of brain atrophy at all. It’s just focusing on entrepreneurship and doing something you’re passionate about, vice working in an office 50 hours a week for someone else.
It can be argued that moving from one job to another is more a later in life career change. Verses ending working and using hobbies, adventures and other life learnings as a means to grow. Such as learning a new language, playing a musical instrument or other means to intellectually stimulate your brain.
I know one area that is critical to me is being about to constantly focus 15-20 hours a week on working out and health improvements. As I try to squeeze that in with a 70 hour/week job it is difficult.
So I can agree with your point, my challenge is understanding what could lay ahead, as I would not expect a secondary career. It is one of the reasons I value this website and others like it so much as it seems so many other people are facing the same decisions or recently made them.
I always say, the definition of intelligence is learning from other people’s mistakes and experiences.
One has to ask though would work have caused a stress related Illnous that ate up that 3m. Life’s full of what ifs… Life isn’t about the money, it’s about life. Money is just a facilitator. 3m means you could have facilitated more things. But do you want to facilitate more things? If not you made the right choice.
It’s all about choices.
I sort-of-retired recently. I was part of a corporate ‘synergy’ plan and that was the best thing for me. No more long commute or crazy work hours. I could have retired but decided to change careers and work for a not for profit that helps disadvantaged youth. Yeah it is half the pay but it is double the reward!
Can’t see in article.
How much at 50ish did OP have in assets? 2m?
Great article and topic and think the calculation of “What Retiring early” will cost $ wise is fairly easily to come up with for most but since earlier retirement is different for everyone the benefits are often harder to quantify.
For me, knowing I can retire tomorrow if I want to is a great feeling and also allows me to be very selective on clients/work which ensures that I continue to enjoy my job, that it has a very good work/life balance, and it’s fairly easy (since I have been doing it so long) so not a lot of stress. My current plan to continue to work for the next few years potentially until the kids go to college although that is subject to change if I can’t find clients on “my terms” which is very possible as well and I am okay with that.
I think the Buffett quote was “Would you switch places with Warren Buffett right now with all his wealth and be 87 years old as well”. This 47 year old would not.
MillionaireInterview73
https://esimoney.com/millionaire-interview-73/
This is both exciting and depressing. It’s taken me a while to “walk away” from how much money I would have made. Assuming no change in my job level, I’m walking away from 29 years at $300,000/yr, plus inflation style raises. The numbers are astronomical, especially at when investment earnings instead of withdrawals are added.
I’m deciding my freedom is worth more than $10mil in earnings and another $10mil in investment gains..this is before considering I could play the game to get higher in the organization.
It’s been a lot to absorb for someone who grew up fairly poor when I could do a lot of good with that money, especially when I worked hard to get the skill set to earn this level of income.
Lots of interesting thoughts, but freedom is priceless
You didn’t lose. You didn’t gain. It’s not like you owned and then lost them.
The additional money would do 3 things. 1. It would shorten your portfolio need by 13 years since you would be 13 years closer to death. 2. It would decrease your healthcare cost. 3. If you had 4% WR in mind it would reduce it to probably under 2% which would mean your could de-risk your portfolio even further probably to the point where you would need only cover inflation till age 100.
So much of this FIRE talk is based on assumptions and projections, aka narrative. It might work it might not. I think it’s precious how people work for 10 years and then plan a 50 year retirement on the back of an envelope with 10 years of savings. I have no dog in the hunt. I’m retired and quite happy with my choices
I agree! You get to a point where you need to think about “how much is enough”. Working longer will always bring more income and add to your net worth but you might not live log enough to enjoy it all. Knowing when to get out is key. Great post!
Yes, it was Buffet who said that to a 25-year-old in an audience who asked him something like, How do I become as wealthy as you?” and Warren said he’d give away his fortune to be 25 again.
I’d ask one step further……You clearly don’t regret exiting Corp America at 52 with $3mil net worth. Knowing what you know now how would you feel about going at say 45 with $2mil net worth….?
If you’re asking for me, I would do it as detailed here:
https://esimoney.com/my-financial-independence-numbers/
If you’re asking for you, I can’t be sure as I have no idea what your retirement budget looks like.
Folks tend to use the 8% rate of return as an investment benchmark. However, that’s assuming one is putting all the money into stocks. If you’re going with, say, a 65%/35% split (stocks to bonds), a more realistic return would probably be 5%.
I agree that 8% may be too high of a rate or return if you have allocated your portfolio into a traditionally conservative retiree allocation. On the other hand, you also lost on 401k match and health insurance employer subsidy. HSA accounts too. On the other other hand, you may have been laid off during that 13 year period.
However, the number is secondary to me. Early retirement is a trade-off. You have to acknowledge you are losing out on income by retiring early. That’s the opportunity cost. If your life is an income optimization problem, you should never retire. You should work until the day you die.