Walk away from $1 million a year?

[Anonymous]

That's basically our plan and what we are on track for right now. Dh will do freelance work because he loves it and would be bored without doing something. Though current projections put us at having paid off our mortgage

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP again. It sounds like a lot of posters believe there is no such thing as "good debt." I hear that a lot on bogleheads. I'm not sure I agree. With the Trump (ugh) tax stuff there's less of an incentive as before to keep a mortgage, but it still seems to me that, over the long term, you will do better in the market than what you'd save in interest by paying off a mortgage with a low interest rate (in my case, 3.25 percent). I realize that not having a mortgage is a comfort thing for many, though.

You can keep the mortgage, people are suggesting you pay it off because 1) you haven't answered the question about how much you spend, just said you have a $2k/month mortgage and no other debt, and 2) without more information that's all we can advise you on.

If your total annual outlay is less than $200k you can retire today. If you don't know what it is you need to figure that out first. If it's more than $200k then you need to reduce it, and paying off the mortgage is the only clue anyone has to go on for a way to do that because it's the only information you've provided.

I hear you. The bottom line is that I obviously can retire on 200k a year, my question is how crazy is it to walk away from a guaranteed $1 million a year to do that? Would you do it? I'm doing a sanity check.

[Anonymous]

Anonymous wrote:OP here. I should add that all the kids are out of college and married. We have a mortgage of about 2k a month and no other debt.

When did you have children?

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. I should add that all the kids are out of college and married. We have a mortgage of about 2k a month and no other debt.

When did you have children?

Early. In our 20s.

[Anonymous]

Anonymous wrote:Would you walk away/retire in your early/mid 50s from a job that you absolutely hated but were pretty much guaranteed around $1 million a year for another decade knowing that if you retired now your portfolio would conservatively generate about $200k a year and your employer would allow you and your spouse to stay on its health insurance forever if you paid the full premium?

Asking for a friend . . .

I would definitely walk away if I "absolutely hated" it. You're not guaranteed tomorrow. Especially in your mid50s, time is really quite precious. I know quite a number of people whose whole life changed with one diagnosis. $200k/year is more than I'd need to be happy and comfortable. I wouldn't look back.

[Anonymous]

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Anonymous wrote:OP here. I should add that all the kids are out of college and married. We have a mortgage of about 2k a month and no other debt.

I mean, I'd probably pay off the house. I know its not necessary but just a mental thing before quitting work. But obviously you can easily do what you are proposing.

I'd work one more year, pay off the house, get everything in order, then walk away.

Another miserable year, another million dollars that's taxed to death and ends up being a lot less. Then you pay off the house and have no mortgage but your overall net worth doesn't change. You just have more of it invested in your house and not generating any income. So your portfolio generates less money but you have no mortgage.

Isn't that six of one, half dozen of the other, except you've lost another year?

You do not understand net worth, my friend.

Sure I do. It's gross assets minus liabilities. If you have, say, $5 million in stocks/bonds and a house worth $1 million but with a $500k mortgage, then your net worth is $5.5 million. If you take $500k from the stocks/bonds and pay off the mortgage you now have $4.5 million in stocks/bonds and $1 million in your house -- $5.5 million again. No difference.

No, because he's working another year and paying off the house with that money. You said "six of one, half a dozen of the other, except you've lost another year" which indicates that you do not realize that working another year and making another million dollars, whether it goes into stocks or to pay off debt, will in fact improve OP's net worth. There is a difference.

NP here. PP was quite clear, work another year, then pay off the house, but your net worth does not change. Yes, that's correct, it won't change (other factors not withstanding) whether you pay off your house after that extra year or not. If you compare it to a year ago, yes, of course it will change, you will have worked another year and you will have likely received other non wage income but PP (who totally understands net worth and you're all just being dicks about it) wasn't talking about that he/she was talking about whether to then pay off house.

[Anonymous]

Anonymous wrote:OP here. I should add that all the kids are out of college and married. We have a mortgage of about 2k a month and no other debt.

I would walk

[Anonymous]

The choice is yours. I'd want to leave my grandkids with fully paid for college/graduate school college funds and maybe gift each kid enough for a nice house.

[Anonymous]

I could easily live in great style off $200k a year, so yes.

[Anonymous]

On a scale of 1-10, how much do you hate the job?

[Anonymous]

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Anonymous wrote:OP here. I should add that all the kids are out of college and married. We have a mortgage of about 2k a month and no other debt.

I mean, I'd probably pay off the house. I know its not necessary but just a mental thing before quitting work. But obviously you can easily do what you are proposing.

I'd work one more year, pay off the house, get everything in order, then walk away.

Another miserable year, another million dollars that's taxed to death and ends up being a lot less. Then you pay off the house and have no mortgage but your overall net worth doesn't change. You just have more of it invested in your house and not generating any income. So your portfolio generates less money but you have no mortgage.

Isn't that six of one, half dozen of the other, except you've lost another year?

You do not understand net worth, my friend.

Sure I do. It's gross assets minus liabilities. If you have, say, $5 million in stocks/bonds and a house worth $1 million but with a $500k mortgage, then your net worth is $5.5 million. If you take $500k from the stocks/bonds and pay off the mortgage you now have $4.5 million in stocks/bonds and $1 million in your house -- $5.5 million again. No difference.

No, because he's working another year and paying off the house with that money. You said "six of one, half a dozen of the other, except you've lost another year" which indicates that you do not realize that working another year and making another million dollars, whether it goes into stocks or to pay off debt, will in fact improve OP's net worth. There is a difference.

NP here. PP was quite clear, work another year, then pay off the house, but your net worth does not change. Yes, that's correct, it won't change (other factors not withstanding) whether you pay off your house after that extra year or not. If you compare it to a year ago, yes, of course it will change, you will have worked another year and you will have likely received other non wage income but PP (who totally understands net worth and you're all just being dicks about it) wasn't talking about that he/she was talking about whether to then pay off house.

No, you're reading incorrectly. PP was saying that working the extra year wouldn't change OP's net worth -- that's why he said "Isn't that six of one, half dozen of the other, except you've lost another year?" The implication is that OP's net worth would be the same either way, and the only difference is the lost time. That's incorrect, and demonstrates that PP does not understand net worth.

[Anonymous]

Anonymous wrote:OP here. I should add that all the kids are out of college and married. We have a mortgage of about 2k a month and no other debt.

What’s your current net worth?

[Anonymous]

I would totally quit.

Signed, a non-partner in biglaw who can't stand it and wishes I was in the financial position to quit. It sounds like you know what you're doing financially. And wow, what a low mortgage payment you have (jealous). Enjoy your retirement.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP again. It sounds like a lot of posters believe there is no such thing as "good debt." I hear that a lot on bogleheads. I'm not sure I agree. With the Trump (ugh) tax stuff there's less of an incentive as before to keep a mortgage, but it still seems to me that, over the long term, you will do better in the market than what you'd save in interest by paying off a mortgage with a low interest rate (in my case, 3.25 percent). I realize that not having a mortgage is a comfort thing for many, though.

You can keep the mortgage, people are suggesting you pay it off because 1) you haven't answered the question about how much you spend, just said you have a $2k/month mortgage and no other debt, and 2) without more information that's all we can advise you on.

If your total annual outlay is less than $200k you can retire today. If you don't know what it is you need to figure that out first. If it's more than $200k then you need to reduce it, and paying off the mortgage is the only clue anyone has to go on for a way to do that because it's the only information you've provided.

I hear you. The bottom line is that I obviously can retire on 200k a year, my question is how crazy is it to walk away from a guaranteed $1 million a year to do that? Would you do it? I'm doing a sanity check.

Only you know HOW miserable you are, and how happy you could be on $200k/year. Ask yourself what you will do when you/your spouse needs a new car, wants to take a fancy vacation, etc. You no longer will have bonuses, etc. to cover these things. You need to think, REALLY THINK, about how you live now and how you would like to live in retirement. And make sure your spouse is on board.

Lots and lots of people (us included) would be thrilled with a $200k annuity every year and never having to work again. Only you know if your current wants/needs fit within these parameters.

[Anonymous]

Depends. Does it make you feel physically sick? Or just kind of boring?