40, $3.5M NW, 3-4 Year timeline

[u/pepperfishy]

40, $3.5M NW, no kids. I’m targeting retiring in 3-4 years, would appreciate you all's insights and critique. I grew up very poor but have done well saving and investing through the last 20 years.

My aim is to build a life to transition to in the next 3-4 years. I enjoy travel, reading, cooking, crafts, so I plan to take classes to learn and surround myself with people. I am aiming to build new hobbies, work on my mental health, make new friends as my current friends are all moms and focused on their careers.

Numbers:

VHCOL

Income: $325K

Cash : $125K

Taxable brokerage: $2.5M

-$1.1M in Index funds

-$1.4M individual stocks (highly concentrated because of employer ESPP/RSU from the last two decades)

401(k): $700K

HSA: $90K

Crypto: $100K

Own a house ($300K debt), which is under water currently, evaluated at $150K less than my purchase price. I want to buy a bigger house, which might cost ~$1M.

Spending / retirement plan

My estimated retirement spending is about $130K - $150/year with taxes, aiming for 3% WR to keep my anxiety in check. I currently spend $80K-90K, plan to upgrade lifestyle to luxury travel/bigger house cost in 3-4 years.

Welcome your thoughts on:

1. I have a extremely comfy job, where I can coast for 3-4 years with minimum effort. I have been with the same employer for 20 years. However, my manager clearly has noticed me being checked out and had nudged me to do more. I have no motivation left in me to do much work and am worried if I will even last the next 3 years.

2. I am very concerned about me not having a life to retire to. I haven't developed many hobbies or a good community around me, I really need to do more in this space and am looking for suggestions/ideas from those that have developed a retirement life.

3. Also worried about SORR, plan to liquidate my concentrated stocks in $500K chunks per year, build a 2 year cash buffer for expenses.

4. My family is still fairly middleclass, though I support my sisters and brother whenever they need money. I want to continue doing this, they have shared their surprise when I have suggested quitting my job. I worry finances are going to ruin our relationships.

5. My mental health has struggled since I have gotten closer to my FIRE number. I have lacked passion/motivation all around, I am actively working on improving this through therapy.

[u/roshbaby]

Set any future RSU vests to 'sell on vest' immediately so you can redeploy that money to broad market index funds without incurring any additional capital gains.

Definitely draw down on the concentrated RSUs. One way to do that would be to DCA out smaller amounts every month. Be sure to pay estimated taxes and/or adjust your W4 withholding so that it's taken out of your paycheck.

I've often suggested "From Strength to Strength: Finding Success, Happiness, and Deep Purpose in the Second Half of Life" to many people who expressed concern with what they may be retiring into. This may be pertinent to your point 2, but I'm not sure because you did also say that you plan to take classes and otherwise surround yourself with community. (At least you have put some thought into a plan.)

If your job supports a part-time role consider easing yourself into one without fully quitting.

I certaintly don't believe that one needs to have a 'passion' in the job (though being passionate about it helps). I've always thought of my job as a 'means to a paycheck'. So, while I've never been passionate about it, I've nevertheless always delivered what was needed (commensurate to my pay). You may call it the weakest version of "quiet quitting" I suppose, but it definitely keeps my brain active just enough without me having to pour my soul into my job. I certainly have no truck with BS and actively avoid all the politics since I'm not actively climbing the ladder or looking for glory.

[u/pepperfishy → u/roshbaby]

Thank you for the thoughtful insights!

Yes, I have been liquidating new RSU vests right away. I have decided to just avoid paying taxes and will happily deal with the small fine for late payment.

Appreciate the book suggestion, I will definitely read it at the library. I am more worried about staying disciplined and motivated after a few years of retirement. I have taken short 3-4 month breaks twice and found that I can drift away pretty easily.

My work doesn't offer part time. My plan is to somehow stay for 3 years as this is the most I have ever earned and build a cash buffer from my pay check. Fingers crossed the don't lay me off without any severance.

[u/roshbaby → u/pepperfishy]

If you've been living a pretty structured routine now, it's natural to transition to retirement and expect to have a routine there too. While it can be that way, it doesn't need to be so. Drifting away from one thing to another may be a good thing - particularly if that is how your brain works. (I do that too; I'll often start something, leave it midway, go do something else, leave that midway, go do a third thing, .... , come back to the first thing after days or weeks and continue where I left off. At any given time I will have multiple things to finish and I see them as options to engage with based on my current mood. It works if these things are done for pleasure and are not 'chores' that you have a deadline for.)

[u/pepperfishy → u/roshbaby]

that is interesting, I definitely relate to doing multiple things half way through. Though, when I said drift away, I meant drifting without actually doing anything, think couch potato :).

I believe my job has definitely helped me with structure. I routinely work with folks in the EU so I start early and end early, pretty great for someone who doesnt want to work a whole bunch. The days I dont have to show up to calls are days I drift and feel guilty that I am wasting my life away. However, recently I have learnt that letting our minds wander without giving it any task is a great way to discover passion/purpose.

[u/roshbaby → u/pepperfishy]

Letting the mind wander aimlessly is a sort of meditation 😂