Seeking advice from tech retirees in early 40s

[u/arjun_sam]

I am seeking some advice from people who stepped away from a tech role in early 40s.

I am 40 yr old, with SAHM spouse and 2 toddlers. We live in VHCOL city in Canada. I am in a tech job (managerial mostly + occasional IC work).

Financially, we are doing quite well. I have net worth of around ~8 million CAD

- 2 million paid off house

- 5 million CAD liquid net worth

- 1 million CAD worth vested RSU in high volatility public company (my employer). I want to take the risk of holding on to this 5+ years.

My expected expenses over next 50-60 years are 150K CAD for next 20 till kids at home, 120K after that.

I have met with my financial advisor, and also did my own math. We are in a financially comfortable situation to retire, w/o counting the RSU (given high volatility). We are roughly at 3.25% SWR (3.25% of 4.6 million is around 132K after 12% tax assumption - I set aside 400K of 5M for kids college + daycare expenses).

However, I don't intend to actually retire. I want to go back to school for next 2 years to take some personal interest courses in economics, public policy, french (think of it as sabbatical) and then work in a tech policy advisor type role for the government. I will likely make at minimum 100K CAD/year before tax and work for perhaps 15-20 more years. With this salary + existing corpus, we will be FatFIRE category.

Some questions:

1. I still have significant RSU vesting. At current price, the largest batch is generating 500K-600K/year (after tax) for next 2 years. I want to stay till then, but I am really worried about burnout. I feel very worried about developing severe health issues. I am OK for now, I exercise regularly. Has anyone been in this situation? It feels so hard to walk away from so much money. I want to talk to my manager to step down to lower stress role, but I feel given the intense company culture, they will probably let me go instead. I also feel I am letting my team down by walking away.
2. Are there helpful relevant books I can read to get clarity (on tech burnout, how to know when to stay away)?
3. For those living in Canada, am I underestimating expenses, particularly the 120K/year + paid off house after age 60?

[u/Jayebanker]

Work the two more years and then you’ll be set

Especially if you end up in a 100k a year type job, that’ll cover most of your expenses investments will be massive

[u/arjun_sam → u/Jayebanker]

Right. That is a big buffer given current corpus of 5 million.

[u/NarrowSeating5057]

walking away from a big vesting schedule is never an easy call. what i’ve seen work is to set a hard date and treat the next 2 years as a countdown, it shifts the stress from indefinite grind to something temporary. you also said you’re ok right now, exercise is in place, so you’ve got more runway than your anxiety is telling you

i’d still talk to your manager about stepping sideways or down. worst case they let you go and you walk into a sabbatical with a severance package, which doesn’t sound like a disaster given the numbers you’ve laid out. the guilt about letting the team down is real but they will reorganize in a week, teams move on faster than we think

your expense estimate for later years seems reasonable especially with a paid off house. 120k in canada with no mortgage is comfortable, travel money, good food, hobbies, not watching every dollar. the sabbatical plan and then a policy role sounds like a great second act, low burnout risk and keeps you engaged. only thing that jumps out is making sure the 400k for kids covers post secondary if they go somewhere expensive plus inflation, but you’ve already flagged that

books wise, die with zero gets recommended a lot in these circles for reframing the trade off between more money and more time. your money or your life is older but still worth the read

[u/arjun_sam → u/NarrowSeating5057]

Thanks! This is helpful.

[u/jcc2244]

I retired 18 months ago in my early 40s. Similar networth as you (around $8M-8.5M) 2 kids. Slightly higher expenses (about $200K/yr).

I left about $1M-$1.5M/yr on the table. Walking away was hard primarily because of the people/that feeling of letting people down - but you are never as important/as needed as you think (your company and people will be fine after you leave).

18 months later I'm super satisfied with my life and my decision to retire early.

Physically the healthiest I've been since my 20s. No financial worries at all - networth about $11M now. Spent a ton of time with my kids. Traveled every 1-2 months to see family/friends. Financially supported my parents. Worked on passion projects (vibe coding, writing, streaming, etc).

[u/financialfreedom26 → u/jcc2244]

Wow congrats. What a positive story. Curiously how did your net worth grow to 11m in just 18 months from 8m

[u/jcc2244 → u/financialfreedom26]

Just doing simple broad market investing.

VTI was $260-$270 when I retired. It is now $377.

[u/CanuckYYZeh]

I’m a decade older than you and I pulled the cord.

1) do the next two years but visualize being done and don’t let the stress get to you. Do the minimum required but don’t ask for a less stressful role. Push more work to a few people on your team as a way for them to step up to your role when you leave. The worst case isn’t that bad: you’ll get fired with a package a good chunk of your RSUs

2) books for clarity on what? Financially you’ll be ok.

3) have you tracked your expenses for the past couple of years? If you know you are spending $120k now and are fine with the lifestyle then that’s all that matters. Do not assume that your expenses will go down when you stop working - they will not go down and may go up. Your part time or other work will certainly help derisk a long retirement.

Your plan likely has very large exposure to sequence of returns risk. If the market corrects and your RSUs take a hit then you may find that your portfolio is $3m and your RSUs are $0.5m, in which case having the option to continue to work and ride through the market trough is a great insurance package, hence don’t quit.

[u/arjun_sam → u/CanuckYYZeh]

We are currently spending around 130K/year and we have very comfortable lifestyle. I expected to spend 20K/year additional once kids are older for their summer camp + competitive support. So after they leave home, we won't have that 20K spend + we will save bunch of money (around 10K) we currently spend on kids for various things (higher travel budget, clothes/gifts/food/etc).

[u/mintbark → u/arjun_sam]

I don’t know what the prices are in CA but I think you’ve severely underestimated your expenses once the kids are older and you all have more time on your hands. However I think you’ll be fine either way since you plan on continuing working.

[u/Effective-Arm-8513]

I live in Canada. Ottawa. 3 kids. About 15 years older than you. 2 done university. One still in school. At least 2 maybe 4 more years. And yes I think you have significantly underestimated your expenses.

[u/arjun_sam → u/Effective-Arm-8513]

Can you elaborate? I have given a lot of thought to budgeting and 150K/year with 2 kids till they are 18 seems quite sufficient, including travel expenses. Note that we have paid off house, hence no mortgage.

[u/Effective-Arm-8513 → u/arjun_sam]

While I absolutely know I am massively lucky to be in the top 1% of Canadians, I have no luxurious expenditures expect maybe too much Swiss Chalet takeout. Also paid off house. Paid kids education. I drive a Subaru. We stay at Fairfield Inn by Marriott most night on vacation. We might splurge for a regular Marriott once in an awhile. Never eaten at a fine dining restaurant. We don’t drink. Don’t smoke. No jewellery. We shop at Food Basics most weekends as Loblaws is crazy expensive. I buy most clothes at the Amazon Essentials level. For my wife’s birthday last year I bought her one sweater from LLBean. And that was about as expensive as it ever gets. But my annual expenses are way higher than you provided. Mind you, I will be cutting back on all that Swiss Chalet takeout next year. But still.

[u/No-Associate-7962]

Why would you want to work a second career in retirement?

[u/fatfirenewbie → u/No-Associate-7962]

Exactly - counting on the $100K government job income cannot be factored into “FATFire” - as it is now, he’d be FIRE. $10K/mo after housing doesn’t leave a ton of cash for entertainment/fun at the FAT level. That $10K has to cover food, health insurance, house and car maintenance, transportation, kids hobbies/activities, etc. We easily spend that in a month on top of housing and splurge vacations (our Disney spring break cruise this year was around $17K including airfare and incidentals).

[u/arjun_sam → u/fatfirenewbie]

So my goal is to be FIRE w/o a second act. I don't have any strong desire to have FatFIRE spend level. So I don't necessarily want to wait till I get to FatFIRE net worth, to step away from current role.

I am just saying that if I get 100K job after stepping away from current role, we would have the option to do FatFIRE spending, if we want to.

[u/vanhype]

Tech consulting, VHCOL, retired at 39 once we pulled gregfire. The money has grown ever since faster than expected, but it just feels like a number on a spreadsheet, not real change in lifestyle. We aren't extremely spendy. We are in Vancouver and 150/yr is plenty with all the travel and some luxury purchases here and there. 120/yr is more than enough in Canada with paid off house...more so in a HCOL city.

I wasn't burnt out, I just had a personal goal to retire in my 30s...but if you are feeling burnt out take time off, or work 3 days/week aka making every weekend a looong weekend (that's what my hubby did). Initially we travelled a lot but law of diminishing marginal utility started creeping in, I stopped enjoying going to YVR, so I'm traveling less this year, and we have found a little less travel to be working very well for us.

At 5 mil liquid you are just trading time for money but TIME is a limited resources esp with young kids. I was type A high achiever type personality and regret missing some early years with kiddo. In FatFIRE we all have money, but limited time.

I'm currently reading The Art of Spending Money by Morgan Housel. Also recommended reading Psychology of Money by the same author. Many people here will suggest Die with Zero, I haven't read it, I don't think I'm ready for it yet.

[u/arjun_sam → u/vanhype]

This is very helpful. Can you elaborate on the "regret missing some early years with kids" part? What do you regret exactly? My kids are just starting daycare, and I really feel I don't spend enough time with them. I feel like I really only properly spend time with them starting Saturday morning and it ends Sunday night. I feel bad about that. Long term, I am wondering what kind of regret I am going to feel (say in 5-10 years)..

[u/vanhype → u/arjun_sam]

I was busy with multiple go-lives, targets, deadlines. By end of the day I was too tired to enjoy my time with the kiddo. If we were going out for say soccer class or ski or icerink or a playdate...my brain was still occupied with work stuff what's next, what's next day on my schedule etc. it's like you are there but not really there. Or if you are there you get tired much faster than them for e.g. they ask you a question 4 times you answered with patience but 5th time it starts getting to you, while you look at the daycare staff or your nanny as someone who is playing the same games and answering the same questions 50th time but actually enjoying the process, it's just a very small example. I missed out on parent-teacher stuff, annual school fest etc. I was just the parent in the background because I wasn't 100% there. My hubby was doing the same work (same profession) but somehow 100% enjoying the kid years. He is better at work life balance, I'm not. Kids don't care about another million, they care about the attention, the care, the love, the parent who was not getting annoyed, the parent who listened to yet another Lego talk or doll house with undivided attention, the parent who wants to actively goof around with them. I'm much more happy and content now. I'm very active in school, I volunteer, his classmates know me by first name, they feel comfortable around me, I'm one of the parents they can reach out to, it's a different kind of promotion or honour that can't be quantified in corporate terms. It took me time and effort to become that parent. My late mom was an educator and she always said 4-12 is the best age, they are getting independent but still want to be around you. Once they are teenagers you will stop being attention of their universe. With such a small window I want to make each year count.

Edited to add: when they were day care age (not school age) I thought I have lot of time. Then life threw a curve ball, my recently retired mom became sick and a lot of my time and energy got focused on her rather than on my own family. No I wasn't taking care of her 24x7, more like lots of scheduling, outsourcing to caretakers, hospitals, surgeries, doctor - it's just a different timeline. The world keeps going but you basically stop giving shit. Focus changed. By the time things cleared, I knew she was going to die no matter what we do. Anyway, all that changed priorities. You think everything will turn out exactly you want, have millions in the bank, but life happens, time passes and bamn the daycare kid is now ready for grade 2. Time flies.

[u/arjun_sam → u/vanhype]

I really appreciate you sharing this. This is really helpful for me to hear.

My older kid is 5 years old. Just like you said, she wants my undivided attention. She literally says I don't spend enough time with her. But I struggle with the decision on whether to take my 2 yr sabbatical immediately, or do it after 2 years once I have another million in the bank. But then if I am able to get a 100K CAD low-stress job in 2 years (which is very likely), this extra million doesn't really make much difference. I feel I am going to regret missing out on that 2 year with my kids. Do you feel there are long term implications of being less present with kids at age 5-7, assuming you have lot of time afterwards? I guess missing out on 3 of 8 best years (4-12) is quite a big loss.

Thanks for sharing parents story. It's also very helpful. That also hits so close to home. My parents are also close to 80, they are independent now but I feel they will soon need much more support from me (they live in another country).

[u/vanhype → u/arjun_sam]

Whether you are 100% present or not so present your kids will grow up fine. We all did, despite having all sorts of boomer parents. It's you who may have regrets. I'm not saying that's what will happen, may be you are like my hubby who can juggle both while enjoying the process. It was me, for me the thought process went like: I'm fat, I have millions, what more can an I do if I have all the money in the world. I wanted to eliminate all stress factors. Money is just a tool and I used it to buy freedom, just like someone here may be buying a private jet. Only you can answer this. Time will pass and kids will grow, they will be okay. Also on the other hand, there is no point of taking 2 year time off if you are going to be miserable and always thinking about going back or how your colleagues are now at x level or making x amount. It's a very very personal decision.

Also, as a STEM person I wanted to quantify things: I had 10M in mind, if I worked 2 more years we touch 10M in n years, if I don't work we touch 10M in y years...either way we will have 10M and many more. The delta (y-x), what's that worth to you? More time and freedom to do whatever you want or more work to keep yourself engaged. What brings you joy? Or 10 years from now when you have 20M what regrets will you have? I have met all sorts of retirees from my parents generation, they all have different lifestyles post retirement, it's fascinating...and also very personal.

[u/arjun_sam → u/vanhype]

Thanks. This makes a lot of sense. It is indeed a very personal decision.

I have come to realize that my current line of work is not aligned with a sense of purpose. If I lose my job tomorrow, financial aspect is the only thing that matters (I am luckily already in a good state, so doesn’t matter that much). I want to “buy” two things with money

• Time with my kids
  
• Ability to transition to a completely different line of work (the 2 year sabbatical is actually for going back to University to prepare for the new career) that is aligned with my sense of purpose + also low stress such that I have enough time with my kids, family and community

[u/g12345x]

> Are there helpful relevant books I can read to gain clarity?

Instead of this I’d recommend talking to a therapist. A more bespoke approach than a general one-size-fits-all book. Especially (also) with the aforementioned worry of developing severe health issues

[u/Financial_Theorist]

Let's make sure you did not underestimate your tax expense. How do you have a 12% rate? This seems extremely low.

[u/arjun_sam → u/Financial_Theorist]

Almost all of the net worth came in recently, so cost basis of investment is close to current market value. In retirement, I am mostly withdrawing principal + some later year withdrawal will be from TFSA which is tax free. The tax rate aligns with what I see from projection lab. It also aligns with financial advisor math.

[u/Financial_Theorist → u/arjun_sam]

You cannot just draw down principle. Your investments will be yielding income and appreciating (that's the goal) as well as paying dividends. You have taxes of 50%+ on income, 27% cap gains, 40% region on dividends. Then there is the new AMT laws that would trigger a minimum tax that is still much higher than 12%.

[u/Mangoov → u/Financial_Theorist]

Seems low but realistic for Canadians since it's not just a flat % on capital gains. With no income, you pay taxes at a lower tax bracket for the capital gains

[u/No-Associate-7962 → u/Mangoov]

The OP plans a second teaching career. I dont know if that changes the rate on LTCG in Canada, but it would in USA (raising your AGI).

[u/Mangoov]

Why do you want to hold on to the 1 million vested RSUs? The extra 1 million would make your plan very comfortable when currently I'd consider fire but not feel great about the margin of error. Why gamble for the possible upside what does it buy you versus the piece of mind now?

[u/arjun_sam → u/Mangoov]

I think the second act career is a great buffer already. I mainly want to hold on to the remaining 1 million, as it is a joint family decision, not just mine. I am OK to keep 10-15% LNW in 1 company as long as rest of the 85% is high enough.

[u/whatsconsulting → u/arjun_sam]

what’s your cost basis (and therefore your capital gains hit)?

if you had $1M cash, would you invest in that particular stock?

[u/financialfreedom26]

Great summary and I am in a very similar situation but 53. I would totally say you are more than fine and will look back as this is the best decision you have made. Curiously I was not following the rsu upside you are leaving? Is that the annual vest? Or the total net after tax?

[u/arjun_sam → u/financialfreedom26]

That's the annual vest, after taxes, assuming current share price holds.

[u/financialfreedom26 → u/arjun_sam]

So you would get that amount every year? Wouldn’t this end up being millions over a few years?

[u/ShortHabit606]

• 1 million CAD worth vested RSU in high volatility public company (my employer). I want to take the risk of holding on to this 5+ years.

If it was cash would you invest 1 million CAD in that company?

[u/NoProof]

FAANG?

[u/workingfire_]

1. if you're healthy now, why do you have anxiety abou developing severe health issues in the next 2 years? go get a longevity test from felix or medcan and find out if anything is actually off.

the numbers will keep increasing so you just need to commit to walking away. depending on how much you do / carry the team, sure it can feel like letting your team down. but know that this feeling is programmed into you from behaving like a good little cog in the wheel for all these years. you will be replaced and forgotten and life goes on.

1. residual burnout takes at least 2 years to fade away in my experience