Giving Up a $250k Salary to Retire Early Is Hard | Hacker News Reader

Giving Up a $250k Salary to Retire Early Is Hard

whitecoatinvestor.com

27 pointsgist33 comments

Someone in the article's comments asked about working part time and the author responded "veterinary academia doesn’t really understand <1.0 FTE." Is the same true of FAANG-ish companies? Can you (officially) work part time in a big tech job?

You can and many do, although this tends to be reserved for more senior engineers. Obviously a pay cut is involved.

Strictly the answer is yes with the more truthful answer being it depends on your manager.

The easiest way is probably being in a country that requires part time to be offered.

In my experience large companies reserve part time employment for valued contributors with long tenure- usually they have title like principal or fellow, and contribute in ways that cannot be hired for.

In my experience you have to be very special and important to the company to earn a part time position like this. You definitely won't start out in a part time capacity.

Big tech hire a lot of part time workers.

They scrub the toilets, serve the food, mow the campus lawns and classify pictures for the ai.

The trick to asking something like this is to do it at interview time.

Before you start working somewhere you can ask for all sorts of nonstandard things.

Not sure about bigger tech, but I did a 4 day week for a bit and I'd shift the weekends, so I'd have a 4 day weekend then a day weekend then a 4, with 4 days of work between.

This is the OP: https://www.vetmed.auburn.edu/faculty/erik-hofmeister/

College professor in Alabama makes $250k? Not bad. I guess being a doctor helps.

say you didn't read the article without saying you didn't read the article

i didn't read the article

I comment on HN.

This (+ many other signals) are giving me the "market top" vibe.

I think the vibe may instead be: growing income disparity. The WSJ reported over the weekend that over 50% of all consumer spending now comes from the top 10% of household incomes. So while some folks are flush to retire early, many are not.

Sad to see people still parroting the 4% rule when you can get "risk free" US Treasuries, today, paying more than that. Not to speak of the numerous, still conservative, investments paying far higher.

This isn't the 2010s era with ultra low fixed income yields. If you intend to retire early, please educate yourself on the state of the market

I think 4% is still a fine thing to plan around. I don't think it's wise to plan as if today's treasury rates will last your entire retirement.

You can lock in cash flowing assets today yielding 6%+ with very low risk. Think REITs with conservative portfolios and strong balance sheets.

You can lock in today's treasury rates for 30 years by buying a 30Y treasury bond.

So, yes, they will last if you understand where to put your money. The options are extremely numerous and plentiful now in cash flowing assets, and you don't have to deal with the uncertainty of selling off principal in down markets to finance your retirement

6% after inflation? The problem with 30yr bonds is that it is effectively 2% assuming 2.5% inflation rate. Stock returns have been generally around 10% even after accounting for inflation. A good mix is critical and what is a good mix depends on the personal circumstances.

Are you trying to retire with stable cash flow, or grow your wealth?

For many, retirement is first and foremost about generating a stable income. A guaranteed lower rate of return is usually desirable over a speculative higher rate of return.

Certainly, but a stable inflation-adjusted income. If your income is stable in nominal dollars, then it is constantly decreasing in real dollars.

The 4% rule, by definition, provides stable cash flow.

30Y treasury bond yielding 4.625% according to this source[0]. Please educate me so I can understand where you are seeing 6%+

[0] https://www.treasurydirect.gov/marketable-securities/treasur...

The 4% rule requires increasing that amount at the rate of inflation throughout retirement. 30 years in the case of the original studies. Even with an inflation rate of 2.5%, the required withdrawal will more than double after 30 years. The 4.625% you can lock into a 30-year Treasury would not be enough.

The 4% rule suggests selling 4% of your principal per year.

Buying a 4.625% yielding bond does not require selling principal at all.

But you're taking my point too literally. You can easily buy a 6 or 7% yielding bond that is lower risk than equities, but still paying far more in a more certain fashion

You can buy REITs today paying 6% that will grow rents around the rate of inflation (O is one example).

You can far surpass a 4% yield on cost in year 1, while also locking in inflation adjusted income growth today, very trivially, without selling one dollar of principal.

Unfortunately any thread on this is drowned out by uninformed people, or people who don't understand retirement is first and foremost about securing a stable (and non anxiety inducing) cash flow. Not growing wealth maximally.

There have been many times in history where the broad index has been flat for years. 2000 to 2010 is a famous more recent period. Would you be comfortable selling 4% a year into year 9, having watched your wealth decline materially over the last decade?

I guarantee you the retiree in bonds getting 5% and maintaining 100% of their principal is experiencing much less anxiety. And bonds give you the optionality to swap to equities in a down market like 2000 or 2008

> Unfortunately any thread on this is drowned out by uninformed people

That's a fairly aggressive statement for someone that doesn't know what the 4% rule is. It's definitely not this

> The 4% rule suggests selling 4% of your principal per year.

https://www.investopedia.com/terms/f/four-percent-rule.asp

So if you withdraw 4% in year 1, and your underlying equities are flat for 10 years because the market moves sideways, as it did in 2000 to 2010, what percentage are you withdrawing in year 10? It's more than 4%

That just makes my example above even worse for a retiree.

Is it true or not that you can secure well above 4% in year 1 YoC in a relatively low-risk manner in today's market, and also secure it against inflation?

Yes, this is true.

So either you disagree with this premise and can back it up with a meaningful counterpoint, or you can agree and move on.

For REIT example (O), the yield is 5.61% and you need to pay tax on top of that. Assuming 25% tax, you will net 4.2%. Current inflation is 2.9% [0], so assuming principal conservation, you can only spend 1.4%. Much worse than 3.5/4% on the market.. Am I missing something?

[0] https://tradingeconomics.com/united-states/inflation-cpi

> The 4% rule suggests selling 4% of your principal per year.

No, it doesn't. You misunderstand the 4% rule. The 4% rule states you sell 4% of your principal in the first year, then inflation-adjust the 4% value every year. If the stock market rockets and your portfolio jumps 30%, you still only sell/spend 4%+inflation. If your portfolio drops 20%, you still sell/spend 4% of first year + inflation.

> There have been many times in history where the broad index has been flat for years. 2000 to 2010 is a famous more recent period. Would you be comfortable selling 4% a year into year 9, having watched your wealth decline materially over the last decade?

This is exactly why the 4% rule has the allocation be 60% equities, 40% bonds, rebalancing every year. Bonds have their place for reducing volatility.

> I guarantee you the retiree in bonds getting 5% and maintaining 100% of their principal is experiencing much less anxiety. And bonds give you the optionality to swap to equities in a down market like 2000 or 2008

If you're 100% bonds, what criteria would you ever use to get back into equities?

What does the 4% rule have to do with yields of treasuries? This is a 30-year time horizon that changes spending purely based on inflation figures. Yields in the market do not matter.

TIPS would work, but you're not getting 4% on TIPS. Though you can get 2.375% on 30-year TIPS, which isn't bad, just not enough to suffice for the 4% rule.

Again, what do treasury yields have to do with the 4% rule? The 4% rule assumes you’re investing 60% in equities.

>> Though you can get 2.375% on 30-year TIPS

30 years? The author of the article is 47 years old, and his wife is 43. What happens if they live to be 80?

The 4% rule was proposed by Bill Bengen in the context of a 30-year retirement. Others have studied it in other contexts (including an infinite horizon) but 30 years is where the "safe withdrawal rate" literature started.

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