More advice for BigLaw Survivor, please?

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supalong52
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Re: More advice for BigLaw Survivor, please?

Post by supalong52 »

BigLaw Survivor wrote:Interestingly, I just now went back to my checking account and calculated exactly what I spent in the last six months through today excluding federal and state income taxes but including absolutely everything else. The total: $108,267. In the past six months we've made virtually no effort to cut our expenses, keeping the cleaning service, the gardener, etc., plus we took two pretty expensive vacations including three plus weeks in Europe with our youngest daughter helping her get settled in grad school (and spending too much money on her). The bottom line is that I do think I could live forever like I've lived for the last six months, and the question is: can I do that with the portfolio that I have?

Edit: I've now gone back for the last 12 months and the total is $212,888 . . .
BigLaw Survivor -- I actually have a question for you. You're kind of like future-me in an alternate reality. Alternate reality because I'm thinking of walking away from BigLaw much earlier and with much less than you. Would you do it in my situation?

Married, but no kids yet
I'm 35, wife is in late 20s.
Work for a top firm and make $500K+ a year ($600K+ in good years with bonus) - not equity partner yet. Really hate the environment and pressure.
Net worth (all cash/stocks/retirement) of $1.9M.
Spend $55K a year in a very high cost of living area.
Would relocate to lower cost of living area to purchase house for $275K and get rid of $2K+ rent. Also in that exchange, can fit in health insurance and maybe even a kid!

Or since you have gone the stretch, is it worth powering through for another 15-20 years and jack up that net worth? Youth or security? Or some middle ground?
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

SQRT wrote:You seem to have a reasonable handle on your current spending, but do you think this might change in retirement? Certainly did for me. More travel, new homes, new hobbies? Some expenses related to working might reduce as well. Is a $210k lifestyle optimal in retirement for you? Or just status quo? If you started with a clean slate what would you do?
Good questions.

There will definitely not be new homes, and certainly not more expensive ones. If anything, we'd eventually downsize into the condo, but that's about it. We're not leaving this area, at least not full time, and our current set up is probably the most affordable way to stay here.

We've always traveled -- two trips abroad this year, plus a week at the beach and a week in the mountains -- and I expect this will increase. But we've always been economical about travel. We've been just about everywhere, but we don't stay in expensive hotels or go out to fancy restaurants when we're there. It's just not our style. Still, you're right, we should budget more for travel.

Hobbies? I've never really had any. Just work and family and travel. Any ideas? Ha ha ha.

In recent years I didn't really have too many work-related expenses. In years past there were commuting and parking costs, which were considerable, but when we moved downtown a few years ago that got rid of the commute -- I started walking. I was never one for expensive suits or anything; I wore the same cheap clothes for years. I did eat lunch out every day, though, and that's one thing I'll no longer have.

I don't know if a $210k lifestyle is "optimal" or not. I just know that that's what I've been living and I haven't been hurting. I also know that there are no big changes planned for the foreseeable future, for a variety of reasons -- other than me not working. That's why the number makes sense to me.
SQRT
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Re: More advice for BigLaw Survivor, please?

Post by SQRT »

BigLaw Survivor wrote:
SQRT wrote:You seem to have a reasonable handle on your current spending, but do you think this might change in retirement? Certainly did for me. More travel, new homes, new hobbies? Some expenses related to working might reduce as well. Is a $210k lifestyle optimal in retirement for you? Or just status quo? If you started with a clean slate what would you do?
Still, you're right, we should budget more for travel.

Hobbies? I've never really had any. Just work and family and travel. Any ideas? Ha ha ha.
After retirement we took up activities mainly related to more travel and physical activity. Specifically, downhill skiing, biking, and more general working out. These activities can be done without too much extra expense. But if you like to bike or ski in exotic places, the expenses can certainly add up.

How do you intend to fill your time once retired? Not difficult to do, but might affect your expense levels. You don't sound like the kind of guy who will be watching a lot of daytime TV?
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

supalong52 wrote:
BigLaw Survivor wrote: BigLaw Survivor -- I actually have a question for you. You're kind of like future-me in an alternate reality. Alternate reality because I'm thinking of walking away from BigLaw much earlier and with much less than you. Would you do it in my situation?

Married, but no kids yet
I'm 35, wife is in late 20s.
Work for a top firm and make $500K+ a year ($600K+ in good years with bonus) - not equity partner yet. Really hate the environment and pressure.
Net worth (all cash/stocks/retirement) of $1.9M.
Spend $55K a year in a very high cost of living area.
Would relocate to lower cost of living area to purchase house for $275K and get rid of $2K+ rent. Also in that exchange, can fit in health insurance and maybe even a kid!

Or since you have gone the stretch, is it worth powering through for another 15-20 years and jack up that net worth? Youth or security? Or some middle ground?
supalong52 --

Since you asked . . .

When I was your age I also "hate[d] the environment and pressure." In fact, I hated it from the very beginning. But I had come from nothing, got married young, and at 35 already had four kids ranging in age from 5 to 14. I felt that I had no other options, so I stayed. And each year I made more money and felt more stuck in the job because of it. Who in their right mind goes from nothing to hundreds and hundreds of thousands of dollars a year -- ten times more than anyone else in his family -- and walks away from it?

Then, one day, the kids were gone and I came to the realization that I had enough money that no matter what happened I was going to be just fine. The combination made it so that, for the last year or so, I couldn't even muster the energy to fake it at my law firm. The atmosphere became very poisonous for me. I was just so done. So I left.

If you think you're feeling pressure now, I guarantee you will feel it even worse once you start a family. You'll look around you, for example, and see that the other lawyers' kids are almost all in private school, even when they live in top public school districts. And you'll do one of two things in response: You'll send your own kids to private school and compound the pressure on you, or you'll go the public school route and compound your differences between you and the other lawyers. And, as for the lawyers who don't have kids, you'll feel different from them, too, and question their priorities and values. Isn't there more to life than work, you'll wonder. This is just one example. The bottom line is that feeling disaffected and alienated in the law firm environment isn't something that in my experience improves with time. It only gets worse.

In sum, you feel like I did at 35. Looking back, I don't regret not leaving earlier, given my own personal situation. I had obligations, and I'm smart enough to know that others with the same obligations but less pay had it far worse. But, unlike me, you have the resources at 35 to go in a different direction than I did. So, well . . . I think you now know how I'd answer your question.
Last edited by BigLaw Survivor on Mon Oct 26, 2015 11:59 am, edited 1 time in total.
supalong52
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Re: More advice for BigLaw Survivor, please?

Post by supalong52 »

BigLaw Survivor wrote:
supalong52 wrote:
BigLaw Survivor wrote: BigLaw Survivor -- I actually have a question for you. You're kind of like future-me in an alternate reality. Alternate reality because I'm thinking of walking away from BigLaw much earlier and with much less than you. Would you do it in my situation?

Married, but no kids yet
I'm 35, wife is in late 20s.
Work for a top firm and make $500K+ a year ($600K+ in good years with bonus) - not equity partner yet. Really hate the environment and pressure.
Net worth (all cash/stocks/retirement) of $1.9M.
Spend $55K a year in a very high cost of living area.
Would relocate to lower cost of living area to purchase house for $275K and get rid of $2K+ rent. Also in that exchange, can fit in health insurance and maybe even a kid!

Or since you have gone the stretch, is it worth powering through for another 15-20 years and jack up that net worth? Youth or security? Or some middle ground?
supalong52 --

Since you asked . . .

When I was your age I also "hate[d] the environment and pressure." In fact, I hated it from the very beginning. But I had come from nothing, got married young, and at 35 already had four kids ranging in age from 5 to 14. I felt that I had no other options, so I stayed. And each year I made more money and felt more stuck in the job because of it. Who in their right mind goes from nothing to hundreds and hundreds of thousands of dollars a year -- ten times more than anyone else in his family -- and walks away from it?

Then, one day, the kids were gone and I came to the realization that I had enough money that no matter what happened I was going to be just fine. The combination made it so that, for the last year or so, I couldn't even muster the energy to fake it at my law firm. The atmosphere became very poisonous for me. I was just so done. So I left.

If you think you're feeling pressure now, I guarantee you will feel it even worse once you start a family. You'll look around you, for example, and see that the other lawyers' kids are almost all in private school, even when they live in top public school districts. And you'll do one of two things in response: You'll send your own kids to private school and compound the pressure on you, or you'll go the public school route and compound your differences between you and the other lawyers. And, as for the lawyers who don't have kids, you'll feel different from them, too, and question their priorities and values. Isn't there more to life than work, you'll wonder. This is just one example The bottom line is that feeling disaffected and alienated in the law firm environment isn't something that in my experience improves with time. It only gets worse.

In sum, you feel like I did at 35. But, unlike me, you have the resources to go in a different direction. So, well . . . I think you now know how I'd answer your question.
Thanks for the honest feedback. I always had the vague sense that buying a $2M house (median in our town) and having kids would be like getting sucked in a black hole. My wife and I are both planning on giving notice in three months. I cannot wait. Best of luck to you as well!
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

[/quote]

After retirement we took up activities mainly related to more travel and physical activity. Specifically, downhill skiing, biking, and more general working out. These activities can be done without too much extra expense. But if you like to bike or ski in exotic places, the expenses can certainly add up.

How do you intend to fill your time once retired? Not difficult to do, but might affect your expense levels. You don't sound like the kind of guy who will be watching a lot of daytime TV?[/quote]

I've started going to the gym every day and in the last four months have dropped more than 20 pounds. I walk my dogs. I hang out with grandkids (had kids young, so I now have grandkids young). I just tell myself that it's only been a few months and to give myself time . . . I'll figure it out. The only certainty at this point is that I'm very, very glad I stopped working. I've never looked back.
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

supalong --

You're going to be just fine! Congratulations!
frugalecon
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Re: More advice for BigLaw Survivor, please?

Post by frugalecon »

supalong52 wrote:
BigLaw Survivor wrote:
supalong52 wrote:
BigLaw Survivor wrote: BigLaw Survivor -- I actually have a question for you. You're kind of like future-me in an alternate reality. Alternate reality because I'm thinking of walking away from BigLaw much earlier and with much less than you. Would you do it in my situation?

Married, but no kids yet
I'm 35, wife is in late 20s.
Work for a top firm and make $500K+ a year ($600K+ in good years with bonus) - not equity partner yet. Really hate the environment and pressure.
Net worth (all cash/stocks/retirement) of $1.9M.
Spend $55K a year in a very high cost of living area.
Would relocate to lower cost of living area to purchase house for $275K and get rid of $2K+ rent. Also in that exchange, can fit in health insurance and maybe even a kid!

Or since you have gone the stretch, is it worth powering through for another 15-20 years and jack up that net worth? Youth or security? Or some middle ground?
supalong52 --

Since you asked . . .

When I was your age I also "hate[d] the environment and pressure." In fact, I hated it from the very beginning. But I had come from nothing, got married young, and at 35 already had four kids ranging in age from 5 to 14. I felt that I had no other options, so I stayed. And each year I made more money and felt more stuck in the job because of it. Who in their right mind goes from nothing to hundreds and hundreds of thousands of dollars a year -- ten times more than anyone else in his family -- and walks away from it?

Then, one day, the kids were gone and I came to the realization that I had enough money that no matter what happened I was going to be just fine. The combination made it so that, for the last year or so, I couldn't even muster the energy to fake it at my law firm. The atmosphere became very poisonous for me. I was just so done. So I left.

If you think you're feeling pressure now, I guarantee you will feel it even worse once you start a family. You'll look around you, for example, and see that the other lawyers' kids are almost all in private school, even when they live in top public school districts. And you'll do one of two things in response: You'll send your own kids to private school and compound the pressure on you, or you'll go the public school route and compound your differences between you and the other lawyers. And, as for the lawyers who don't have kids, you'll feel different from them, too, and question their priorities and values. Isn't there more to life than work, you'll wonder. This is just one example The bottom line is that feeling disaffected and alienated in the law firm environment isn't something that in my experience improves with time. It only gets worse.

In sum, you feel like I did at 35. But, unlike me, you have the resources to go in a different direction. So, well . . . I think you now know how I'd answer your question.
Thanks for the honest feedback. I always had the vague sense that buying a $2M house (median in our town) and having kids would be like getting sucked in a black hole. My wife and I are both planning on giving notice in three months. I cannot wait. Best of luck to you as well!
Supalong,

I don't know about others, but I would be very interested in hearing about your experience when you give notice and get established in a different mode of life. Congrats on creating options for yourself!
Carefreeap
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Re: More advice for BigLaw Survivor, please?

Post by Carefreeap »

magellan wrote:
BigLaw Survivor wrote:... before maintenance expenses, which as I've said haven't been high.
Estimating maintenance costs from actual recent experience is unreliable because these costs are usually very lumpy. You may go several years with minimal expenses then get hit with something that costs tens of thousands of dollars.

Many people analyze rental property profitability using rule-of-thumb estimates for maintenance. Maybe something like 1-2% of property value or 10-20% of the gross rental income annually. So for $1m of rental property value producing $5k per month, a reasonable allocation for maintenance could be anywhere between $5k and $20k per year depending on the property.

Many landlords don't understand that even though depreciation is a non-cash item on your taxes, it actually is a very real expense for a landlord. Each year, your tenants 'use up' part of the life of your property. This doesn't just mean things like the roof, the paint job, the heating system, and other typical maintenance items. It also applies to things like the kitchen and bath(s). A kitchen renovation easily costs $50-100K and kitchens over 30 years old look dated and worn out. So just covering the amount of kitchen that gets 'used up' each year could cost $1,500-3,000. Imo, a good estimate of your true annual expenses will have some accounting for this, even if it's very rough.
Probably one of the more insightful posts on LLing in a HCOLA although no way would I spend even $50k on a kitchen remodel in a rental unit! :wink:

One reason we are strongly considering selling our N. San Diego rental is that while we could easily spend $100k on kitchen and 2 bath remodels + a new roof, it would take us 10+ years to recoup that cost in rental increases. Doesn't make sense to do it.
Every day I can hike is a good day.
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magellan
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Re: More advice for BigLaw Survivor, please?

Post by magellan »

BigLaw Survivor wrote:I just don't believe that I'd be better off owning a row home in this city without a basement rental than I am with one.
That makes sense. I wasn't arguing that these rentals are a bad idea at all. In fact, for people who can make smart purchases and aren't bothered by the hassle of being a landlord, I personally think rental properties can be a great diversifier.
curmudgeon
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Re: More advice for BigLaw Survivor, please?

Post by curmudgeon »

magellan wrote:
BigLaw Survivor wrote:I just don't believe that I'd be better off owning a row home in this city without a basement rental than I am with one.
That makes sense. I wasn't arguing that these rentals are a bad idea at all. In fact, for people who can make smart purchases and aren't bothered by the hassle of being a landlord, I personally think rental properties can be a great diversifier.
I would agree that you don't necessarily need to make any changes now, but your housing solution is not necessarily stable for the long term. It is certainly a plausible, maybe even likely, scenario that 7 years from now the mortgage on the main house pops up to 5 or 5.5% (and starts amortizing). That could push your monthly payment to $6000 or more. With kids and grandkids visiting, you may not feel like downsizing to a 640sqf condo yet. That payment would mean drawing $43K more a year from your accounts, but it would really be more like $60K more a year, because you have to pay taxes on that money. That's a pretty sizable (and inflexible) amount of additional money to be drawing.

It sounds like you like where you are living, and are likely to prefer to stay there indefinitely. In that case, I'd give serious thought to trying to get the condo mortgage paid off in the next seven years. It's a much more manageable bite to knock out, and it would then create a rental cash flow in a form that would partially balance out the increased mortgage payments, when you need it.
travellight
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Re: More advice for BigLaw Survivor, please?

Post by travellight »

@cherijoh: Travellight, you seem to have come up with 9K of mortgage interest/year by multiplying $300K by 0.03. Sorry, but that isn't how mortgages work! You have to follow an amortization schedule with the interest front loaded. Initially, almost all the payment is interest. I'm not sure OP has given enough info to calculate his mortgage interest, but I guarantee you it isn't as low as $9K unless he is many years into the mortgage, which is unlikely with a $300K balance."

Sorry, I was working with assumptions from my own mortgage which I didn't spell out. I have an interest only mortgage of 2.55% so I rounded that up to 3%. I think it truly is interest only and not amortized; I am familiar with front loading of interest on conventional mortgages. What do you think though of my overall point of how real estate does seem like a favorable investment? (assuming one is tough enough to manage tough times as well as smooth ones and is either lucky or savvy enough to have bought well)
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

Hi all! I cannot believe it has been nearly a year since my last post, and well over a year since I retired. Time sure flies, which is precisely why it was so important to me to get out of big law when I did. Anyway, I thought I would give a report on where things currently stand with me financially, for anyone who might be interested.

As of today, my net worth (according to Personal Capital) is $4.96 million. That is actually an increase of almost $200,000 from when I last posted here in October 2015. Last week my net worth was over $5 million, before the big drop in the stock market on Friday. The bottom line is that, with year one coming to a close, I seem to be doing pretty well.

Spending has been pretty consistent, if not a little less, than what I anticipated. I gave myself a budget of $16,000 a month, and rarely exceeded it. With the cash flow from my rents and dividends (I recently invested about $150,000 in tax free municipal bonds), I have been able to spend this much not only without depleting my overall net worth but while watching it actually increase. So things are pretty good so far. Yes it's only Year One but My God am I happy I quit!
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bottlecap
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Re: More advice for BigLaw Survivor, please?

Post by bottlecap »

Thanks for the update and congratulations.

I'm glad to hear you got out while the getting was good and you're happy with the decision!

JT
Leemiller
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Re: More advice for BigLaw Survivor, please?

Post by Leemiller »

Congrats and thanks for the update. $5m is my current estimated walk-away number, but we are over a decade from getting there I would guess. That's pretty awesome that you managed to walk away before any mandatory retirement age at your firm!
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

:happy Well before mandatory! Thank you! And thank you God!! :happy
B0bL0blawsLawBl0g
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Re: More advice for BigLaw Survivor, please?

Post by B0bL0blawsLawBl0g »

Thanks for the update, and congratulations! Do you ever miss practicing law (if not the billing pressures and demanding client relationships)?
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matjen
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Re: More advice for BigLaw Survivor, please?

Post by matjen »

:sharebeer

Thank you for the update BigLaw Survivor. Congrats!
A man is rich in proportion to the number of things he can afford to let alone.
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

I don't miss anything about the law. Nothing about it at all!
J295
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Re: More advice for BigLaw Survivor, please?

Post by J295 »

Appreciate the update
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

Happy Easter! For anyone who might be interested, here is an update on my retirement situation and plans. I last updated in September.

As everyone knows, the market has generally been doing well, although stagnating lately, since the election (Trump, ugh, but that's another story that I'll stay away from), and as a result so has my portfolio. According to Personal Capital, which I've been using to monitor my financial situation since my retirement, my net worth has risen from $4.96 million to $5.21 million since my last update. I'm also continuing to live pretty comfortably within our $16,000 a month budget.

My accountant just did my taxes and I had a net operating loss (NOL) of $14,000 for 2016. We owed no income taxes, federal or state.

As many suggested when I first started this thread, I have decided to sell our investment condominium. It will likely go on the market next week. Our fantastic tenants of the last five years have given notice, and that led me to do a reevaluation. Our realtor says we can easily get $485,000 for the condo, and I agree, and we owe about $235,000 on the mortgage. We expect to net about $180,000 after commissions, fees, and capital gains taxes (which our accountant estimates at $33,000!), and I think we'd do better and have fewer headaches investing that money in a high dividend ETF than continuing to rent. Currently our fixed costs on the condo are $1900 a month and it rents for $2500. A $600 a month positive cash flow on a $180,000 investment is 4 percent, which isn't terrible, but that's before repairs and maintenance so the actual return is lower.

So that's the latest. Comments and advice welcome and appreciated.
antheus
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Re: More advice for BigLaw Survivor, please?

Post by antheus »

I read through the entire first page of this thread before realizing it was from 2015...

Thanks for the update, it's great to hear things have been going well. I'm glad you're selling that condo, I think it's the right move and will simplify your life a bit which is a lot of what retirement is about. It's an investment that may make a bit more sense for someone with a smaller portfolio but for you it just seems to add additional complications to your life for marginal benefit and all it takes is one small headache (i.e. having to find new tenants) to make it a PITA. Congratulations and all the best.
WildBill
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Re: More advice for BigLaw Survivor, please?

Post by WildBill »

Howdy

This is an interesting thread. Thanks for posting the update, as I might not have seen it otherwise.

Here are several thoughts.

Doublecheck the tax due on the condo sale. You will owe 27% on the capital gain, but you should have tax lass carryforwards from previous years, as I assume your income while working was well above the $150 K limit where you could take the loses as a deduction. As you know, the basis is reduced every year by claimed depreciation, but you should have tax loss carryforwards from previous years that take some of the sting out.

Any tax loss harvesting opportunities? They are pretty valuable now as you will be offsetting a nasty 27% tax on the condo gain.

By the way, I think your decision is a good one. I started reading the thread at the beginning, and my main concern was that you were potentially overleveraged and overexposed to your local real estate market. Not terribly so, but you might have become uncomfortable if equity and real estate markets both took a nasty turn, a la 2009.

Sort of a sideways question, but my impression is that you are quite satisfied with your current home. Why not apply the condo gain against your current mortgage and or refinance?
My impression is that in your current situation the interest you are paying on your current mortgage considerably outweighs the tax benefits of carrying it. In your current situation - similar to my own, only without a mortgage - you should be able to continue in essentially a zero tax situation even without the mortgage interest deduction.

Another thought is that when presented with a bull market on the cusp of retirement, it is ungrateful to the gods to ignore it and not adjust your asset allocation. I have been happily using the run up in equities to adjust from pre-retirement 80/20 to 60/40. Just a thought.

Enjoyed the thread, and I think you got a lot of excellent advice and were wise to post.

Good luck

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

Thanks to both antheus and WB for your responses. It's nice to be on such a civil and helpful forum.

WB the primary reason I'm not inclined to pay down my mortgage further is because the interest rate is very good (3.25 percent), it's interest only for another six years, and I already have close to a million dollars in equity in the house already. I definitely agree that I'm not getting much of a tax benefit from the deduction now that I have no income, but I am getting some: I've elected to take a substantially equal periodic payment (under IRS rule 72(t)) from one of my retirement accounts of about $33,000 a year, and the mortgage deduction is the biggest thing I have to bring this down to zero - meaning it's not taxed at all.

But one of these days, real soon, I'll really have to do the math.
WildBill
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Re: More advice for BigLaw Survivor, please?

Post by WildBill »

BigLaw Survivor wrote:
But one of these days, real soon, I'll really have to do the math.
Howdy

I think it would be wise to run the numbers sooner rather than later. Paying interest to avoid taxes is often a losing proposition. It tends to become even more of one when you are in lower tax brackets, which is where you should be now.

Take my advice with a grain of salt, as I am biased as an ignorant hillbilly with an ingrained horror of debt, but do run the numbers. :happy

Good luck

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

Ha ha WB, I do hear you. But what about the basic proposition that I likely can do better than 3.25 percent (my mortgage interest rate) in the stock market?
J295
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Re: More advice for BigLaw Survivor, please?

Post by J295 »

Ha ha WB, I do hear you. But what about the basic proposition that I likely can do better than 3.25 percent (my mortgage interest rate) in the stock market?
Maybe, maybe not ..... I will tell you for us we paid off our home as quickly as possible and then when we transitioned to another home paid cash. We transitioned to retirement (mostly) 5 years ago at age 53 and it's been a long time since we've had any debt and for us (not for everyone, I understand) it works well -- we sleep well at night a still believe we are good financial stewards for ourselves and our family (which will hopefully inherit from us down the road).

Perhaps you can drill down on this from your own perspective by considering ....
-- if this is a prudent decision for you, why not borrow more money (maybe not 3.25, but a bit higher, but still should be low enough to outperform long term ???? ....
-- if this is right for you, why not also increase your equity allocation away from the lower returns of bonds, cash, etc. ??

I'm not at all trying to be ornery, just giving a different perspective from one who has been satisfied choosing a different path as far as debt is concerned.

Best of luck, and really appreciate your follow up posts ... it's always great to see how things play out for everyone ....
WildBill
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Re: More advice for BigLaw Survivor, please?

Post by WildBill »

Howdy

Point taken. That is one scenario, and a very realistic one. In that scenario you are a happy guy.

How about this one - equity markets and real estate markets take a 50 % hit? Not unrealistic, as it happened very recently.

Your mortgage resets and you face a substantial increase in payments and your ability to refinance is gone - you don't have the reported income to support a new mortgage per normal underwriting and your ability to pay cash is compromised by a drop in equity values. In this scenario you are not such a happy guy. Things might even get a little tight.

However, if you had refinanced and established a stronger equity position in the property it would be a non-event.

Equity values are contingent - debt is forever.

Good luck

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid
Topic Author
BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

I actually wonder whether, even now, and even if I wanted to, I could refinance. Would a bank even given me a mortgage since I don't have an income anymore? From poking around a bit I'm not so sure it's all that easy . . .
WildBill
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Re: More advice for BigLaw Survivor, please?

Post by WildBill »

BigLaw Survivor wrote:I actually wonder whether, even now, and even if I wanted to, I could refinance. Would a bank even given me a mortgage since I don't have an income anymore? From poking around a bit I'm not so sure it's all that easy . . .

Howdy

I really don't know. I am a mortgage rookie, certainly in today's market, as I paid cash.

But, if you show up with $250K (from your condo sale and some from the taxable account) to put down on refinancing an ? 850K ? (don't remember the exact number) over 15 years I can't imagine not finding a suitable mortgage.

But I may be wrong. Others on the forum will be better informed.

Like 3295 I am not trying to be contentious,or ornery but am looking at it based on my own experience and perspective. In general -

Paying cash, or significant equity into a primary residence, is essentially prepaying rental/housing expenses. It goes on the "balance sheet" as "pre-payed" expenses. Viewing it in investment terms is OK as a secondary consideration, but do not let that override the fact that a residence is an expense item, not an investment. You might get lucky, and have a favorable increase in value, and it looks like you have, but what if the luck turns? Do you want to be over-leveraged on an expense?

The only way to go broke, or to get kicked out of a home, is to borrow money you cannot repay. That is an unlikely scenario for you, but also not inconceivable. And the consequences of that happening, however small, are sufficiently nasty that I would take action to mitigate them.

And all conditions, both in the markets and in your personal situation, now are highly favorable for you to do so. Might not be so in the future.

Good luck

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid
WildBill
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Re: More advice for BigLaw Survivor, please?

Post by WildBill »

Howdy

Bankrate shows 15 year fixed rate mortgages at 3.43%

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid
Valuethinker
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Re: More advice for BigLaw Survivor, please?

Post by Valuethinker »

BigLaw Survivor wrote:Happy Easter! For anyone who might be interested, here is an update on my retirement situation and plans. I last updated in September.

As everyone knows, the market has generally been doing well, although stagnating lately, since the election [Edit: I deleted this comment; here in the UK we've had our own challenges], and as a result so has my portfolio. According to Personal Capital, which I've been using to monitor my financial situation since my retirement, my net worth has risen from $4.96 million to $5.21 million since my last update. I'm also continuing to live pretty comfortably within our $16,000 a month budget.
I am in my mid 50s. I have been switching some resources into ST bonds. Bonds because I think equity markets are not sufficiently discounting some risks, political primarily but also economic, and the next bear market could take me uncomfortably close to my projected retirement rate (not until my mid 60s). Company has been taken over by Private Equity, and seen quite a few departures (at a much more senior level than mine! I hasten to add)-- very few people get to choose when they go, in this world.

The thing with bear markets it is seldom one sees them coming. 2000 was in retrospect obvious, overvaluation and overhype on the Internet bubble, 2008 (see The Big Short) was again, obvious in retrospect, but I don't think many people had forseen how bad it would get. The next one, too, when it comes, will be "obvious" after the fact.

Bear markets are typically 30-50% falls in equity markets. Recent bear markets have recovered quickly (note though that the early 2000 bear market actually lasted nearly 3 years). There's no guarantee they will the next time.

If your equity portfolio dropped by 40% would you be OK with it? If not, you might think about having more bonds.

I bought Short Term bonds because I think in the US and UK, interest rates are trending upwards. This is less clear in Eurozone etc.

Don't be afraid to consider annuities (SPIA - there's a wiki here) as a way of drawing down capital but allowing your spending to continue at a level you desire.
My accountant just did my taxes and I had a net operating loss (NOL) of $14,000 for 2016. We owed no income taxes, federal or state.

As many suggested when I first started this thread, I have decided to sell our investment condominium. It will likely go on the market next week. Our fantastic tenants of the last five years have given notice, and that led me to do a reevaluation. Our realtor says we can easily get $485,000 for the condo, and I agree, and we owe about $235,000 on the mortgage. We expect to net about $180,000 after commissions, fees, and capital gains taxes (which our accountant estimates at $33,000!), and I think we'd do better and have fewer headaches investing that money in a high dividend ETF than continuing to rent. Currently our fixed costs on the condo are $1900 a month and it rents for $2500. A $600 a month positive cash flow on a $180,000 investment is 4 percent, which isn't terrible, but that's before repairs and maintenance so the actual return is lower.

So that's the latest. Comments and advice welcome and appreciated.
You are wise to sell it if you are not going to use it personally or for family. It's basically risk, and property markets don't go on rising forever (Boston, right? Pretty strong right now?). You have a home, that's a pretty significant investment in the real estate market.

It's also hassle. Lots of things that can go wrong.

You made money. I am watching Toronto (and Vancouver, Sydney, Melbourne, Auckland) but right now Toronto (up something like 25% Y-on-Y) is shaping up for the property blowup which will rival 1989 (took 22 years for it to recover, in real terms). Even the conventional wisdom is getting worried. Making money in real estate is no sure thing.
Last edited by Valuethinker on Mon Apr 17, 2017 8:34 am, edited 1 time in total.
Valuethinker
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Re: More advice for BigLaw Survivor, please?

Post by Valuethinker »

BigLaw Survivor wrote:Thanks to both antheus and WB for your responses. It's nice to be on such a civil and helpful forum.

WB the primary reason I'm not inclined to pay down my mortgage further is because the interest rate is very good (3.25 percent), it's interest only for another six years, and I already have close to a million dollars in equity in the house already. I definitely agree that I'm not getting much of a tax benefit from the deduction now that I have no income, but I am getting some: I've elected to take a substantially equal periodic payment (under IRS rule 72(t)) from one of my retirement accounts of about $33,000 a year, and the mortgage deduction is the biggest thing I have to bring this down to zero - meaning it's not taxed at all.

But one of these days, real soon, I'll really have to do the math.
Do that math.

You no longer have a labor income. Volatility on a leveraged asset (your house) is going to hurt-- you can't dig your way out from under easily any more.

Probably in the early 90s property market crash you were too busy building a career, raising a family, to notice much what your house was worth?

This time, it wouldn't feel like this. And it can take years to recover. 3.5% pa on the stock market does not seem hard to achieve, but what if markets are 20-30% lower when we start?

I accept there may be tax reasons to keep as you are.

Given where you are in your life, and where we are in terms of the risk cycle (both the financial risks, and the political ones) it might be worth pulling in your horns a bit?
Last edited by Valuethinker on Mon Apr 17, 2017 8:34 am, edited 1 time in total.
Valuethinker
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Re: More advice for BigLaw Survivor, please?

Post by Valuethinker »

PS I should note that I am really glad you "saw the light" and pulled the trigger on retirement.

It's really important to enjoy each phase of our lives, but also to feel purposeful - -so a mix of hedonistic activities (travel etc.), family ones and community ones (being of service and help to others). Viktor Frankel was right when he said the purpose of life is to find meaning. Happiness is an incidental byproduct.

Your previous situation had ceased to make you happy-- in fact it was an obstacle to that.

Money is just a means to an end. And I just had a (fine) walk through a local cemetery with my wife, there are 1 million people buried in that cemetery. It reminds you that we all wind up in the same place.
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

Thanks for all you helpful advice! Just FYI, I'd rather not divulge what city I live in.
Valuethinker
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Re: More advice for BigLaw Survivor, please?

Post by Valuethinker »

BigLaw Survivor wrote:Thanks for all you helpful advice! Just FYI, I'd rather not divulge what city I live in.
sorry. I misremembered, that's all.
Nearly A Moose
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Re: More advice for BigLaw Survivor, please?

Post by Nearly A Moose »

I have nothing to offer other than my thanks for posting this thread and for the regular updates. I'm a big law senior associate (this far happier with my experience than you seem to have been with yours), am cautiously optimistic about my advancement prospects, and very interested in learning what the financial picture and mechanics will look like. Would love to be in a position to stay in this line of work for exactly as long as I enjoy it and to punch out the moment that changes. So, this thread has been very instructive - both seeing what your financial picture looked like when you retired and what you've done.
Pardon typos, I'm probably using my fat thumbs on a tiny phone.
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

Thanks. This is what I really like about this forum. It's helpful both to the posters and to the readers. Everybody benefits. I sure have.

Congrats on your happiness and success at your law firm!
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

One other thing I guess I should mention for folks who are monitoring this thread and my decision making. I had always assumed that there was no way I could take money out of any of my retirements accounts before I turned 59 1/2 without paying the 10 percent penalty. Then I stumbled upon IRS rule 72t, which allows for pre-59 1/2 withdrawals without penalty so long as you set the withdrawals up as "substantially equal periodic payments," which basically means paying yourself an annuity using a formula developed by the IRS. After concluding that this made sense to me, I set one up with one of my IRAs. The balance in the account was in the high 700s when I set this up, and I'm now paying myself the maximum (around $33,700 a year) from this account annually. Under the rule, I now have to pay myself this exact amount for at least 7 years or until I reach 59 1/2, whichever is later, which in my case means until I'm 62.

What appealed to me about this was that (1) it means I don't have to sell anything in my taxable brokerage account to get cash for day-to-day living expenses and (2) given my current situation, not only can I take this money out without penalty, I can take it out without having to pay any taxes on it at all. I always knew that one of the advantages of a 401k is that you can deduct contributions when you are in a higher tax bracket and withdrawal and pay taxes when you're in a lower bracket, but it never occurred to me that I'd ever be in a position where I could withdrawal without paying any taxes at all.
pshonore
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Re: More advice for BigLaw Survivor, please?

Post by pshonore »

BigLaw Survivor wrote:One other thing I guess I should mention for folks who are monitoring this thread and my decision making. I had always assumed that there was no way I could take money out of any of my retirements accounts before I turned 59 1/2 without paying the 10 percent penalty. Then I stumbled upon IRS rule 72t, which allows for pre-59 1/2 withdrawals without penalty so long as you set the withdrawals up as "substantially equal periodic payments," which basically means paying yourself an annuity using a formula developed by the IRS. After concluding that this made sense to me, I set one up with one of my IRAs. The balance in the account was in the high 700s when I set this up, and I'm now paying myself the maximum (around $33,700 a year) from this account annually. Under the rule, I now have to pay myself this exact amount for at least 7 years or until I reach 59 1/2, whichever is later, which in my case means until I'm 62.

What appealed to me about this was that (1) it means I don't have to sell anything in my taxable brokerage account to get cash for day-to-day living expenses and (2) given my current situation, not only can I take this money out without penalty, I can take it out without having to pay any taxes on it at all. I always knew that one of the advantages of a 401k is that you can deduct contributions when you are in a higher tax bracket and withdrawal and pay taxes when you're in a lower bracket, but it never occurred to me that I'd ever be in a position where I could withdrawal without paying any taxes at all.
Unless those were non-deductible IRA contributions, I'm puzzled as to why distributions are tax free.
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BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

Sorry, I should have been more clear. They're tax free only because I'm currently in the zero percent tax bracket.
remomnyc
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Re: More advice for BigLaw Survivor, please?

Post by remomnyc »

BigLaw, I hope to follow your example soon. I have been lining up my ducks to retire early, and one of my big fears was being able to get a mortgage without an income. (We are currently renting.) My banker at Wells Fargo ("WF") told me to quit whenever. WF provides an asset depletion loan up to 1/3rd of investible assets. The rates are the same as for income-qualified jumbo mortgage loans. The 10/1 ARM is currently 3.25% with 25-bp more for interest only and 25-bp less with a $500k deposit to WF. You may want to refi early to protect your downside in case the market value of your home falls when your loan matures at the same time you take a big hit to your portfolio.
WildBill
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Re: More advice for BigLaw Survivor, please?

Post by WildBill »

Howdy

The 72t idea is a pretty good one. Getting money out of a tax deferred account without paying taxes on it is pretty creative. As you are in the zero bracket you may still have some room for zero cost IRA to Roth conversions. Check that out.

I would still pay attention to your mortgage. The reason you are in a zero tax situations is because you are paying around 30k per year in interest for the privilege of saving about 4K a year in taxes. In your position I would apply the proceeds of the condo sale as well as some of the increase in taxable accounts to paying off a chunk of equity and refinancing, probably over 15 years.

You would still have a substantial interest deduction - around 18k in the first year on a 600k loan - but you would also be building equity rapidly - something like 30 k in the first year.

You are in great shape in general, but the possibility for that mortgage to reset at a bad time would concern me.

Good luck

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid
btenny
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Re: More advice for BigLaw Survivor, please?

Post by btenny »

Big,

How did you get multiple IRAs and one the right size to deplete? Did you do splitting into multiple IRAs back when or recently? I am just curious how you went about this and have no plans in this regard so if this is personal forget it.

Also I suggest you do some real serious tax planning for the future when you start drawing SS and any income you have at that time. I think you might want to plan out converting a big chunk your IRA to a Roth IRA while you are in a near zero tax bracket. That way when you get to 70.5 and are drawing SS and need to do RMDs you will not have huge tax bills. I did not do enough of this back when I first retired and will be pushed hard into the 25/28% tax bracket when I start RMDs next year. SO beware.

Have fun and good luck.
Valuethinker
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Re: More advice for BigLaw Survivor, please?

Post by Valuethinker »

Nearly A Moose wrote:I have nothing to offer other than my thanks for posting this thread and for the regular updates. I'm a big law senior associate (this far happier with my experience than you seem to have been with yours), am cautiously optimistic about my advancement prospects, and very interested in learning what the financial picture and mechanics will look like. Would love to be in a position to stay in this line of work for exactly as long as I enjoy it and to punch out the moment that changes. So, this thread has been very instructive - both seeing what your financial picture looked like when you retired and what you've done.
If I make a comment from (late-ish) muddle age and having quite a few friends who are partners in law firms.

These things are a lot more fun in the prospect.

When you are 55, have been a partner for 25 years, things will probably seem a bit different:

- there will have been firm mergers, and walkouts, and being a partner means getting to be an (often unwilling) participant in the politics. You'd think it would be about what you bill, and that's it, but alas life is never so simple. It's not just the work you do, it's the politics of the organization (this is hardly unique to law firms). Measuring what counts as success for partners is not simple, and it gets less simple as the organizations grow.

Some measure of this might be what being a partner in a Big 4 accounting firm meant, say 30 years ago, vs. now. You take a lot more orders, now.

Law, like any other field, is in huge flux. It won't in 25 years be what it is now.

- there will be some clients you enjoy working with, and who value your services. But it's likely the majority will let you down on one, or both, of the criteria. It gets old doing stuff either for people who are jerks or behaving like jerks. (My GP is in their late 50s, and has similar views about their clients-- some have a grievous sense of entitlement (remember, this is in the land of socialized medicine)).

- if your practice is litigation oriented that will change you-- I've never met a litigator who wasn't oriented towards debating every point, negotiating everything. Corporate lawyers are similar (on the negotiation point).

- the finiteness of life will seem more present. Your own health will not be as good as it is in your 20s (for 90% of us) and you may have acquired some incurable health issues (that shock, when you have a chronic issue rather than an acute one-- I literally had not been inside of a hospital except for a broken arm and a cut, in over 25 years). More importantly, you will have friends who have incurable illnesses, and may already have died.

None of this is to put you off doing a job you love. Just remember, in the normal season of a man or woman's life, your perspective will change. I have little doubt BigLawSurvivor was top of his game, and felt that way, for many years, even decades. If you read back from the beginning, it was quite hard for him to let go-- for me, it was when he said how great it would be if someone else made the decision for him, that it was clear he had to let go.
To every thing there is a season, and a time to every purpose under the heaven:

2 A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted;


3 A time to kill, and a time to heal; a time to break down, and a time to build up;

4 A time to weep, and a time to laugh; a time to mourn, and a time to dance;

5 A time to cast away stones, and a time to gather stones together; a time to embrace, and a time to refrain from embracing;

6 A time to get, and a time to lose; a time to keep, and a time to cast away;

7 A time to rend, and a time to sew; a time to keep silence, and a time to speak;

8 A time to love, and a time to hate; a time of war, and a time of peace.

9 What profit hath he that worketh in that wherein he laboureth?

10 I have seen the travail, which God hath given to the sons of men to be exercised in it.

11 He hath made every thing beautiful in his time: also he hath set the world in their heart, so that no man can find out the work that God maketh from the beginning to the end.

12 I know that there is no good in them, but for a man to rejoice, and to do good in his life.
Ecclesiastes was a wise man

I've known a lot of people who wanted out of law-- people with seemingly successful and prestigious practices, good lifestyles, interesting work.
Topic Author
BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

btenny wrote:Big,

How did you get multiple IRAs and one the right size to deplete? Did you do splitting into multiple IRAs back when or recently? I am just curious how you went about this and have no plans in this regard so if this is personal forget it.
I had two retirement accounts at my former law firm, a traditional 401k available to all employees and a defined benefit plan available only to partners. I rolled the balance of the defined benefit plan into a separate 401k after I left the firm. I decided to use that one for the SEPP because it has a smaller balance.
Topic Author
BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

Valuethinker wrote:
Nearly A Moose wrote: If I make a comment from (late-ish) muddle age and having quite a few friends who are partners in law firms.

These things are a lot more fun in the prospect.

When you are 55, have been a partner for 25 years, things will probably seem a bit different:
Obviously this occurred to me as well but who am I to assume that everyone is the same as me? I honestly was never happy in the law, so Nearly A Moose is years ahead of me. And I do know other law firm partners my age who, on the surface at least, appear pretty happy in their jobs. All I know is that I wasn't.
Nearly A Moose
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Re: More advice for BigLaw Survivor, please?

Post by Nearly A Moose »

Valuethinker wrote:
Nearly A Moose wrote:I have nothing to offer other than my thanks for posting this thread and for the regular updates. I'm a big law senior associate (this far happier with my experience than you seem to have been with yours), am cautiously optimistic about my advancement prospects, and very interested in learning what the financial picture and mechanics will look like. Would love to be in a position to stay in this line of work for exactly as long as I enjoy it and to punch out the moment that changes. So, this thread has been very instructive - both seeing what your financial picture looked like when you retired and what you've done.
If I make a comment from (late-ish) muddle age and having quite a few friends who are partners in law firms.

These things are a lot more fun in the prospect.

When you are 55, have been a partner for 25 years, things will probably seem a bit different:

- there will have been firm mergers, and walkouts, and being a partner means getting to be an (often unwilling) participant in the politics. You'd think it would be about what you bill, and that's it, but alas life is never so simple. It's not just the work you do, it's the politics of the organization (this is hardly unique to law firms). Measuring what counts as success for partners is not simple, and it gets less simple as the organizations grow.

Some measure of this might be what being a partner in a Big 4 accounting firm meant, say 30 years ago, vs. now. You take a lot more orders, now.

Law, like any other field, is in huge flux. It won't in 25 years be what it is now.

- there will be some clients you enjoy working with, and who value your services. But it's likely the majority will let you down on one, or both, of the criteria. It gets old doing stuff either for people who are jerks or behaving like jerks. (My GP is in their late 50s, and has similar views about their clients-- some have a grievous sense of entitlement (remember, this is in the land of socialized medicine)).

- if your practice is litigation oriented that will change you-- I've never met a litigator who wasn't oriented towards debating every point, negotiating everything. Corporate lawyers are similar (on the negotiation point).

- the finiteness of life will seem more present. Your own health will not be as good as it is in your 20s (for 90% of us) and you may have acquired some incurable health issues (that shock, when you have a chronic issue rather than an acute one-- I literally had not been inside of a hospital except for a broken arm and a cut, in over 25 years). More importantly, you will have friends who have incurable illnesses, and may already have died.

None of this is to put you off doing a job you love. Just remember, in the normal season of a man or woman's life, your perspective will change. I have little doubt BigLawSurvivor was top of his game, and felt that way, for many years, even decades. If you read back from the beginning, it was quite hard for him to let go-- for me, it was when he said how great it would be if someone else made the decision for him, that it was clear he had to let go.
To every thing there is a season, and a time to every purpose under the heaven:

2 A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted;


3 A time to kill, and a time to heal; a time to break down, and a time to build up;

4 A time to weep, and a time to laugh; a time to mourn, and a time to dance;

5 A time to cast away stones, and a time to gather stones together; a time to embrace, and a time to refrain from embracing;

6 A time to get, and a time to lose; a time to keep, and a time to cast away;

7 A time to rend, and a time to sew; a time to keep silence, and a time to speak;

8 A time to love, and a time to hate; a time of war, and a time of peace.

9 What profit hath he that worketh in that wherein he laboureth?

10 I have seen the travail, which God hath given to the sons of men to be exercised in it.

11 He hath made every thing beautiful in his time: also he hath set the world in their heart, so that no man can find out the work that God maketh from the beginning to the end.

12 I know that there is no good in them, but for a man to rejoice, and to do good in his life.
Ecclesiastes was a wise man

I've known a lot of people who wanted out of law-- people with seemingly successful and prestigious practices, good lifestyles, interesting work.
Thanks for the perspective. I'm trying to keep eyes wide open. I'm very fortunate in that I have it much better than nearly all my law school classmates right now (at least from the perspective of having a manageable big law practice), but I also don't really care to die in the saddle.
Pardon typos, I'm probably using my fat thumbs on a tiny phone.
Topic Author
BigLaw Survivor
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Re: More advice for BigLaw Survivor, please?

Post by BigLaw Survivor »

btenny wrote:I think you might want to plan out converting a big chunk your IRA to a Roth IRA while you are in a near zero tax bracket.
I've seen this advice before, and frankly I'm confused. How can I convert a "big chunk?" Aren't I limited to $6500 a year? Let's say, for example, that after selling my condo I netted $180k after capital gains taxes. I couldn't just turn around and put all the money into a Roth, right?

Don't forget you're talking to a total novice here.
Dottie57
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Re: More advice for BigLaw Survivor, please?

Post by Dottie57 »

BigLaw Survivor wrote:Thanks for responding so quickly. Other than the obvious and unpredictable expense of health care (we are both in good health), I don't know what other expenses to anticipate. There's housing, which as I said for a while at least will be covered by the rentals. We don't have debt beyond the mortgages and the relatively small LOC, and the kids all have nest eggs and are pretty self-sufficient. I'm having trouble understanding how we couldn't live off of 200k or so a year under these circumstances. Obviously in recent years we've spent more than that but we had college, etc. and paid as we went.

One more thing: on the defined benefit plan, I honestly don't know what it will pay or whether it can be rolled over to the 401k, but in either event with a balance of $167k it's only 4 percent of my holdings (or 3 percent if real estate equity is included), so I don't think it's very material.
You need to know your expenses - mortgage being one of them. It is a lot of work to go through and see where money has gone but is a worthwhile task. Your mortgage is a. Ig expense. If it is gone, expenses go down. So really getting a handle on where you spend is invaluable for planning for the future.
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