I faced a lot of age discrimination when I returned to the workforce at age 50. I was given a lot more responsibility than my job was supposed to entail and even with outstanding performance reviews, I was not considered for promotions, not offered additional training (even when I asked), had to fight to get paid decently, etc. I worked long hours, took fewer sick days than my younger colleagues, etc. When I called them out about it, I was retaliated against.
Oh yeah, I stayed 12 years. Much longer than most of my younger coworkers. I would have stayed longer but at that point I decided not to deal with that carp anymore and I was financially able to leave.
In my consulting practice, I work with senior executives who are often highly skilled. But, every X years, this level of folks is pitted against each other as the choose the next CEO and COO. Those not chosen often have to leave. They have, in effect, aged out.
Some leave preemptively and are sometimes able to get the CEO job at a smaller company. Others never really find the next gig. There a lot more fortunate than others as they typically have been well paid. Some become angel investors and some advisors, but most would really prefer the full-time executive gig.
Curious - couldnāt those execs make the decision not to jump into the ring vying for the CEO job? That way they wouldnāt have to go through the whole transition to a new company if they lost out on the top jobā¦?
Most times a new CEO wants to hire their own senior team. If you donāt want to throw your hat in the ring, you probably have to align yourself with the right candidate. If you donāt then youāll probably have to leave anyway. And in well run companies, usually part of the process of getting to one rung below CEO is being viewed as a potential successor.
Of course some insecure CEOs prefer to hire less strong people who arenāt a threat. But that just means any replacement CEO will come from outside the company and get rid of those people.
@Jolynne_Smyth, as @oldfort and @Twoin18 point out, at that level, you are pretty much in the competition whether you want it or not. Most do.
@BunsenBurner, our clients are in many industries. We mostly donāt have small biotech clients. We have had a biotech client but a bigger one. But I have seen this in a number of my clients.
The main thing is that people get pushed out because of their rank which is something of a proxy for age. So de facto age discrimination.
Just jumping into this conversation, and itās A LOT to weed through so forgive me if this has been answered already. Can anyone suggest a tool for calculating your annual or monthly suggested spending for a given nest egg? For example, if I have $XXX saved (in a diverse portfolio) and Iām XX age, I have $XXX to spend each year. Iāve tried googling things but my key words are too vague to give back exactly what Iām looking for.
What Iāve seen many times is the idea of spending 4% of your nest egg each year and it is likely to safely last for 30 years. So, if you started out with $1,000,000, you would take $40,000 out each year to spend. Obviously if you needed it to last less time you could probably spend more. If you wanted to have a higher amount potentially remaining you could spend less. This is just a quick and dirty plan that I have seen spoken about often.
If I understand what you are asking, I think you could use the 4% rule? Lots of people work on the assumption that you will draw down 4% of your investment portfolio a year so that it lasts 25-30 years. So, if you had $1M you could take $40k/year to supplement SS.
However, as we say on cc, YMMV. Some years you might take more, some less.
The 4% rule is often cited. We donāt use it, though. We are using our retirement savings to bridge from our retirement (at 59) to taking SS (at 70). We have spent 4.5-5%. We are not concerned, though, because we have run simulations that include our SS when it kicks in. At that point, we will be dropping our withdrawal rate under 4%. I really like Firecalc - you can enter information specific to your situation & run various scenarios using different withdrawal rates.
We can up our withdrawals in our early go, go years and once SS kicks in, there will be a bigger income stream.
We have a house payment still (3% interest so we have no incentive to pay early) which will be payed off when we start drawing SS so our monthly expenses are going to go substantially down.
Not that we canāt afford the mortgage but it is a big chunk of our monthly expenses.
We calculated in reverse: If we want to spend an inflation-adjusted $X annually for 35 years, how much do we need to have in the portfolio for $X to be a 2-3% annual withdrawal (not comfortable with 4%).
Really depends where you are in your work/retirement cycle. If you still have many years to work and contribute, it is more helpful to use a program where you set your hoped for retirement spend over your life expectancy and the formula tells you how much you need to set aside. If you are getting close to retirement, then you need a program that tells you what your budget should be be given your life expectancy and current level of savings.
Sorry for the potentially dumb question, but this āruleā assumes you wonāt tap your initial investment, correct? Basically 4% withdrawal and hopefully >4% earnings?
You can hope for a >4% return, but thatās over time. You might have to take money out in down years. All the numbers are inexact. The 4% is based on total portfolio holdings.
Thank you. We are still years away from retirement, but I have become somewhat of a savings fanatic and just trying to get all our ducks in a row to hopefully retire when DH is 59.5 (10 years)
Would love opinions on the experts here of what else we may want to consider to reach that goal of āearlyā retirement.
DH has contributed the max 401k for the past +/- 15 years, and prior to that at least 10%. I was a sahm for years but have been a consultant for 7 years and have a SEP IRA and fund that with about 15% of my pre tax income. DH also has an IRA with max contribution. Looking into a backdoor Roth conversion with post tax 401k contributions through his employer but not clear on whether that is possible yet. He also will have a very nice pension with healthcare benefits pending he stays until 55 which he completely plans to do.
We also have a low 6 figure tax managed account with, 6 month emergency fund in a HYSA, and one year +/- of his salary in a CD ladder. I also have a low 6 figure inherited IRA that needs to be exhausted in 10 years.
We have been paying an extra $800-1000 principal monthly on our mortgage which is almost 6% (This will not be our retirement home)
Daughters 529 will fully fund her remaining 2 years undergrad and we cash flow her apartment rental. Grad school TBD but she will work first for sure.
What else would you do to position yourself for retirement in 10 years?
The 4% rule isnāt just simply 4% each year. Itās based on your starting amount. If you start with 1,000,000 then the first year you would take $40,000. The next year you would take $40,000 plus the rate of inflation. For example, if the rate of inflation the following year is 2% you would multiply the $40,000 by 2% (1.02) and you get $40,800 which you would draw the 2nd year. The third year you would multiply $40,800 by the rate of inflation and withdraw that. Repeat each year.
The 4 percent rule was based on studies showing worse case scenario and yet allowing your money to last for 30 years.
(This will not be our retirement home)