53 and frozen

[seagypsy]

Hi,

I've been lurking here for awhile. In 2009, my dear mother passed away and left me with a sizeable inheritance. All told, my current net worth is a bit over $3 million. I have no debt, own my home outright and live on a modest federal government salary. The only reason I haven't made the leap to ER is the low cost health insurance I could carry into retirement (if things stay the way they are).

The problem is that I'm unhappy where I work. I could retire in early 2016, with a reduced pension and keep the health insurance. Or....I could plan my escape, work part time (self-employed), and see what the exchanges bring in October.

The only two things I have decided are (1) that I will not retire until at least year end, and (2) I need to sit down with a financial planner and determine the best AA for me. I didn't want to do anything rash with such a large windfall so I've been sitting on an extremely large cash position and that just will not do.

So I am asking, if there is anyone reading this who thinks I should work another 2 years and 7 months just to keep the health insurance? My mother was quite frugal and the thought of spending more on health insurance than I might need to, might cause her to roll over in her grave.

The question is, do I live for her memory, or live for me?

Thanks in advance for your input.

 

[pb4uski]

If I were in your situation I would have a talk with Vanguard and have them do a financial plan for you including projected health care costs in the analysis.

Beyond that you'll have a tough decision to make but I suspect as much as your mother would dislike spending more on health insurance, she also would not want you to toil away in a job that makes you unhappy.

 

[serie1926]

Seagypsy, I'd give Bill Schultheis a call. He and his team are awesome!

 

[Mulligan]

Interesting question, Sea. Reading between the lines on what you posted, I believe you can and should be able to do both. You appear to already have adopted many of your mother's traits. Have you checked out some of the links in the health forum showing some of the preliminary rates? They don't appear to be prohibitively expensive. You already will have a pension. Unless you drastically change your lifestyle, it doesn't appear you will fritter away her wealth she bestowed to you. Being unhappy in your job is not a question of frugalness, but of happiness. I would think her gift to you is an expression of her wanting you to be happy.
As a side note, I had a recent conversation with my father who is very frugal and has accumulated close to 7 figures without ever having made more than 50k a year. I tried to convince him to spend some of it on himself as all the siblings may just blow all the money he worked so hard for. His answer amused me... "Well I hope everyone will get as much enjoyment spending it, as I did saving it"....

 

[growing_older]

With $3MM in net worth, comfortably multiples of my own goal, I wouldn't wait for the health insurance unless you have some significant pre-existing condition that's makes it problematic for you.

 

[Meadbh]

Welcome seagypsy. I see you live in New York. If that is NYC, your cost of living must be quite high. Assuming you plan to stay in NYC, what will your expenses be in ER? Are you interested in moving to a lower cost area?

$3m is a substantial sum of money but if you live in an expensive area, it might not sustain you without a pension. I think it's really important to get a financial plan in place, organize your asset allocation, and get a handle on your current and projected expenses before you take any irreversible steps. If you haven't already, run your numbers through FireCalc and other retirement calculators.

It's also important to prepare for the nonfinancial side of ER. Do you have interests and social connections that will carry forward into ER? My personal approach to this would be to take the next year, at least, to get everything in place before making a decision. If your j*b is not toxic, I would probably hang in there for the health insurance. Two years and 7 months is not a long time. When you are FI, you can ignore a lot of the BS that goes on in the w*rkplace.

 

[Free To Canoe]

.....As a side note, I had a recent conversation with my father who is very frugal and has accumulated close to 7 figures without ever having made more than 50k a year. I tried to convince him to spend some of it on himself as all the siblings may just blow all the money he worked so hard for. His answer amused me... "Well I hope everyone will get as much enjoyment spending it, as I did saving it"....

Good one.

What better use of money could you possibly have than to make yourself happy by ERing early. I am sure your Mother would approve. Other suggestions that were posted are pretty good, too (IMHO).

 

[omni550]

seagypsy,

Welcome aboard.

We've got some federal retirees on this board. Perhaps they'll be posting here soon.

omni

 

[Amethyst]

Hi there,

My thought is to hang in there, unless you are so wretched that it's affecting the way you live and behave. (E.G. depression, losing your temper often, and so on). That is just my doggedness speaking, though. Not only would I hate to lose the health insurance, but you must have worked for quite a while to qualify for even a reduced pension, which is almost in your grasp.

Is there any chance you can switch to a different office/task set? That's what I do when a job situation gets unbearable. I have a strong set of generalist skills which can be - and have been - applied almost anywhere in my business. I find the "new learning" stage of each job to be the most fun. Then there is the contribution phase, and finally, the "BS is getting heavy" stage which prompts me to look for something new

Definitely ponder and learn all you can about AA. There is much to be learned about AA on this forum, such as that your pension is almost like a "bond," which could allow you to be a little riskier with your inheritance money. Since you're mostly in cash right now, you likely won't incur the complicated tax issues that dissuade some of us from rebalancing our money that was invested long ago when we knew zip.

Good luck,

Amethyst

 

[target2019]

Hi,

I've been lurking here for awhile. In 2009, my dear mother passed away and left me with a sizeable inheritance. All told, my current net worth is a bit over $3 million. I have no debt, own my home outright and live on a modest federal government salary. The only reason I haven't made the leap to ER is the low cost health insurance I could carry into retirement (if things stay the way they are).

The problem is that I'm unhappy where I work. I could retire in early 2016, with a reduced pension and keep the health insurance. Or....I could plan my escape, work part time (self-employed), and see what the exchanges bring in October.

The only two things I have decided are (1) that I will not retire until at least year end, and (2) I need to sit down with a financial planner and determine the best AA for me. I didn't want to do anything rash with such a large windfall so I've been sitting on an extremely large cash position and that just will not do.

So I am asking, if there is anyone reading this who thinks I should work another 2 years and 7 months just to keep the health insurance? My mother was quite frugal and the thought of spending more on health insurance than I might need to, might cause her to roll over in her grave.

The question is, do I live for her memory, or live for me?

Thanks in advance for your input.

It sounds like once you get a few decisions made, things will begin to fall into place. Many people are unhappy in their jobs, and many are unhappy out of their jobs. Will you be able to make retirement work for you? By this I mean are you running away from one set of problems at work? I've worked with a lot of civilian employees of gov't, and I know the macro picture is quite stressful for all involved. If there are job problems, though, I'd start applying elsewhere in civil service.

If it were me, I'd tough out the 2 years 7 months, and greatfully accept the health insurance. However, you are the best judge of whether staying on the job for even a little while longer would severely impact your health and well being.

Wish you well...

 

[seagypsy]

Thanks to all of you for your input. While I currently live in New York, I will escape to northwestern Washington state. Due to budget constraints, there are no other jobs which would satisfy my needs within the federal government. Alas, this was my second career (accounting after finance - but not a CPA), and I only have 11 years in federal service, so my pension will be quite small. We're talking $1,000/month kind of pension! In any case, I'm not an impulsive person, and don't throw away money. I drive my cars until they die, and only occasionally, treat myself to something special. I'm content in every area of my life except the darn job. I think first I will get my financial house in order and perhaps things will become clearer within the next six months.

 

[hakuna matata]

Come on up to the NW--you will love it! My wife is in a similar position, she has about 17 months to go to get her pension and the insurance. She can't afford to lose her insurance and the pension is a cog in our retirement plans. So although we have hit our FI number we both are working that additional 16-17 months to get her pension. Good luck it is a tough decision for sure.

 

[Katsmeow]

[-]How old are you?[/-] I see now that you are apparently 53.

How much do you spend per year?
[-]
My first thought is that unless you are quite young or you have very high yearly spending, that you should be fine retiring at the start of 2014 and buying insurance on the exchange[/-]. I see now that you are 53 which isn't exactly quite young but isn't 60 either.

Which leads me to:

Have you run any type of retirement calculator such as Firecalc?

I assume you are single and support no one other than yourself?

In the "old" days (before the Affordable Care Act), I would have said to perhaps wait to qualify for health insurance before leaping (although I could see even then leaping if you applied for health insurance and found out you could get it before you actually retired). With the ACA, I wouldn't be that worried about the health insurance part of it and wouldn't feel I needed to wait for that reason. I would run a calculator (or get professional advice) or two or three.

 

[MBAustin]

Welcome, seagypsy!

I am in the camp with those who say to take your time. With $3MM in assets you can get a lot of analysis and planning help for $0 from Vanguard (for example).

There are many threads related to the "how did you decide when to ER" topic here, so peruse them for ideas and start to develop a list of what you need to have in place before you ER.

From personal experience, once you start working through this, the answer becomes clear (or at least clearer). Good luck!

 

[Rambler]

2 years and 7 months. Hang in there for the health insurance unless you believe you won't make it to 65. When I started counting down the days, I had about as much time as you do, at two and a half years, give or take. At the end of the day, we had a market meltdown and an insufficient second string in my megacorp, so I ended up staying 6 years from the start of my countdown. I'm glad I did. Financially I'm much more comfortable. I wish I could have done better with the succession panning, but it is what it is. I don't have the healthcare support that you will have in 2yr7mo, but what I was able to add to the portfolio with my extra years takes care of that.

R

 

[Chuckanut]

I believe it was Steve Jobs who said something to this effect:

Don't waste your life living somebody else's life.

 

[Live And Learn]

Hi there. I think your mother would want you to be happy, regardless of anything else. Being friviolous might make her unhappy - but spending money on healthcare is not frivolous. Once you get the financial analsys you can determine how much you can spend, or how much you might have of the portfolio if you retired today versus later. Take a look at the projected remaining nest eggs that are projected at age 90 or 95 - I suspect there might have a good chance of having a substantial nestegg to leave to heirs / charities / etc which might help you make your decision easier.

 

[Brett_Cameron]

You did not say if your home is included in your net worth and what fraction of your net worth your home represents. It would make a difference in what you may do.

 

[JoeWras]

You did not say if your home is included in your net worth and what fraction of your net worth your home represents. It would make a difference in what you may do.

Agree.

And also current expenses (high cost area or low cost?)

I'd stick it out. Health insurance is the one thing keeping me and DW in OMY syndrome. We'll get some benefit from her. I have none. The federal plan from what I've read here is great in comparison. Even with ACA, the inflation of costs is scaring the daylights out of me.

So, you are only talking 2 years. You hate your job. Take ALL vacation. I think you may get sick time? If so, get "sick" occasionally. Volunteer for unpaid leave if they give it or force it on you, etc.

I'm kind of doing that now. I don't get sick time, but I'm taking every last second of vacation time. No more letting it evaporate and falling on my sword for Megacorp.

 

[Mulligan]

Thanks to all of you for your input. While I currently live in New York, I will escape to northwestern Washington state. Due to budget constraints, there are no other jobs which would satisfy my needs within the federal government. Alas, this was my second career (accounting after finance - but not a CPA), and I only have 11 years in federal service, so my pension will be quite small. We're talking $1,000/month kind of pension! In any case, I'm not an impulsive person, and don't throw away money. I drive my cars until they die, and only occasionally, treat myself to something special. I'm content in every area of my life except the darn job. I think first I will get my financial house in order and perhaps things will become clearer within the next six months.

Certainly is a personal decision. The best advise given has been from yourself, by thinking it through the next 6 months. I left money on the table. I have a nice pension, but I went out 3 years prior to maximizing it. I could have retired this year, and had $15k more a year, but I have no regrets as I have enjoyed these past 3 years and hopefully many more.
If you are as frugal as you appear to be, I don't see how staying or retiring is really going to matter that much to you financially unless you have other goals for the inheritance. This is not a suggestion or even advise, but me just thinking out loud on how much 3 million is. If you put the whole amount in the 30 yr US treasury bond at current approx. 3.28% yield, you would receive almost 100k in interest alone in addition to your pension, and then SS the following 10 years. It would appear no matter what choice you take, you should be set financially with the principal of your money mostly intact throughout your life.

 

[travelover]

It sounds like you are frugal enough that with $3 million, you will leave an inheritance when you die. Start packing.

You can add time onto the front of a retirement, but not onto the back.

 

[David1961]

Hi,

I've been lurking here for awhile. In 2009, my dear mother passed away and left me with a sizeable inheritance. All told, my current net worth is a bit over $3 million. I have no debt, own my home outright and live on a modest federal government salary. The only reason I haven't made the leap to ER is the low cost health insurance I could carry into retirement (if things stay the way they are).

The problem is that I'm unhappy where I work. I could retire in early 2016, with a reduced pension and keep the health insurance. Or....I could plan my escape, work part time (self-employed), and see what the exchanges bring in October.

The only two things I have decided are (1) that I will not retire until at least year end, and (2) I need to sit down with a financial planner and determine the best AA for me. I didn't want to do anything rash with such a large windfall so I've been sitting on an extremely large cash position and that just will not do.

So I am asking, if there is anyone reading this who thinks I should work another 2 years and 7 months just to keep the health insurance? My mother was quite frugal and the thought of spending more on health insurance than I might need to, might cause her to roll over in her grave.

The question is, do I live for her memory, or live for me?

Thanks in advance for your input.

With the government cutting back, maybe they will offer you an early out option before 2016. Not saying you should plan on that, but is there any way you can research and find out if it is likely your agency would offer it?

 

[SumDay]

I am in the camp with those who say to take your time. With $3MM in assets you can get a lot of analysis and planning help for $0 from Vanguard (for example).

I second this suggestion. If there's anything I've learned since joining this board, it's NOT TO PAY a financial advisor a % of your portfolio on a monthly/yearly basis. Fidelity and/or Vanguard will easily fit the bill and you'll be paying WAY less than if you were sharing you & mom's wealth with some advisor.

Bogleheads is a great place to learn more about asset allocation. Spend the next 2+ years learning all you can about that, unless you just can't.

Good luck to you, and welcome to the forum!

 

[jclarksnakes]

Paying money to a financial planner is way more frivolous than buying health insurance. Take a little time to learn about investing and talk to the people at Vanguard. They can come up with a plan that is better than what you would get from many financial planners.

 

[seagypsy]

You did not say if your home is included in your net worth and what fraction of your net worth your home represents. It would make a difference in what you may do.

Modest home, worth between 275K to 300K based on recent sales in the area. That is included in my net worth so 10% or less. I'd probably purchase another home in the same price range. Maybe a condo. Can't rent because I have two dogs.

BTW, I am single but in a committed relationship for over 15 years. He has his own income. We live together - no joint assets. His net worth is substantially lower than mine and he is disabled. Has a month income of $2,400. Our children are grown. Mine is living here but moving out in two weeks!

The cost of living on Long Island is definitely high. Washington state appeals to me. Some things are less, some are about the same. My property taxes here are over $10K.

I decided to review my expenses and start tracking them again. I got lazy for awhile. I know I haven't spent more than $75K and the principle is still intact, and growing too modestly.