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Forced ER - not ready emotionally!
Old 07-21-2009, 01:12 AM   #1
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Forced ER - not ready emotionally!

I have been lurking here for quite a while, and I figure that it's time to introduce myself. DH and I have been planning an ER for a while - it was supposed to be this year, but....well....the market intervened. Then my job...well, that's another story, but I worked in IT for one of those CA S&L's that got taken over by the FDIC, then bought by megabank. Guess what - megabank doesn't need us any more, now that the conversion is complete! So my last day of work is tomorrow. So even though we had planned on retiring, (and we still hope that DH will follow next spring!), it's still hard to take when it's on "their" terms and not mine! There's a lot of us forced out - these are people that I've worked with for almost 20 years. Some can retire, but the majority can't. It's tough to see everyone struggling - there's just not a lot of IT jobs out there right now unless you're a young pup!

If you want the whole sob story, then I have to add that my youngest graduated from HS this year. I was extremely active at the school - PTA president, that type of thing - so now that part of my life is over also! I've completely lost my identities all in the last three months.

Anyway, it's not all bad. I can now spend the time needed to fix up the house - we want to put it on the market and move - we live in Orange County, CA, so we want to take what little money we can get out of it and run (preferably before the next earthquake!). We are probably heading to San Antonio - not 100% sure, but that's where we're leaning towards. We love Texas (lived in Houston in the early 80's), but I want to get to a little bit smaller metropolitan area.

Financially, I think that we'll be okay - health insurance will be a big issue, of course. I am in the process of trying to re-allocate our portfolio away from stocks - and I'm finding that to be a little challenging right now. I've never been comfortable with bonds (never had time to fully understand them). I guess that I have time now!

At some point I'll post our info and ask opinions. Right now I'm just venting a little (sorry about that!) and feeling a little sorry for myself. I have truly enjoyed the reading that I've done so far and I look forward to spending more productive hours here!
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Old 07-21-2009, 06:05 AM   #2
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Quote:
Originally Posted by nanannjen View Post
I have been lurking here for quite a while, and I figure that it's time to introduce myself. DH and I have been planning an ER for a while - it was supposed to be this year, but....well....the market intervened. Then my job...well, that's another story, but I worked in IT for one of those CA S&L's that got taken over by the FDIC, then bought by megabank. Guess what - megabank doesn't need us any more, now that the conversion is complete! So my last day of work is tomorrow. So even though we had planned on retiring, (and we still hope that DH will follow next spring!), it's still hard to take when it's on "their" terms and not mine! There's a lot of us forced out - these are people that I've worked with for almost 20 years. Some can retire, but the majority can't. It's tough to see everyone struggling - there's just not a lot of IT jobs out there right now unless you're a young pup!

If you want the whole sob story, then I have to add that my youngest graduated from HS this year. I was extremely active at the school - PTA president, that type of thing - so now that part of my life is over also! I've completely lost my identities all in the last three months.

Anyway, it's not all bad. I can now spend the time needed to fix up the house - we want to put it on the market and move - we live in Orange County, CA, so we want to take what little money we can get out of it and run (preferably before the next earthquake!). We are probably heading to San Antonio - not 100% sure, but that's where we're leaning towards. We love Texas (lived in Houston in the early 80's), but I want to get to a little bit smaller metropolitan area.

Financially, I think that we'll be okay - health insurance will be a big issue, of course. I am in the process of trying to re-allocate our portfolio away from stocks - and I'm finding that to be a little challenging right now. I've never been comfortable with bonds (never had time to fully understand them). I guess that I have time now!

At some point I'll post our info and ask opinions. Right now I'm just venting a little (sorry about that!) and feeling a little sorry for myself. I have truly enjoyed the reading that I've done so far and I look forward to spending more productive hours here!
If you are adequately compensated and have no serious expenses, forced retirement spares you the -for some- the agony of making yourself the decision. In my case I was compulsorily laid off. I wanted to retire, but I doubt my wife would have let me do it if it had been voluntary. More so considering that there is no early retirement for her, being a civil servant.
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Old 07-21-2009, 06:07 AM   #3
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Welcome...seen your posts around here a few times. We are becoming empty nesters this September as well. It really leaves a blank spot in the home, doesn't it? I have not lost my job, and don't think I will...but you never know, as you found out. I also think we would be ok, but we now have 2 kids in college, and the still uncertain markets are not at all comforting. So we are sticking it out for now.

Good luck to you, and welcome to the board!

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Old 07-21-2009, 07:16 AM   #4
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nanannjen, sounds like the good news is that you've been thinking about retiring anyway relatively soon. I was laid off last October and had been planning to retire in 2011- had a big decision to make as to whether to look for another job or just go ahead and pull the trigger and retire.

Guess I'm what is called "semi-retired" with a lot more retired than semi, I always had a sawmill as a hobby so bought a new mill and now cut wood for others about a day a week on average- I love it, great fun, meet some interesting people, make a few bucks so I don't feel guilty when I eat breakfast out or buy a new tool.

Net is that the timing wasn't my decision either but finding much to do to stay busy and enjoying everything more- working in the yard isn't a chore I have to get done, finding time to help a neighbor with a project is easy, etc.

We're also looking to move from this area (we've bought property in WV and will move there in a year or two when my DW retires). I can relate to your comments about losing your identity but now you get to start on a new one!

Best of luck with the retirement, hope you enjoyed today and all the time you'll have to do what you've only wished you had time to do before!
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Old 07-21-2009, 07:39 AM   #5
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My sister in law went through a very similiar experience. She worked for a bank in Baltimore that ran into trouble and was merged into a PA bank. Her job in accounting was eliminated about two weeks ago. Unfortunately, she and her DH are not able to retire. She's pounding the pavement looking for another job.

Good luck to you and welcome!
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Old 07-21-2009, 09:30 AM   #6
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nanannjen, if you still can use your former employer's EAP see if they have a prep for retirement program. Recently I heard one of our former astronauts say that the lack of structure and goal setting when he left the corp left him, effectively, rudderless. Retirement often changes the roles of family members. When I worked in HR I would share with employees that work is both an economic and a social activity, retirement effects both. Finding a program that addresses the impact of retirement on relationships is worth the effort.

You might check with Fidelity to see if they have any seminars on bonds in an IRA portfolio.
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Old 07-21-2009, 09:52 AM   #7
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Being laid off, instead of retiring when you wanted, should also make you eligible for COBRA and maybe other laid-off benefits that can help ease the transition to retirement. You might want to double check with your former HR and do a little investigating to find out what you qualify for.
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Old 07-21-2009, 10:31 AM   #8
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Unemployment Comp should be fairly easy to snag as well. Sorry you got the boot but am sure based on what you shared that this can be made into lemonade!
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Old 07-21-2009, 01:44 PM   #9
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I understand the part about not being "emotionally ready". Our story is similar to yours. My husband's position was eliminated as part of the NASA Shuttle phase-out. He was NOT emotionally ready for this - even though we knew it was coming. We are also OK financially but my DH wants to work.

In our state, if you get a pension - which my husband does - you are eliminated from Unemployment Compensation.

We also are trying to make the portfolio changes from "accumulation" to the "other stage"---can't quite choke it out yet. Consequently, we also are trying to study the "bond piece". We have time to work on it but are scouring past posts for information based on the experience of those who have "walked the walk".

We also are planning on selling our house within the next year or three and moving closer to our kids.

Health insurance is using cobra subsidy until it runs out. THEN ................$1200 a month for 20 months. Obviously, we are hopeful that something gets worked out to make insurance more financially reasonable.....counting the days to Medicare. We are grateful for the 9 months of subsidy but anxious about what comes after that.

It would be appreciated if the seasoned veterans would chime in with their bond portfolio advice and experience. We are thinking that we will keep about a 60/40 stock/bond mix for a couple of years.
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Old 07-21-2009, 02:21 PM   #10
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Vent away. We are here to help. Reinventing your life can be daunting but look at it this way. Is it really so bad taking the time, energy and talent you used on your job and directing those skills to work on you and want you want to make out of the rest of your life? Sure, one has to look back and what is being left behind but my God the vistas to behold looking forward.
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Old 07-21-2009, 03:44 PM   #11
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Welcome to FIRE and the next chapter in your life. Based on your background, you should be well-equipped for the transition-it was going to happen anyway, right? Look at the timing as a bonus? Lots of good advice and life experiences to draw from on the board, and don't worry- there are a lot of other emotionally unstable folks here, too!

All the Best!
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Old 07-21-2009, 04:54 PM   #12
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Similar to you, I was thinking about when I could ER, then found myself laid off from my j*b earlier this year. I was pretty well prepared financially but I know what you mean - I was a little pissed off that it was on their terms and not mine but I got over that and now I'm just glad to be done with that former employer. The more I review my finances, the better I feel that I am indeed FIRE'ed and will never have to look for another job, at least not for financial reasons. Meanwhile, my friends still working for that former employer of mine are being face with their 3rd paycut this year - some of them wish they would be laid off and consider me the lucky one. So far, I'm enjoying my new found freedom and I wish you all the best in your new adventures. COBRA should be very cheap for the first 9 months, it's summer, please try to make the best of this - it could be a blessing in disguise!
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Old 07-21-2009, 07:05 PM   #13
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nan, what do you want to know about bonds? Ask away and some of us can drone on until you (and everyone else) tell us to shut up.
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Old 07-21-2009, 07:55 PM   #14
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I've never been comfortable with bonds (never had time to fully understand them). I guess that I have time now!
Welcome to the forum! Here's a discussion you might find helpful.

Bond Basics - Canadian Money Forum
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Old 07-21-2009, 11:10 PM   #15
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First of all, thank you for all of your responses! I sincerely hope that I wasn't too whiney - I think I was feeling sorry for myself, and it leaked into my post!

Regardig bonds - first of all, thank you, Mead, for posting that link. What a great explanation! I've read that type of thing before, but that one is clear and concise. I'm going to print it out for future reference.

My problem is that I know I need to diversify - if DH is going to retire in less than a year, then we need to figure out what we're going to live off of! Here's our statistics:

I'm 52, DH is 53. We have about 1.2m in our various retirement accounts, pretty much all pre-tax. Of that, about 175,000 is cash, $24,000 in bonds that mature in 2011 and the rest is stock. We have about $325,000 in non-retirement, with $20,000 in cash and $37,000 in Fidelity CA Tax Free Bond fund. Our house is worth around 1.3m, with loans against it totalling $450,000. We also own a condo in Phoenix worth around 180,000 - it's paid for.

We want to sell our house and move - get a new house maybe in the $500,000 range - maybe pay cash? Not sure on that yet. We still have two at home - both in community college, so cheap right now. Neither will be looking at expensive schools - GPA's need a little work! I'm not eligible for COBRA, because I was only part time (I had a sweetheart deal because I'd worked there so long.) We have insurance from DH, but he's only been with his company for 3 years, so I don't know if he will have any options for insurance from them when he retires. I'm guessing that we will need in the range of $80,000 - $90,000 a year to live on. DH hopes to work part time and bring in a little - maybe get insurance, but probably not - career change time for him.

To get to the point of all this - I know that I should be adding bonds - but it just seems like a really bad time to be buying them! I know I should have TIPS, especially since I definitely feel that there's inflation in our future - but from everything I read, it's not a good time to buy them either. What can I do right now - say, in the next three months - to lessen my exposure to stocks? I've been fully invested for so many years, I'm finding it very difficult to change my mindset away from stocks! I've got cash to invest - I just need to figure out where to put it. Thoughts? And thanks in advance!
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Old 07-21-2009, 11:25 PM   #16
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nan, if I had your situation, I would retire today.

Cheers,

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Old 07-21-2009, 11:29 PM   #17
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Have you considered buying bonds/cds for the next 2-5 year's withdrawals and Wellington or Dodge and Cox Balanced for the balance? When you pull cash from your IRA sell the same amount from the above mutual funds to fill your pail.
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Old 07-22-2009, 02:15 AM   #18
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I understand the part about not being "emotionally ready". Our story is similar to yours. My husband's position was eliminated as part of the NASA Shuttle phase-out. He was NOT emotionally ready for this - even though we knew it was coming. We are also OK financially but my DH wants to work.

In our state, if you get a pension - which my husband does - you are eliminated from Unemployment Compensation.

We also are trying to make the portfolio changes from "accumulation" to the "other stage"---can't quite choke it out yet. Consequently, we also are trying to study the "bond piece". We have time to work on it but are scouring past posts for information based on the experience of those who have "walked the walk".

We also are planning on selling our house within the next year or three and moving closer to our kids.

Health insurance is using cobra subsidy until it runs out. THEN ................$1200 a month for 20 months. Obviously, we are hopeful that something gets worked out to make insurance more financially reasonable.....counting the days to Medicare. We are grateful for the 9 months of subsidy but anxious about what comes after that.

It would be appreciated if the seasoned veterans would chime in with their bond portfolio advice and experience. We are thinking that we will keep about a 60/40 stock/bond mix for a couple of years.
Medicare for 2 people will cost 2/3 of that amount, +/-. I pay about $400, have a good Medigap but a low end Part D. My Part B premium is not the lowest, but neither is it the highest.

Medicare is fine, but not the sweet deal many are expecting. And as usual, if you have any income Sam wants to bleed you. So far I would be way ahead just self funding. (Taking part A only)

Ha
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Old 07-22-2009, 07:23 AM   #19
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It would be appreciated if the seasoned veterans would chime in with their bond portfolio advice and experience. We are thinking that we will keep about a 60/40 stock/bond mix for a couple of years.
While not necessarily a veteran of retirement (working on my third year), my/DW's AA was set at 60/40 for our target retirement date of 59. During my working years (my wife - same age, was to retire at the same time, but found she was not ready according to plan) was in the 90/10, 80/20 range over many years.

About three years before retirement, I started to sell off profits from many years and established our respective retirement cash buckets, with a four year horizon. This was based upon our return history of since when we started saving/investing for retirement - close to 30 years ago.

On average, we found positive returns (in round numbers) in 66% of years, meaning out of every three years, two would be positive - one negative. This did not account for the degree of profit/loss, but just to give us an estimation of returns based upon the way we invest, and represents our ability to face risk.

Based upon this, we set a four year gross income target for our cash, which is considered within the "bond" portion of our AA. Since the cash bucket would be backed up by a lot of bond holdings (representing many years of income), we felt that four years was optimal for us, in retirement. Many folks say that you should not have that much in cash, due to not having the opportunity to invest and loss of value due to inflation. In retirement, conservation of income becomes much more important than gains in portfolio value (believe me) during rough patches, as we are having now.

Since my wife delayed her anticipated retirement, her cash bucket remained at the four year target. This would allow her to leave her job (for any reason) without having to worry about immediate income. Of course, since she plans to retire/take SS in less than a year (at age 62), that four year bucket will be "worth" a few more years of income, due to the SS income offset.

Since she continues to contribute to her 401k, and I'm drawing the majority of my retirement income from my portfolio (no pension - but I did set up an SPIA at retirement to make my own pension), and with the downturn in the equity side (bond/cash is holding its own), we're down to around a 55/45 actual portfolio vs. our 60/40 target, a/o this date.

We don't rebalance (I did when I worked, through adjustments in contributions) and we reinvest all distributions, resulting in additional holdings (in both bond and equity based funds).

Some folks may say that a 60/40 AA target in retirement is too aggressive, however we are looking at our retirement plan (target is age 100, regardless if we think we're going to make it or not) and to be very conservative at our planned retirement age (again, 59 - 40+ years planned retirement) along with the fact that we will have additional income streams coming on-line in the next 8.5 years, in addition to our current cash holdings (reduces the need to sell in a down market) gives us confidence that for us, the AA target makes sense for this time in life. I do expect to reduce to a more conservative AA in the future.

For you? I have no idea .... Anyway, since you asked, there's our real-life situation....
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Old 07-23-2009, 09:35 PM   #20
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there is no early retirement for her, being a civil servant
How's that again? Civil servants, with their deluxe pensions, are typically the most likely to take early retirement.

I must be missing something.
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