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Decision time with a package on the table
Old 02-23-2018, 04:59 AM   #1
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Decision time with a package on the table

My plan was to semi-retire within the next 12-24 months. Staying that long was solely a financial based idea to pad the dollars and make the ride a little less stressful . Iím less and less motived by the j*b itself., but the comp and benefits are good. I very recently got the call to HR. A package roughly equaling a year in comp is on the table. My decision and it needs to be made soon. My initial reaction was take it and run. Itís now kind of freaking me out a little. This is it...if I take it, no more Mega BS, but no more reasonable healthcare costs, bonus, options...etc, etc. The semi-retirement situation involves ramping up RE investments a little more. DW and me.

The numbers look pretty good in Firecalc. We might need to think before we buy on a few more things than we currently do. But we should be okay especially if the RE thing adds to the equation at all.

We havenít fully worked out the entire offer. The year I mentioned is an estimate based off the initial meeting. We havenít talked about healthcare, timing to liquidate RSU/Options or any thing else. (Anyone with advise on that potential conversation, please jump in)

Iíll be thinking about and discussing with DW a lot over the next few days, so if you have thoughts, questions, experiences...please share.
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Old 02-23-2018, 05:18 AM   #2
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For a while I also considered going part time to ease into RE. After thought, I decided that I really wanted to cut the cord, not make it smaller. If your numbers are good then I say take the offer.
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Old 02-23-2018, 05:24 AM   #3
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As Stevie Miller continues to say "go on take the money and run."

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Old 02-23-2018, 06:20 AM   #4
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I’m in a similar situation except my job was, not unexpectedly, eliminated. I’m leaning heavily toward leaving although I did interview for the job created to replace mine and one other, essentially combining the two jobs. After Cobra ends, I would need to solve for 5 years of medical coverage. My only hesitation is emotional attachment to my team members and desire to complete the big projects that I initiated.
Since your numbers are adequate, if you don’t love your work and you are emotionally prepared, I would say do it.
That said, there are incredible opportunities for emerging technology applications in my field that I find much more exciting, the ability to pursue those fully inclines me to move on.
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Old 02-23-2018, 06:41 AM   #5
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Iíll share an anecdote. A coworker was offered a package that amounted to a yearís worth of salary. He declined. Ten months later his job was eliminated and he was sent packing with three months of salary.

He worked ten months for one month of salary.
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Old 02-23-2018, 06:52 AM   #6
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You could be fine taking the package and retiring now, but we don’t know. There’s not enough information here to offer a meaningful reply. But there are red flags like
  • My initial reaction was take it and run. It’s now kind of freaking me out a little. A little is pretty normal.
  • The semi-retirement situation involves ramping up RE investments a little more. To what? From 40:60 to 60:40 or to 90:10?
  • The numbers look pretty good in Firecalc. We might need to think before we buy on a few more things than we currently do. But we should be okay especially if the RE thing adds to the equation at all. Could be just fine, but I’d want better than “pretty good” or “should be okay” before pulling the plug. Retirement is a long time. Some people are fine with 80% prob of success, others need 200% to sleep at night - there is no right answer, depends on you.
  • We haven’t talked about healthcare, timing to liquidate RSU/Options or any thing else. I’d have all spending nailed down, especially healthcare.
IMO it’s irresponsible for anonymous others, with nothing vested in your future, to casually say you’ll be fine and take the money and run based on so little info. Anecdotes can be useful or misleading. ‘I know one guy who’ is not helpful.

It IS a big decision, and you’re the only one who has the actual numbers, and knows what probability of success you can live with.
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Old 02-23-2018, 06:54 AM   #7
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Originally Posted by Philliefan33 View Post
Iíll share an anecdote. A coworker was offered a package that amounted to a yearís worth of salary. He declined. Ten months later his job was eliminated and he was sent packing with three months of salary.

He worked ten months for one month of salary.


Thanks for the reply. I would say thatís an absolute possibility in my case as well. Definitely one of the variables Iím considering.
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Old 02-23-2018, 07:13 AM   #8
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Originally Posted by hopeisnotaplan View Post
Thanks for the reply. I would say thatís an absolute possibility in my case as well. Definitely one of the variables Iím considering.
If this is a real possibility, it seems like a quasi no-brainer. Take a hard look at this situation. In my experience, if an employee thinks he/she is a target, then it is usually more imminent than he/she perceives.
The main elephant in the room is always health care. Insurance costs should be a somewhat known figure to help you make an objective decision. But if you were already planning some sort of RE in 12 to 24 months, I presume you have a reasonable estimate.
And, since you were planning RE anyway, you can explore finding other part-time employment after taking the package.
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Old 02-23-2018, 07:16 AM   #9
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Originally Posted by Midpack View Post
You could be fine taking the package and retiring now, but we donít know. Thereís not enough information here to offer a meaningful reply. But there are red flags like
  • My initial reaction was take it and run. Itís now kind of freaking me out a little. A little is pretty normal.
  • The semi-retirement situation involves ramping up RE investments a little more. To what? From 40:60 to 60:40 or to 90:10?
  • The numbers look pretty good in Firecalc. We might need to think before we buy on a few more things than we currently do. But we should be okay especially if the RE thing adds to the equation at all. Could be just fine, but Iíd want better than ďpretty goodĒ or ďshould be okayĒ before pulling the plug. Retirement is a long time. Some people are fine with 80% prob of success, others need 200% to sleep at night - there is no right answer, depends on you.
  • We havenít talked about healthcare, timing to liquidate RSU/Options or any thing else. Iíd have all spending nailed down, especially healthcare.
IMO itís irresponsible for anonymous others, with nothing vested in your future, to casually say youíll be fine and take the money and run based on so little info. Anecdotes can be useful or misleading. ĎI know one guy whoí is not helpful.

It IS a big decision, and youíre the only one who has the actual numbers, and knows what probability of success you can live with.
I agree with this for the most part, but that anecdote about getting sacked later is a very real possibility. A lot of times if they don't get enough for voluntary layoffs, involuntary (and less beneficial) layoffs soon follow. It should be taken into account. Also, morale can be lower, and work load higher, after purges.

That said, the rest of midpack's post holds. You need a comfortable level of confidence in your plan if you take the package, or an alternate plan to either cut costs or create income.

Also, this may or may not be a one-time offer. I've seen packages come every year or two. Unfortunately I wasn't in the group they were offered to when I was looking to pull the plug.
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Old 02-23-2018, 07:18 AM   #10
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Donít forget to look at taxes on the lump sum & RSUs.
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Old 02-23-2018, 08:14 AM   #11
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Quote:
Originally Posted by hopeisnotaplan View Post
My plan was to semi-retire within the next 12-24 months. Staying that long was solely a financial based idea to pad the dollars and make the ride a little less stressful . Iím less and less motived by the j*b itself., but the comp and benefits are good. I very recently got the call to HR. A package roughly equaling a year in comp is on the table. My decision and it needs to be made soon. My initial reaction was take it and run. Itís now kind of freaking me out a little. This is it...if I take it, no more Mega BS, but no more reasonable healthcare costs, bonus, options...etc, etc. The semi-retirement situation involves ramping up RE investments a little more. DW and me.

The numbers look pretty good in Firecalc. We might need to think before we buy on a few more things than we currently do. But we should be okay especially if the RE thing adds to the equation at all.

We havenít fully worked out the entire offer. The year I mentioned is an estimate based off the initial meeting. We havenít talked about healthcare, timing to liquidate RSU/Options or any thing else. (Anyone with advise on that potential conversation, please jump in)

Iíll be thinking about and discussing with DW a lot over the next few days, so if you have thoughts, questions, experiences...please share.


Hereís a copy of my Hello post from a couple years ago. The numbers have changed slightly up but not significantly. It should provide at least a little more perspective for those that said not enough info.

Quote:
Originally Posted by hopeisnotaplan View Post
New here and wanted say hello and lay out my situation/plan...

46, married, no kids; want to semi-retire at 50. which to me means doing something productive, just not 50+ hours a week in the office.

Current stats:
No debt
about $3.9M net worth, of that:
$900K in two houses (TN and FL) - live in TN fulltime
$1M in 401K/IRAs
$400K in other Real Estate investments - not our houses
$1.5M in market, mutual funds/ETFs, individual stocks, etc.
The rest in cash/misc. assets

I've always had 50 as a goal. If the NW rises a little in these next 3/4 years, I think we'll be fine. If not, I can certainly hang around a little longer until the math works better. Healthcare is probably the big concern if I leave at 50.

That's about it for now...I welcome any comments or thoughts.
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Old 02-23-2018, 08:35 AM   #12
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At the beginning of the year I transitioned from full time to part time to be semi retired and then fully retire in the fall. I wish I had just cut the cord entirely.
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Old 02-23-2018, 09:01 AM   #13
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48 years old with over $3m in retirement assets and a 1 yr package.... tough spot to be in.

Kidding aside, unless your living costs are outrageous I think you'll be fine.

You might want to use healthsherpa.com to recon health insurance costs in your locations in TN and FL to see if residing in one or the other has cheaper health insurance.

If you did take the package are there other things that you could do, was consulting or whatever, that would be similar to the part-time work that you planned before this opportunity came along? Would it feel odd to reject the package and then resign or request a reduced work schedule in 12-24 months?

If the semi-retired work you planned was outside your current employer then it seems to me that your employer just gave you a free pass to the earlier version of your plan. Congratulations.
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Old 02-23-2018, 09:01 AM   #14
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Originally Posted by hopeisnotaplan View Post
Hereís a copy of my Hello post from a couple years ago. The numbers have changed slightly up but not significantly. It should provide at least a little more perspective for those that said not enough info.
There is no indication on how much you will spend in retirement. You really need to nail down how much you will spend in retirement including health before you can reach a solid decision. Determining your retirement income will play a large part in your health care costs. You need to do the hard work of figuring it all out. Knowing what MegaCorp will offer for healthcare is critical.
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Old 02-23-2018, 09:14 AM   #15
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Originally Posted by hopeisnotaplan View Post
Hereís a copy of my Hello post from a couple years ago. The numbers have changed slightly up but not significantly. It should provide at least a little more perspective for those that said not enough info.
Maybe I missed it earlier, but annual expenses? Projected SS benefit? Pension? Projected healthcare costs/year you are assuming prior to Medicare?

You've done a nice job saving, nice that you have options. But it all depends on spend rate.

I will say however, that had my company offered a package such as this I would have thought long and hard about it. Instead they cut me loose unexpectedly with no advance notice. Darn
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Old 02-23-2018, 09:27 AM   #16
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48 years old with over $3m in retirement assets and a 1 yr package.... tough spot to be in.

Kidding aside, unless your living costs are outrageous I think you'll be fine.

You might want to use healthsherpa.com to recon health insurance costs in your locations in TN and FL to see if residing in one or the other has cheaper health insurance.

If you did take the package are there other things that you could do, was consulting or whatever, that would be similar to the part-time work that you planned before this opportunity came along? Would it feel odd to reject the package and then resign or request a reduced work schedule in 12-24 months?

If the semi-retired work you planned was outside your current employer then it seems to me that your employer just gave you a free pass to the earlier version of your plan. Congratulations.


I'm confused about his age..48 in this post which he said was a couple years ago .but then he says he needs 5 years of bridge HI to medicare.

His liquid is about 1.5 which does make a difference. Lots of RE and he does not say he makes any income from the second house in Florida. Is he old enough to tap the IRA without penalty. Can they live on the MM cash a go low for ACA lots of variables here and of course how much do they spend.
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Old 02-23-2018, 09:39 AM   #17
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I'm confused about his age..48 in this post which he said was a couple years ago .but then he says he needs 5 years of bridge HI to medicare.
That was a different poster who said 5 years to medicare.
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Old 02-23-2018, 10:00 AM   #18
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That was a different poster who said 5 years to medicare.
Need more coffee but if the OP is only around 50 his options for HI and accessing retirement income could be a problem.
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Old 02-23-2018, 10:07 AM   #19
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I agree with this for the most part, but that anecdote about getting sacked later is a very real possibility. A lot of times if they don't get enough for voluntary layoffs, involuntary (and less beneficial) layoffs soon follow. It should be taken into account. Also, morale can be lower, and work load higher, after purges.
I don't dispute that it's a real possibility, but only the OP can gauge his situation.

There were over 37,000 people killed in the US in auto accidents in a recent year, doesn't mean we're all going to sell our cars and stop driving. Saying I know a guy who passed on a package and was then layed off is analogous to saying I know a guy who got killed in an auto accident... Neither here nor there?

Now that we've seen more info from the OP, looks like he/they might be able. Health insurance at 50 would be a serious concern/unknown for me...but that's just me.
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Old 02-23-2018, 10:14 AM   #20
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Are you saying that a guy who was offered a package and passed on it is not more likely to be let go in a layoff type situation?

There has to be a reason he was offered that package in the first place. Something is going on whether it's him personally or the company trying to lower. costs..
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