My plan is working...

[CindyBlue]

Thought I'd tell you that my plan is working.
When I first got onto this FIRE form, and asked about the possibilities of retiring, you all suggested (ok, required! (smile!)) that I track my spending so I'd know exactly what I needed to live on for a year. I'm not good at day-to-day expense tracking, so I did something else.
Last December, I opened up a new checking account, and transferred just the amount of money I thought I needed to live on, not counting taxes, or the COBRA I will have to pay for 18 months if I retire in June of next year (the COBRA money is already built into a separate savings account.) Starting January 1st of this year, I have lived off of only the money in this account.
I have spent "normally", including vacations and extras (I bought a new toy (an antique sewing machine), I had to buy a new computer this year, and we are in the process of replacing the recently broken washer dryer, so I've already added that estimated expense into the budget numbers.)
So far, I'm well under budget. I've projected ahead to the end of the year, and with those numbers, by the end of the year I'm projected to have spent about 73% of what I had budgeted to spend. The left over budgeted money is very close to what I will need for COBRA, too...nice!
I have the savings to make it to my pension and then to Medicare and Social Security, and beyond. And to cover my always high dental expenses, (thanks, mom and dad!)
I'm now officially FI!
And I'm here to say that now I know for sure that (barring the apocalypse), I can work another year knowing that any time I want to, I can tell them all where to go and quit. Working another year will save me a lot of my own money (I'd like to get as close to pension and then Medicare age and then Social Security age as I can before I retire, if possible, in order to save my own money so we can use it to travel or for age related expenses down the road.) I just love knowing that I am now working because I want to, not because I have to. I like my work a lot, just not some of the higher-ups that can make life miserable.
I am a natural worrier, and this year long process has done a lot to help me sleep at night.
Thank you all, so very, very much, for your helpful, generous, and entertaining posts and advice!

 

[street]

LOL! I'm laughing because it is as simple as that. Great job now you have them (your work place) just where you want them. LOL

 

[REWahoo]

Thought I'd tell you that my plan is working.

I love it when a plan comes together!

Congratulations and thanks for the update.

 

[CindyBlue]

LOL! I'm laughing because it is as simple as that. Great job now you have them (your work place) just where you want them. LOL

You are right - it was as simple as that. But it took planning and patience to set it up - and the right amount of money saved to open that new account. I'm lucky in that I've always been a relatively good saver, and with the help and advice from the people here on the FIRE Forum, the planning went well. It was the patience that was hard for me! Waiting out the year was finger tapping! I checked the projections every month at first, grinding my teeth as I waited it out to the last day of the month so I'd be accurate. Then as the months with the "big bills" (car insurance, etc) came and went, it started getting more and more accurate and optimistic. And as the year gets closer and closer to the end, I'm checking it sometimes every two weeks. Being able to check helped with my worrying (smile!)
I love that now I feel I'm able to speak the truth at work, not just try to stay under the radar in order to ensure my paycheck. I have decided (and have already started) to use that new ability as a chance to try to make things better for the people I will leave behind. Maybe if I speak the truth, while the higher-ups might get ticked off, they might see some of the validity of my concerns. And maybe other people will get the courage to speak up, too, because I am. There is some safety in numbers (smile!)

 

[UnrealizedPotential]

The trouble is everyone has a boss. It all rolls down hill, so unlikely any changes will be made voicing your opinion. Still, it sounds like you are in a good place, and you are in control of your future now. That's a good thing.

 

[CindyBlue]

The trouble is everyone has a boss. It all rolls down hill, so unlikely any changes will be made voicing your opinion. Still, it sounds like you are in a good place, and you are in control of your future now. That's a good thing.

Yep, you are right. Maybe I'm being too optimistic. But I can at least try, and feel an obligation to do so. I just hope I can be diplomatic when I say it (smile!).
You said it well...I feel I'm in control of my future!

 

[Red Badger]

A great Thanksgiving post! Congratulations on your upcoming "journey." You'll find it so much more rewarding than w*rk.

Best wishes and thanks for the update!

 

[gayl]

Isnt being FI awesome! Congrats on having options ☺

 

[mistermike40]

Congratulations! Now that you're FI this year will pass quickly

 

[Curmudgeon]

Congratulations! Though It seems as though you've already thought about it some, I would emphasize: don't forget about occasional (and large) one time expenses, like a new car or major home repair when it's needed. And be sure you know how much health insurance is going to cost you once COBRA is gone.

Your idea of setting up a separate account is great. One of the things that saved my bacon, when it came to trying to calculate my expenses, was the fact that I had been doing all of my spending through one account. Even though my finances overall were somewhat messy (multiple accounts, multiple banks, multiple brokerages, etc.) all of my spending - including paying monthly credit cards off - had been going through a single checking account at my primary bank.

 

[CindyBlue]

You are so right. I knew I'd never be able to track absolutely everything I spend in a year if I didn't set up that separate account.
It was, surprisingly, harder than usual to spend, though. I kept thinking ok, I'll just wait on this thing, or maybe I can do this cheaper - just because it was "that" account (smile!) I had to "force" myself to spend normally, so I could get a true accounting of what I really spend when I'm "spending normally." That way I also have a good idea of where I can economize if/when I need to.
My COBRA will be very expensive, which is why I've already saved for it in a separate savings account. And if I have to go off COBRA, it will be about double that, and I've budgeted for that, too. The "extra" left over in my projected budget this year will cover a lot of it, to my happy surprise. But if I retire next June, I'll have exactly 18 months of COBRA coverage until my 65th birthday in January (because while my contract is officially over in June, my health plan (I've been told!) goes through August...I'll have to check that out more carefully when I make the decision to retire. It might only be true if I am hired for the next year!) That will get hopefully get me to Medicare via COBRA. I really should work another year, financially speaking, and I'm young enough and I like the work so I might - providing that I will be offered the opportunity. I've been at this job a long time and I am thus more expensive, so who knows?
I will not be rich - far from it (smile!) I will always have to be careful. But it's sure a good feeling to know that I should be able to take care of expenses when I stop working.

 

[mrfeh]

Don't rely too heavily on one year's spending. There are expenses that don't occur every 12 months.

 

[CindyBlue]

Don't rely too heavily on one year's spending. There are expenses that don't occur every 12 months.

Thanks, you are right. I need to be aware of those "occasional" "big" expenses.
I've reviewed our checkbook registers (both men and hubby's) for the past few years (he saves them) and pretty much everything, big or small, that normally could happen has occurred in the past 5 years or so. I've also got a savings account that will cover big expenses (a new-to-me car (i.e., used!) if needed, for example.) The only thing that could devastate my projected budget at this time, and I suspect at any time, is a big health issue. That's one reason I'd like to be able to work one more year if possible, because it would keep that year's budget money in my savings account to help in emergencies such as that. But if not, then I'll tighten the belt for awhile and still know I can make it.

 

[Toocold]

This is similar to my experiment that I've been running the last 3 years, in which after I hit my FI number, I transfer a specific budget amount every month to my main account. The rest -- whether it's my normal w-2, bonuses, passive income -- go into my investment account.

The theory is that I get to see what surprise expenses come up, if I can't "pay the bills" on a particular month.

 

[Floridatennisplayer]

Love your post!!!!

Happy Thanksgiving lady.

I just got off my conference call with my Fidelity advisory service person. I will be 63 in March and plan to retire in 2 years from then at 65. Told her about the extreme pressure of my job and she says.......”You do realize you can quit today don’t you?” I moaned about paying horrible pricing for my own health insurance for 2 years and after years of saving and saving, the thought of withdrawing that money for two years without any income mentally bothers me.

She mentioned which would be worse....working for 2 more years, numerous reports, field rides with management, pressure, etc. or not working, playing tennis, being stress free by withdrawing money that was for this very purpose. She explained I can get Obama care cheaply by just withdrawing from our savings account, which is not considered income and not draw on SS and my annuity as planned until 65. This will show me as a low income to qualify for lower healthcare pricing. Out total annual expenses are about $60k and I have $300k just sitting in our checking account. At 65 our SS and annuity will cover all of our annual expenses.

I think I can deal with the withdrawals in this light.

 

[Amethyst]

Oh, what a cheerful thread this is! Good job, everybody.

 

[Walt34]

I just love knowing that I am now working because I want to, not because I have to.

I found this to be crucial when I took a job after retirement. It changed my entire outlook on work, simply knowing that if things started to not go well I had the option of leaving. And indeed when things did go south, I quit.

 

[kcowan]

Congratulations! I predict that you will become increasingly intolerant of the work atmosphere now that you know it is unnessary!

 

[walkinwood]

A wonderful thread. Congratulations!

I think you've realized a truism. By tracking something (spending in this case), you influence behavior. That's why tracking spending is such an important activity.

Look into Obamacare with an eye towards subsidies. If your income is less than 400% of the federal poverty level, you could get considerable subsidies. It is uncertain how long this will continue, but it is worth some time & effort to track. It may also influence when you ER - ie. early in the year if you want to keep income down. Lots of good threads on it here.

Good luck.

 

[CindyBlue]

Love your post!!!!

Happy Thanksgiving lady.

I just got off my conference call with my Fidelity advisory service person. I will be 63 in March and plan to retire in 2 years from then at 65. Told her about the extreme pressure of my job and she says.......”You do realize you can quit today don’t you?” I moaned about paying horrible pricing for my own health insurance for 2 years and after years of saving and saving, the thought of withdrawing that money for two years without any income mentally bothers me.

She mentioned which would be worse....working for 2 more years, numerous reports, field rides with management, pressure, etc. or not working, playing tennis, being stress free by withdrawing money that was for this very purpose. She explained I can get Obama care cheaply by just withdrawing from our savings account, which is not considered income and not draw on SS and my annuity as planned until 65. This will show me as a low income to qualify for lower healthcare pricing. Out total annual expenses are about $60k and I have $300k just sitting in our checking account. At 65 our SS and annuity will cover all of our annual expenses.

I think I can deal with the withdrawals in this light.

Congratulations! I'm so glad for you! Now you have to make a very important decision!
I'm going to look into the idea that I might be able to qualify for Obama Care by not "having any income" - which I won't, except for withdrawing from my savings and maybe from my 403b in order to make it the 1 1/2 years until Medicare. I'm wondering if the 403b counts as "income" for the purposes of Obama Care?
Thank you for the interesting thought...I might not be far behind you (smile!)

 

[CindyBlue]

A wonderful thread. Congratulations!

I think you've realized a truism. By tracking something (spending in this case), you influence behavior. That's why tracking spending is such an important activity.

Look into Obamacare with an eye towards subsidies. If your income is less than 400% of the federal poverty level, you could get considerable subsidies. It is uncertain how long this will continue, but it is worth some time & effort to track. It may also influence when you ER - ie. early in the year if you want to keep income down. Lots of good threads on it here.

Good luck.

I think that our income will be more than will allow me any subsidies. My husband will retire when I do, and he already has SS and will then draw from his pension. He also is mandated to withdraw from his 403b because he is over that age limit. This will kick us up above any subsidies, I'm pretty sure. I looked it up last week but will look it up again, just to make sure.
For my job, I sign a contract. Once I sign that contract, I cannot leave before June. So any decision to retire must come in March or April, when contracts for the next year are offered and signed. The (i.e., my internal) pressure to make a decision is starting as the new year gets closer (grin!)
Thank you!

 

[CindyBlue]

Congratulations! I predict that you will become increasingly intolerant of the work atmosphere now that you know it is unnessary!

I think that your prediction has already started coming true

 

[AS2019]

Congratulations! The dedicated bank account is an excellent idea! I've been tracking my spending with Mint, but maybe I'll try the second account method as well!

Good luck with everything!

 

[CindyBlue]

Congratulations! The dedicated bank account is an excellent idea! I've been tracking my spending with Mint, but maybe I'll try the second account method as well!

Good luck with everything!

I hope it works for you, too. For me, it was a painless method of making sure that absolutely every dollar was accounted for, even the miscellaneous ones. I might not know exactly what monies I spent on exactly what for the "little stuff" such as garage sale shopping or Starbucks, because I use cash for that, but I do know exactly how much I spent this year, because it's no longer in that account. At the end of the year, I can subtract out the checks I wrote for main bills and big expenses to see how much miscellaneous money I spent, also showing me where I can economize should I need to. I made sure my work checks (automatic deposit) went into the other, main, account, so there was no doubt that I was only spending money from the "practice for retirement" account

 

[Bir48die]

I know I will get skewered for this but I will say again that getting health care subsidized by drawing on savings while having substantial assets goes against my grain. It's just another way Americans game the system as others pay their costs. I'm not against single payer but there should be financial means testing if we're going to keep this system. Sorry but this is just my opinion.