OMY - With Meaning ...

[Kickernick]

I've always had this interesting thought about highly paid athletes that are financially independent and retire early from their careers: why don't they work "one more year" and donate all of the money they earn their last season to charity? Wouldn't that be a magnanimous gesture? Wouldn't every fan and city they visited be excited by what the are doing?

Then I was thinking - shouldn't I do the same thing? I'm a (relatively) high paid employee for Megacorp and my dear wife and I are financially independent at 48. Rather than retire early - how about working the next year and build a charitable nest egg to then give away in early retirement? (Retire at 50).

We already give money to charity each year, so this would be an "extra" and give our early retirement a purpose - to give away the OMY treasure. Anyone else thought of thought of this? Anyone else doing it?


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[G8tr]

Interesting idea. The same could be done in terms of saving an angel investor fund to support young entrepreneurs.


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[JoeWras]

I'm not giving it all away, but in these last OMY years, we're giving a large percentage to our donor advised fund which we'll be able to direct out over the upcoming years.

 

[GreenER]

What a great idea! I don't think I could stand to stay on any longer than I have to. We will probably be kind of tight at the beginning of ER but I anticipate having more than we need on the far end and I look forward to creating a charitable trust down the line.

 

[Kickernick]

Fidelity offers a Giving Fund you can put $$ into and designate where the money gets donated later. It's a tax deductible irrevocable trust.

 

[wingfooted]

Adding up my US Federal tax bill over the years, and considering that I don't live in the US only carry the blue passport - I feel that in fact I have made a lifetime of charitable contributions. Certainly I don't need to donate the earnings from OMY to feel good about myself.

The recent addition of a 3.8% ACA tax on investment income - so that I can work in a third world country to exceed the ACA threshold and then have the pleasure to subsidize health care benefits for someone else - just reinforces my personal opposition to wealth distribution schemes.

So I am going to have to say NO to OMY beyond what I've already committed to doing (JAN 2016) and NO to donating that year of my life to charity.


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[Lucantes]

Myself and my wife and my favorite charity!
I plan on working right up to the point that we are FI, and then we will RE and I will never think about OMY or work ever again (honey-do's don't count!).

 

[splitwdw]

I've always had this interesting thought about highly paid athletes that are financially independent and retire early from their careers: why don't they work "one more year" and donate all of the money they earn their last season to charity? Wouldn't that be a magnanimous gesture? Wouldn't every fan and city they visited be excited by what the are doing?............

I'm not a sports fan but I would think that the possibility of further injury would make some athletes want to get out as soon as they are FI. Also some athletes do a lot of charity work while active in their sport.

 

[JoeWras]

Adding up my US Federal tax bill over the years, and considering that I don't live in the US only carry the blue passport - I feel that in fact I have made a lifetime of charitable contributions. Certainly I don't need to donate the earnings from OMY to feel good about myself.

I won't get too deep into politics, but I don't blame you. I am saddened that our governments are directing charity, and many people feel like you do. I do too to some degree and fear tax code will get even more antagonistic to personal charity. Oh well.

Still isn't stopping me. I'm not doing it out of guilt. DW is still working anyway to a retirement goal. Feels good and gives us some purpose in life outside of our own little world.

 

[MichaelB]

The thread topic, working OMY and donating the income, is interesting. so let's try to stay on topic.

 

[Mulligan]

I'm not a sports fan but I would think that the possibility of further injury would make some athletes want to get out as soon as they are FI. Also some athletes do a lot of charity work while active in their sport.

Plus very few athletes are provided the opportunity to work that extra year. Most in fact get retired several years before they want to. Plus the "name" athletes face the problem of having their peak maximum contract ending with declining skills. They are not willing to play for a significant pay cut while teams in the salary cap era are not willing to pay high dollar for an athlete in decline.


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[Live And Learn]

I've done two more years to add cushion to my numbers. It has been extremely difficult emotionally to "hang in there". While the theory of working OMY to donate money sounds good on paper, the thought of staying in my career makes me .

One of the reasons I want to ER is so I can donate more of my time and talents, doing things that I find emotionally fulfilling.

 

[Jay_Gatsby]

OMY for charity sounds nice, but wouldn't it make more sense to ensure that a portion of your estate goes to charity? Or start donating heavily once you're no longer spending money to travel? That way, you don't need to spend OMY at w*rk. The point of FIRE is to enjoy your time - which is a finite resource.

 

[38Chevy454]

Adding up my US Federal tax bill over the years, and considering that I don't live in the US only carry the blue passport - I feel that in fact I have made a lifetime of charitable contributions. Certainly I don't need to donate the earnings from OMY to feel good about myself.

The recent addition of a 3.8% ACA tax on investment income - so that I can work in a third world country to exceed the ACA threshold and then have the pleasure to subsidize health care benefits for someone else - just reinforces my personal opposition to wealth distribution schemes.

So I am going to have to say NO to OMY beyond what I've already committed to doing (JAN 2016) and NO to donating that year of my life to charity.

I agree, forced gov't wealth redistribution schemes only get me PO'd.

I give my charity money direct to who I want. I also will not work any longer than I am planning, enjoy life while I am alive. Then any leftover can be settled out of estate, which includes some provisions for charity.

 

[Rick_Head]

Many, many pro athletes don't seem to be FI, or at least able to LBYM.

The NFL players: Dan Marino and 78 Percent of NFL Players Are Bankrupt or Broke | GOBankingRates

According to Sports Illustrated, approximately two years after retirement, the percent of NFL players bankrupt or financially stressed is a whopping 78 percent. This means more than three-fourths of players either can’t manage their money, or employ people who choose not to manage their money well.

The NBA isn't a lot better: Personal finances of professional American athletes - Wikipedia, the free encyclopedia

Originally the statement "60% of NBA players go bankrupt within five years after leaving their sport" was released by a representative of the NBA Players' Association in 2008, although according to another person it remains unclear if that number is accurate in any way.

I'll let you google other sports.

 

[Jay_Gatsby]

I agree, forced gov't wealth redistribution schemes only get me PO'd.

I give my charity money direct to who I want. I also will not work any longer than I am planning, enjoy life while I am alive. Then any leftover can be settled out of estate, which includes some provisions for charity.

One could say that the Government has plenty of my money with which to help out the "less fortunate". I'm constantly hearing from Government-types that they know how to spend my money better than I do, but if people who need help aren't being helped, then it's clear that they don't.

Doesn't matter to me as long as they don't raise my taxes with the sob story that more money is needed to help the less fortunate (sorry for diverting slightly into politics).

 

[Jay_Gatsby]

Many, many pro athletes don't seem to be FI, or at least able to LBYM.

The NFL players: Dan Marino and 78 Percent of NFL Players Are Bankrupt or Broke | GOBankingRates
The NBA isn't a lot better: Personal finances of professional American athletes - Wikipedia, the free encyclopedia
I'll let you google other sports.

Let's not forget all the people who have their hands out when a son, daughter, cousin, friend, etc... lands a multi-million dollar contract.

 

[MichaelB]

The thread topic, working OMY and donating the income, is interesting. so let's try to stay on topic.

Discussions about taxation, government spending, redistribution, etc, often end poorly and lead to premature thread closure, especially when they are unrelated to the thread topic. Let's stay on topic, folks.

 

[JoeWras]

OMY for charity sounds nice, but wouldn't it make more sense to ensure that a portion of your estate goes to charity? Or start donating heavily once you're no longer spending money to travel?

I hope to do all of the above, including donating now during OMY.

Granted, I'm not giving all of my OMY away to charity. Just significant amounts (over 20%). Still enjoying some of the fruits of OMY.

And here's something else I'm doing. Instead of donating cash, I'm donating our most heavily appreciated liquid assets. Get the deduction now, and a chance at less income later when we need to live off it.

 

[Kickernick]

I thought I would post a quick update on this idea. We've now saved 8 straight monthly paychecks. Enough to buy a very nice exotic sports car. We have 4 months to go before the savings fund gets topped off with our annual bonus in early March. Should be just 3 weeks before my final day at work. Then we can start the fun of giving it all away!

 

[longranger]

I suspect during the first five years or so after retiring many previously charitable individuals will be busy making sure that their financial projections were accurate or more padded than they thought. After that resuming giving without anxiety will be a particular joy.

 

[kaudrey]

That's great, OP!

Personally, I plan to retire on schedule (not for a while yet), but one of the reasons I want to retire early is so that I can volunteer my time. There are many ways to give, and I love that you are doing this!

 

[Loving Life]

I retired 5 years ago, lasted 3 months and now working on my 3rd, 2 year contract overseas in Asia. I keep saying its my last, but if the $$$ is still there and I am enjoying it, the Extra $$ will keep my kids from ever having to worry about $$ in the future. And, I am having a great time traveling through Asia. (so yes, there is meaning )

 

[Kickernick]

Giving of your time and saving money for future generations are certainly admirable ...

We have been saving our paychecks for nine months now. We've been depositing the money into a savings account. There is already enough money to buy a very nice exotic sports car, but we are committed to donating the money in our first few years of early retirement. It should be a very healthy six-figure balance by the time I retire early in 2016.

 

[Retire2017]

Kudo to OP.