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Year by year pre-FIRE checklist
Old 01-10-2017, 11:04 AM   #1
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Year by year pre-FIRE checklist

Is there a year-by-year checklist for FIRE. I'm still about 10yrs away, hopefully, but what are some of the smart things to do starting say 5 yrs prior? I was thinking of things like:

Year +4/5:
1. If plan to relocate evaluate the real estate market and if the market is favorable sell the current residence in the HCOLA
2.
3.

Year +2/3:
1. If the stock market is favorable convert 2-3yrs of expenses to cash/CDs
2.
3.

Year +1:
1. Purchase a new car/truck to last you 20yrs
2. Purchase a new house using cheap leverage if the rates are low
3. Look for ways to get fired (kidding!)
4.
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Old 01-10-2017, 11:12 AM   #2
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Potentially buy a house twice in the last five years?

I would add, create an AA you can live with, rebalance, tax loss harvest and repeat from pre thru post retirement. Know the tax laws, tax brackets and the +/- that go with each one. Do you own taxes to understand and plan better.
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Old 01-10-2017, 11:27 AM   #3
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Originally Posted by COcheesehead View Post
Potentially buy a house twice in the last five years?
+1

OTH, assess overall condition of existing home's roof, HVAC, water heater, etc. - R&R as needed.
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Old 01-10-2017, 11:57 AM   #4
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Putting cash balance aside is actually detrimental financially from rational perspective but helps immensely from mental perspective.
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Old 01-10-2017, 01:24 PM   #5
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Thanks those were just random examples for the sake of examples. I was curious if someone had taken the time to build a pre-FIRE checklist. It sounds like it may not exist.
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Old 01-10-2017, 01:28 PM   #6
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This post may be what you are looking for: How do/did you prepare for ER?
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Old 01-10-2017, 01:36 PM   #7
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In addition to Nords' list that REWahoo links to, there was a good thread on Bogleheads last February that got into the weeds on the five years pre & post retirement. Here is link to the post that summed the thread up: https://www.bogleheads.org/forum/vie...83420&start=50
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Old 01-10-2017, 01:45 PM   #8
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Quote:
Originally Posted by candrew View Post
OTH, assess overall condition of existing home's roof, HVAC, water heater, etc. - R&R as needed.
+1
In addition, perform any "long term" home improvements, if you intend to stay in your house for a while, 1-2 years before retirement while you still have working cash flow. We have upgraded bathrooms and floors without impacting our retirement savings.
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Old 01-10-2017, 02:07 PM   #9
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Quote:
Originally Posted by dvalley View Post

Year +1:
1. Purchase a new car/truck to last you 20yrs
3. Look for ways to get fired (kidding!)
4.
I am still driving my old car. I probably should have gotten the new one like you said, but I put new tires on and need to wear them out before I get rid of the car.

I tried my hardest to get them to fire me, but I finally ended up having to quit on my own
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Old 01-10-2017, 03:56 PM   #10
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Thanks for those links, much appreciated!
Joe, I put the new car in there since most folks would be due for one. I'm a gear head so i have several old project cars in addition to my daily driver. Speaking of which I've been collecting tons of tools over the past 10yrs because once I retire I wouldn't want that as yet another expense when I get into my full on DIY Mr-fix-everything-mode. Besides non-electronic tools will last me a lifetime and more for sure. But again that's very specific to me.
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Old 01-10-2017, 05:18 PM   #11
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About 3 years before FIRE, I started putting together a ladder of CD's and individual TIPS (not a mutual fund) in order to cover our anticipated expenses beyond pensions and dividends. I ought to have started earlier. The TIPS were 10-year, mostly bought at auction, with no commission. You have the option of getting an all TIPS ladder at original issue if you start 10 years ahead. Buying the ladder year by year like this means that you are unlikely to get stuck buying it all at low real interest rates. (My ladder needed to be only 13 years long because by then I would be 70 and with SS, my portfolio demands should be minimal. I still have a couple rungs to buy.)

I like this plan because with 5-year CD's and 10-year TIPS, you can get out on the yield curve where rates are good without a lot of risk. You don't have to worry about the NAV of a bond fund declining due to rising interest rates just as you need to sell. With the TIPS ladder, even if inflation spikes, your cash flow is protected in real terms (at least it is pre-tax). I do have some bond funds, but they are for out years well beyond the fund duration where I should come out ok despite interest rate gyrations. It is comforting to have these lots maturing at predictable value every six months, especially since our pensions are small.

I also accumulated some I-bonds to cover major expenses where timing was unknown, like roof and car replacements. Tax on these is deferred until you sell, which ought to be when you are in a low bracket.
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Old 01-10-2017, 10:10 PM   #12
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I have a list that I developed for myself starting with several years from retirement:

- Pay off mortgage.
- Get umbrella insurance policy.
- Draw up will, medical directive, and power of attorney. Make sure beneficiary forms are in place.
- Start saving up cash for buying a new car, fixing up and selling home, and relocation. Start CDs and/or online money markets to park cash.
- Track annual expenses (I started about 3-4 years before retirement).
- Research timing and impact of SS, Roth conversions, Medicare Part B, and RMDs using FIRECALC and i-ORP to determine estimated retirement income (e.g., ongoing process it seems).

- Maintain awareness of home prices and rental costs for relocation destination.
- Estimate federal and state income taxes for retirement state (e.g., I went through the state tax instructions and filled out the forms).
- Estimate expenses in retirement including travel.
- Obtain birth certificate and copy of SS card to get passport for future travel and driver's license in retirement state.
- Sign up for a final employer sponsored retirement planning course.
- Obtain additional credit card.
- Get any dental work needed (e.g., new fillings, visit to periodontist to discuss any necessary procedures).
- Start moving to a more conservative asset allocation for retirement if that is your plan.

- Research different SWR methods. Review procedure for withdrawing from 401k.
- Get physical and any medical tests done in last work year.
- Spend down FSA in last work year.
- Fully fund 401k, IRA, HSA in last work year.
- Consider a HELOC.
- Purchase upgraded software through at home program if available.
- Copy any personal items off work computer and take home important documents and records. Keep emails and phone numbers for co-workers and HR.

Of course there will be many visits with HR in the last few months and HR wants you to review all your records to ensure they are correct. I don't plan to start decluttering and fixing up the house to sell it until after retirement or this list would be much longer.
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Old 01-10-2017, 10:19 PM   #13
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Old 01-10-2017, 10:31 PM   #14
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-Donor Advised Fund
-Clear all overhead like extra cars, big houses, and anything that sucks money.
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Old 01-11-2017, 03:56 AM   #15
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May be nice to develop a sticky post somewhere.

Anything related to taxes, insurance, healthcare (in the US) and income (getting loans/credit at favorable rate) benefits from planning a few years ahead.
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Old 01-11-2017, 06:30 AM   #16
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Quote:
Originally Posted by dvalley View Post

Year +4/5:
1. If plan to relocate evaluate the real estate market and if the market is favorable sell the current residence in the HCOLA
2.
3.
If you are healthy and your employer offers HDHI with HSA - use that - then you can put ~ $6,000 for a family per year in an HSA account, in 5 years you have $30,000 to spend later for your health care.
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Old 01-11-2017, 08:17 AM   #17
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If you are healthy and your employer offers HDHI with HSA - use that - then you can put ~ $6,000 for a family per year in an HSA account, in 5 years you have $30,000 to spend later for your health care.
And, if retiring only somewhat early (moi), you can use $1000 catch-up contribution if age 55 or older, to go with the $6750 family contribution... https://www.shrm.org/resourcesandtoo...on-limits.aspx
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Old 01-11-2017, 09:40 AM   #18
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My target is currently April 2021, when I turn 51. I don't really have too much of a detailed strategy on getting there, other than saving as much as I can, and building my portfolio so that a good chunk of my expenses will be covered by the dividends, rather than having to sell assets.

I also want to move, and I'm planning on doing that around the time I turn 50. I figure it's easier to secure a mortgage while I have a j*b, so I might as well get the house situation under wraps before I pull the plug.

I'm also not *that* hard-pressed for April 2021, so as that date approaches, if I feel I'm truly not ready, I'll just do the OMY syndrome thing.
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Old 01-11-2017, 11:40 AM   #19
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Here's what I remember doing before retirement.

Three to five years beforehand:
1.) move my investments to my planned retirement AA, instead of my accumulation phase AA (in other words, from 100:0 to 45:55).
2.) attend pre-retirement seminars given by HR at work. These educated me on topics like how much my pension would be, when I would get it, what about health insurance, blah blah blah.
3.) Do a lot of online research about possible retirement locations, and spend my vacations visiting them.
4.) Keep good records of my expenses.

One to three years before retirement:
1.) Continue with all of this, except my investments were moved.
2.) Finish old long term projects at work, avoid taking on new projects.

Zero to one year before retirement:
1.) All of the above, except my investments were still in my retirement AA. Figure out how much income they would provide me, add my tiny pension, and make sure that my expenses would be covered.
2.) research what model of "retirement car" I wanted. Decided not to buy it until right after I retired, in order to avoid parking lot dings at work.
3.) start fixing up house to sell. Research methods for moving and how much that would cost. I ended up not moving for 7 years, but didn't know that at the time.
4.) Go through 20,000+ work e-mails and delete those that I didn't need any more. Delete other unnecessary digital files at work. OK, should have done that earlier. What a PITA!
5.) The week before I retired, I put a few (100?) e-mails that were important on a CD that I burned, with other important digital files, and gave that to my supervisor.
6.) Go through paper files at work and separate into those that need to be given to my supervisor, and those that need to be shredded.
7.) Shred what needs to be shredded, returned things borrowed from others, give the rest to my supervisor. Transfer classified materials according to procedures.
8.) Go to your doctor and get a physical.
9.) The last week I notified all my work related contacts of my retirement and gave them my supervisor's name, email, and phone number.
10.) Inform your car insurance of your retirement, since you may get a lower rate.
11.) Go through all the bureaucratic list of retirement tasks that your workplace gives you; things like having your computer account deleted, your access to databases turned off, and phone number re-assigned, blah blah blah. Get everything signed off as required.
12.) You know the stuff given to you by your work, for use at work only? Give the GOOD stuff that is in demand to your friends at work (and tell them that it is for work use only). I am thinking of the super nice high capacity hole punch that all the other scientists wanted and dropped by to borrow all the time, and my office chair, for example. The rest can go to office scavengers after you retire.
13.) The last day, send an e-mail to your colleagues saying what a privilege it was to work with them and so on (if it was).

All of this is going to vary depending on you, your plans, your job, your personality, and so on. I doubt that my list will be of any help at all. Really, I guess all that is absolutely necessary is to tell your supervisor that you are done, and walk out.
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Old 01-11-2017, 04:09 PM   #20
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Thanks for the input so far, especially those of you that took the time to really call out the bulletted items. These are all helping turn the wheels in my head.

I couldn't help but notice most of you guys put in a lot of time and effort on workplace related things; like cleaning out old emails, discussing projects etc. For me I'll probably put in my 2 week notice and call it good unless my then employer or manager is unusually nice to me.
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