One month from Tender the Resignation- Need Advice

[Prague]

Hi everyone - we have been talking about ER for a couple of years now and will be finally pulling the trigger by giving notice to our respective firms in a month! The plan is to give a two week notice but we have seen people getting escorted out on the day of the notice, so we have been keeping it quiet.

We know that right after giving notice/leaving employment, we have some immediate tasks at hand:
1. Decide on whether to use Cobra or one of the ACA plans. We currently do not quite know the full cost of Cobra and don't want to ask HR about it at the moment.
2. Transfer 401K to our own IRA account at our own brokerage house.

We are also starting to plan some longer term travel - i.e. travel that lasts more than a month.

For the more longer term, we know we also have to decide if we want to keep our current place and move somewhere else, both for climate and COL/tax reasons.

Would love to hear those who have gone through this process on any other things we should be thinking about and preparing. It is both exciting and nervous

 

[marko]

With a month to go it sounds like you haven't spent a lot of time thinking about it in any great detail. My sense is that most RE's here spent about a year or two with a least some sort of direction in mind.

I'd just go for it and then maybe just take a trip or two and then after some time figure out your next steps. No need to hurry; time is your new currency.

Unless they spent a lot of time planning ahead, I suspect many people here ended up in a different place/mindset than when the first walked out the door. But that takes a series of months to 'come down' and realize what you want to do IMO. Time can provide you a different perspective and wants/needs than when you view things through a work prism.

 

[Prague]

Thanks @marko. Actually we have been planning for ER for a number of years and it is only in the last couple of months we decided on a definitive date. I have also been a frequent "lurker" here and gained a lot of perspectives. We just want to get some advice on to-dos immediately before/after "pulling the trigger".

 

[travelover]

Good advice to take it slow and acclimate and let your mind clear. Don't make any hasty decisions, especially about moving. Generally ACA is cheaper than COBRA, especially if you can control your taxable income. HealthSherpa.com will get you some costs for insurance.

 

[marko]

Thanks @marko. Actually we have been planning for ER for a number of years and it is only in the last couple of months we decided on a definitive date. I have also been a frequent "lurker" here and gained a lot of perspectives. We just want to get some advice on to-dos immediately before/after "pulling the trigger".

What I should have said is not to do anything that is irreversible right away until the dust has settled.

 

[Buckeye]

Sometimes your employer documents on your W-2 the full cost of your health insurance. That can be a peek at what your current plan would cost on COBRA...at minimum.

 

[CardsFan]

Hi everyone - we have been talking about ER for a couple of years now and will be finally pulling the trigger by giving notice to our respective firms in a month! The plan is to give a two week notice but we have seen people getting escorted out on the day of the notice, so we have been keeping it quiet.

We know that right after giving notice/leaving employment, we have some immediate tasks at hand:
1. Decide on whether to use Cobra or one of the ACA plans. We currently do not quite know the full cost of Cobra and don't want to ask HR about it at the moment.
2. Transfer 401K to our own IRA account at our own brokerage house.

We are also starting to plan some longer term travel - i.e. travel that lasts more than a month.

For the more longer term, we know we also have to decide if we want to keep our current place and move somewhere else, both for climate and COL/tax reasons.

Would love to hear those who have gone through this process on any other things we should be thinking about and preparing. It is both exciting and nervous

The length of notice time depends a lot on how you relate with your employer and co-workers, and how you have been treated. I gave 3 months, and ended up working part-time an additional 4 months. But as you have seen, you need to be prepared to be walked out the door that day.

I understand not wanting to ask HR too much about Cobra and other retirement benefits, but it depends on your age. If you are in your late 50's it is easier to ask these things, and just say you are planning for the future.

There is usually no rush to transfer the 401k's to IRA's (it was 6 months later before I made the move), and some have found it beneficial to stay in the 401k.

Good luck.

 

[Bamaman]

Give a notice to my MegaCompany, and suddenly security guards would give you 5 minutes to gather your personal belongings. But they'd pay you for the time you gave in the notice.

Thankfully, our benefits for white collar workers came from the unions and our blue collar workers. If enough years and/or age on the job and they'd allow us to purchase healthcare at their cost. It cost me $430 per month for 6 1/2 years for my healthcare and a Medicare supplement for my wife. And I had the $ sitting in a RHSA account to cover it until 2 months before age 65.

I don't blame you for keeping your decision quiet. They'll tell your options after the notice is put in.

Keep the 401K where it is until the company makes you move it. Chances are they're paying some of the administration fees. Then to a Rollover IRA directly to whoever has your other accounts. Don't get a check in hand.

I wouldn't blame you if you took a nice, long vacation. You deserve it.

As far as moving from a HCOL area for retirement, go for it. Moving can also often be a very positive thing--starting a new life. Our company started consolidating offices, so I went ahead and moved because the writing was on the wall. I retired 5 years later.

 

[target2019]

Hi everyone - we have been talking about ER for a couple of years now and will be finally pulling the trigger by giving notice to our respective firms in a month! The plan is to give a two week notice but we have seen people getting escorted out on the day of the notice, so we have been keeping it quiet.

Every situation is different. Your firms sound cut and try on the leaving aspect. What if you gave 4 weeks notice? Maybe they escort you out and have to pay you for four weeks? In any event, good luck with your exit and subsequent vacation.

I know in a small company, at this time, the employee has more bargaining power, as it is extremely difficult to find available, qualified workers. If your job can simply be picked up by another, then it will be a quick exit. If your work is tied to you, there may be something you can negotiate to train a replacement.

 

[Col. Klink]

Good luck and enjoy....

 

[brucethebroker]

Good advice to take it slow and acclimate and let your mind clear. Don't make any hasty decisions, especially about moving. Generally ACA is cheaper than COBRA, especially if you can control your taxable income. HealthSherpa.com will get you some costs for insurance.

You might ask HR something like this: "Am thinking about retirement in 2020. I know the premium can change in a year, but could you tell me the current cost of COBRA for my planning purposes?"

My guess is that they get those kind of questions quite often.

 

[ckelly78z]

A way to ensure that you keep getting paychecks is to take the balance of your vacation, and then your two weeks notice. If you have 4 weeks of vacation, take it, and announce that you will be gone in 6 weeks. Agree that you need to talk to HR about a potential Cobra amount.

 

[joylesshusband]

A way to ensure that you keep getting paychecks is to take the balance of your vacation, and then your two weeks notice. If you have 4 weeks of vacation, take it, and announce that you will be gone in 6 weeks. Agree that you need to talk to HR about a potential Cobra amount.

This is a dumb advice.
Vacation being accrued, if taken in full before quitting (assuming the quitting date is before end of DEC), its "non-earned" portion will have to be paid back to employer upon leaving.
The employer will pay you the actual accrued annual vacation once you leave anyway, it's the law. Then you could take all the vacation you want....

Re. COBRA:
Your W2 forms usually have the code "DD" in cell 12c, followed by the amount your employer paid for your medical insurance premiums. Add this to the annual amount you have paid for the insurance premiums and you will get your COBRA cost.
Oftentimes this info is available in your benefit election package which you fill out in OCT-NOV every year.

Re. Notice:
There is no need to give notice earlier than mandated by the company requirement.
Mine was given 3 months earlier, as I was getting company pension and they needed early notice in order to do their super-precise calculations...

 

[Spock]

My megacorp was known to walk people to the door immediately upon the workers giving notice.
So my officemate had everything prepared, including having a trailer packed with all of their belongings for the move. He was expecting to get walked out the door, climb into his car, and drive to another state to start his new career.
But. Since he where he was going was not a competitor of megacorp, megacorp said he would work until his last day as he had specified when he gave notice.

So... it might pay to check if RETIREES at your megacorp are also escorted out immediately or if it is just people moving to another job.

COBRA: Since you and your spouse are giving notice for March, between the 2 of you you will have 6 months pay... depending on how much you'll be farther down the ACA subsidy scale. With no other info than stated I would guess that you'll be better off on COBRA through year end and then ACA in 2020 when the COBRA cost transition creates a special enrollment event.

 

[Bir48die]

My Cobra cost was less and plan was much better but I agree to research it prior to making the decision.

I would roll the IRA elsewhere.

 

[Prague]

You are right!

This is a dumb advice.
Vacation being accrued, if taken in full before quitting (assuming the quitting date is before end of DEC), its "non-earned" portion will have to be paid back to employer upon leaving.
The employer will pay you the actual accrued annual vacation once you leave anyway, it's the law. Then you could take all the vacation you want....

Re. COBRA:
Your W2 forms usually have the code "DD" in cell 12c, followed by the amount your employer paid for your medical insurance premiums. Add this to the annual amount you have paid for the insurance premiums and you will get your COBRA cost.
Oftentimes this info is available in your benefit election package which you fill out in OCT-NOV every year.

Re. Notice:
There is no need to give notice earlier than mandated by the company requirement.
Mine was given 3 months earlier, as I was getting company pension and they needed early notice in order to do their super-precise calculations...

===
I was able to find the full cost of Cobra by looking up the W2 12c DD line based on your tip. So Thank you! However, it is stated that it is actually the full cost of the health insurance (from both employee and employer contributions), so there is no need to add the amount from our own contribution.

We do not expect to be walked out but we have seen this happen with other coworkers before, so we are just trying to be cautious. We do not want to lose last year's bonus as it is not given to us till end of Q1/end of March.

 

[Prague]

Cobra/ACA

My megacorp was known to walk people to the door immediately upon the workers giving notice.
So my officemate had everything prepared, including having a trailer packed with all of their belongings for the move. He was expecting to get walked out the door, climb into his car, and drive to another state to start his new career.
But. Since he where he was going was not a competitor of megacorp, megacorp said he would work until his last day as he had specified when he gave notice.

So... it might pay to check if RETIREES at your megacorp are also escorted out immediately or if it is just people moving to another job.

COBRA: Since you and your spouse are giving notice for March, between the 2 of you you will have 6 months pay... depending on how much you'll be farther down the ACA subsidy scale. With no other info than stated I would guess that you'll be better off on COBRA through year end and then ACA in 2020 when the COBRA cost transition creates a special enrollment event.

==
Even without the pay from working, we would not be eligible for any ACA subsidy due to higher passive income from investments. While we can find ACA plans at cost comparable or even lower than Cobra, but most of them are HMO plans, not the PPO plans COBRA offers. So we are leaning towards COBRA. Another consideration is to reduce changes in the middle of the year, as the change of plan may force us to change our regular providers.

 

[Prague]

Thanks!

The length of notice time depends a lot on how you relate with your employer and co-workers, and how you have been treated. I gave 3 months, and ended up working part-time an additional 4 months. But as you have seen, you need to be prepared to be walked out the door that day.

I understand not wanting to ask HR too much about Cobra and other retirement benefits, but it depends on your age. If you are in your late 50's it is easier to ask these things, and just say you are planning for the future.

There is usually no rush to transfer the 401k's to IRA's (it was 6 months later before I made the move), and some have found it beneficial to stay in the 401k.

Good luck.

==
Unfortunately or fortunately in our case, we are not yet late 50s I was able to check out last year's Cobra amount from another replier's response via checking W2 form.

Thanks for the advice on 401K transfer to IRAs. I guess we have always done it pretty soon after our job changes in the past - we had an experience that the 401K was tied in a former employer's bankruptcy legal matters for several years before we could make the move. But that is probably an exception than the norm.

Thank you again,

 

[Dreaming of Freedom]

==
Even without the pay from working, we would not be eligible for any ACA subsidy due to higher passive income from investments. While we can find ACA plans at cost comparable or even lower than Cobra, but most of them are HMO plans, not the PPO plans COBRA offers. So we are leaning towards COBRA. Another consideration is to reduce changes in the middle of the year, as the change of plan may force us to change our regular providers.

I would definitely keep the COBRA PPO plan then. Many of the ACA HMO's have tiny networks and no out of network coverage.

 

[swakyaby]

I retired a year ago and faced similar issues. I opted for COBRA the first retirement year because I knew I could keep my PCP and GI specialist, and I would have to change both with the ACA plans I was considering. The cost, however, included a 2% administrative fee above the full employer/employee premiums, since COBRA is administered by a 3rd party. The total cost of COBRA insurance was disclosed in a formal letter shortly after my last day. COBRA is offered with a generous grace period initially, I think it was at least 2 months.

I kept my retirement plans quiet and spoke to no one about it until I formally gave notice. There was nothing to gain by giving colleagues advance notice, and plenty of opportunity to be hurt by it, so I kept it to myself.

It was an easy choice for me to choose to directly transfer my retirement account to a rollover IRA at an investment firm. My retirement plan did not offer anything more than what I could chose myself, had a 1% management fee, and I would not have the degree of control over my retirement assets that I desired.