11 months out - fighting the OMY urge

[Backdraft57]

tominboise, dude, leave already. In all my 35 years at the FD I never had a retiree come by the station and say, wow I really screwed up by retiring, wish I would have worked one more year. I left three years ago. Yea I remember the mind game of OMY. Push through it. I SERIOUSLY doubt you will regret it 6 months into retirement. MHO of course.

 

[UncleDave]

I’ve been a member here for years, and I don’t think I’ve ever posted before today.

We retired in 2015 at 59. Best move we ever made. During that time I have said goodbye to too many great people who didn’t get a chance to retire. Attended the funeral last Saturday of our neighbor of 35 years (same age as me but still working). Now I get to hear the anguish of his spouse who wonders what she should do next, and how things got to this point.

You can keep working as long as you like, but just know that every day you do is one less day that you get to be retired and enjoying life. For me it was a no brainer.

 

[SoReadyToRetire]

Thanks for this post, tominboise. I’ve already 95% decided to retire on 12/31/2019, but OMY syndrome was starting to kick in a tiny bit for me, too. And I only have about 1/4of the assets you have, if that!

But hearing others repeatedly say what they’re saying on this thread is reinforcing my decision to stick with my plan.

 

[ImaCheesehead]

Tom, what will you do for healthcare if the ACA gets chopped? It doesn’t sound as you have retiree health coverage thru work. We don’t, and that is the only reason DH still works. If we lost the guarantee of coverage in spite of pre existing health conditions we would really be in trouble. What is your plan?

 

[YoungSaver]

I can't really help you, but I noticed only one person responded regarding having a 17 year old. How about college expenses?

 

[tominboise]

I can't really help you, but I noticed only one person responded regarding having a 17 year old. How about college expenses?

College expenses are covered via a 529 plan that I don't include in our net worth. She should be good to go, meaning she can get through in 4 years with no debt. Beyond that is on her.....

 

[tominboise]

Tom, what will you do for healthcare if the ACA gets chopped? It doesn’t sound as you have retiree health coverage thru work. We don’t, and that is the only reason DH still works. If we lost the guarantee of coverage in spite of pre existing health conditions we would really be in trouble. What is your plan?

DW is still working at IBM, so we will all go on her plan. We are anticipating that she will get RIFFed before the end of the year, at which time she is eligible to retire from IBM and buy health insurance through them at the group rate, although not subsidized by IBM, obviously.


As a last resort, we would buy private health insurance until Medicare eligible, and I would work enough consulting each year to cover the costs, depending on what they are, etc.

That's all I got at the moment.

 

[trumpeting_angel]

You are correct in that I won't be traveling the world right away. That's on the list, tho. My thought is to take the rest of the year off and work on projects around the house, Ride motorcycles, work out almost every morning, do some quality hunting rather then a frantic weekend, etc.

We have been stalled on a kitchen remodel for some time - this is a good opportunity to get that project going and save some money on it while doing so. I am an engineer by education and career, so I have a lot of ideas I want to poke at.

Next year, I may pad my income by taking a consulting gig or two. I will work on those relationships this fall.

One of the biggest adjustments is that I've been watching the stash grow for 30 years, so watching it go the other way will take some getting used to.

Starting to spend that nest egg has been terrifying for me (retired at the end of June), and watching the market dip 800 points the other day was no fun. I was up at midnight checking out part-time jobs.

I already have consulting work, and was down to p/t before I left my last job, and that certainly made things easier when I suddenly had all this time.

You have a great opportunity here with the severance. Go for it! I’m 66, scarcely ER at this age, and I wish I had left sooner.

 

[gwraigty]

I’ve been a member here for years, and I don’t think I’ve ever posted before today.

We retired in 2015 at 59. Best move we ever made. During that time I have said goodbye to too many great people who didn’t get a chance to retire. Attended the funeral last Saturday of our neighbor of 35 years (same age as me but still working). Now I get to hear the anguish of his spouse who wonders what she should do next, and how things got to this point.

You can keep working as long as you like, but just know that every day you do is one less day that you get to be retired and enjoying life. For me it was a no brainer.

Well, don't be a stranger.

+1

Going back and reading the OP, there's only a different of $50K between the desired goal and the reality, which shouldn't break the bank. Others are addressing the healthcare matter, so I'll leave it at that.

 

[tominboise]

Update - the RIF is now scheduled to happen the week of September 9. So basically a week and half or so left here. I am doing my best to steel my resolve and stay the course to saying "bye - bye" to this, even though I will miss "some" aspects of the job.

 

[LarryMelman]

Well it won't come as a surprise, as it did for me when I got RIF'd almost 20 years ago and didn't see it coming at all. You have done your homework, you have numbers and a plan. Godspeed to you.

 

[KarenF]

330 days.... or 30 days!

To get an idea what health insurance would cost check out healthsherpa.com and pretend that you had an event where you lost coverage.

Thank you so much for the healthsherpa tip - good info!

 

[brett]

I enjoyed my job. I worked with good people. I had 25 really good years at megacorp. I was treated well, was able to grow personally and professionally. I worked hard but I was well paid not only salary, but good bonus money for performance and generous stock options.

Despite that, one of the best days in my career was getting RIF'd, or packaged as we called it. I purposely hung on for 18 months secure in the knowledge that it would come. Nothing beats a golden handshake to exit into FIRE.

I intended to continue working. After six months of rest, relax, and travel I realized that I no longer wanted to do it. That six months was the impetus to retire early at 58/59 and never look back.

A colleague of mine wanted to go, was not going to get a package, and suffered from OMY. He had lots of retirement plans and the resources to see them through. OMY got him. He worked another five, retired at 64 and dropped dead six months later. Instead of 5 years, he got six months of retirement. Never did on thing on his bucket list.

But he didn't leave, in his words, any money on the table. Sad really.

 

[Finance Dave]

To the OP....every state is different, but in Indiana we are on ACA coverage. We get the subsidy by keeping income below 4x FPL...but it seems you may not be able to do that. If we made the income you do, our health care premium for a silver plan would have been $1,414 per month.

You might want to see if there is some way you can stay below 4x FPL for at least a couple years by moving money NOW to Roth or after tax accounts even if it makes for a higher tax bill. As I'm typing I forgot your age or whether you can get the funds out of your IRAs in 2020...but if so see my example below.

One option would be to take out a HUGE amount one year, then live off that money in the bank for the next 2-3 years...this would take some tax modeling but may be worth it.

Example:

2020, take out $500k from your TIRA, and pay taxes due, put the money in the bank (you will have to pay full ACA premiums for that year).

2021, take about $60k out of your TIRA and show this as income...keeping you below 4x FPL so you can get the subsidy for ACA. Then, use $60k of the remaining $380k that you took out in 2020 to live off....leaving you with $320k at end of 2021 in the bank.

2022, take about $60k out of your TIRA and show as income, again keeping you below 4x FPL, and use $60k of the remaining $320k in the bank....

repeat annually until you have to take another huge withdrawal from a TIRA.

When we got the subsidy, it was over $900/month...or almost $11,000 annually. YMMV.

My numbers above may not be accurate, but you get the idea...a quick and dirty piece of math on my part.

Good luck.

 

[LarryMelman]

2020, take out $500k from your TIRA, and pay taxes due, put the money in the bank (you will have to pay full ACA premiums for that year).

2021, take about $60k out of your TIRA and show this as income...keeping you below 4x FPL so you can get the subsidy for ACA. Then, use $60k of the remaining $380k that you took out in 2020 to live off....leaving you with $320k at end of 2021 in the bank.

2022, take about $60k out of your TIRA and show as income, again keeping you below 4x FPL, and use $60k of the remaining $320k in the bank....

repeat annually until you have to take another huge withdrawal from a TIRA.

I don't see how anyone with significant taxable assets (the OP said he did, but I don't think he gave a number) can possibly qualify for ACA subsidy. Unless you bury all your cash in the yard, it's going to generate interest or dividends or etc. which will easily exceed the subsidy cutoff. Am I missing something?

 

[trumpeting_angel]

Depends how much of assets are in tax-sheltered accounts vs brokerage or other sources.

 

[Mdlerth]

You could also stuff your mattress with kruggerands

I don't see how anyone with significant taxable assets (the OP said he did, but I don't think he gave a number) can possibly qualify for ACA subsidy. Unless you bury all your cash in the yard, it's going to generate interest or dividends or etc. which will easily exceed the subsidy cutoff. Am I missing something?

You could put the kitty into non dividend paying stocks. There's no guarantee that some of them won't eventually pay divs, but if they decide to start doing so you'd hear about it in advance.

Likewise there are zero coupon bonds, which don't throw off annual interest payments.

Also, there is the whole arena of collectibles like antiques or Picassos or Duesenbergs. I don't recommend those because of their limited liquidity, but there are folks who pay almost fictional prices for them.

 

[big-papa]

I have decided to go in July, 2020. I will be 60 (DW will be 58 and may or may not be working - she is currently employed as a programmer by IBM but may not be by that time). Anyway, I have had a (mental) target of $3mil in taxable & non taxable assets (IRA, 401k, Savings/brokerage). We have been bouncing around at $2.950mil for the last couple of months, so presuming that the economy doesn't completely tank between now and then, I think we will make it to that threshold. Assets are invested at 60%/32%/8% and the split between taxable and tax exempt is 35% taxable and 65% tax exempt (meaning 35% of our money is in post tax accounts and the rest is in IRA401K).

We also have around $1mil of value in our primary house, a nice cabin and some bare land. We have no debt. I have always used $120k annually as our spending rate. Our budget information would show we spend somewhat less then that.

Things that have me worried - cost of health care insurance.

We would probably start SS for DW at 62 and me at 70. I could go consulting after retirement if needed but don't really want to if I don't have to. Although maybe three months a year to pay the healthcare for the year. Then you aren't really retired, however.

Should I count down the remaining 330 days or make it 695 days?

Probably a stupid question.

Your situation is not unlike mine. I'm 58, still working, and DW is 59 and not working. We're creeping up on a similar number as you, but I don't see a particular number as a goal at this point. We can withdraw enough TODAY to live quite comfortably on and who's to say what would happen 6 months, 1 year, 5 years, etc. to our portfolio after we retire? May have more, may have less - I've chosen an AA such that, historically, we'll be OK even if history repeats itself.

Looks like your situation is similar - at this point it's about choosing a date when you're ready to retire, not looking for a particular dollar amount in your portfolio in which this years gains could easily be reversed next year or several years from now. Yeah, you could save more by adding one more year to your work life, but you're also one year closer to the date of your death.

Cheers

 

[pb4uski]

I don't see how anyone with significant taxable assets (the OP said he did, but I don't think he gave a number) can possibly qualify for ACA subsidy. Unless you bury all your cash in the yard, it's going to generate interest or dividends or etc. which will easily exceed the subsidy cutoff. Am I missing something?

The cutoff for ACA subsidies for a couple is ~$65k of income (MAGI). If the interest/dividend yield is 2%, that would equate to $3.2m of taxable investments.... and most posters' taxle investments are far south of that.

 

[pb4uski]

You could put the kitty into non dividend paying stocks. There's no guarantee that some of them won't eventually pay divs, but if they decide to start doing so you'd hear about it in advance.

Likewise there are zero coupon bonds, which don't throw off annual interest payments.

Also, there is the whole arena of collectibles like antiques or Picassos or Duesenbergs. I don't recommend those because of their limited liquidity, but there are folks who pay almost fictional prices for them.

Another popular option is a SPDA (single premium deferred annuity) which earns interest but is tax-deferred until withdrawn... even if held in a taxable account. AKA a MYGA (multiple year guaranteed annuity)... similar to a CD issued by an insurer.