In 2011, rumors were my then company will file for bankruptcy soon. I came across this forum in 2011 and can not believe so many posts resonated with me so I signed up in 2012. I learned a lot from the posts and I really appreciated the well written responses to questions and the varied topics covered. In my actual life, I can't even speak with anyone about finances. Definitely no one shared my views on LBYM and early retirement. Often I'm asked about why I don't have expensive cars, "toys", clothes or live in a nice, luxury condo.
After a life event in 2000, I had to rebuild my life (financially and literally) after illness/disability and extended unemployment. I was unlucky to be unemployed during 9-11 so it was 1.5 years later, extended by hiring freezes due to 9-11 before I got a part-time position with no benefits but it was enough to pay the bills. I had ~$700 left in my accounts when I received my first paycheck; another week or so, I won't make it. Thankfully, ~6 months later in 2003, the hospitals were hiring again. After working full-time for 1 year and rebuild my reserves, I decided to go back to school and get my doctorate even though my BS degree was grandfathered. I relocated to FL for school in 2005 and again with my great timing, I arrived in time for all 3 hurricanes (Katrina, Rita and Wilma). That lead to a delay of my new job of ~5 months so I took out a student loan to help pay my tuition.
My old company did closed in Aug-2012 but my site was purchased by a small investor and I, along with a handful of staff were retained. I went from working for a large multi-national to a small start-up that closed in 2015. With the start-up, I had the same salary since 2009 but lost all benefits including 401K and health insurance, dental, vision. The 3 years of salary was enough to help me save and build up my war chest for the next unemployment. In 2011, I had the money to be very choosy in my next position or just call it a career and find some part-time work with benefits but my numbers were not sufficient to FIRE at 43 and it was pre-ACA. In 2015, all the calculators I used including Firecalc say I'm 95-100% but because of everything I went through, I did not feel comfortable retiring at 46-47. After Jun-2015 lay-off, I decided to take a break and "try out" my ER lifestyle since the 5 months of income easily covered the remainder of year. In 2016, my rental owner died and her daughters said I needed to move asap. The condo was in a prime central location and the owner's daughters in those 7 years never raised my rent so I did not realize the rent in the area more than double what I was paying. I search into areas I would never consider and it's all less desirable and/or much higher rent than what I was willing to pay. Again, bad timing since being unemployed did not help and no one believed I was retired at 47-48. I am consider an excellent tenant, my landlords appreciated me and that's why I had good rentals at great prices and my rent was never raised. I was lucky to find a rental within a month at a reasonable price from a nice snowbird couple from Canada. I had to show their realtor I had sufficient funds in my accounts to easily cover the rent plus criminal and credit checks and my ex-landladies as references. I knew the couple would want their place back after a year since they come down yearly for the entire winter. I spent a year "ER" in a hot, small rental without any amenities (no pool, gym or clubhouse, etc.). During that time I still look for any opportunities in my niche job. I was willing to relocate but only to desirable places. Since I had the money to be picky, no snowy or frigid locale or no-where land. 2016 was my first full year without any earned income and spending was <$20K and it did not feel tight or deprived and included a move with associated costs plus taxes for Roth conversion. ACA ,<$80 per month with $0 deductible helped a lot!!!
In 2017, comfortable with my 2016 expenses and the income my accounts can generate, I concluded I can ER. I also decided to buy my own place than deal with the headaches and expense of renting since I'll be "unemployed" plus I don't want to move every year or 2. I did not expect to stay in FL and thought I would leave after my didactic but I was still here after 12 years and decided to retire in FL due to COL. May-2017, I bought a condo with a lot of amenities for ER farther north of where I use to live because of affordability. Again, my impeccable timing, I got a job offer out of the blue within 3 days of closing. It was a company I use to work for so I knew a lot of people there. It's the same job and similar salary I had over a decade ago. Really bad part is I moved so far north for ER, it's a 60 miles, 2 hour daily commute. With Trump in office, I was worry about ACA repeal, inflation and taxes. I was back at work on 30-May-2017 since my number won't work with an additional 12-15K+ spending (significantly higher than original calculation) for the next 17 years. My budget would also be too tight for any unexpected large expense(s) and my portfolio will be subject to higher SORR.
My 2 years of "ER" was liberating and the commute is horrible plus there was a recent lay-off. So I am looking at my numbers again assuming no ACA and high HI cost until medicare eligible. My new plan is to set aside 150K from my taxable account for healthcare for the next 14 years since this is the biggest unknown. My ACA silver plan without subsidy was ~$400/month in 2017. I know age was why it was low so I budgeted age 52-55, $7.5K/year and 56-65, $12k/Year. I have a fully paid off condo and 2018 car, all my other expenses are low so my essential budget is ~12K per year. I know 20K a year, <3% WR from taxable account is sufficient to cover my essential and discretionary spending and make all my numbers work until 67, FRA. If SS is still available, then great. If not, my tax deferred retirement accounts can be used with my remaining taxable accounts and should provide a comfortable 27K/year with <3% WR. All of the above numbers assumes 0% real return at retirement, where the income generated will cover inflation.
Does my new plan seem feasible? I am segregating healthcare from yearly spending to better calculate for what I can control. Since my essential is 12K and my budget is 20K, the 8K can be all discretionary spending or can cover for overages in essential or HC >12K. I also set aside 30K for lumpy expenses for new HVAC, new appliances, new car, HI deductible, etc. The 150K for HC and 30K will be in a high interest CD or account so it can keep up with inflation. I will not touch my retirement accounts until FRA and use only my tax accounts to fund ER. I don't intend to retire for at least a year, need 2 more years for 100% 401K vesting. I can accumulate ~60K/year with 401K match and after tax savings. Every year I work, 1 less year ER funding to Medicare. The numbers are based on another potential lay-off next year when I turn 51.
After a life event in 2000, I had to rebuild my life (financially and literally) after illness/disability and extended unemployment. I was unlucky to be unemployed during 9-11 so it was 1.5 years later, extended by hiring freezes due to 9-11 before I got a part-time position with no benefits but it was enough to pay the bills. I had ~$700 left in my accounts when I received my first paycheck; another week or so, I won't make it. Thankfully, ~6 months later in 2003, the hospitals were hiring again. After working full-time for 1 year and rebuild my reserves, I decided to go back to school and get my doctorate even though my BS degree was grandfathered. I relocated to FL for school in 2005 and again with my great timing, I arrived in time for all 3 hurricanes (Katrina, Rita and Wilma). That lead to a delay of my new job of ~5 months so I took out a student loan to help pay my tuition.
My old company did closed in Aug-2012 but my site was purchased by a small investor and I, along with a handful of staff were retained. I went from working for a large multi-national to a small start-up that closed in 2015. With the start-up, I had the same salary since 2009 but lost all benefits including 401K and health insurance, dental, vision. The 3 years of salary was enough to help me save and build up my war chest for the next unemployment. In 2011, I had the money to be very choosy in my next position or just call it a career and find some part-time work with benefits but my numbers were not sufficient to FIRE at 43 and it was pre-ACA. In 2015, all the calculators I used including Firecalc say I'm 95-100% but because of everything I went through, I did not feel comfortable retiring at 46-47. After Jun-2015 lay-off, I decided to take a break and "try out" my ER lifestyle since the 5 months of income easily covered the remainder of year. In 2016, my rental owner died and her daughters said I needed to move asap. The condo was in a prime central location and the owner's daughters in those 7 years never raised my rent so I did not realize the rent in the area more than double what I was paying. I search into areas I would never consider and it's all less desirable and/or much higher rent than what I was willing to pay. Again, bad timing since being unemployed did not help and no one believed I was retired at 47-48. I am consider an excellent tenant, my landlords appreciated me and that's why I had good rentals at great prices and my rent was never raised. I was lucky to find a rental within a month at a reasonable price from a nice snowbird couple from Canada. I had to show their realtor I had sufficient funds in my accounts to easily cover the rent plus criminal and credit checks and my ex-landladies as references. I knew the couple would want their place back after a year since they come down yearly for the entire winter. I spent a year "ER" in a hot, small rental without any amenities (no pool, gym or clubhouse, etc.). During that time I still look for any opportunities in my niche job. I was willing to relocate but only to desirable places. Since I had the money to be picky, no snowy or frigid locale or no-where land. 2016 was my first full year without any earned income and spending was <$20K and it did not feel tight or deprived and included a move with associated costs plus taxes for Roth conversion. ACA ,<$80 per month with $0 deductible helped a lot!!!
In 2017, comfortable with my 2016 expenses and the income my accounts can generate, I concluded I can ER. I also decided to buy my own place than deal with the headaches and expense of renting since I'll be "unemployed" plus I don't want to move every year or 2. I did not expect to stay in FL and thought I would leave after my didactic but I was still here after 12 years and decided to retire in FL due to COL. May-2017, I bought a condo with a lot of amenities for ER farther north of where I use to live because of affordability. Again, my impeccable timing, I got a job offer out of the blue within 3 days of closing. It was a company I use to work for so I knew a lot of people there. It's the same job and similar salary I had over a decade ago. Really bad part is I moved so far north for ER, it's a 60 miles, 2 hour daily commute. With Trump in office, I was worry about ACA repeal, inflation and taxes. I was back at work on 30-May-2017 since my number won't work with an additional 12-15K+ spending (significantly higher than original calculation) for the next 17 years. My budget would also be too tight for any unexpected large expense(s) and my portfolio will be subject to higher SORR.
My 2 years of "ER" was liberating and the commute is horrible plus there was a recent lay-off. So I am looking at my numbers again assuming no ACA and high HI cost until medicare eligible. My new plan is to set aside 150K from my taxable account for healthcare for the next 14 years since this is the biggest unknown. My ACA silver plan without subsidy was ~$400/month in 2017. I know age was why it was low so I budgeted age 52-55, $7.5K/year and 56-65, $12k/Year. I have a fully paid off condo and 2018 car, all my other expenses are low so my essential budget is ~12K per year. I know 20K a year, <3% WR from taxable account is sufficient to cover my essential and discretionary spending and make all my numbers work until 67, FRA. If SS is still available, then great. If not, my tax deferred retirement accounts can be used with my remaining taxable accounts and should provide a comfortable 27K/year with <3% WR. All of the above numbers assumes 0% real return at retirement, where the income generated will cover inflation.
Does my new plan seem feasible? I am segregating healthcare from yearly spending to better calculate for what I can control. Since my essential is 12K and my budget is 20K, the 8K can be all discretionary spending or can cover for overages in essential or HC >12K. I also set aside 30K for lumpy expenses for new HVAC, new appliances, new car, HI deductible, etc. The 150K for HC and 30K will be in a high interest CD or account so it can keep up with inflation. I will not touch my retirement accounts until FRA and use only my tax accounts to fund ER. I don't intend to retire for at least a year, need 2 more years for 100% 401K vesting. I can accumulate ~60K/year with 401K match and after tax savings. Every year I work, 1 less year ER funding to Medicare. The numbers are based on another potential lay-off next year when I turn 51.
