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07-03-2020, 09:54 AM
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#1
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Confused about dryer sheets
Join Date: Jul 2020
Location: ATL
Posts: 6
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Early out crossroads
Hello All,
52, DINK, always had an unwritten goal to FIRE in the 53-55 timeframe.
Due to COVID, my company just announced an early-out package. Three years at 2/3 pay plus two years of no-cost healthcare. I must decide in two weeks to apply for this or not.
After building a spreadsheet, the numbers are close to a wash whether I stay to 53 (and work hard) or go now. The greatest hit is in lost future savings; about $160K before growth. I made the "mistake" in also comparing the early-out to instead staying and working 2/3 the hours until age 56. That's over $400K in lost savings plus the value of not touching funds until later.
Our monthly expenses are $6500 and we have $3.4M across all accounts, mostly 401k and a mix of Roth & Traditional IRA. I have a small pension that will kick in immediately plus a USAF pension & TriCare that start at age 60.
My biggest concerns are with buying healthcare from age 54-59 (which adds aprox. $1200/mo to our budget), learning about tax strategy, and paying for pop-ups, like a kitchen remodel or a new roof. The other one is that simple, but human, desire to not screw up such an important decision.
All of my reading and FIREcalc trials indicate I'm good to go, yet, now that the moment is at hand I am mildly overwhelmed at the reality of the moment I've dreamed of actually being here. On the other hand, I feel mentally ready and do hope this proves to be the right choice.
I would appreciate any advice. While I thought I was prepared for this, I suddenly feel like there is so much I don't know.
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07-03-2020, 09:58 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Mar 2012
Posts: 3,931
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Take the package - don't over analyze. You will thank me 12 months from now.
Congrats!
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07-03-2020, 10:02 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2015
Posts: 5,867
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I would take it.
If you are good to go now, 3 years of 2/3 pay and paid health care for 2 of those, seems like the cherry on top!
__________________
Give a Man a fish, he will eat for a day.
Teach a Man to fish, he will eat for a lifetime.
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07-03-2020, 10:03 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2016
Location: Northern Virginia
Posts: 7,591
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It would be worth it to me to take the package. You are financially ready.
Key for me is you said you are mentally ready. That's important.
Let us know what you decide.
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07-03-2020, 10:14 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Aug 2007
Posts: 2,874
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Early out crossroads
What are the odds the employer will eventually have forced layoffs?
Usually the first severance package is the best. It would be a bummer to stay and then be laid off later with a worse package.
Edit to add: your numbers look good. I would have been gone a long time ago!
__________________
Eat, Drink and Be Merry.
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07-03-2020, 10:23 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Aug 2012
Posts: 1,862
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I'd be outta there. DH took a package at 54 and then went back as a consultant for a few hours a day for ~10 years. He was recovering from cancer, so the timing was perfect.
Good luck on your decision. It sounds like you're ready.
__________________
FIRE Class of 2018 @ 61
Old men and women sit in the shade of trees they planted long ago
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07-03-2020, 10:28 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2016
Posts: 9,525
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Wow, great package. Like some have commented they may offer this cut deeper with lay offs and you get nothing.
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07-03-2020, 10:41 AM
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#8
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Thinks s/he gets paid by the post
Join Date: Sep 2013
Location: Ventura County
Posts: 1,433
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You probably realize that you are asking a group of people self-selected for having chosen earlier retirement than most. Of course we're going to tell you to go for it.
That said, the package you've been offered is much better than most of those I've seen. I first asked this question here at age 53, and even though my assets were significantly less than yours and my package included 9 months of pay rather than your 2 years I got similarly enthusiastic recommendations to bail.
and I hemmed and hawed and waited another 2 years before going... and now at 60 wish I had left when everyone said (or even earlier).
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07-03-2020, 10:46 AM
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#9
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Dryer sheet wannabe
Join Date: May 2012
Posts: 13
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You should be just fine! If you are ready then go for it!!
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07-03-2020, 10:55 AM
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#10
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Full time employment: Posting here.
Join Date: Jun 2014
Posts: 521
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I would take the package. Another way to put this, if you were to continue to work, your incremental increase is 1/3 of your current salary.
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07-03-2020, 10:59 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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In my case, the first year the employer offered generous buyouts, the second year, all they got was the boot. With 3.4M, I'd go now. There is a whole new world out there and you are young enough to have a whole second post working life.
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07-03-2020, 11:08 AM
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#12
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Thinks s/he gets paid by the post
Join Date: Dec 2017
Posts: 1,620
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Quote:
Originally Posted by kch130
I would appreciate any advice. While I thought I was prepared for this, I suddenly feel like there is so much I don't know.
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Can you get another job in 2 years? Maybe with healthcare? If so, it could be a back up plan. I think it is a great package.
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07-03-2020, 11:14 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Jan 2011
Location: Fair Lawn
Posts: 2,963
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My post is # 13 on this thread. Here's my suggestion: Read and heed Post #'s 2 -12.
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07-03-2020, 11:16 AM
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#14
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Recycles dryer sheets
Join Date: Jan 2015
Location: Boerne
Posts: 421
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Quote:
Originally Posted by kch130
Hello All,
52, DINK, always had an unwritten goal to FIRE in the 53-55 timeframe.
Due to COVID, my company just announced an early-out package. Three years at 2/3 pay plus two years of no-cost healthcare. I must decide in two weeks to apply for this or not.
After building a spreadsheet, the numbers are close to a wash whether I stay to 53 (and work hard) or go now. The greatest hit is in lost future savings; about $160K before growth. I made the "mistake" in also comparing the early-out to instead staying and working 2/3 the hours until age 56. That's over $400K in lost savings plus the value of not touching funds until later.
Our monthly expenses are $6500 and we have $3.4M across all accounts, mostly 401k and a mix of Roth & Traditional IRA. I have a small pension that will kick in immediately plus a USAF pension & TriCare that start at age 60.
My biggest concerns are with buying healthcare from age 54-59 (which adds aprox. $1200/mo to our budget), learning about tax strategy, and paying for pop-ups, like a kitchen remodel or a new roof. The other one is that simple, but human, desire to not screw up such an important decision.
All of my reading and FIREcalc trials indicate I'm good to go, yet, now that the moment is at hand I am mildly overwhelmed at the reality of the moment I've dreamed of actually being here. On the other hand, I feel mentally ready and do hope this proves to be the right choice.
I would appreciate any advice. While I thought I was prepared for this, I suddenly feel like there is so much I don't know.
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Reserves? Although relatively small USAF pension compared to active, you have seemed to amass a large investment portfolio. My recommendation wo
uld be to take take the offer and run and run fast. Congrats, you have already won my friend.
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07-03-2020, 11:26 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,374
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$1,200 per month for wealth insurance is simply the price of freedom to do what you want. That's a pretty good package and you have plenty of $$$$.. I'd take it.
Change is hard and you are veering outside of your comfort zone... that is perfectly normal.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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07-03-2020, 02:18 PM
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#16
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Moderator
Join Date: Jul 2010
Posts: 7,945
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Sounds like you've thought it through and, like many of us were, are just a bit hesitant to take such a definitive step. With the package plus your assets plus your plan to ER in the next couple of years anyway, sounds to me like it's time to put your name in the Class of 2020 thread!
__________________
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute." William Feather
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ER'd Oct. 2010 at 53. Life is good.
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07-03-2020, 03:46 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2013
Posts: 11,078
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Try not to scream YIPPEE on your way out the door. Those years of your life are worth way more than any amount of lost income.
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07-03-2020, 03:52 PM
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#18
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Recycles dryer sheets
Join Date: Nov 2015
Posts: 63
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I would take the package, and don’t have nearly as much saved up. You never know if things really get worse, they may have layoffs and not be able to offer packages.
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07-03-2020, 05:01 PM
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#19
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Recycles dryer sheets
Join Date: Mar 2018
Location: Baltimore
Posts: 77
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Just do it. Congrats.
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07-03-2020, 05:04 PM
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#20
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Thinks s/he gets paid by the post
Join Date: Aug 2017
Posts: 2,111
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I'd take it in a heartbeat and have a lot less assets. Go!
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