How did You Pick the Final Date?

[Senator]

Everyone has a unique situation for the way they picked their final day of work. If you were laid off, you have little choice. If you actually gave notice, there may have been some science to it.

What went into your calculation on how you determined your final date of work? Or what is going into your calculations if you have yet to FIRE?

In my case, I waited until I was at least 55, I wanted to make sure that any likely social security changes would not affect me. There were no guarantees, but one less unknown. My birthday is in early November.

When I made my plans at 54, I originally was going to leave right after I maxed out my 401K when I turned 56. That would be anywhere between the end of February and the end of April, depending on how large bonuses were. It was nearly two years out. As I started delving into things, I realized there were other things to consider. We receive ~60% of our pay in the first six months of the year. There are many milestones that make it fun to track and worthwhile to stay just a bit longer.

On January 2, I receive a 1.67 days of vacation, a paid holiday (1/1), and a $400 match to my HSA. Pretty good money for one day, almost 5 days’ pay for a single day of work.

Around late January, I have worked enough so that my contributions to my 401K will have exceeded 4% of my salary, so I secure the current years 401K match, to be received the following year.

At the end of January, I receive a 4% 401K match for the prior year’s contributions. It’s a lump sum, and I do not have to be employed to get it.

In mid-February, I receive a long term incentive bonus. It’s a bonus we vest over the next four years, but the past four years are vested and I receive those funds. About 5% of my pay. I needed to stay for that.

At the end of February, I receive a performance bonus that can be as much as ~15% of my pay, depending on the performance of the company (and me). I needed to stay for that.

I would max out my 401K sometime in March, as I always allocate 75% of my paycheck to the 401K. Worse case, it’s the end of April. By the end of January I can typically predict the date it will be maxed out. It’s very likely my last chance to put any money in a 401K for the rest of my life. I wanted to stay for that.

From there it is a slug to June 23, where I will have put in 1,000 hours. That gives me another year of calculated pension, which is worth ~$100 at age 65. An annuity of that amount would probably be worth ~$10K, so that is not bad money for the couple of extra months.

Once I get to the end of June, July 1 brings another 1.67 days of vacation and a month of healthcare. Like triple pay day.

If I work July 5, I get the 4th of July as a paid holiday, so double pay for that day.

From there, it’s not worth staying around, so I am gone!

 

[HadEnuff]

I was prepared to work a couple more years, or quit when my dental practice sold, whichever came first. I figured if I couldn't sell it in 2 or 3 years, I'd just give it away and walk. Once I had a buyer, I let the buyer decide how long he wanted me to stick around. We closed in September, and he wanted me to work a very limited (2 half-days/week) until March 1, to ease the transition. R minus 17 days, and counting.

 

[RockyMtn]

mine was pretty simple....end of employment contract.

 

[RE2Boys]

My organization was going through a downsizing but offered a voluntary early retirement incentive, but you had to apply and be gone by Feb 3. Turned in my badge Feb 3.

 

[pb4uski]

We had two homes and sold one of them in October. I realized that our expenses were much lower with one house rather than two and we were ready. I wanted to give my employer suitable lead time so I decided that I wanted to have my last day of work be our last workday of the year which happened to be a couple days before Christmas. I had about 6 weeks of vacation pay so I proposed to stay on payroll through mid-February so I could get the holidays and health insurance for January and February (if you were on payroll on the 1st you qualified for the month). HR came back and proposed February 1, and I agreed to that.

My last day of work was just before Christmas and since I was on vacation after that I was available to answer questions until I turned in my laptop on February 1.

In January, DW and I went to NYC (where our main office was) and they threw me a nice retirement party and I got to say good-bye to my colleagues.

The other benefit was that I change my 401k deduction to 100% effective January 1 so I deferred tax on all that accumulated vacation pay.

 

[Ronstar]

I gave 6 months notice to terminate my contract at the end of Q1 2013, and agreed to another year of part time, retiring on April 2, 2014. Thought that retiring at the end of a qtr would make company stock sale accounting easier.

 

[2017ish]

I was prepared to work a couple more years, or quit when my dental practice sold, whichever came first. I figured if I couldn't sell it in 2 or 3 years, I'd just give it away and walk. Once I had a buyer, I let the buyer decide how long he wanted me to stick around. We closed in September, and he wanted me to work a very limited (2 half-days/week) until March 1, to ease the transition. R minus 17 days, and counting.

We are taking a similar approach. Once we had around enough assets to support desired discretionary spending, DW gave initial notice to her group last May or June, expecting it would take until August 2017 to get a replacement out of residency. Now, maybe, they think they've found a lateral hire. If/when that doc signs, they'll discuss how long to juggle call schedule, office space, and the like with DW continuing (probably 12.31.16?). Her last day is my last day, unless we have a case set for trial or an appeal underway that would benefit from another month or two of my time.

 

[CoolChange]

Senator,

The logic you use has led me to a series of OMY's: My distribution is a bit different though, seeming to give me another carrot (401k max, holiday, bonus, etc.) just a few more weeks down the road. I have been in the executive suit; these incentives are working on me exactly as designed.

Several changes to my situation, including moving into an individual contributor role, have made the OMY's tolerable if not exactly enjoyable. My current carrot is fully funding my 2016 401(k). The next one will be some vacation (use it or lose it), then holidays and remainder of vacation, then bonuses & vesting, then I'll be almost to 2017....

 

[W2R]

The first date upon which I became eligible for retiree health insurance was 11/7/2009.

That was a Saturday, so in order to make sure there was no question about it, I retired on 11/9/2009.

 

[Aerides]

My planning is very similar to Senator, as my megacorp also front loads the year with Bonus, hsa, stock grants, etc. I'm loading my 401k to be complete the annual max by March, and my MC matches quarterly, requiring employment on the last day of the quarter to get the match (so 3/31, 4/1 to be safe) MC also likes to force dates around payroll date, and 4/1 is one of them.

So anytime then or after, depending on a few personal factors and things.

 

[MichaelB]

An assignment to another country with an end date for me. The job was a bad fit, I didn't do it well, and had some serious ethical encounters with my management. I wanted to return (back home), they gave me a new job in the same location, even though I was a fish out of water. They said "you have no alternative", so I showed them I did, and quit.

 

[Gumby]

When I left private practice for public service in 2007, I was just going to work until my young wife completed 25 years of service and could retire with a modest pension. We intended to finance our retirement on her pension and our portfolio. I did not expect to work long enough to get a pension myself. That would have been July 2014. However, the enormous portfolio hit that we took in 2008/09 convinced us that we had been too optimistic and that we should: 1) amass a greater starting portfolio and 2) ensure that pension income would cover our basic living expenses.

Accordingly, I committed to working until I could get a pension, along with essentially free retiree health care for both of us. That point will be reached on November 1, 2017. Since the young wife is a teacher, she would never retire during a school year, as it would be harmful to her students. That makes the end of June 2018 the earliest retirement date for her (and for me, since she would strongly dislike having me retired while she works). However, if she works one more school year, until the end of June 2019, she will hit the 30 year mark and her penalty for retiring early is substantially reduced. I must retire on the first of a month, so that means July 1, 2019 is my date.

At that point, our pension income will definitely cover our expenses with no reduction in our current standard of living. When social security starts for me in 2021, it will add a 25% buffer. And, God willing, by that point our portfolio should be of sufficient size that a 4% withdrawal rate would completely replace both pension and social security income should that ever be necessary.

Yes, it is a very conservative approach, but once I stop work, I never want to go back.

 

[Mulligan]

Pension with cola covered 167% of my monthly spending needs based on previous 5 year spending patterns. Time to go... 6 years later pretty much the same....


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[Aerides]

MichaelB I fantasize that moment, when a boss might ask me to take on something and I refuse. Hearing something like "you really don't have a choice" and then imagining the faces when I say "oh, but I do".

 

[MRG]

After 29 years I finally had too much of idiots who didn't know the difference between data and hardware issues. I'd been OMY for a couple and needed an excuse.

Actually my Fidelity guy suggested that those type of additional rewards, while appealing, make little difference to a 35 year retirement. YMMV.

 

[Midpack]

I retired effective Jun 30, 2011. My date was tied to a bonus payment, that simple.

 

[Andre1969]

My goal was always to retire around my birthday, which is April 2. A few years ago, a more lucrative time would have been to do it around September, though. We usually got a bonus in August, and a raise in September. So I figured realistically, I'd stay around to get the bonus, and quit soon after the raise, so any vacation pay got paid out at a higher rate.

But then, I got to thinking about it...was waiting like that really worth w*rking over another summer? The bonus is usually around $1000, or about $400 after they take out taxes, 401k, etc. And lately our raises have only been around 3%.

Fortunately, the company came around to my way of thinking. As luck would have it they changed our raise cycle. Now we get a bonus in March, and raises take effect the first week of April.

So, I'm still shooting for doing it close to my birthday...just don't have a definite year in mind yet. At one time, my goal actually was this year...April 2, 2016, where my last day of employment would be April Fool's Day, a Friday, and my birthday would kick off my retirement. But, the real world got in the way. Now I'm shooting for April of 2020. Time will tell though.

 

[Music Lover]

I always knew that 55 was the earliest I could leave and do so with no penalty on my pension, but only recently found out that I could take a year of leave and make it pensionable. So, I'm now retiring at the end of March, 2 months prior to my 54th birthday...I'll be on vacation for 2 months, then on leave for a year, then "officially" retiring.

 

[razztazz]

I picked April Fools Day. It was whimsical. The Establishment was convinced I wouldn't really leave and I wanted to be a bit of a pr1ck on my way out.
And it reduced my work life to that "Dream Season" from the old TV show "Dallas" where none of the story lines or events mattered because it was all just a dream one of the characters had.

 

[rodi]

My date was changed at the last minute.

I planned on retiring at age 55 (which won't happen till later this year.). Then my boss had a staff meeting and told us that 3 of us would be rotating, 1 week at a time, at a customer site on the other coast. No significant reason to have us there other than to "appear" responsive to the customer, and to babysit them. I came home and discussed with my husband - and we agreed that 2 week notice was in order.

Ironically, this rotation at the customer site lasted exactly two weeks then was dropped.

 

[Andre1969]

I picked April Fools Day. It was whimsical. The Establishment was convinced I wouldn't really leave and I wanted to be a bit of a pr1ck on my way out.
And it reduced my work life to that "Dream Season" from the old TV show "Dallas" where none of the story lines or events mattered because it was all just a dream one of the characters had.

Did you wake up in bed with Suzanne Pleshette?

 

[Which Roger]

After I became eligible for a (reduced and frozen) pension at age 50 I volunteered for 3 different rounds of layoffs with the hope of getting a severance package. To no avail, since the big boss really wanted to keep the group together even though people were being let go in droves in the rest of the company.

Roughly coincident with my 3rd attempt, I reached the combination of age+service where my pension would no longer be reduced. There were a lot of changes going on at the company, so I told myself that I would be out of there the next time a change occurred that I didn't like. A few weeks later, they announced a major reorg that would have landed me in a dysfunctional project, and my boss announced his retirement. I gave one month notice and the rest is history.

 

[jjquantz]

I realized in 2013 that we were getting very close to the point where one of us could stop making the daily commute. Then as 2014 started it became clear that the non-profit for whom I was working was not going to continue offering the services that I had been hired to perform for them. They offered to keep me on in the new model, but I had no interest in being part of yet another Washington think tank. Also, I had serious doubts about the organization's chances for success. (Aside - They are currently down to 4 employees from 9 and one of the board members who founded the organization 20+ years ago has since formed a competing non-profit with similar goals.)

So, in short, when the three contracts that I was managing all wrapped up on 9/30/2014, I was out the door. Fortunately, DW was very supportive and she enjoys her current employment situation.

 

[CardsFan]

My last day of work was just before Christmas and since I was on vacation after that I was available to answer questions until I turned in my laptop on February 1.

This was the same logic I used to pick February 1. At first I was just trying to get into January to get a $1200 HSA deposit, and then realized I had enough vacation to get into February, since I had already changed to working 3 days a week. It also vested me in the bonus plan for the year, but that turned out to be a big zero, as Megacorp "under-performed" its target.

 

[photoguy]

My date was driven by tax, bonus/stock, and housing considerations.

Basically we picked a rough date that would occur
* after the end of year bonus paid
* after quarterly stock vested
* after we maxed out 401k for the year (company matched 50% immediately)
* early enough in the year so that our marginal tax rates were low
* late enough in the year so that we had enough income to take advantage of low marginal rates

This all pointed to a march-june time frame. However we also needed to coordinate with the sale of our house (in the bay area). However our house sold much faster than expected -- once escrow closed I gave my 2 week notice. This resulted in a last day for me of 3/4. My wife stuck around longer and worked until 6/9.