RIFed due to COVID-19, the slate is wiped clean

[nash031]

Hi all,

The quick and dirty: 43, wife 39, two kids 3.5 and 15-mos. I recently retired from the Navy after 20 years, and took a lucrative leadership job 10 minutes from my house. That job was eliminated due to the devastating effects of COVID-19 on the travel industry. Wife is also currently furloughed, but we expect she will return to her job shortly.

We are fortunate: we have planned for ER for almost a decade... we have my pension (NPV ~$2.1M) throwing steady income, and her unemployment benefits cover the gap alongside my modest severance. Health care is covered by the Feds for life. I have a good handle on our expenses now and projected into retirement (timeline for her to stop working is probably 10 years). We are in no immediate financial distress at all, and the likelihood of long term problems are minimal. She loves her job and is good at it - when it returns - I always have the fall back of defense contracting, though probably nothing excites me less!

We have about $1.6M in invested assets aside from the pension - I've made several moves into the down market which have been lucrative right off the bat, and we have about $300K locked up in our house with 28.5 yrs left on the mortgage at 3.375% (we do not intend to live here forever). Provided my wife returns to work, we can realistically live off of dividends and let capital grow over time even if I do nothing but sip mimosas. In all likelihood, I will pursue my own small business (coaching multi-sport athletes) after a little bit of time off here. But maybe there's something more?

So... my slate is wiped clean again, but this time not on my timeline. I'd like to know from the forum:

In my situation, what would you invest your time in? What should I learn from a financial perspective? What can I do to add value starting today?

The rug's been pulled out from under us, and I guess I'm just seeking some feedback/clarity from the wizened here who've maybe experienced this themselves. Thanks guys!

 

[daylatedollarshort]

Sorry to hear about the job upsets, but overall it sounds like you are in great financial shape. Do you need earned income from either of you in addition to your pension and investment income to cover your annual expenses?

I kind of view my retirement job / hobby as learning how to live better and reduce expenses. At a 40 year retirement, every $1K cut in annual expenses meant needing $40K less in after tax retirement funding. I had a hobby job where I could make the $40K or more, but for me I enjoyed the expense reduction projects more and financially I think we came out ahead focusing on those instead of the side income. Maybe that is something you could invest your time in for now. Our adult kids are into hobbies like bread baking, victory gardens, herb gardens, learning to propagate plants, wine making, etc. The more self sufficient you are the less income you need long term to cover your annual expenses.

Otherwise going back to school, getting more certifications, degrees, etc. is another option to position yourself for when the depression is over. Reddit is usually a good source for advice on degrees and certifications.

 

[cathy63]

Sorry to hear the job fell apart. Any chance they will rehire you as the economy comes back? Is your pension income high enough that it makes you ineligible for unemployment?

As to how to invest your time now, what about getting started on setting up your coaching business? Learn about whether you should incorporate; what kind of insurance you should have; create invoicing and payment processes for your future clients; figure out how you'll market your services ... there's a lot you can do to prepare for running your own small business even before you get started doing it. I also wonder if you can do some coaching even now. You should be able to stay far enough away from an athlete in an outdoor setting for some types of coaching activities.

 

[bloom2708]

Get on LinkedIn. Update the resume. Network, network, network.

Everyone is living "small" these days. Stay small and nimble. You are well ahead of the curve (thank you for your service). You have the assets to go slow, be picky and protect your family.

There are jobs out there, but it may take longer and take more clarity around covid.

I would not prioritize more school. Programs are in a big change pattern.

Enjoy spending time with the family. Spend maybe an hour a day networking and researching careers. I would start within a reasonable commute area. This isn't a great time to plan a big move.

 

[dvalley]

2.1M in pension, 1.6M invested rough math suggests 110k at 3% WR.

I'd say congratulations and enjoy early RE

 

[HI Bill]

2.1M in pension, 1.6M invested rough math suggests 110k at 3% WR.

I'd say congratulations and enjoy early RE

If spending is <income, I agree! Congrats on having the foresight and taking action to be prepared!

 

[daylatedollarshort]

2.1M in pension, 1.6M invested rough math suggests 110k at 3% WR.

I'd say congratulations and enjoy early RE

+1. That is why I asked if the pension and portfolio income (plus free medical care!) was enough to cover current expenses. $110K is more than twice the median household income in the U.S., and most of those households do not have free medical care. If the $110K is a correct number and still not enough, I'd work on lowering expenses rather than looking for extra earned income.

 

[nash031]

Do you need earned income from either of you in addition to your pension and investment income to cover your annual expenses?
...
Otherwise going back to school, getting more certifications, degrees, etc. is another option to position yourself for when the depression is over.

Thanks! We're not quite fully FI, but we're really, really close. Wife is also furloughed and we can absorb her job loss for a long, long time if it doesn't come back. We're pretty much break even with my pension and UI right now, so there's no pressure to start anything now now now. If she goes back to work, I don't need to really do anything, but I think I'll want to coach and continue racing while I can and it interests me.

I have a master's already, got my PMP before I left the service. Right now, I'm working towards another coaching license as well, so that seems a smart move.

Sorry to hear the job fell apart. Any chance they will rehire you as the economy comes back? Is your pension income high enough that it makes you ineligible for unemployment?

As to how to invest your time now, what about getting started on setting up your coaching business? Learn about whether you should incorporate; what kind of insurance you should have; create invoicing and payment processes for your future clients; figure out how you'll market your services ... there's a lot you can do to prepare for running your own small business even before you get started doing it. I also wonder if you can do some coaching even now. You should be able to stay far enough away from an athlete in an outdoor setting for some types of coaching activities.

There is a chance they could re-hire, but as I told the COO, I'm not going to hold my breath. If they brought me back, it would like be a half-step up promotion (this is based on my conversation with the COO) who said it would like be a regional leadership role where I'd split time between my (old) office 10 minutes from the house and another locale within 90 miles. Even if offered, I'm not sure I'd take that considering all the commute time. We'll see.

Pension is too high for unemployment.

YES! Thank you for the small business list. I need to turn attention to some of those things. I can answer a number of those questions from what I know, but I don't have anything lined up or identified for exactly how I could go about that. I have coached in the past - free for friends - and am making a couple of networking moves that will open me up for clients in the near term once I pull the trigger.

2.1M in pension, 1.6M invested rough math suggests 110k at 3% WR.

I'd say congratulations and enjoy early RE

... almost there... like another year at most... We live in San Diego, still owe a bunch on the house, two young kids where we have help so we can work and pursue passions. When they start school, our expenses will go down quite a bit, and that will definitely make us "officially FI" and then some. We've got a couple of "brass ring" desires we may want to afford, but that will likely happen just if DW works until 50 as she currently plans (she's 39, but loves what she does).


Thanks guys, I appreciate the feedback thus far. Yesterday was my last day on the job, and while I've aimed to never work for the man again, it was always supposed to be on my time and my call. While we're in a good spot, this has upended me quite a bit...

 

[38Chevy454]

Well that's a tough news to take, but the silver lining is you have prepared well and have good savings to get through. Sucks that your pension prevents you form getting any unemployment. Especially with the extra $600/week on top of unemployment being paid out now.


Since your RIF'd job may or may not come back, and having sufficient funds to get by, I do think it's a good time to start your own business. You do not need immediate income and have time to develop the customer base. For sure read all you can about business tax rules and business laws. I have a small home based business related to my old car hobby, it is a nice tax advantage each year. Pus Iget a little extra fun money.

 

[nash031]

For sure read all you can about business tax rules and business laws.

Thank you!

Any recommendations to start?

 

[daylatedollarshort]

Any recommendations to start?

I recommend the Nolo press books on business taxes, LLCs, hiring contractors - whatever you need for your field. I had a lawyer set up our first LLC, and I figured out from the Nolo books he did it wrong. I was able to make the corrections myself. Advantages of your own business are the tax deductions and possibly your own retirement fund, with much higher limits than most employees have with employer 401Ks.

 

[Gabieta]

In case you may be interested, current VA 30 year rate is 2.75%. If you currently have a VA loan, the streamline refinance is a breeze -- no appraisal, no income check, etc. And, if you have a VA disability rating, the funding fee gets waived.

May be worth it to lower the mortgage payment!

 

[nash031]

In case you may be interested, current VA 30 year rate is 2.75%. If you currently have a VA loan, the streamline refinance is a breeze -- no appraisal, no income check, etc. And, if you have a VA disability rating, the funding fee gets waived.

May be worth it to lower the mortgage payment!

I’ll check it out. Last I had checked, I couldn’t refi yet. We refi’d in August of 2019 to 3.375%, so I need to look into that. I’d take an extra couple hundred a month and faster equity!

 

[SnowballCamper]

In my situation, what would you invest your time in?

Figure out what YOU really enjoy doing and do it. You've won the game. Enjoy yourself.

BTW I've recently discovered I really enjoy boatbuilding. The first one is just a stand up paddle board. But I cut a hole in the wall of the shed to make room. And I get to work at MY pace every day (or not every day ;-)

 

[Tekward]

Have you considered consulting? I also have the finances/pension (Go Navy) to weather the uncertainty and I have found occasional w@rk to be stimulating.



I believe that many companies are open to flexible support during these tough times. COVID had me home for March & April but I'm now fully booked again (defined as some w@rk on most weeks). I enjoy the role (since I only take on work I like) and ample time off.

 

[nash031]

Have you considered consulting? I also have the finances/pension (Go Navy) to weather the uncertainty and I have found occasional w@rk to be stimulating.

I haven't... I'm not sure what I would want to do for consulting more than coaching athletes.

I was contacted by a contractor on Tuesday via LinkedIn, but the job wouldn't be a great fit so I declined the interview. If anything, having run the numbers and looked at this through the lens of "what if I never make another dime", I'm going to be pretty picky about what I do. I told my wife on Monday night, "The thought of many of the contracting jobs I know about just creates a pit in my stomach."

I am also just about seven weeks away from completing my cooling off period, so I could look at Federal jobs as well. That said, my idea of starting my own business is picking up steam. Thanks to this thread, I've found various resources which helped me identify some questions, put pen to paper to develop a bit of a business plan and numbers in a spreadsheet to identify my overhead... I'm going to let it simmer for a little bit.

 

[DrRoy]

When I was in a situation like that, I put all of my effort into finding the next job. Also, be sure to control spending. You have a good base of assets, so that helps weather the storm.

 

[someguy]

I'm in a similar position to you although have been winding down a small business and recent goings on and other unrelated factors have caused that to happen faster than I planned. It's a weird time to be in this position -- on the one hand you have all this free time but far fewer obvious ways to use that time.

Running a small business is a unique and interesting experience (especially if you have others working for you) and one that can be rewarding and successful if you have the right core personality. Being a long-time athlete, IMO, indicates a lot of those traits are probably present. I believe having a clear purpose is helpful over time. If you're starting something up just to kill time, you'll probably find yourself meandering and uncommitted.

I also recommend reconnecting or improving connections, but not just in the "looking to get something" sense. Admittedly, the traditional ways of doing that are not possible/advisable right now but think outside the box.

 

[friar1610]

I haven't... I'm not sure what I would want to do for consulting more than coaching athletes.

I was contacted by a contractor on Tuesday via LinkedIn, but the job wouldn't be a great fit so I declined the interview. If anything, having run the numbers and looked at this through the lens of "what if I never make another dime", I'm going to be pretty picky about what I do. I told my wife on Monday night, "The thought of many of the contracting jobs I know about just creates a pit in my stomach."

I've posted previously about this. I (reluctantly) worked for a couple of defense contractors for several years after a 28+ year USN career as a restricted line officer. I enjoyed very little of that time but used it to sock away a lot of money so I could completely retire at 58. My advice would be to follow your gut WRT to that field (although I had plenty of friends who said they enjoyed their post-USN Beltway Bandit careers. Of course, some of them enjoyed their OPNAV tours as well, so different strokes.)

One thing I would strongly advise, however: if you had any significant security clearances while on active duty, don't let more than a year elapse before going to work for a contractor (if that's what you're forced to do) so it'll be much easier to get it reinstated.

Im so far removed from all this that I doubt I could be of any real help but feel free to PM me if you have any Qs.

 

[Poopycat]

Welcome to the RIF’d-due-to-COVID Club. I was let go due to COVID a month ago tomorrow.

It sounds like you are in good financial shape. The fact that your health care is taken care of gives you a huge advantage...I’m quite envious, as health care is the only reason I’m trying to find another job.

There are roles out there. Maybe not as many, and there may be more competition, but companies are still hiring. If you want to work, start applying ASAP. I think the situation for white collar workers is going to worsen if the economy doesn’t improve, so put in as much effort now as you can before there are more layoffs. In a way, I am glad I was let go early so I’d be able to search when there was a little less competition.

Do your best to not settle. If the jobs the recruiters are reaching out to you about are making your stomach churn, then listen to your gut instincts and decline. You can afford to be picky, and you don’t want to be in a situation where you take something just so you have a job, then be back to searching a year later when you’re bored or unhappy. I have to remind myself to be selective and not apply for just anything.

Since you do have health care covered, it might be a good time to come up with a business plan if you have an interest in consulting or self-employment.

Good luck. I’m sure things will work out.

 

[nash031]

... Also, be sure to control spending.

DW and I ran the monthly budget numbers again and we have identified where we can trim if need be.

...on the one hand you have all this free time but far fewer obvious ways to use that time.

Running a small business is a unique and interesting experience (especially if you have others working for you) and one that can be rewarding and successful if you have the right core personality. Being a long-time athlete, IMO, indicates a lot of those traits are probably present. I believe having a clear purpose is helpful over time.

I hear you. Part of the limitation for me is I have all this time... but I don't. With a 3.5yo and 15-month old in the house, my time isn't "mine" nearly as much as I would like. Originally, I had planned to work until they started school, but now that may not pan out. I'm not sure I can be home all day, even working from home, because I get drawn into Daddy and household stuff so easily! But I am a "doer", so not "doing" is a challenge. I have to actively make myself stop before diving headlong into whatever's next before I'm ready or before I've considered my options thoroughly enough.

The other "time" factor in play is my wife is also currently furloughed, and while we think she'll return to her work, that's not guaranteed. So what right now looks like a great time to dive into starting my own business, that may not be our reality if she also gets RIFed or laid off.

One thing I would strongly advise, however: if you had any significant security clearances while on active duty, don't let more than a year elapse before going to work for a contractor (if that's what you're forced to do) so it'll be much easier to get it reinstated.

I re-upped my clearance last year, so it's in good standing for a little bit. I have about seven more weeks in my "cooling off" period. Right before I accepted my other job, I was in contact with one contracting company where I know quite a few people, and their work is in a different line of business than what I did. My reputation carried me there, and it'd be a good company to work for long-term. The position they wanted me for was not really of interest, and I'm not sure I would rather work for them than coach. It's something I'm churning over before I go and expend that "silver bullet" by reaching out to the principal I was in contact with before.

Welcome to the RIF’d-due-to-COVID Club. I was let go due to COVID a month ago tomorrow.

It sounds like you are in good financial shape. The fact that your health care is taken care of gives you a huge advantage...I’m quite envious, as health care is the only reason I’m trying to find another job.

There are roles out there. Maybe not as many, and there may be more competition, but companies are still hiring. If you want to work, start applying ASAP. I think the situation for white collar workers is going to worsen if the economy doesn’t improve, so put in as much effort now as you can before there are more layoffs.

Do your best to not settle....

Since you do have health care covered, it might be a good time to come up with a business plan if you have an interest in consulting or self-employment.

I'm sorry to hear about your situation. It's tough. It's been a very tough week. Ups and downs... today is a bit of a "down", but I'm just letting it all simmer.


I hear you on the competition. I think there are going to be a few people out of work, and some of these positions aren't going to come back, which will squeeze a lot of us out.


I spent a few hours this week brainstorming business ideas and running some "start-up" and overhead financial numbers for my coaching business idea. It was good to put those thoughts down. While I don't have a full business plan, I have a firm grasp on the costs associated with it, and it's a relatively low-risk proposition. It's not something I'd get rich off of, but at this point we'll be rich or not based on duration of work and our ability to not spend down any kind of assets. We're going to be fine from that perspective however this shakes out. That is the silver lining here!


I do appreciate all the thoughts here. It's good to have a bit of an outlet with like-minded folks, even some who are going through it or have been through similar in the past! One day at a time...

 

[imnontrad]

First of all, since you have Tricare and over 1 million NW, decide whether you really need to go back to work. Some chose to retire from the military and just enjoy life (https://the-military-guide.com/).
If you choose to work, then decide whether you want to wait for your employer to hire you back, apply elsewhere, or whether this is a time to start your own business. If your wife decides that she enjoys working, you could transition to the stay-at-home dad role (no child care expenses) while you work on starting your business.

 

[ExFlyBoy5]

First of all, since you have Tricare and over 1 million NW, decide whether you really need to go back to work. Some chose to retire from the military and just enjoy life (https://the-military-guide.com/).

I can agree with this, 100% I think Nash would like to continue to w*rk, unlike me.

 

[steveark]

Your situation mirrors mine. You have plenty of money/ income. So now you only have to figure out what keeps you happy. In my case I've done light consulting, one day a week on average, but it really makes a difference in my attitude. I have a friend, he's 68, a real rocket scientist. He commutes from Utah to Arkansas to build missiles, and we play tennis when he is here. Same kind of thing. I'm guessing you need some work, but not full time. In your area of expertise it is available. And thanks for your service, my dad lost a couple or three body parts in the navy in WW2. I know freedom isn't free for men like you. God bless you my friend.

 

[samcat]

We set up an S Corp through Legalzoom 15 years ago. It was super easy. California taxes most entities an $800 minimum tax. Keep that in mind when you think about setting up an entity.