Elderly Parents/Bad Job - need your opinions!

[Erbragg1]

I first posted about a year ago seeking opinions on whether the forum thought I was on track to FIRE in a few years. Got some great advice then, but need some more now as a lot has changed for me in the past year.

Three main things concern me: first, my parents and my DW’s parents are all taking turns visiting the hospital and are declining rapidly. It has been somewhat shocking how quickly their collective health situations have taken turns for the worse in the past year or so. Second issue is my j*b has become untenable over the last few months. Two more reorgs in the past four months and the latest one has clearly put me in the “undesirable” category. I firmly believe they are pigeonholing me with the hope that I will eventually quit. They may eventually just lay me off, but it will be miserable in the meantime.

This brings me to the third item which is my finances and my reason for posting today. I have had a really good year and would like very much to RE so I can get away from my horrible w*rk situation and use my time to spend as much as possible with the parents and to help them out.

Here is my situation in a nutshell:

$2.4M in invested assets. AA currently is 70% stocks, but I have started backing that down and have moved many of the stocks to strong dividend payers.

$1.8M in tax advantaged
$450K in Brokerage
$60K in 529
$65K in cash, CD, Money Market

Also have $300K equity in house, have an HSA with $15K in it and own a Long Term Care Policy.

DW is 49 and I will hit 50 in November and we are assuming a longevity of 95 years old =45 years in retirement. Two kids (20, 17). Eldest is 1/2 way through college and youngest is a senior in HS. 529 money will pay for almost all of the expected future costs for their education.

DW will get a small ($3K per year with COLA) starting at 60. Our combined SS at 62 will be roughly $2400/mo.

Expenses have been tracked religiously over the past year based on advice from my first post. From now till house is paid off, I will need $104K/year. Once House is paid in 2028 (10 more years), expenses will drop to $85K/year.

I can bridge the gap from ER till SS kicks in via combination of 72t and burning down Brokerage money.

FireCalc somewhat confuses me as there are a lot of different options/assumptions you can play with. I get anywhere from an 87% to a 100% depending on which assumptions I use.

I would greatly appreciate feedback from you all on whether you feel it would be too risky to pull the plug towards the end of this Year?

 

[JoeWras]

Ebragg1: I was in a similar situation with similar numbers at your age.

If I had to do it over again, I would have taken a 1/2 to 1 yr leave to be with my parents.

I was a chicken to do this because 6 years ago the job market was not what it is today. I had fear. Still no excuse.

Just an idea that is in between extremes of staying with it and retiring. The worst that can happen is Megacorp says no and lets you go. So what. You only have your parents once in a lifetime.

 

[Dtail]

I first posted about a year ago seeking opinions on whether the forum thought I was on track to FIRE in a few years. Got some great advice then, but need some more now as a lot has changed for me in the past year.

Three main things concern me: first, my parents and my DW’s parents are all taking turns visiting the hospital and are declining rapidly. It has been somewhat shocking how quickly their collective health situations have taken turns for the worse in the past year or so. Second issue is my j*b has become untenable over the last few months. Two more reorgs in the past four months and the latest one has clearly put me in the “undesirable” category. I firmly believe they are pigeonholing me with the hope that I will eventually quit. They may eventually just lay me off, but it will be miserable in the meantime.

This brings me to the third item which is my finances and my reason for posting today. I have had a really good year and would like very much to RE so I can get away from my horrible w*rk situation and use my time to spend as much as possible with the parents and to help them out.

Here is my situation in a nutshell:

$2.4M in invested assets. AA currently is 70% stocks, but I have started backing that down and have moved many of the stocks to strong dividend payers.

$1.8M in tax advantaged
$450K in Brokerage
$60K in 529
$65K in cash, CD, Money Market

Also have $300K equity in house, have an HSA with $15K in it and own a Long Term Care Policy.

DW is 49 and I will hit 50 in November and we are assuming a longevity of 95 years old =45 years in retirement. Two kids (20, 17). Eldest is 1/2 way through college and youngest is a senior in HS. 529 money will pay for almost all of the expected future costs for their education.

DW will get a small ($3K per year with COLA) starting at 60. Our combined SS at 62 will be roughly $2400/mo.

Expenses have been tracked religiously over the past year based on advice from my first post. From now till house is paid off, I will need $104K/year. Once House is paid in 2028 (10 more years), expenses will drop to $85K/year.

I can bridge the gap from ER till SS kicks in via combination of 72t and burning down Brokerage money.

FireCalc somewhat confuses me as there are a lot of different options/assumptions you can play with. I get anywhere from an 87% to a 100% depending on which assumptions I use.

I would greatly appreciate feedback from you all on whether you feel it would be too risky to pull the plug towards the end of this Year?

Just on the Firecalc side, since you provided us with financial info, if you wish to provide us the Firecalc inputs you used, we can see if there are any input or interpretation issues.

 

[Oz investor]

Erbragg1,

a question ( that you only need to answer to yourself and DW )

are you better off leaving the job early ( obviously your opinion of your j*b is declining )

if the answer is yes would a trip to some medical professionals be wise , it sounds like there are several new areas of stress in your life , maybe a medically advised break or change of lifestyle might be the answer ( and a possible health-care claim )

of course you could always resign stating 'family reasons ' but a medical backing , for the break would let you start a new career after the crisis with the four seniors had passed , with less stigma ( if you decide to rejoin the workforce at all )

my ( financial ) concerns would be a cost blowouts in the medical costs the 4 seniors might incur in the foreseeable future ( next 3 years ) which might also coincide with an economic downturn .

please watch your health ( and your wife's ) an extra set of medical bills sounds like the last thing you need .

take care and good luck

 

[Another Reader]

I wouldn't do it. You really only have $2.25M invested. At 4 percent, that only gives you $90k.

How much can you comfortably cut your expenses? Can you find consulting or part time work to make $30k a year, before taxes? Those are the two things I would look for if I wanted to get out now.

Does your employer offer packages when they lay people off? If a good one came along and you could cut expenses or make up the difference in work income, then I might go for that.

 

[Conundrum]

Another option would be to use 12 weeks of FMLA to care for a family member. Or, take the time to care for yourself but that’s a conversation to have with your doctor. Check your state laws as well. They may give you additional flexibility.

This would at least give you some time to process all the issues on your plate and develop a plan of action.

 

[Dtail]

I wouldn't do it. You really only have $2.25M invested. At 4 percent, that only gives you $90k.

How much can you comfortably cut your expenses? Can you find consulting or part time work to make $30k a year, before taxes? Those are the two things I would look for if I wanted to get out now.

Does your employer offer packages when they lay people off? If a good one came along and you could cut expenses or make up the difference in work income, then I might go for that.

I realize that SS might not be fully there, but are you taking the ~29k est SS into account?

 

[Another Reader]

I realize that SS might not be fully there, but are you taking the ~29k est SS into account?

He has 17 years to FRA. That will put him squarely in the haircut age group. I would not count on full SS. He is planning 45 years of retirement. 4 percent works for 30 year retirements. 3 to 3.5 percent is more likely to succeed for longer retirements. He will have to pull out a much higher percentage in the early years to supply the required income. Sequence of return risk is a big risk with the large draw downs required early on.

I'm too conservative to take these risks. I would need some other sources of income or a substantial reduction in expenses to turn in my notice.

 

[Erbragg1]

I wouldn't do it. You really only have $2.25M invested. At 4 percent, that only gives you $90k.

How much can you comfortably cut your expenses? Can you find consulting or part time work to make $30k a year, before taxes? Those are the two things I would look for if I wanted to get out now.

Does your employer offer packages when they lay people off? If a good one came along and you could cut expenses or make up the difference in work income, then I might go for that.

If the market went south for a few years, I could easily cut expenses by $10K or so (by limiting travel and entertainment). I am also not counting likely inheritance money in the equation. I conservatively expect to inherit $250k from my parents and my DW will likely inherit $125K from her parents. I do not want to count though.

 

[Jerry1]

Another option would be to use 12 weeks of FMLA to care for a family member. Or, take the time to care for yourself but that’s a conversation to have with your doctor. Check your state laws as well. They may give you additional flexibility.

This would at least give you some time to process all the issues on your plate and develop a plan of action.

This is what I would recommend. I’d want a better financial picture to consider full retirement.

IMO, I’d want the finances to be as stated minus the mortgage. Ten more years of mortgage payments is a tough hurdle for a young retiree with two college student children. The 529 is the next hurdle. I’m not sure of your children’s college choices, but $60K (or $30K each), is not even a year at a State college for each child. Full boat for my one daughter that did go to college about 10 years ago was $25K per year.

Take a leave and help yourself and your parents. Maybe even take some of that time to get your resume updated and see about some part time work, consulting or even a new job.

 

[Erbragg1]

Just on the Firecalc side, since you provided us with financial info, if you wish to provide us the Firecalc inputs you used, we can see if there are any input or interpretation issues.

The main variables on firecalc that skew the result for me are the assumed portfolio rates of return and which spending models you choose to use. If I use the constant spending Scenario and use the total market return from 1930 onwards, I get a success of 94.7%. If I use 1920 as the start point, My success rate drops to 91.7%. If I use 1940 onwards, success rate climbs to 100z. It really just depends on what time period you include that drives the predicted success rate.

 

[Conundrum]

How much did you plan for healthcare?

We have been in a bull market for a long time. I haven’t a clue when a significant correction will occur but I feel there is a considerable sequence of returns risk in the coming years. Plan your AA carefully to somewhat mitigate the risk.

 

[DrRoy]

He has 17 years to FRA. That will put him squarely in the haircut age group. I would not count on full SS. He is planning 45 years of retirement. 4 percent works for 30 year retirements. 3 to 3.5 percent is more likely to succeed for longer retirements. He will have to pull out a much higher percentage in the early years to supply the required income. Sequence of return risk is a big risk with the large draw downs required early on.

I'm too conservative to take these risks. I would need some other sources of income or a substantial reduction in expenses to turn in my notice.

I am sort of on the fence with your situation. Your early WR is about 4.6%. I agree that for a 40+ year retirement that is too high. By the time you get SS, it will be more like an inflation adjustment for your total income than a real boost. I agree that your should have your WR under 3.5%. Are you willing to reduce expenses now or find a little more income? Even the potential 13% failure rate is more risk than I would want.

 

[joeea]

I would greatly appreciate feedback from you all on whether you feel it would be too risky to pull the plug towards the end of this Year?

You have many years of retirement to fund. That's a lot of years of risk.

It might be possible to squeak by, but there are a lot of things that could derail your plans. Sequence of return effects could do it for example - and you have many years of exposure to that. You may be exposed to a lot of inflation risks. And children can often be a source of unexpected expenses. Healthcare costs prior to Medicare are a wildcard.

If it were me, I'd try hard to delay your retirements as long as possible. If you decide you cannot work full time, you and your wife might consider part-time work. Or perhaps you retire and your wife works full time.

But it reads as if you have already made up your mind. You should at least run the numbers trying to optimize your social security benefits to provide a bigger lifetime base of inflation-adjusted income. Try out some of the online calculators available.

And look for ways to reduce your expenses. Since you have kept detailed records for a year, look to see if you can cut expenses as much as possible in the early years where such cuts would have maximal effect.

Good luck.

 

[flintnational]

I will suggest one other option. You could leave your current employment, spend time helping the aging parents and then return to a less stressful job for a few years. Even if you are not at your same compensation, this will give your investments time to grow before you start withdrawing. Except for the caring for parents part, this is essentially what I did. I left a well paying job and spent the last few years of my career in a job that paid about 60% of my prior position. But, I worked from home and only worked four days per week. The savings grew and I FIRED at 54.

 

[target2019]

Another option would be to use 12 weeks of FMLA to care for a family member. Or, take the time to care for yourself but that’s a conversation to have with your doctor. Check your state laws as well. They may give you additional flexibility.

This would at least give you some time to process all the issues on your plate and develop a plan of action.

This approach puts the OP in a better position right now, which is why I agree it's a good option.

Hard to say what the employer will do after the 12 weeks is up, but OP can always quit. There could also be a layoff soon after, giving OP even more time to make decisions.

 

[MI-Roger]

Deja Vu

I was in a similar position 6 years ago:

• Was on the top of the Lay-Off list for Round #3 of Head-count Reductions
• Had enough assets to probably retire, but not confident
• Was 56 years old, wife 53
• Kids were out of college but just starting their careers so some parental assistance might still be required
• One failing health parent out of four remaining

I retired and found a nearly identical job working for an employee-focused company in a different industry.

Control your own fate, don't let it control you!

 

[Dtail]

The main variables on firecalc that skew the result for me are the assumed portfolio rates of return and which spending models you choose to use. If I use the constant spending Scenario and use the total market return from 1930 onwards, I get a success of 94.7%. If I use 1920 as the start point, My success rate drops to 91.7%. If I use 1940 onwards, success rate climbs to 100z. It really just depends on what time period you include that drives the predicted success rate.

Okay that makes sense. I was concentrating on the "can be confusing" part.

 

[Maenad]

I concur with the FMLA option, then quit if needed to take care of your parents, and be prepared to return to the workforce in a year or so at a lower-paying position, or set yourself up with people you know to do some consulting if you can.

Whether you retire now or go back to work later, I think it's wise to take time to help your parents. I'm looking at this with my mom in the next year or two.

 

[MRG]

This approach puts the OP in a better position right now, which is why I agree it's a good option.

Hard to say what the employer will do after the 12 weeks is up, but OP can always quit. There could also be a layoff soon after, giving OP even more time to make decisions.

You can also go on intermittent FMLA, what I did for DW for several years. You're limited to the the same 12 weeks but you can take it by a day or partial days. My employer hated it.

It's odd because after being salaried my entire career it was more like being hourly.

 

[tb001]

Maybe you mentioned this in another thread, but does that 104 include healthcare, taxes and infrequent/1x large expenses like a new car/roof?

I agree with others that it’s too soon, but there are alternatives to what you’re doing. As others have mentioned, a part time job, taking leave or just quitting and knowing you’re going to go back to work later. You can always take a lower paying, lower stress position.

 

[Erbragg1]

How much did you plan for healthcare?

We have been in a bull market for a long time. I haven’t a clue when a significant correction will occur but I feel there is a considerable sequence of returns risk in the coming years. Plan your AA carefully to somewhat mitigate the risk.

I used ObamaCare estimates and increased them by 20% in my expense plan. I agree we are likely to see a significant down market in the next 2-5 years.

 

[Erbragg1]

If it were me, I'd try hard to delay your retirements as long as possible. If you decide you cannot work full time, you and your wife might consider part-time work. Or perhaps you retire and your wife works full time.

But it reads as if you have already made up your mind. You should at least run the numbers trying to optimize your social security benefits to provide a bigger lifetime base of inflation-adjusted income. Try out some of the online calculators available.

.

Thanks for the feedback. I want to clarify that I have definitely not made up my mind and am very likely to delay retirement at least till the middle of next year. Of course MegaCorp may make that decision for me....

My DW is looking to go back to w*rk for a few years once my youngest graduates next June. I have not made any assumptions in my model for this as it is not a certainty that she will get something to her liking. However, if she does, it will be a significant impact as she would likely make at least $80K/yr and would provide medical for three more years.

 

[Erbragg1]

I will suggest one other option. You could leave your current employment, spend time helping the aging parents and then return to a less stressful job for a few years. Even if you are not at your same compensation, this will give your investments time to grow before you start withdrawing. Except for the caring for parents part, this is essentially what I did. I left a well paying job and spent the last few years of my career in a job that paid about 60% of my prior position. But, I worked from home and only worked four days per week. The savings grew and I FIRED at 54.

Thanks Flint. This is definitely an option. It is kind of scary for me as I am at Director level and have been for a number of years. I am concerned that it would be very difficult to find a lower level position as I would be “overqualified” and in my mid-50s by then.

 

[Erbragg1]

You can also go on intermittent FMLA, what I did for DW for several years. You're limited to the the same 12 weeks but you can take it by a day or partial days. My employer hated it.

It's odd because after being salaried my entire career it was more like being hourly.

Thanks all for the suggestions on FMLA. I need to look into this further as I do not really know how it works on the detail level. I am particularly intrigued by the intermittent FMLA. My parents are on the east coast. DWs parents and we are on the west coast near each other. Travel back and forth for a week here and there over many months to help my parents would be great rather than 12 straight weeks off.

My employer will hate it too though. I think it would increase the likelihood of being laid off. They have already put me in what I perceive to be an expendable position so if cuts are coming, I would certainly be a target. I am not clear on the legality of them laying someone off while on intermittent FMLA. I know they can’t do anything while on normal FMLA. Can anyone shed some light on that?