I've made several comments in other posts about my intention to finally retire in January 2015. I will say that once I had firmly made this decision it's getting harder to get up in the morning and come in. Unfortunately, I feel I have a financial issue that makes it worth waiting. I'll also detail some other issues and plans for people to comment on or ridicule me whichever the case may be.
- I foolishly enrolled in a SERP plan where I had before tax dollars put into an IRA like plan but it must pay off soon after leaving the company. The payouts can be spread over 1 to 5 years which is determined by the election made at sign up. I "heard" that I could change this later but I didn't hear that it delayed the payout by 5 years. I don't want to go there so I have to deal with a big lump sum about a month after leaving the company. This would trigger income taxes about 5 times my normal amount (well into the 33% level) if I left now and it gets worse with every paycheck. If I leave in January, my income tax "only" doubles where I spread most of it out into lower tax brackets. This explains my planned delay to January 2015.
- I'm trying to burn as much vacation time as I can before the end of the year but I also don't want to make it obvious I'm a short timer. I expect to have a lump sum of about $25,000 coming when I cash out the remaining vacation time in January. I'm thinking of increasing my 401k deduction up to the annual maximum in an attempt to capture as much of this and two January pay periods as possible. I don't know if cashed out vacation time can go into my 401k. I certainly don't want to ask HR. Does anyone know if this is a practical way to reduce my taxable income?
- My FireCalc 99% run gives me a little over twice my "normal" living expenses (including taxes and post employment medical) so I get the only benefit of being a chronic OMY-er. This "normal" expense amount doesn't include serious vacations or significant help with grandkids' college expenses. I'm a believer in Bernicke plus I can also live with a variable withdrawl rate expecially when older. It just so happens that my and DW's SS and pensions are just slightly above this "normal" expense amount. I'm thinking of creating a sinking fund with CDs to pay these amounts until we are old enough to collect SS and medicare. The remaining portfolio balance would then be more aggressively tapped at a 5% rate (similar to what Merriman talks about). This would have my "normal" expenses covered but extra money would float with overall market performance. I still expect to have happy heirs when the casket lid is closed. Comments?
- I am a professional engineer. Do any of the engineers in the forum think it's worth keeping this up-to-date "just in case?"
- Are there any other things I should be looking at doing?
Last edited: