Force Severance / Struggling

[brett]

Thank you for all the responses, appreciate all the advice. I have a lot to think about, and I wont be seeking any employment in the near future while I process everything.

I spent my career in the IT business. I saw lots of people terminated. I was in a position to select employees and to deliver the 'news'. Some of them were colleagues, some were friends. And are friends to this day. It was about downsizing, seldom performance.

My observation. The vast majority of the ended up in what turned out to be better paying positions and they were often more happy with their new employment.

A few used their termination packages, often in the range of 12-18 months, to start their own now successful businesses or consulting shops.

Look at this as a huge opportunity. To reflect on where you are, where you want to be. Surprisingly not many of us take the time to do this and some stay in positions that they are happy with.

Stop struggling. Focus on the opportunities and the blank page ahead of you. They will quickly overcome your struggles.

So...think about it, speak to your spouse or close friends/colleagues who know you best. Do some networking. Get some interview practice.

Then, move forward with your life. You will be successful as long as you do not fall into the 'poor me' morass.

 

[HI Bill]

With a 2.375% withdrawal rate, you're absolutely golden, sans a Black Swan event. What would getting to $5M get you, a lower withdrawal rate? that accomplishes what? exactly?

At $5M, it's impossible to risk away Black Swan events. You'd have to diversify real estate, global investments, and precious metals in multiple countries (along with multiple citizenships), and even that might not help you survive WWIII, or a supervolcano eruption. This would cost several times $5M.

Enjoy your FIRE!

 

[Surewhitey]

Problem or opportunity? .

I would only caution you that at age 51, even with a stellar professional resume, finding another big job will be pretty unlikely. Ageism is very real...at least in my case it was. A year's pay will lead to the question "why have you not worked for the past year?" My three year severance/non-compete became my albatross in that regard.

I'd let it all settle in for a bit. Easier said than done, but turn the negative into a positive. Enjoy the free time, lack of pressure, sleep late. It can be disorienting but it becomes normal after awhile. You're luckier than you realize.

We didn't have this experience with ageism. Moving back to TX in 2015 after being away from the w*rkforce for 3 years, no college & both of us found something immediately. DW is up the food chain in big insurance & now 58, I'm 52 & self employed now (coasting)... Probably depends more on the local market right now as everything is in demand too.

I think he's more than fine, but sounds like he's not ready personally...

 

[Texas Proud]

With a 2.375% withdrawal rate, you're absolutely golden, sans a Black Swan event. What would getting to $5M get you, a lower withdrawal rate? that accomplishes what? exactly?

At $5M, it's impossible to risk away Black Swan events. You'd have to diversify real estate, global investments, and precious metals in multiple countries (along with multiple citizenships), and even that might not help you survive WWIII, or a supervolcano eruption. This would cost several times $5M.

Enjoy your FIRE!

You forgot the asteroid or comet hitting your house...



You cannot get rid of all risk... just minimize as best you can...


For the avg person the OP has done so for finances... now go live life...

 

[AZsniper]

I am in a somewhat similar position as you with kids the same age. I don't quite have as much saved, but I do have a decent pension.
It sounds like you have done a fantastic job and have worked very hard to get to this point. If I were in your shoes, I would take 6 months or the whole year off and decompress.
Focus on your health, hobbies, discover a new talent or instrument, etc. If you want to re-enter the workforce after this break, then go for it!
If you have not yet, read this book. "The joy of not working" -zelinski.
Best of luck. Enjoy the Severance pay......you have done so well that you don't need to optimize everything any longer.

 

[Dtail]

Take some deep breaths and consider your options over time. Unfortunately, I agree that ageism is very real and it could be difficult to land a high paying job.
However over time the anger will dissipate and you will probably become more comfortable with the idea of ER.

 

[Car-Guy]

If it were me in the same "boat" (and knowing what I know now) I'd be more pi**ed than worried. Reading over your posts, I think over the next year, you'll realize you are financially in great shape, even retiring as young as you are.

If you still want to work (I would not) have you considered going to work for a consulting firm in your field of expertise? Make some good money and "keep busy" until you are really ready to retire? I know when I retired at 60 there were plenty of opportunities for me to do some consulting work, that I did not pursue, but that you may want to consider..

 

[LarryMelman]

Wait a minute. Who is laying off engineers? And giving them a year of severance? We don't lay off because we know the possibility of hiring replacements is pretty much zero (we've had openings for months to years and get literally NO qualified applicants). Retirements are killing us. From where I sit, the job market for engineers has never been better.

 

[Route246]

I'm in Silicon Valley, FI and luckily "well-employed" with a package that is very difficult to leave on the table at age 66. I don't work for money but I do like money so it is difficult to walk away as long as my job is interesting which it is. I took a package at age 59 from a previous company (year+ salary and benefits) and immediately joined my present company when my termination became official. I am fortunate to have marketable engineering skills at my age but that was also planned and executed out of fear of being aged out. It was a lot of work to stay current and I'm proud of that achievement. I'm an outlier in that respect but I am willing to work outside of my comfort zone in order to stay current. Outside of the comfort zone requires occasionally being clueless, inept, incapable and struggling to avoid humiliation but avoiding humiliation is a great motivator to learn and become clueful. Some people just cannot deal with that sort of stress and I get that.

There are engineers being laid off all over Silicon Valley, even at the big 5 (Google, Amazon, FB, Apple, Microsoft), the vast majority of those being aged out (high package, declining skill, etc.). They don't call it laying off but for all intents and purposes it is. Many just take contract gigs to keep busy. As an engineer it is almost impossible to be unemployed if you're willing to contract without benefits and a permanent position, the hourly rates are quite high, too.

Wait a minute. Who is laying off engineers? And giving them a year of severance? We don't lay off because we know the possibility of hiring replacements is pretty much zero (we've had openings for months to years and get literally NO qualified applicants). Retirements are killing us. From where I sit, the job market for engineers has never been better.

 

[Global Wizzo]

First. Congrats being able to reach the numbers you have.

Take at least half of the year, help the kids, finish up hanging home projects and relax.

You didn’t say what kind of engineer. If you like mentoring, consider offering support to a company helping the new engineers build capability.

Lots of remote contract stuff out there. There is a real shortage of qualified people and those with a work ethic.

Enjoy life. Stress or other health issues could sideline you Enjoy every day and don’t look back.

 

[indiajust]

Had so many engineering layoffs that I never really took any vacation, just waited for the layoff and took a year or so with unemployment. It all blends together. Sunshine, exercise, home cooking and family visits will cure the itch.

 

[House Divided]

I was in a similar situation back in 2012 at the age of 54. I was downsized and given almost a year's severance / paid vacation. I was also able to collect unemployment for 15 months. My DW was a stay at home grandmother keeping our grandkids. We didn't have anywhere near your nest egg, but we live in a LCOL area and we had no debit and a small pension that started when I turned 55. Our kids were already out of college with no loans and married. We were able to do a real life retirement trial run and found that we could easily make it work. We had to do Cobra for health insurance and a few months of private health insurance before the ACA kicked in and we were able to take advantage of big subsidies until Medicare started last year. So my advice is to do a trial run retirement both financially and mentally, some people can't handle not having a structured day that a job provides.

 

[SlowlySaving]

Sorry to hear about the layoff! That happened to me too. I am kind glad it did! LOL
I semi-retired at 49 and switched from Information Technology to photography. I don't make much money in photography, but I do it for fun. I am now 54 and loving life! We have less in savings than you and I have one child who just started college.

Do whatever your heart desires!

 

[winyaz]

I was laid off at about your age and I celebrated, making a point to tell my kids that money in the bank is better security than a job. My job was a good paying work from home job, but I never liked it. I took 2 years off thinking maybe I would never have to work again, but that wasn't really realistic. My wife was still working part time, enough for insurance, but after 2 years I went back to work. I took a seasonal part time job that paid about 1/2 what I was making before while I looked for what I wanted. In the off season I did a lot of hiking. After I took a couple online certifications I was able to get a job as a business analyst that was pretty much in between where I was when laid off (Sr Project Mgr) and where I started my career, as a programmer - exactly what I was looking for. I never liked Project Management and wouldn't even look at such job listings. The job was work from home. After my wife retired I started talking about retirement with my manager and then he let me move to part time, 4 days, 35 hours/week w/ full benefits. (All jobs should be 4 days per week max!). 2 years after that I retired, this time for good.

From the financials it sounds like you have all options open to you. Retire for good but maybe cut back on spending a little, or you could try out retirement for a while, or change careers to something that you enjoy more. No need to rush.

 

[Texas Proud]

Had so many engineering layoffs that I never really took any vacation, just waited for the layoff and took a year or so with unemployment. It all blends together. Sunshine, exercise, home cooking and family visits will cure the itch.

Yea, when I was young I worked at Flour and it was a think that after a project people were laid off... and when to Bechtel or some other firm... which laid them off and back to Flour for the next project..


I asked on engineer about it and he said that it was very common... you followed the winning bidder...

 

[Happy30]

Sorry that happened but it certainly could be a blessing in disguise! Take some time to take care of you and really think through what will be best for you and your family.

I was in a similar situation at 57. I am extremely happy I got the nudge that I needed to be done working! OMY is so real and I felt the same way you do … I spent all these years saving and now I have to go and spend my money … it is scary! I am now 58 and all is going very well!

I love retirement and doing what I want, when I want!

 

[Landolink]

Our numbers are similar. But we are older (58 and 54). And we have 1 kid out of college and 2 in college. I just stopped working from a 2nd career job that was physically taxing. Wife is working with health insurance. It’s uncomfortable for me but I am beginning to feel very good. Taking time off at this point in your life can be a very good thing. Enjoy your kids while they are home.

 

[ERasap]

Sorry that happened but it certainly could be a blessing in disguise! Take some time to take care of you and really think through what will be best for you and your family.

I was in a similar situation at 57. I am extremely happy I got the nudge that I needed to be done working! OMY is so real and I felt the same way you do … I spent all these years saving and now I have to go and spend my money … it is scary! I am now 58 and all is going very well!

I love retirement and doing what I want, when I want!

Happy, thank you for that and I hope you are right! I have been enjoying the time, and days are going too fast.

I am torn still. As others said, smarting still a bit over the way things happened after all those years, but also the logical side of me knows it was a good thing for me.

I have worked the numbers 9 ways to Sunday and it looks ok, but I have also engaged an advisor from Fidelity to look it over and see what he thinks also.

A work friend did something similar at 51, and he called and we spoke for a while, and that helped some as well.

I think having the kids in school is the #1 stressor, and the contemplation of hopefully 35-40 years of retirement and making sure the money lasts. Trying to understand all the risks and plan.

Starting from a case where historically PE ratios are high, we have had a 40 year bull run in treasuries that is ending, inflation is rearing its head after also a 40yr hiatus, just seems the potential for poor initial sequence of returns is pretty high.

 

[Koolau]

It's tough being forced into retirement. No matter how much planning you've put into it, having the decision taken out of your hands must be daunting. Still, from your description of your finances and spend level - and especially continuing access to health insurance through your DW, it would seem you are in very good shape indeed. I applaud your "restricted" budget - at least until you see how things are going.



You still have options to downsize your house or even move to a lower cost of living area, so you are not without back-ups. Best of luck. Please check back here often and let us know how you are doing.

 

[emmaswan]

Appreciate OP for starting this thread. The responses, as always, are top-notch and food for thought.

 

[Texas Proud]

Happy, thank you for that and I hope you are right! I have been enjoying the time, and days are going too fast.

I am torn still. As others said, smarting still a bit over the way things happened after all those years, but also the logical side of me knows it was a good thing for me.

I have worked the numbers 9 ways to Sunday and it looks ok, but I have also engaged an advisor from Fidelity to look it over and see what he thinks also.

A work friend did something similar at 51, and he called and we spoke for a while, and that helped some as well.

I think having the kids in school is the #1 stressor, and the contemplation of hopefully 35-40 years of retirement and making sure the money lasts. Trying to understand all the risks and plan.

Starting from a case where historically PE ratios are high, we have had a 40 year bull run in treasuries that is ending, inflation is rearing its head after also a 40yr hiatus, just seems the potential for poor initial sequence of returns is pretty high.

One thing that I did was place the kids in college on a budget... they get X amount and no more...


First kid was doing fine until he moved his girlfriend in with him... I said she needed to pay her share... it seems she never did... I stopped paying after one year with GF... (BTW, they are married now)


DD is spending like her rich friends.... she will run out of money in her junior year at the rate she is going.. she is well aware of what I am willing to pay... it is not a secret...


Having a fixed budget for the kids hopefully will get them spending right... if not, that is not on you... but it does take out stress as you KNOW the amount you will spend...

 

[zekeboz]

@ERasap Since you are an engineer you might want to check out 'Big Ern's' site, Early Retirement Now and the Safe Withdrawal Series. He provides a level of detail and interactive google spreadsheet that quite frankly puts to shame what we spent for one off professional reviews of our finances (can we retire in X and can we spend Y per year?).

We have had a green light to pull the plug from a few professionals but the details that this series provided along with the analysis was the key feedback in knowing we are going to be ok.

https://earlyretirementnow.com/start-here/

Post that contains link to spreadsheet
https://earlyretirementnow.com/2018/08/29/google-sheet-updates-swr-series-part-28/

 

[big-papa]

Engineer here as well. Your post looks like what mine would have been at when I was in my early 50's. In fact, eerily similar, even down to the size of the severance package. I didn't know what I know now, but in hindsight, financially, I also could have retired at about that time.

So I filed for unemployment because I started actively looking. It was great as it paid for COBRA which was my biggest worry.

It did take quite a while to get there, though - about 10 months. Unemployment ran out and I was getting close to having to dip into savings. I ended up taking a position in my industry but in an area that I really didn't want - Program Management. Fortunately, just a few months in I was able to move back into my chosen area via a transfer. I was there for 3 years when they closed down our local site. Fortunately, with experience comes the ability to see these things coming from a mile away and I got another package and had the next gig lined up before we closed the doors. 7 years at the new job and retired from it at age 62 this past summer a couple of months after our only kid finished college and started working. I had the experience because it was my 3rd rodeo happening to me and, some very large number of times I witnessed it and/or had to let engineers go myself.

While I could have retired back in my early 50's I'm actually glad I didn't. I don't think I was mentally ready yet. Kid was still in middle school, I didn't have the being at home all the time experience that Covid brought via working-from-home. And while on paper, financially, we could have retired, I'm very happy that I jumped back in and built more margin via years of salary, bonuses, and RSU's. It sounds like you're struggling with this as well. You've been given a lot of advice already regarding the financial side and you've done a lot of the work yourself.

Extra margin is good, just don't get yourself stuck in OMY (One More Year) mode. And remember, finances are there to enable your life. But it isn't life. In my case, I decided to retire when I became concerned that each additional year of stress would result in more than 1 year loss of life expectancy.

Cheers
Big-Papa

 

[brett]

I was on the opposite end of the spectrum.

Waiting, and hoping, for 14 months or so that my job would be eliminated and I would be gone. I wanted the package. I was ready for retirement at 58/59.

When it finally came I was thrilled. The only challenge was that I was instructed to keep that thought to myself and to my spouse until such time as a package was negotiated.

I had a great employer. Treated very well up to and including the termination settlement. Absolutely no hard feelings toward the megacorp employer or those who made the decision that my number was 'up'. They did me a huge favor!

 

[surprising]

One thing that I did was place the kids in college on a budget... they get X amount and no more...


First kid was doing fine until he moved his girlfriend in with him... I said she needed to pay her share... it seems she never did... I stopped paying after one year with GF... (BTW, they are married now)


DD is spending like her rich friends.... she will run out of money in her junior year at the rate she is going.. she is well aware of what I am willing to pay... it is not a secret...


Having a fixed budget for the kids hopefully will get them spending right... if not, that is not on you... but it does take out stress as you KNOW the amount you will spend...

I am in a similar situation with two daughters in college and each with 529 money that isn't enough to pay for all 4 years. Oldest daughter's 529 just ran out with 2 quarters to go and she knows she has to get a loan to cover the rest. However, who would've thought interest rates would skyrocket to multi-decade highs right before we need a loan!? She doesn't qualify for federal subsidized loans so she has to go private route where the interest rates are not great. SO, most likely we will end up loaning her the money at a more favorable interest rate, which will eat into our emergency savings (or sell stock).
If I were still working full time, I would have no problem paying for the rest of her college without dipping into savings, so that bums me out.

My youngest daughter is a sophomore in college at a much cheaper school that should've been completely covered by 529, but she will also run out of money because the drastic downturn in stocks and bonds really hit her 529 returns and so she started with significantly less than my older daughter. So in about a year and half I'll be figuring this all out again.

Both daughters are very responsible with money. My oldest has had a job the entire time in college to pay for room and board. This situation is not their fault, yet they are suffering. This is why I want to help rather than say "you ran out of money, tough luck." Just some things to consider.. the best of plans have no guarantee of working out.