Unexpected early retirement - requesting advice

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Topic Author
meemow
Posts: 18
Joined: Tue Jul 24, 2018 7:13 pm

Unexpected early retirement - requesting advice

Post by meemow » Wed Aug 01, 2018 7:34 pm

Hello All,

After several years worth of reading this forum and learning a lot from the advice given to others, I have unexpectedly found myself in a position where I might have to retire sooner rather than later. In fact, much sooner than expected – like maybe tomorrow if necessary. It is funny how all these years I was planning and saving for possible lay-offs/outsourcing/off-shoring/down-sizing/firing/etc/etc and, well... none of those things happened. Instead, a completely unexpected medical event caught me off-guard – a real wake up call that I may need hang my hat up now and start taking care of my health. There are some days that I feel completely unable to work – a new feeling for me and very unsettling. My apologies in advance for the very long post to follow. I will pose my questions up front followed by the actual detailed break-down of the assets below:
  • With the funds I have now can I retire? (I think yes, but now that reality is hitting me squre in the face, I'm feeling shaky about this)
  • If I have hit the overall “magic number”, should I rebalance my portfolio to 50/50 instead of sticking w/ the current 70/30? Since I have a rather large amount in bonds and tax exempt on my taxable accounts, my plan would be to live off of those assets (~770K) until I reach 59.5. During that interim time I would like my retirement assets to still grow, so my thinking is to leave things at the current allocation -- is that a good approach? Or is that too risky?
  • Some funds in here have high E/R (I'm looking at you BPTRX!), but a few others like FCNTX and MERDX have given good returns over the past 7 years and I'm a bit reluctant to let them go. I also realize that with my health further declining, I will need to simplify significantly. I would appreciate any feedback / thoughts on this
  • I have heard that getting to financial independence is admired by all but in social settings people always ask “what do you do, where do you work, what is your occupation” which carries a sense of one's social standing. And when one is not able to answer those “occupation” types of questions, one loses that 'social standing' especially if you are a younger person (and I look rather young). Is that true? How do folks navigate that? I get asked those questions a lot, and I worry that once I retire, I will be lost in society and/or be treated with great disdain... I guess I should not care what other people think but oftentimes the quality of our lives is affected by the way others treat us

Thank you so much for reading this post !
Meems

Emergency funds: ~25K
Debt: ~245K Mortgage
Tax Filing Status: Single
Tax Rate: 28% Federal, 5.25% State
Age: 51
Current Asset allocation: ~70% stocks / ~15% bonds / ~15% Cash Instruments (CDs, etc)
Current International allocation: 11% of stocks (or 7.93% of total assets)

Total size of assets: ~3M (not including house or mortgage)

Current Assets
Taxable Accounts (% of total assets)
  • CDs (mostly) and money market: 10.88%
    - CDs: $243K
    - Money Market (Tax exempt VMSXX): $51K
    - Bank account: $40K
  • Foreign Large blend / growth: 2.93%
    - VFWIX: $7.4K (e/r: 0.23%)
    - FDIVX: $82K (e/r: 0.94%)
  • Domestic Large blend / growth: 16.39%
    - VTSAX: $176K (e/r: 0.035%)
    - FCNTX: $137K (e/r: 0.74%)
    - SPY ETF: $80K (e/r: 0.0945%)
    - RYOCX: $25K (e/r: 0.129%)
    - FPURX: $82K (e/r: 0.55%)
  • Bonds: 14.3%
    - EE Bonds: $73.5K
    - Treasury Direct: $10K
    - VWIUX (Tax exempt bonds): $353K
  • Stocks (misc): .06%
Total Taxable: $1360K

Retirement Accounts: 401Ks and IRAs
  • Cash Balance: 4.67%
    - Funds: $142K
  • Foreign Large Blend / Growth: 5.0%
    - TSP-I: $113K (e/r: 0.033%)
    - VWIGX: $23K (e/r: 0.45%)
    - VTSNX: $2K (e/r: 0.09%)
    - VHGEX: $8K (e/r: 0.48%)
    - DODFX (Roth): $6K (e/r: 0.63%)
  • Domestic Large Blend / Growth: 37.84%
    - TCP-C: $259K (e/r: 0.033%)
    - VITSX: $118K (e/r: 0.035%)
    - VTSAX: $68K (e/r: 0.04%)
    - VTSMX: $27K (e/r: 0.14%)
    - VEIRX: $546K (e/r: 0.17%)
    - FCNTX: 7K (e/r: .74%)
    - FCNTX (Roth): $128K (e/r: 0.74%)
  • Domestic Midcap / Smallcap: 6.82%
    - TSP-S: $165K (e/r: 0.033)
    - BPTRX: $25K (e/r: 1.52%)
    - MERDX: $18.4K (e/r: 0.89%)
  • Stocks and Sector Funds: 1.08%
    - GE Stock: $30K
    - VGELX: 4K (e/r: .3%)
Total Retirement Assets: $1689K

Total Assets: ~3,049.4K

Annual Contributions:
  • - Traditional IRA: $5.5K + $1K = $6.5K
    - 401K: $18.5K + $6K = $24.5K
Expected Retirement Income:
  • - Pension: $18K / year (@ 62)
    - SS: not sure how to estimate this if I stop working now @ 51.
Expected Expenses:
  • - Avg Yearly Expenses (including all taxes): $85K
    - Avg Yearly Expenses (w/o Federal taxes, but includes soc sec, etc): $62K
    - Medical Expenses: I would have to pay out of pocket, I am currently on FEHB but once I leave Gov't I believe I will no longer have this. So estimating $15-20K for insurance and other medical expenses
Simulations:
  • - Vanguard PAS' tool: $76K (not incl. Federal taxes) has 99% success rate
    - I also ran the numbers on i-Orp and Firecalc (default settings, I did not tweak any of the knobs, assumed no pension or SS) says a max $95K yearly spending will show a 100 rate of success. That gives me some comfort, mayyybe

qwertyjazz
Posts: 1132
Joined: Tue Feb 23, 2016 4:24 am

Re: Unexpected early retirement - requesting advice

Post by qwertyjazz » Wed Aug 01, 2018 7:42 pm

If you are leaving for medical reasons are you sure your medical costs will not dramatically go up?
G.E. Box "All models are wrong, but some are useful."

Topic Author
meemow
Posts: 18
Joined: Tue Jul 24, 2018 7:13 pm

Re: Unexpected early retirement - requesting advice

Post by meemow » Wed Aug 01, 2018 7:46 pm

qwertyjazz wrote:
Wed Aug 01, 2018 7:42 pm
If you are leaving for medical reasons are you sure your medical costs will not dramatically go up?
Indeed I do expect it go up, but I do not know how to model that. I suppose in a case like that I would have to cut my expenses accordingly in other areas

But I am following this thread: viewtopic.php?f=1&t=255410&newpost=4047 ... ead#unread
with great interest

User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Unexpected early retirement - requesting advice

Post by Pajamas » Wed Aug 01, 2018 7:50 pm

Consider making it work now and pulling the trigger very soon rather than asking if it can work. You certainly have enough assets and surely your spending is at least somewhat flexible. Biggest risk to your finances would be negative market returns soon in your retirement so take that into account.

qwertyjazz
Posts: 1132
Joined: Tue Feb 23, 2016 4:24 am

Re: Unexpected early retirement - requesting advice

Post by qwertyjazz » Wed Aug 01, 2018 7:52 pm

meemow wrote:
Wed Aug 01, 2018 7:46 pm
qwertyjazz wrote:
Wed Aug 01, 2018 7:42 pm
If you are leaving for medical reasons are you sure your medical costs will not dramatically go up?
Indeed I do expect it go up, but I do not know how to model that. I suppose in a case like that I would have to cut my expenses accordingly in other areas
I think the question is how close are you to a retirement where you could keep your health benefits. With changing rules in health insurance and your variable health, eeking out some mid time working for the feds might be worth it if at all possible. Otherwise your plan looks grossly good and others will likely chime in with tweaks.
G.E. Box "All models are wrong, but some are useful."

KlangFool
Posts: 14144
Joined: Sat Oct 11, 2008 12:35 pm

Re: Unexpected early retirement - requesting advice

Post by KlangFool » Wed Aug 01, 2018 7:53 pm

meemow wrote:
Wed Aug 01, 2018 7:34 pm
  • I have heard that getting to financial independence is admired by all but in social settings people always ask “what do you do, where do you work, what is your occupation” which carries a sense of one's social standing. And when one is not able to answer those “occupation” types of questions, one loses that 'social standing' especially if you are a younger person (and I look rather young). Is that true? How do folks navigate that? I get asked those questions a lot, and I worry that once I retire, I will be lost in society and/or be treated with great disdain... I guess I should not care what other people think but oftentimes the quality of our lives is affected by the way others treat us

meemow,

This is what I used when I was unemployed.

I am a consultant. I am in between projects. Are you looking for a consultant to work on some of your projects?

This tends to stop all other questions.

KlangFool

Topic Author
meemow
Posts: 18
Joined: Tue Jul 24, 2018 7:13 pm

Re: Unexpected early retirement - requesting advice

Post by meemow » Wed Aug 01, 2018 7:55 pm

Pajamas wrote:
Wed Aug 01, 2018 7:50 pm
Consider making it work now and pulling the trigger very soon rather than asking if it can work. You certainly have enough assets and surely your spending is at least somewhat flexible. Biggest risk to your finances would be negative market returns soon in your retirement so take that into account.
Just to make sure I understand by "making it work" -- do you mean to lessen my market exposure by reducing my 70/30 to be much more conservative ?

Dottie57
Posts: 7140
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Unexpected early retirement - requesting advice

Post by Dottie57 » Wed Aug 01, 2018 7:58 pm

OP find out about medical after leaving job. Re Health: is this a condition where disability can be claimed and if so, can med ins be retained?

Whatabout a pension? When would it come into effect?

Topic Author
meemow
Posts: 18
Joined: Tue Jul 24, 2018 7:13 pm

Re: Unexpected early retirement - requesting advice

Post by meemow » Wed Aug 01, 2018 8:01 pm

KlangFool wrote:
Wed Aug 01, 2018 7:53 pm

meemow,

This is what I used when I was unemployed.

I am a consultant. I am in between projects. Are you looking for a consultant to work on some of your projects?

This tends to stop all other questions.

KlangFool
Yes but then they might try to hire me - and frankly I am just exhausted

Dottie57
Posts: 7140
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Unexpected early retirement - requesting advice

Post by Dottie57 » Wed Aug 01, 2018 8:04 pm

meemow wrote:
Wed Aug 01, 2018 7:55 pm
Pajamas wrote:
Wed Aug 01, 2018 7:50 pm
Consider making it work now and pulling the trigger very soon rather than asking if it can work. You certainly have enough assets and surely your spending is at least somewhat flexible. Biggest risk to your finances would be negative market returns soon in your retirement so take that into account.
Just to make sure I understand by "making it work" -- do you mean to lessen my market exposure by reducing my 70/30 to be much more conservative ?
Making it work may mean reducing your lifestyle to fit expenses into a lesser income. Your healthcare is a wild card so, how would you cut spending.

P.S. I would have more in CD’s and fixed income. Maybe 60/40. Until Pension and SS kick in.

User avatar
Pajamas
Posts: 6015
Joined: Sun Jun 03, 2012 6:32 pm

Re: Unexpected early retirement - requesting advice

Post by Pajamas » Wed Aug 01, 2018 8:05 pm

meemow wrote:
Wed Aug 01, 2018 7:55 pm
Pajamas wrote:
Wed Aug 01, 2018 7:50 pm
Consider making it work now and pulling the trigger very soon rather than asking if it can work. You certainly have enough assets and surely your spending is at least somewhat flexible. Biggest risk to your finances would be negative market returns soon in your retirement so take that into account.
Just to make sure I understand by "making it work" -- do you mean to lessen my market exposure by reducing my 70/30 to be much more conservative ?
I was thinking on a general level, more about reducing expenses and having a buffer of near-cash to cover a few years of expenses in case of a market crash to allow time for recovery, but whatever it would take to make it work. Sounds like you have a strong need to stop working soon.

Topic Author
meemow
Posts: 18
Joined: Tue Jul 24, 2018 7:13 pm

Re: Unexpected early retirement - requesting advice

Post by meemow » Wed Aug 01, 2018 8:09 pm

Dottie57 wrote:
Wed Aug 01, 2018 7:58 pm
OP find out about medical after leaving job. Re Health: is this a condition where disability can be claimed and if so, can med ins be retained?

Whatabout a pension? When would it come into effect?
Dottie57,
I am not sure if there is COBRA or if I would be even eligible for it, I would have to find out about that. What I do know is that my MRA (Minimum Retirement Age) is 56 years and 4 months.
If I separate before MRA, I will not get to continue FEHB retiree medical benefits (which would start at age 62 I think).

The struggle I am having is that I don't think I can hang in there another 5 years, I am so exhausted already. The condition (I will refrain from stating the specifics lest I accidentally diverge into a medical question) is one that only very specific cases will qualify for disability.

meemow

KlangFool
Posts: 14144
Joined: Sat Oct 11, 2008 12:35 pm

Re: Unexpected early retirement - requesting advice

Post by KlangFool » Wed Aug 01, 2018 8:10 pm

meemow wrote:
Wed Aug 01, 2018 8:01 pm
KlangFool wrote:
Wed Aug 01, 2018 7:53 pm

meemow,

This is what I used when I was unemployed.

I am a consultant. I am in between projects. Are you looking for a consultant to work on some of your projects?

This tends to stop all other questions.

KlangFool
Yes but then they might try to hire me - and frankly I am just exhausted
meemow,

Come on.

Use one of the following responses:

A) Just say that you are only willing to work 1 hour per day at $2,000 per hour.

B) The project is not interesting enough for you. There is not enough fun.

KlangFool

Dottie57
Posts: 7140
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Unexpected early retirement - requesting advice

Post by Dottie57 » Wed Aug 01, 2018 8:15 pm

meemow wrote:
Wed Aug 01, 2018 8:09 pm
Dottie57 wrote:
Wed Aug 01, 2018 7:58 pm
OP find out about medical after leaving job. Re Health: is this a condition where disability can be claimed and if so, can med ins be retained?

Whatabout a pension? When would it come into effect?
Dottie57,
I am not sure if there is COBRA or if I would be even eligible for it, I would have to find out about that. What I do know is that my MRA (Minimum Retirement Age) is 56 years and 4 months.
If I separate before MRA, I will not get to continue FEHB retiree medical benefits (which would start at age 62 I think).

The struggle I am having is that I don't think I can hang in there another 5 years, I am so exhausted already. The condition (I will refrain from stating the specifics lest I accidentally diverge into a medical question) is one that only very specific cases will qualify for disability.

meemow
Financially the medical and pension are very valuable. Work with your doctor to see what can be done to help you. Do nothing in haste.

JBTX
Posts: 5539
Joined: Wed Jul 26, 2017 12:46 pm

Re: Unexpected early retirement - requesting advice

Post by JBTX » Wed Aug 01, 2018 8:19 pm

meemow wrote:
Wed Aug 01, 2018 7:34 pm
Hello All,

After several years worth of reading this forum and learning a lot from the advice given to others, I have unexpectedly found myself in a position where I might have to retire sooner rather than later. In fact, much sooner than expected – like maybe tomorrow if necessary. It is funny how all these years I was planning and saving for possible lay-offs/outsourcing/off-shoring/down-sizing/firing/etc/etc and, well... none of those things happened. Instead, a completely unexpected medical event caught me off-guard – a real wake up call that I may need hang my hat up now and start taking care of my health. There are some days that I feel completely unable to work – a new feeling for me and very unsettling. My apologies in advance for the very long post to follow. I will pose my questions up front followed by the actual detailed break-down of the assets below:
  • With the funds I have now can I retire? (I think yes, but now that reality is hitting me squre in the face, I'm feeling shaky about this)
  • If I have hit the overall “magic number”, should I rebalance my portfolio to 50/50 instead of sticking w/ the current 70/30? Since I have a rather large amount in bonds and tax exempt on my taxable accounts, my plan would be to live off of those assets (~770K) until I reach 59.5. During that interim time I would like my retirement assets to still grow, so my thinking is to leave things at the current allocation -- is that a good approach? Or is that too risky?
  • Some funds in here have high E/R (I'm looking at you BPTRX!), but a few others like FCNTX and MERDX have given good returns over the past 7 years and I'm a bit reluctant to let them go. I also realize that with my health further declining, I will need to simplify significantly. I would appreciate any feedback / thoughts on this
  • I have heard that getting to financial independence is admired by all but in social settings people always ask “what do you do, where do you work, what is your occupation” which carries a sense of one's social standing. And when one is not able to answer those “occupation” types of questions, one loses that 'social standing' especially if you are a younger person (and I look rather young). Is that true? How do folks navigate that? I get asked those questions a lot, and I worry that once I retire, I will be lost in society and/or be treated with great disdain... I guess I should not care what other people think but oftentimes the quality of our lives is affected by the way others treat us

Thank you so much for reading this post !
Meems

Emergency funds: ~25K
Debt: ~245K Mortgage
Tax Filing Status: Single
Tax Rate: 28% Federal, 5.25% State
Age: 51
Current Asset allocation: ~70% stocks / ~15% bonds / ~15% Cash Instruments (CDs, etc)
Current International allocation: 11% of stocks (or 7.93% of total assets)

Total size of assets: ~3M (not including house or mortgage)

Current Assets
Taxable Accounts (% of total assets)
  • CDs (mostly) and money market: 10.88%
    - CDs: $243K
    - Money Market (Tax exempt VMSXX): $51K
    - Bank account: $40K
  • Foreign Large blend / growth: 2.93%
    - VFWIX: $7.4K (e/r: 0.23%)
    - FDIVX: $82K (e/r: 0.94%)
  • Domestic Large blend / growth: 16.39%
    - VTSAX: $176K (e/r: 0.035%)
    - FCNTX: $137K (e/r: 0.74%)
    - SPY ETF: $80K (e/r: 0.0945%)
    - RYOCX: $25K (e/r: 0.129%)
    - FPURX: $82K (e/r: 0.55%)
  • Bonds: 14.3%
    - EE Bonds: $73.5K
    - Treasury Direct: $10K
    - VWIUX (Tax exempt bonds): $353K
  • Stocks (misc): .06%
Total Taxable: $1360K

Retirement Accounts: 401Ks and IRAs
  • Cash Balance: 4.67%
    - Funds: $142K
  • Foreign Large Blend / Growth: 5.0%
    - TSP-I: $113K (e/r: 0.033%)
    - VWIGX: $23K (e/r: 0.45%)
    - VTSNX: $2K (e/r: 0.09%)
    - VHGEX: $8K (e/r: 0.48%)
    - DODFX (Roth): $6K (e/r: 0.63%)
  • Domestic Large Blend / Growth: 37.84%
    - TCP-C: $259K (e/r: 0.033%)
    - VITSX: $118K (e/r: 0.035%)
    - VTSAX: $68K (e/r: 0.04%)
    - VTSMX: $27K (e/r: 0.14%)
    - VEIRX: $546K (e/r: 0.17%)
    - FCNTX: 7K (e/r: .74%)
    - FCNTX (Roth): $128K (e/r: 0.74%)
  • Domestic Midcap / Smallcap: 6.82%
    - TSP-S: $165K (e/r: 0.033)
    - BPTRX: $25K (e/r: 1.52%)
    - MERDX: $18.4K (e/r: 0.89%)
  • Stocks and Sector Funds: 1.08%
    - GE Stock: $30K
    - VGELX: 4K (e/r: .3%)
Total Retirement Assets: $1689K

Total Assets: ~3,049.4K

Annual Contributions:
  • - Traditional IRA: $5.5K + $1K = $6.5K
    - 401K: $18.5K + $6K = $24.5K
Expected Retirement Income:
  • - Pension: $18K / year (@ 62)
    - SS: not sure how to estimate this if I stop working now @ 51.
Expected Expenses:
  • - Avg Yearly Expenses (including all taxes): $85K
    - Avg Yearly Expenses (w/o Federal taxes, but includes soc sec, etc): $62K
    - Medical Expenses: I would have to pay out of pocket, I am currently on FEHB but once I leave Gov't I believe I will no longer have this. So estimating $15-20K for insurance and other medical expenses
Simulations:
  • - Vanguard PAS' tool: $76K (not incl. Federal taxes) has 99% success rate
    - I also ran the numbers on i-Orp and Firecalc (default settings, I did not tweak any of the knobs, assumed no pension or SS) says a max $95K yearly spending will show a 100 rate of success. That gives me some comfort, mayyybe
On the surface, being single with $3 million, you are in very good shape. Plus an additional modest pension at 62. You likely can easily retire. And it doesn't have to be a permanent decision. If you get this thing under control in a couple of years perhaps you can work at a job that pays less but you enjoy.

Given you have a government position, are there any options such as PTO, leave of absence, medical leave, disability, etc that would allow you to stay as an employee on leave and keep your benefits?

I am in same position with Contra - I have it in a Roth, and keep watching it, but it has generally kept up or modestly exceeded performance of S&P and other growth counterparts. Sooner or later I'll probably convert it, but I haven't yet.

It might make sense to reduce your AA somewhat. 70% is a perfectly reasonable stock percent for a 50 year old, but it is on the aggressive side. Perhaps go 60% if 50% seems too far. But 50% is reasonable as a conservative allocation, especially for somebody who is having to deal with the stress of medical issues, and will have a modest pension and social security down the road.

I'd really suggest you consider target date or life strategy funds for your retirement accounts. You don't really need any of the stress of all this right now.

As to your last question - in what sort of social situations will you be that this will be an issue? I have a bit of the same thing as I tend to float in and out of employment and contract work. Mostly I think people stop asking because they can never figure out what I am doing/not doing. :D

If I were in your shoes I'd probably say something like (assuming they aren't somebody you want to share the truth with) - "I was an XXXX, but I got burned out/tired of the rat race/tired of the bureacracy and decided to take a break for a while".

delamer
Posts: 9315
Joined: Tue Feb 08, 2011 6:13 pm

Re: Unexpected early retirement - requesting advice

Post by delamer » Wed Aug 01, 2018 8:22 pm

Dottie57 wrote:
Wed Aug 01, 2018 7:58 pm
OP find out about medical after leaving job. Re Health: is this a condition where disability can be claimed and if so, can med ins be retained?

Whatabout a pension? When would it come into effect?

My thought exactly — have you looked into disability retirement?

https://www.opm.gov/forms/pdfimage/sf3112-2.pdf

User avatar
telemark
Posts: 2534
Joined: Sat Aug 11, 2012 6:35 am

Re: Unexpected early retirement - requesting advice

Post by telemark » Wed Aug 01, 2018 8:26 pm

70/30 feels way too aggressive to me, but I'm older and don't have $3 million to work with. Currently at 50/50 with about $1.25 million, but my projected expenses are also lower. On the expensive funds, I would drop them immediately. Costs definitely matter when you're at 1% and higher.

> What do you do?

I get asked this a lot, and I say "I'm retired now, but I used to be a computer programmer". The reaction is usually on the lines of "congratulations, you have to be pretty smart to pull that off", but I'm pushing 60 and not likely to be mistaken for someone in his forties. If anyone has felt disdain they did a good job of hiding it.

Medical costs are the big unknown here. If you can keep your adjusted taxable income (MAGI) under four times the poverty level, about $48K for a single, you should qualify for an ACA subsidy that limits your expenses to about $400/month. That shouldn't be too hard if you're pulling expenses from your taxable investments. Unless the law changes, of course. Roth conversions count as taxable income so this limits your ability to do that.

ColoRetiredGirl
Posts: 163
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Location: Colorado

Re: Unexpected early retirement - requesting advice

Post by ColoRetiredGirl » Wed Aug 01, 2018 8:31 pm

meemow wrote:
Wed Aug 01, 2018 7:34 pm
Hello All,

After several years worth of reading this forum and learning a lot from the advice given to others, I have unexpectedly found myself in a position where I might have to retire sooner rather than later. In fact, much sooner than expected – like maybe tomorrow if necessary. It is funny how all these years I was planning and saving for possible lay-offs/outsourcing/off-shoring/down-sizing/firing/etc/etc and, well... none of those things happened. Instead, a completely unexpected medical event caught me off-guard – a real wake up call that I may need hang my hat up now and start taking care of my health. There are some days that I feel completely unable to work – a new feeling for me and very unsettling. My apologies in advance for the very long post to follow. I will pose my questions up front followed by the actual detailed break-down of the assets below:
  • With the funds I have now can I retire? (I think yes, but now that reality is hitting me squre in the face, I'm feeling shaky about this)
  • If I have hit the overall “magic number”, should I rebalance my portfolio to 50/50 instead of sticking w/ the current 70/30? Since I have a rather large amount in bonds and tax exempt on my taxable accounts, my plan would be to live off of those assets (~770K) until I reach 59.5. During that interim time I would like my retirement assets to still grow, so my thinking is to leave things at the current allocation -- is that a good approach? Or is that too risky?
  • Some funds in here have high E/R (I'm looking at you BPTRX!), but a few others like FCNTX and MERDX have given good returns over the past 7 years and I'm a bit reluctant to let them go. I also realize that with my health further declining, I will need to simplify significantly. I would appreciate any feedback / thoughts on this
  • I have heard that getting to financial independence is admired by all but in social settings people always ask “what do you do, where do you work, what is your occupation” which carries a sense of one's social standing. And when one is not able to answer those “occupation” types of questions, one loses that 'social standing' especially if you are a younger person (and I look rather young). Is that true? How do folks navigate that? I get asked those questions a lot, and I worry that once I retire, I will be lost in society and/or be treated with great disdain... I guess I should not care what other people think but oftentimes the quality of our lives is affected by the way others treat us

Thank you so much for reading this post !
Meems

Emergency funds: ~25K
Debt: ~245K Mortgage
Tax Filing Status: Single
Tax Rate: 28% Federal, 5.25% State
Age: 51
Current Asset allocation: ~70% stocks / ~15% bonds / ~15% Cash Instruments (CDs, etc)
Current International allocation: 11% of stocks (or 7.93% of total assets)

Total size of assets: ~3M (not including house or mortgage)

Current Assets
Taxable Accounts (% of total assets)
  • CDs (mostly) and money market: 10.88%
    - CDs: $243K
    - Money Market (Tax exempt VMSXX): $51K
    - Bank account: $40K
  • Foreign Large blend / growth: 2.93%
    - VFWIX: $7.4K (e/r: 0.23%)
    - FDIVX: $82K (e/r: 0.94%)
  • Domestic Large blend / growth: 16.39%
    - VTSAX: $176K (e/r: 0.035%)
    - FCNTX: $137K (e/r: 0.74%)
    - SPY ETF: $80K (e/r: 0.0945%)
    - RYOCX: $25K (e/r: 0.129%)
    - FPURX: $82K (e/r: 0.55%)
  • Bonds: 14.3%
    - EE Bonds: $73.5K
    - Treasury Direct: $10K
    - VWIUX (Tax exempt bonds): $353K
  • Stocks (misc): .06%
Total Taxable: $1360K

Retirement Accounts: 401Ks and IRAs
  • Cash Balance: 4.67%
    - Funds: $142K
  • Foreign Large Blend / Growth: 5.0%
    - TSP-I: $113K (e/r: 0.033%)
    - VWIGX: $23K (e/r: 0.45%)
    - VTSNX: $2K (e/r: 0.09%)
    - VHGEX: $8K (e/r: 0.48%)
    - DODFX (Roth): $6K (e/r: 0.63%)
  • Domestic Large Blend / Growth: 37.84%
    - TCP-C: $259K (e/r: 0.033%)
    - VITSX: $118K (e/r: 0.035%)
    - VTSAX: $68K (e/r: 0.04%)
    - VTSMX: $27K (e/r: 0.14%)
    - VEIRX: $546K (e/r: 0.17%)
    - FCNTX: 7K (e/r: .74%)
    - FCNTX (Roth): $128K (e/r: 0.74%)
  • Domestic Midcap / Smallcap: 6.82%
    - TSP-S: $165K (e/r: 0.033)
    - BPTRX: $25K (e/r: 1.52%)
    - MERDX: $18.4K (e/r: 0.89%)
  • Stocks and Sector Funds: 1.08%
    - GE Stock: $30K
    - VGELX: 4K (e/r: .3%)
Total Retirement Assets: $1689K

Total Assets: ~3,049.4K

Annual Contributions:
  • - Traditional IRA: $5.5K + $1K = $6.5K
    - 401K: $18.5K + $6K = $24.5K
Expected Retirement Income:
  • - Pension: $18K / year (@ 62)
    - SS: not sure how to estimate this if I stop working now @ 51.
Expected Expenses:
  • - Avg Yearly Expenses (including all taxes): $85K
    - Avg Yearly Expenses (w/o Federal taxes, but includes soc sec, etc): $62K
    - [b[/b][/b]Medical Expenses: I would have to pay out of pocket, I am currently on FEHB but once I leave Gov't I believe I will no longer have this. So estimating $15-20K for insurance and other medical expenses


Simulations:
  • - Vanguard PAS' tool: $76K (not incl. Federal taxes) has 99% success rate
    - I also ran the numbers on i-Orp and Firecalc (default settings, I did not tweak any of the knobs, assumed no pension or SS) says a max $95K yearly spending will show a 100 rate of success. That gives me some comfort, mayyybe
Are you eligible for a pension with the government? If so, you should be able to get health insurance through them or from FedVIP. You may want to ask your HR department to see if you are eligible for early retirement and/or continued medical benefits.

To answer your question about “occupation” and “social standing” there are two approaches 1) ask them why they are asking (not the friendly approach) or 2) Tell them you are a retired “from whatever your occupation was” and then ask them their occupation. On occasion I sometimes give them a “really?” expression letting them know the question is inappropriate. Frankly, my job never defined who I am. Nevertheless, people are always impressed by my “occupation “. IMHO, who cares what you did for a living. I am more interested in what makes you you such as hobbies, life experiences etc. Trust me, do not let those type of people rent space in your head.

mouses
Posts: 3905
Joined: Sat Oct 24, 2015 12:24 am

Re: Unexpected early retirement - requesting advice

Post by mouses » Wed Aug 01, 2018 8:33 pm

I hope things go well with your health. Take good care of yourself as much as you can.

If people ask what you're doing, say you're a ghost writer. If they ask for who, say you can't divulge that.

Dottie57
Posts: 7140
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Unexpected early retirement - requesting advice

Post by Dottie57 » Wed Aug 01, 2018 8:45 pm

mouses wrote:
Wed Aug 01, 2018 8:33 pm
If people ask what you're doing, say you're a ghost writer. If they ask for who, say you can't divulge that.

:D Love the answer.

Topic Author
meemow
Posts: 18
Joined: Tue Jul 24, 2018 7:13 pm

Re: Unexpected early retirement - requesting advice

Post by meemow » Wed Aug 01, 2018 9:03 pm

Dottie57 wrote:
Wed Aug 01, 2018 8:15 pm
Financially the medical and pension are very valuable. Work with your doctor to see what can be done to help you. Do nothing in haste.
Thank you - I needed to hear that, it's probably not what I was wishing to hear but something I needed to hear

NightFall
Posts: 267
Joined: Wed Mar 12, 2014 4:38 pm

Re: Unexpected early retirement - requesting advice

Post by NightFall » Thu Aug 02, 2018 7:04 am

meemow wrote:
Wed Aug 01, 2018 8:01 pm
KlangFool wrote:
Wed Aug 01, 2018 7:53 pm

meemow,

This is what I used when I was unemployed.

I am a consultant. I am in between projects. Are you looking for a consultant to work on some of your projects?

This tends to stop all other questions.

KlangFool
Yes but then they might try to hire me - and frankly I am just exhausted
There was a thread about what to tell people you do when you were retired. I think my favorite response was "part-time porn star". You could use "professional job-seeker" or some other amusing response. I'd just use the truth.

Call_Me_Op
Posts: 7384
Joined: Mon Sep 07, 2009 2:57 pm
Location: Milky Way

Re: Unexpected early retirement - requesting advice

Post by Call_Me_Op » Thu Aug 02, 2018 7:50 am

If someone asks what you do, just tell them you're retired. They will think you are wealthy (which is pretty much true).
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

GmanJeff
Posts: 523
Joined: Sun Jun 11, 2017 7:12 am

Re: Unexpected early retirement - requesting advice

Post by GmanJeff » Thu Aug 02, 2018 8:01 am

In my view, your highest priority is to better understand your options for retaining FEHB post-separation. If available to you, the FEHB will greatly mitigate your financial risk associated with future medical expenses. Generally, you must be entitled to an immediate annuity under a retirement system for civilians, and must have been continuously enrolled in the program for the 5 years preceding your retirement. Consequently, you may need to qualify for a disability retirement. If you do not meet the criteria for such a retirement, you're unlikely to be able to remain covered by the FEHB and will have to plan accordingly, which means analyzing your finances with consideration given to your anticipated medical and health insurance expenses.

Rupert
Posts: 4122
Joined: Fri Aug 17, 2012 12:01 pm

Re: Unexpected early retirement - requesting advice

Post by Rupert » Thu Aug 02, 2018 8:10 am

meemow wrote:
Wed Aug 01, 2018 9:03 pm
Dottie57 wrote:
Wed Aug 01, 2018 8:15 pm
Financially the medical and pension are very valuable. Work with your doctor to see what can be done to help you. Do nothing in haste.
Thank you - I needed to hear that, it's probably not what I was wishing to hear but something I needed to hear
Even if you don't qualify for disability retirement, perhaps requesting a reasonable accommodation from your agency -- possibly including a move to a job with less responsibility and stress -- would work? I would do just about anything to get and keep federal retiree health benefits. They're almost invaluable in this day and age.

lostdog
Posts: 2046
Joined: Thu Feb 04, 2016 2:15 pm

Re: Unexpected early retirement - requesting advice

Post by lostdog » Thu Aug 02, 2018 8:12 am

I am 42. When asked, I tell people I am retired. Nothing changed. I promise you, if they're your real friends, they'll still be your friends. Not one person in my friend circle has made any bad remarks. It really is about a person's character, not wealth.

It also helps to develop the habit of not caring what other people think of you.
Total World Stock and Total World Bond. The simple two fund diversified portfolio. "Simplicity is the master key to financial success."

smitcat
Posts: 4320
Joined: Mon Nov 07, 2016 10:51 am

Re: Unexpected early retirement - requesting advice

Post by smitcat » Thu Aug 02, 2018 8:59 am

lostdog wrote:
Thu Aug 02, 2018 8:12 am
I am 42. When asked, I tell people I am retired. Nothing changed. I promise you, if they're your real friends, they'll still be your friends. Not one person in my friend circle has made any bad remarks. It really is about a person's character, not wealth.

It also helps to develop the habit of not caring what other people think of you.
Absolutely true.

Topic Author
meemow
Posts: 18
Joined: Tue Jul 24, 2018 7:13 pm

Re: Unexpected early retirement - requesting advice

Post by meemow » Thu Aug 02, 2018 6:51 pm

JBTX wrote:
Wed Aug 01, 2018 8:19 pm
On the surface, being single with $3 million, you are in very good shape. Plus an additional modest pension at 62. You likely can easily retire. And it doesn't have to be a permanent decision. If you get this thing under control in a couple of years perhaps you can work at a job that pays less but you enjoy.
Right - as you say it does look that way on the surface. But given the fact that I have been considering retiring so early... and with future health issues, the picture stops looking as rosy. Also anecdotal evidence from people around me, when I see them retire, they don't often come back
Given you have a government position, are there any options such as PTO, leave of absence, medical leave, disability, etc that would allow you to stay as an employee on leave and keep your benefits?
It's possible - I am really blessed to have this job and so I am currently exploring all options at the moment...
I am in same position with Contra - I have it in a Roth, and keep watching it, but it has generally kept up or modestly exceeded performance of S&P and other growth counterparts. Sooner or later I'll probably convert it, but I haven't yet.
Contrafund was the first investment I ever made in my early twenties and have held onto it since, because it's done reasonably okay over the years, but at the point I have to simplify, I will change it over to VTSAX
As to your last question - in what sort of social situations will you be that this will be an issue? I have a bit of the same thing as I tend to float in and out of employment and contract work. Mostly I think people stop asking because they can never figure out what I am doing/not doing. :D
After reading a few of these responses, methinks I need to grow a thicker skin !

Topic Author
meemow
Posts: 18
Joined: Tue Jul 24, 2018 7:13 pm

Re: Unexpected early retirement - requesting advice

Post by meemow » Thu Aug 02, 2018 7:00 pm

delamer wrote:
Wed Aug 01, 2018 8:22 pm
Dottie57 wrote:
Wed Aug 01, 2018 7:58 pm
OP find out about medical after leaving job. Re Health: is this a condition where disability can be claimed and if so, can med ins be retained?
Whatabout a pension? When would it come into effect?
My thought exactly — have you looked into disability retirement?

https://www.opm.gov/forms/pdfimage/sf3112-2.pdf
You and Dottie57 bring up good questions. I am working closely with a few Dr's to figure this out - so as of now I am not sure if I would qualify for disability. In the meantime, the only reason these are even possibilities (FERS disability, medical insurance, retiree medical, etc) is because I have this job. And I am grateful for it - so while trying to work out the medical stuff, today, I have resolved myself to hang in there as best as I can - I need the medical insurance.

aristotelian
Posts: 6464
Joined: Wed Jan 11, 2017 8:05 pm

Re: Unexpected early retirement - requesting advice

Post by aristotelian » Thu Aug 02, 2018 7:08 pm

You will be fine with $3M plus Pension and SS.

Does the $85K assume your current tax rate or your retirement tax rate? I would re-run the numbers assuming you pay off your mortgage and retirement tax rate, which is likely a lot lower.

Regarding SS, this is an excellent tool: https://socialsecurity.tools/app.html

As far as what to tell people, I don't think anyone can hold it against you that you are retired due to medical reasons. Anyone who would hold it against you is not the kind of person you need to worry about.

For tax efficiency you probably want to convert more of your pre-tax accounts to bonds and buy stock in your taxable account.

Not a big deal, but I hope the GE stock was a recent purchase :)

Topic Author
meemow
Posts: 18
Joined: Tue Jul 24, 2018 7:13 pm

Re: Unexpected early retirement - requesting advice

Post by meemow » Thu Aug 02, 2018 7:14 pm

telemark wrote:
Wed Aug 01, 2018 8:26 pm
70/30 feels way too aggressive to me, but I'm older and don't have $3 million to work with. Currently at 50/50 with about $1.25 million, but my projected expenses are also lower. On the expensive funds, I would drop them immediately. Costs definitely matter when you're at 1% and higher.
It is rather aggressive, but I was invested even more aggressively prior to this and only recently moved 15% to bonds, which was a pretty big adjustment for me. I still have a ways to go...

Regarding projected expenses, a lot of that are the various taxes (Fed, state, SS, property tax, Medicare, FERS pension). My non-tax expenditures not including any of the tax items listed above is about $37K. I'm always a bit stymied when people in general talk about yearly expenditures, but don't specify which taxes are included or excluded :confused because for me the numbers can be grossly different

Topic Author
meemow
Posts: 18
Joined: Tue Jul 24, 2018 7:13 pm

Re: Unexpected early retirement - requesting advice

Post by meemow » Thu Aug 02, 2018 7:29 pm

aristotelian wrote:
Thu Aug 02, 2018 7:08 pm
You will be fine with $3M plus Pension and SS.

Does the $85K assume your current tax rate or your retirement tax rate? I would re-run the numbers assuming you pay off your mortgage and retirement tax rate, which is likely a lot lower.

Regarding SS, this is an excellent tool: https://socialsecurity.tools/app.html
The $85K is current tax rate for everything (state, federal, etc), not during retirement. I thought it best to over-estimate my expenses
For tax efficiency you probably want to convert more of your pre-tax accounts to bonds and buy stock in your taxable account.
Yes, I quite have it backwards don't I? I recently learned that my index funds are very tax efficient whereas bond funds much less so and should ideally be placed in tax advantaged accounts. I just haven't gotten around to making those changes yet... (see point below)
Not a big deal, but I hope the GE stock was a recent purchase :)
Haha - yes recent as in "30-years ago recent"
I had toyed with the idea of selling a number of times over the years, but never made the time to do so and got distracted by other non-financial things. Now it is less than half of what it was at its height - a mistake and hopefully lesson learned !

Topic Author
meemow
Posts: 18
Joined: Tue Jul 24, 2018 7:13 pm

Re: Unexpected early retirement - requesting advice

Post by meemow » Thu Aug 02, 2018 7:31 pm

mouses wrote:
Wed Aug 01, 2018 8:33 pm
I hope things go well with your health. Take good care of yourself as much as you can.

If people ask what you're doing, say you're a ghost writer. If they ask for who, say you can't divulge that.
Thank you so much for your kind words, it is much appreciated :-)

delamer
Posts: 9315
Joined: Tue Feb 08, 2011 6:13 pm

Re: Unexpected early retirement - requesting advice

Post by delamer » Thu Aug 02, 2018 7:33 pm

meemow wrote:
Thu Aug 02, 2018 7:14 pm
telemark wrote:
Wed Aug 01, 2018 8:26 pm
70/30 feels way too aggressive to me, but I'm older and don't have $3 million to work with. Currently at 50/50 with about $1.25 million, but my projected expenses are also lower. On the expensive funds, I would drop them immediately. Costs definitely matter when you're at 1% and higher.
It is rather aggressive, but I was invested even more aggressively prior to this and only recently moved 15% to bonds, which was a pretty big adjustment for me. I still have a ways to go...

Regarding projected expenses, a lot of that are the various taxes (Fed, state, SS, property tax, Medicare, FERS pension). My non-tax expenditures not including any of the tax items listed above is about $37K. I'm always a bit stymied when people in general talk about yearly expenditures, but don't specify which taxes are included or excluded :confused because for me the numbers can be grossly different

The payroll taxes are the easiest to account for, because you know they’ll go to zero once you stop working.

Property taxes shouldn’t change unless you move.

Income taxes can be hard to estimate, since they will go down but not disappear. But using an app like TaxCaster will do a good job with a federal estimate.

JBTX
Posts: 5539
Joined: Wed Jul 26, 2017 12:46 pm

Re: Unexpected early retirement - requesting advice

Post by JBTX » Thu Aug 02, 2018 8:46 pm

meemow wrote:
Thu Aug 02, 2018 6:51 pm
JBTX wrote:
Wed Aug 01, 2018 8:19 pm
On the surface, being single with $3 million, you are in very good shape. Plus an additional modest pension at 62. You likely can easily retire. And it doesn't have to be a permanent decision. If you get this thing under control in a couple of years perhaps you can work at a job that pays less but you enjoy.
Right - as you say it does look that way on the surface. But given the fact that I have been considering retiring so early... and with future health issues, the picture stops looking as rosy. Also anecdotal evidence from people around me, when I see them retire, they don't often come back
Given you have a government position, are there any options such as PTO, leave of absence, medical leave, disability, etc that would allow you to stay as an employee on leave and keep your benefits?
It's possible - I am really blessed to have this job and so I am currently exploring all options at the moment...
I am in same position with Contra - I have it in a Roth, and keep watching it, but it has generally kept up or modestly exceeded performance of S&P and other growth counterparts. Sooner or later I'll probably convert it, but I haven't yet.
Contrafund was the first investment I ever made in my early twenties and have held onto it since, because it's done reasonably okay over the years, but at the point I have to simplify, I will change it over to VTSAX
As to your last question - in what sort of social situations will you be that this will be an issue? I have a bit of the same thing as I tend to float in and out of employment and contract work. Mostly I think people stop asking because they can never figure out what I am doing/not doing. :D
After reading a few of these responses, methinks I need to grow a thicker skin !
Speaking of disability, is social security disability an option (SSDI). If you qualified you should qualify for Medicare eventually, I think.

fsrph
Posts: 1068
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Location: Pa.

Re: Unexpected early retirement - requesting advice

Post by fsrph » Thu Aug 02, 2018 9:16 pm

meemow wrote:
Wed Aug 01, 2018 9:03 pm
Dottie57 wrote:
Wed Aug 01, 2018 8:15 pm
Financially the medical and pension are very valuable. Work with your doctor to see what can be done to help you. Do nothing in haste.
Thank you - I needed to hear that, it's probably not what I was wishing to hear but something I needed to hear
First, best wishes in dealing with your health issue. I agree with Dottie in "do nothing in haste". Can't you take s medical leave till you sort things out? I think you can comfortably retire with your assets. As far as your asset allocation that's more of a personal choice and can always be second guessed depending on how stocks perform. Personally, I would reduce equity exposure to at least 50/50. I'm a believer in Bill Bernstein's saying that if you've won the game then stop playing. In fact, right now I'm about 30% stocks and I'm comfortable with this allocation. Good luck.

Francis
"Success is getting what you want. Happiness is wanting what you get." | Dale Carnegie

bhough
Posts: 79
Joined: Wed Feb 15, 2017 6:53 pm

Re: Unexpected early retirement - requesting advice

Post by bhough » Thu Aug 02, 2018 9:31 pm

Dear OP,

I'm sorry about your health problems. Here are my thoughts:

1) Can I retire? Yes
2) Should I rebalance? No
3) How should I answer what do you do? For the first year, say that you are taking a mid-life sabbatical. By the end of that year, I suspect that you'll have time to figure out what you want to do with what time you have remaining. Then answer with that.

Congratulations on your nest egg, hard work and wise choices. I wish you a long and happy life.
b

Osprey
Posts: 42
Joined: Sat May 27, 2017 3:04 am

Re: Unexpected early retirement - requesting advice

Post by Osprey » Thu Aug 02, 2018 9:59 pm

Very sorry to hear about your medical condition. Have u considered requesting to go on up to 12 weeks of FMLA unpaid or sick leave to focus on your medical issues and then see if you are well enough to return to work?

Rwsawbones
Posts: 112
Joined: Fri Jan 20, 2017 11:21 pm

Re: Unexpected early retirement - requesting advice

Post by Rwsawbones » Thu Aug 02, 2018 11:30 pm

I am sorry to hear of your ill health.

When asked about your occupation when retired the accurate answer is that you are an investor.

As far as disability is concerned though it might not apply to you butcfor other posters should one qualify for Social Security Disability after a 6 month lag the benefit is similar to the benefit at full retirement age and after 2 years of benefits regardless of age one is eligible for medicare.

I agree with not acting in haste. Transitions are stressful and often professional counseling can help one sort out issues.

In your case the good news is that you have significant financial assets and acumen.

I wish you well.

Rwsawbones
Posts: 112
Joined: Fri Jan 20, 2017 11:21 pm

Re: Unexpected early retirement - requesting advice

Post by Rwsawbones » Thu Aug 02, 2018 11:36 pm

Another thought. I certainly hope you health improves. But if it does not you may be eligible for Social Security disability at at later date

Dandy
Posts: 6001
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Re: Unexpected early retirement - requesting advice

Post by Dandy » Fri Aug 03, 2018 5:58 am

Sorry about your medical issue I'm sure that has come out of left field and is a cause of much stress.

You seem to have enough assets but I'm not sure I'd stick with a 70/30 allocation especially after such a long bull market and with the prospects of future employment uncertain to say the least. I'd lean toward 50/50 or so.

A big risk is health insurance/medical costs. You need to determine your post retirement coverage/premiums/insurer. I would also talk to Medicare/Social Security to determine coverage, qualification for disability, etc. I would also discuss your condition with a trusted doctor to determine likely outcomes/time frames/treatments, if any/costs, etc. It might be information you don't want to hear but it might be critical to your financial planning.

It would make sense to simplify your portfolio. You should be in a lower tax bracket soon (unfortunately) which should enable you to even adjust taxable investments, if needed with less tax exposure. I wouldn't stay in love with high expense funds due to past performance.

It is also time to consider trimming unnecessary expenses and get a feel for your base line expense run rate.

Best of luck with your health and retirement planning.

carolinaman
Posts: 3887
Joined: Wed Dec 28, 2011 9:56 am
Location: North Carolina

Re: Unexpected early retirement - requesting advice

Post by carolinaman » Fri Aug 03, 2018 7:51 am

Dottie57 wrote:
Wed Aug 01, 2018 7:58 pm
OP find out about medical after leaving job. Re Health: is this a condition where disability can be claimed and if so, can med ins be retained?

Whatabout a pension? When would it come into effect?
You should research your health care options now. You mentioned working for some government agency. Many government's have long term disability which may include extended health care options, such as ability to pay for same health care as existing employees. Also, just being a retired employee may give you access to their health care insurance at your cost.

The good news is that $3M assets seems quite adequate for your retirement. However, health care is such a wild card and your existing health issue may limit your options and increase your overall health care costs in a major way.

kaudrey
Posts: 1023
Joined: Fri Nov 22, 2013 2:40 pm

Re: Unexpected early retirement - requesting advice

Post by kaudrey » Fri Aug 03, 2018 11:57 am

As a fellow fed, I'll just re-iterate what some others have said. Look at options such as:

1) FMLA leave
2) Reasonable Accommodation (this could be so many things, it might help)
3) Disability

Also, as to FEHB, if you leave before your MRA, you can get Temporary Coverage for 18 months, so keep that in mind. You have to pay the full cost, but it might be better than an ACA option even with the subsidies you'd get with minimal income.

gotester2000
Posts: 620
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Re: Unexpected early retirement - requesting advice

Post by gotester2000 » Fri Aug 03, 2018 12:45 pm

lostdog wrote:
Thu Aug 02, 2018 8:12 am
I am 42. When asked, I tell people I am retired. Nothing changed. I promise you, if they're your real friends, they'll still be your friends. Not one person in my friend circle has made any bad remarks. It really is about a person's character, not wealth.

It also helps to develop the habit of not caring what other people think of you.
The challenge is to convince yourself first(most difficult) of retiring in young age when you have skills, then family(get along with spouse) - society is easier if you sail through first two.
I have experienced that you should value yourself - otherwise others wont and think you are free and worthless.

Yellowjacket1
Posts: 48
Joined: Sat Jul 28, 2018 2:54 pm

Re: Unexpected early retirement - requesting advice

Post by Yellowjacket1 » Fri Aug 03, 2018 7:47 pm

If you think you may need to apply for Social Security Disability Insurance (SSDI), PM me. I have been on SSDI for last 9 months after unexpectedly being hit with a major health issue. I would be glad to pass along some things for you to consider.

User avatar
tuningfork
Posts: 473
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Re: Unexpected early retirement - requesting advice

Post by tuningfork » Fri Aug 03, 2018 8:28 pm

I agree with others that you have enough $ to retire if you choose to, with future health insurance and other healthcare expenses associated with your condition being the wild card.

If your condition is causing your job to be physically exhausting, is it possible to find another role at the same employer allowing you to keep your current healthcare benefits and bridging you until you qualify for retiree healthcare? That would significantly reduce the risk of being overwhelmed by healthcare expenses.

As for what to tell others after retiring, my answer depends on the situation. It's usually along the lines of "I retired from my career in software development several years ago, and now I am pursuing art full time". If for some reason I don't want to disclose that I'm retired, I just tell them I'm an artist. And if I suspect someone thinks I'm "rich" because I retired early and are trying to get a handout, I point out that I'm on fixed income, and direct them to my website where they can support me by buying some of my art. (I haven't actually had to use that line yet, but I'm prepared just in case). For you, you will need to be doing *something* after you retire, hopefully more than just managing your health condition. Whatever hobbies or volunteer activities you do can become your new "career," even if you don't seriously pursue it for income.

Cruise
Posts: 727
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Re: Unexpected early retirement - requesting advice

Post by Cruise » Sat Aug 04, 2018 1:31 am

OP: Sorry about your health. Congrats on your decision to retire/take leave to work on your health.

Regarding the awkwardness with which you anticipate responding to questions about your employment status: It will feel odd at first, at least until you practice your response, try different approaches, and see which one suits you and a particular occasion.

I'm also youngish-looking for my age, and when I first retired,I told people I retired. Some people who hate their work can't deal with that due to envy. After awhile, I started saying that I am a "semi-retired XXX." Of course, if you work for the government, semi-retirement may not be possible, except if you say that you are a "Contract worker for the CIA." :) Clearly, if your identity is tied to your profession, and you enjoy talking about your profession, then no reason abandon it as a talking tool (i.e., say you are semi-retired.)

Good luck with your health.

Blueraidermike
Posts: 28
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Re: Unexpected early retirement - requesting advice

Post by Blueraidermike » Sat Aug 04, 2018 7:17 am

I am disability due to a serious medical condition, I was dx with stage 4 cancer at 48, worked FT till this spring, now I am 54 and on LTD through my employer. The beauty is that I am still allowed to work PT doing the same job and making decent money...at some point I will give up the PT work if I get sicker or the treatments are too hard. Right now its a nice balance.

I share all this to tell you that I know what your feeling. Before you quit explore all your benefits through work and discuss with you doctor is they will support a disability claim. Understand your rights through the FMLA. If you file FMLA, your benefits are guaranteed for at least one more year. If you are approved for disability, you will qualify for Medicare in two years. So the healthcare costs can be mitigated somewhat. And with your portfolio you can afford Cobra - which can be extended up to 30 months.

Lots to consider, one of the reasons why I still work is I still like it and truthfully don't have the portfolio that you do. Feel free to PM me with questions on the disability part.

Topic Author
meemow
Posts: 18
Joined: Tue Jul 24, 2018 7:13 pm

Re: Unexpected early retirement - requesting advice

Post by meemow » Sun Aug 05, 2018 11:44 am

Hello Everyone;

Thank you so much for your generosity and kindness in taking time out to share your insights during this time of uncertainty. I am so touched at the warmth that an anonymous financial forum could provide - this is indeed a unique place. My original intention was to respond to each post, as there was a gold nugget - or several - embedded in each response, but I lost traction mid-way thru the thread and could not keep up the pace. Instead, I would like to summarize the "plan of action" I will be taking based on the immense wisdom of this board. What jumps out at me first and foremost is how ignorant i am about my work benefits particularly those related to retirees and disability - it is high time for me to ameliorate that. So here goes:

Near-Term Plan:
  • Medical (ongoing)
    - Work closely with physicians
    - Obtain any ‘hard evidence’ if needed to file future claims
  • Learn about various Employment Options:
    - FERS disability eligibility
    - SSI disability eligibility
    - Medical insurance (cobra etc) if/when one leaves job
    - FMLA eligibility
  • Workload adjustment:
    - Ways to adjust current workload in current job
    - Ways employer can provide different job w/ lesser responsibilities (maybe a downgrade)
    - Ways to just work part-time (but still get medical benefits…?)
  • Financial Adjustments:
    - Move towards 50/50 allocation
    - Look to see where I can make potential cuts in expenses
    - Move away from high-expenses funds
    - More accurately assess expenses including taxes (e.g. TaxCaster, socialsecurity.tools)
  • Learn more about Retiree benefits:
    - Understand criteria to get FEHB medical benefits upon retirement
    - Understand criteria to get pension upon retirement
I also got a lot of great and several humorous responses regarding how to answer the "what do you do" question in early retirement! I think this might have been the thread referenced earlier:
viewtopic.php?t=170689

meemow

Osprey
Posts: 42
Joined: Sat May 27, 2017 3:04 am

Re: Unexpected early retirement - requesting advice

Post by Osprey » Sun Aug 05, 2018 1:29 pm

Sounds like an excellent action plan! Another thing to consider is that if your medical condition is long term or permanent and limits significant life activities, you may be considered disabled and entitled to a “reasonable accommodation”to help you perform your job. Suggest you get info from your agency on the reasonable accommodation program.

Good luck!

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