Possible Layoff: Need Assurance That We Will Be Okay

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CyclingDuo
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by CyclingDuo » Fri Nov 01, 2019 10:21 am

HomeStretch wrote:
Thu Oct 31, 2019 8:02 am
With a $4.26k portfolio and $75k annual spend, you have 57x annual expenses saved (before SS income).

You will absolutely positively be fine if you are laid off even without a severance package. Do start updating your resume etc. just to feel like you are doing “something” about a work situation you have no control over. Best of luck.

ETA: if you haven’t already, read CyclingDuo’s thread about layoffs. It has a lot of good info:
viewtopic.php?f=2&t=273092&hilit=Lay+off
The OP has plenty of flexibility thanks to being FI.

He has the latitude of taking a part-time job, or a lower paying job in an area of interest without all of the stress if so desired to fill up some time, purpose, and challenge all while he delays having to tap the savings. Perhaps getting medical coverage, and continuing to save while at it.

OP wrote: Quite honestly, I have been thinking about leaving work for quite some time, but I would really like to save up another $135K to $175K before doing so. But that might not possible now. And while I'd rather be able to leave on my own terms and timeline rather than on my employer's, that might not be possible now either.

Although I was age 56 at the time of my layoff, I can relate to what he said. Especially two of his thoughts (which are rather common thoughts by the way): leaving on my own terms and saving up another chunk of money.

The former did not happen. I was given a 3 month time line for my last day of work, and a 6 month time line for receiving my final paycheck (academia spreads the salary for 9 months of work across 12 months of paychecks). Not quite the leaving on my own terms that one envisions.

The latter included my own internal plans for saving another $250K via maxing out my 403b each year for what I thought would be my remaining years in that position. That was just a calculation based on maxing out the 403b with my pre-tax salary contributions (using the catch up rules for being over age 50) to continue to save and add with an effort to create an additional $10K per year in retirement income (4% of $250K) on top of what we had already saved. The leaving on my own terms to retire at or around a typical professor's retirement age at the institution where I was teaching was simply chosen based on what I had seen many of my former colleagues do in the past 15 years (retire in the mid 60's on average).

The latter did not happen. At least it didn't happen at my previous job. I secured replacement income by the time my last paycheck arrived at the end of 6 months of finding out I was being terminated. So the latter is still underway of happening via different venues as I have continued socking away a healthy chunk of my replacement income.

It looks like the OP could go in many directions since he is FI, only age 42 and still possesses plenty of human capital he could tap into if he chooses to deploy it in case the layoff actually materializes. He may lose out on quitting on his own terms this time around, but could still achieve his other goal of saving another chunk of money via another job/venue. His runway for landing and taking off again is also much longer than the one I faced in my mid 50's. This should provide the OP time to contemplate it all and make some decisions.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

Helo80
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Helo80 » Fri Nov 01, 2019 10:23 am

Yes, I think you can safely afford a 2005 Honda Accord. /s


Unfortunately, this is a prime topic for what frustrates many novice investors about this website --- "I have $X millions of dollars, can I retire before 80? "

OP -- based upon others calculations, you have $4 million plus in assets... my gut feeling is that you all are not huge spenders. You have time to figure out what you want to do. Worse comes to worse... you find a nice home or apartment somewhere and figure out next steps if you get laid off.

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Random Poster
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Random Poster » Fri Nov 01, 2019 10:30 am

EnjoyIt wrote:
Fri Nov 01, 2019 9:37 am
BolderBoy wrote:
Thu Oct 31, 2019 9:43 pm
Random Poster wrote:
Thu Oct 31, 2019 7:29 am
Accordingly, my question to you is: If I lose my employment, and even if I do not receive any sort of severance package, will we be okay?
Almost certainly, you will be okay. If you stop working now, you'll have a lot of zero-based SS years, so I wouldn't count on a lot of $$$ from SS when the time comes.

You might want to run your $$$ numbers through firecalc.com and see if if you can achieve a consistent, 100% "pass" for a very conservative AA. Be pessimistic in your entries.
The way the bend points work in SS, you would be surprised how 15 years of high income will fill up those bend points. I can safely assume that OP has filled up the first bend point and likely very close to filling up the 2nd bend point. The third is not worth the effort.
Yes. If I did the math correctly, I hit the 2nd bend point with one more year of full SS earnings (say, next year's, assuming I can stick around to, say, March or April).

CrazyCatLady
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by CrazyCatLady » Fri Nov 01, 2019 10:39 am

The lack of empathy in this thread sets my teeth on edge. Yes, the OP has more money than most of us will have, and yes I think his anxiety steams from a lot more than money issues. Having said that, why is it acceptable to mock him or discount his concerns, just because he is FI? I personally think his concerns are as valid as someone who posts they are 60 and have $50,000 saved (even if not as drastic). FWIW, jealous is not a good look on anyone...

sg2060
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by sg2060 » Fri Nov 01, 2019 11:13 am

CrazyCatLady wrote:
Fri Nov 01, 2019 10:39 am
The lack of empathy in this thread sets my teeth on edge. Yes, the OP has more money than most of us will have, and yes I think his anxiety steams from a lot more than money issues. Having said that, why is it acceptable to mock him or discount his concerns, just because he is FI? I personally think his concerns are as valid as someone who posts they are 60 and have $50,000 saved (even if not as drastic). FWIW, jealous is not a good look on anyone...
I don't take the responses as jealousy. In my opinion, his fears are symptomatic of an unhealthy relationship toward money at 42. He can use this time as an opportunity to correct / work on the relationship (religion, this forum, psychologist, internal reflection, etc.) or it can exacerbate and become worse as he ages. That would be unfortunate given his circumstances because he has the opportunity to go through life as very few do.

Inframan4712
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Inframan4712 » Fri Nov 01, 2019 11:14 am

The real risk to your financial health, and I’m completely serious, is that your wife will get tired of living like a pauper in a one bedroom rental while you have 4 million in assets, and decide to divorce you and live a carefree life with 2 or more million to spend while she’s young.

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CyclingDuo
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by CyclingDuo » Fri Nov 01, 2019 11:21 am

Random Poster wrote:
Thu Oct 31, 2019 3:49 pm
marcopolo wrote:
Thu Oct 31, 2019 2:39 pm
So, what is really driving this question?

Not long ago you started a thread (viewtopic.php?f=1&t=292873&p=4798664#p4798664) about your fear of quitting, maybe the layoff is really a blessing so you don't have to fret over quitting.
I'm scared. I'm afraid of failure. I'm worried that I'll make a mistake and lose a bunch of money and not be able to get it back. I'm concerned that my wife gets sick and I won't be able to afford her health care bills because I picked the wrong insurance plan, or because I didn't save enough, or because I got selfish and left the working life too early.

It is one thing to plan to leave work, it is another thing to actually do it.

Likewise, it is one thing to anticipate leaving work at a particular point in time of your own choosing, and it is another thing to have that point in time moved to an earlier date that results in a reshuffling of one's plans or projections.

There is security in working in a job one dislikes. There is security in sending money to one's investment account on a regular basis. There is security in the routine and the mundane.

There doesn't seem to be a lot of security in the unknown.

But it seems like the majority of respondents believe that we will be okay. That is comforting.
Well stated about your fears, concerns, and the unknown!

All I can offer is that I had all of those fears, concerns, and trepidation of the unknown as well some 20-21 months ago.

If you are indeed facing a layoff, based on what I went through from the end of February 2018 until today, you are going to have to allow the process of moving through it all the time it takes to unfold. No matter what one's financial position is going into a layoff, I wouldn't wish the experience upon anyone even though it is quite common. In spite of it being common, the process of going through it on a personal basis is not a pleasant experience.

Navigating it all is something you have the latitude to face and come out on the other side of the fears, concerns and unknown with a new vision, new purpose, and a new game plan. Start building a list of Option B's, explore all options, and read as much as you can about a layoff, recovering from a layoff, and start brainstorming about what you want to be doing one year, two years, three years, five years, etc... from now.

21 months later from news of my layoff, I now find nearly 50% of my replacement income coming from an industry that I had absolutely no experience in prior to my layoff. I relish the daily challenge of that portion of my replacement income as it provides purpose, challenge, engagement, is much less stressful than the prior 34 years and also funds my 401k - :D .

Stay positive, but allow the process to unfold and go through everything you are going to have to go through. At some point, the fears, concerns, and the fear of the unknown will all start to dissipate.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

fru-gal
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by fru-gal » Fri Nov 01, 2019 11:47 am

Random Poster wrote:
Thu Oct 31, 2019 7:58 am
I'd like to have $625K or so in cash and maybe use some of that to buy, say, a $400K house with a bit leftover for furniture. As it stands now, with $490K, after setting aside $30K for a future car, $40 for furniture, and $75K to $150K for safe living expenses, the maximum spend on a house is something around $270K or so. Not horrible, but it does limit the choices a bit.
Spend some of the other money for the house. Plus maybe you will find a house you really like for less than $400k. In some states, and you seem very flexible about where you will move to, $400K buys a mansion.

I think you need to practice some relaxation breathing. You are in fine shape financially if you keep your head.

dknightd
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by dknightd » Fri Nov 01, 2019 12:13 pm

retiredjg wrote:
Fri Nov 01, 2019 10:12 am
Age 42 is not the ideal time to buy an annuity, but it might give you the assurance of a steady income if you do end up getting laid off.

The only kind of annuity to consider is a SPIA (single payment immediate annuity). It is essentially like buying a pension with part of your savings. Maybe that would allay some of your discomfort about not having a paycheck from work.

Check out immediateannuities.com (I think).
I do not think there is an ideal time to buy an annuity. I agree a SPIA is the way to go, at least for me.

Insurance companies have this all figured out. They spread the risk, and make some money. I'm not sure what actuarial tables they use, but suspect an 42 year old will get about the same as an average 72, on average, over their lifetime.

If you take an SPIA at 42, you will get less dollars/month, but for hopefully more months.
If you take SPIA at 72, you get more per month, but you have actuarial less months to live.
Do not quote these numbers, but lets pretend at
42 you likely die at 84 on average, at
72 you likely will die at 86. again on average.

I do not know what tables they use. But I do know that on average a 42 year old will die younger than a 72 year old will. Because some 42 year olds will not live to 72. I assume that is taken into account on the actuarial tables they use.

On average, I suspect it does not matter much when you buy one.

You do not buy an annuity to maximize money. You buy an annuity if you value a consistent "income" forever for you and your spouse.

gr7070
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by gr7070 » Fri Nov 01, 2019 12:15 pm

Watty wrote:
Thu Oct 31, 2019 10:54 am
Random Poster wrote:
Thu Oct 31, 2019 8:00 am
Olemiss540 wrote:
Thu Oct 31, 2019 7:36 am
This literally MUST be a joke.
It isn't a joke. Since the news hit, I have felt pretty sick and worried and couldn't sleep at all last night. Got up at 2:00 and came into the office to think and ponder. And to post my query. I do not handle uncertainty well.
Financially you will be fine.

Don't discount the non-financial aspects of being "OK" though since even if you find a new job tomorrow this would still be a big change in your life.
This is a great point. I know of people who have become depressed after a layoff.

I'm the primary bread-wonder. I was laid off during the big recession and I made certain I exercised daily, got up on time every day, and kept busy throughout the day, projects, cooked, cleaned, etc.

The nice thing about the layoff is it made me realize I might not be one of those who gets a job in retirement, like I always thought I would. I was always busy and never bored during the layoff - and that's without spending money where possible.

dknightd
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by dknightd » Fri Nov 01, 2019 12:16 pm

Inframan4712 wrote:
Fri Nov 01, 2019 11:14 am
The real risk to your financial health, and I’m completely serious, is that your wife will get tired of living like a pauper in a one bedroom rental while you have 4 million in assets, and decide to divorce you and live a carefree life with 2 or more million to spend while she’s young.
That could happen! Make damn sure your spouse is included in any decision you make

dknightd
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by dknightd » Fri Nov 01, 2019 12:26 pm

OP if you are scared about getting laid off, start sending out resumes.

edit: You may or may not like the offers you get

EnjoyIt
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by EnjoyIt » Fri Nov 01, 2019 1:02 pm

dknightd wrote:
Fri Nov 01, 2019 12:16 pm
Inframan4712 wrote:
Fri Nov 01, 2019 11:14 am
The real risk to your financial health, and I’m completely serious, is that your wife will get tired of living like a pauper in a one bedroom rental while you have 4 million in assets, and decide to divorce you and live a carefree life with 2 or more million to spend while she’s young.
That could happen! Make damn sure your spouse is included in any decision you make
Damn, you are spot on. This is great advice. All decision need to be discussed.

BTW, if you are comfortable on $65k-$70k per year, then you can easily spend 3-3.5% and cut back if the market tanks. What I would do in this situation is to slowly add lifestyle creep. Increase spending by $500-$1k a month every year. That is, if the spouse would prefer to spend more. It would be a nice compromise while still allowing your assets to grow.

visualguy
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by visualguy » Fri Nov 01, 2019 1:11 pm

dknightd wrote:
Fri Nov 01, 2019 12:16 pm
Inframan4712 wrote:
Fri Nov 01, 2019 11:14 am
The real risk to your financial health, and I’m completely serious, is that your wife will get tired of living like a pauper in a one bedroom rental while you have 4 million in assets, and decide to divorce you and live a carefree life with 2 or more million to spend while she’s young.
That could happen! Make damn sure your spouse is included in any decision you make
Definitely. Retiring so early can kill a relationship. Forcing a lifestyle that the other person didn't bargain for (at least not at that stage in life), downward instead of upward mobility, getting on each other's nerves because of too much time together with nothing much to do, etc.

mathwhiz
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by mathwhiz » Fri Nov 01, 2019 1:33 pm

Good Lord. You need some perspective and some perspective fast. Go to skid row in your city and pass by some of the homeless with drug addictions or mental health issues or better yet volunteer some of your time at a shelter where you can talk to these people.

You are worth $4 Million dollars and are having anxiety attacks about losing your job? That is a mental health issue that a therapist or might help you with. It's completely irrational thought and you need some straight talk.

You are financially independent. You may need professional help to understand that.

CnC
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by CnC » Fri Nov 01, 2019 3:32 pm

Random Poster wrote:
Thu Oct 31, 2019 8:00 am
Olemiss540 wrote:
Thu Oct 31, 2019 7:36 am
This literally MUST be a joke.
It isn't a joke. Since the news hit, I have felt pretty sick and worried and couldn't sleep at all last night. Got up at 2:00 and came into the office to think and ponder. And to post my query. I do not handle uncertainty well.
The problem is that the OP is not thinking clearly about their assets.

They are thinking of only spending dividends.

Op throw the dividend spending out the window. Plan on spending 3% of your total money per year. As long as you don't go over that 3% your money should last you forever let alone the rest of your life.

Since you are young I wouldn't spend 4% of your savings.

All that being said you should be just fine.

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zaboomafoozarg
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by zaboomafoozarg » Fri Nov 01, 2019 3:42 pm

surfstar wrote:
Thu Oct 31, 2019 2:13 pm
If someone in the 0.08% of the richest people in the world is loosing sleep over their money... they have other issues besides finances (and we're not allowed to discuss personal medical items here), but perhaps you should talk to someone if the Bogleheads can't reassure you sufficiently.
The more one has, the more one stands to lose. And while OP's net worth is high for the general population, it is probably middle of the road on this forum.

I can see why OP would be concerned and it seems like now might be a good time to start applying to other jobs and see if something more stable comes along.

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Kurmudjon
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Kurmudjon » Fri Nov 01, 2019 3:48 pm

Inframan4712 wrote:
Fri Nov 01, 2019 11:14 am
The real risk to your financial health, and I’m completely serious, is that your wife will get tired of living like a pauper in a one bedroom rental while you have 4 million in assets, and decide to divorce you and live a carefree life with 2 or more million to spend while she’s young.
+1
“Some of its magic some of its tragic but I had a good life all the way.”

EnjoyIt
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by EnjoyIt » Fri Nov 01, 2019 4:12 pm

zaboomafoozarg wrote:
Fri Nov 01, 2019 3:42 pm
surfstar wrote:
Thu Oct 31, 2019 2:13 pm
If someone in the 0.08% of the richest people in the world is loosing sleep over their money... they have other issues besides finances (and we're not allowed to discuss personal medical items here), but perhaps you should talk to someone if the Bogleheads can't reassure you sufficiently.
The more one has, the more one stands to lose. And while OP's net worth is high for the general population, it is probably middle of the road on this forum.

I can see why OP would be concerned and it seems like now might be a good time to start applying to other jobs and see if something more stable comes along.
I remember a spreadsheet a few years back going around with bogleheads wealth on it. I believe $4 million would have been pretty high up on the list, very much well above average and one of the few outliers.
viewtopic.php?f=2&t=154364

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monkey_business
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by monkey_business » Fri Nov 01, 2019 5:48 pm

bearwithbear wrote:
Thu Oct 31, 2019 4:08 pm
OP,

You will be fine.
Breath.
...
Breath.
gazelle1991 wrote:
Thu Oct 31, 2019 5:01 pm
Now breath. Everything will be fine. :beer
Breathe. :P

marcopolo
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by marcopolo » Sat Nov 02, 2019 5:13 am

visualguy wrote:
Fri Nov 01, 2019 1:11 pm
dknightd wrote:
Fri Nov 01, 2019 12:16 pm
Inframan4712 wrote:
Fri Nov 01, 2019 11:14 am
The real risk to your financial health, and I’m completely serious, is that your wife will get tired of living like a pauper in a one bedroom rental while you have 4 million in assets, and decide to divorce you and live a carefree life with 2 or more million to spend while she’s young.
That could happen! Make damn sure your spouse is included in any decision you make
Definitely. Retiring so early can kill a relationship. Forcing a lifestyle that the other person didn't bargain for (at least not at that stage in life), downward instead of upward mobility, getting on each other's nerves because of too much time together with nothing much to do, etc.
Retiring early can also be great for a relationship, you get to spend more time with the person you love, explore different interests both together, and separately. Unless of course, you are a "glass is half empty" kind of guy, always imagining the worst outcomes of any situation.
Once in a while you get shown the light, in the strangest of places if you look at it right.

pennywise
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by pennywise » Sat Nov 02, 2019 7:40 am

Random Poster wrote:
Thu Oct 31, 2019 3:49 pm

I'm scared. I'm afraid of failure.

It is one thing to plan to leave work, it is another thing to actually do it.

Likewise, it is one thing to anticipate leaving work at a particular point in time of your own choosing, and it is another thing to have that point in time moved to an earlier date that results in a reshuffling of one's plans or projections.

There is security in working in a job one dislikes. There is security in sending money to one's investment account on a regular basis. There is security in the routine and the mundane.

There doesn't seem to be a lot of security in the unknown.
RP, I think you are here seeking reassurance about a qualitative issue-will you be ok as your entire life changes-from a large group that is composed primarily of quantitatively minded folks.

So we've got a question that combines financial issues (quant) with emotional issues (qual) and no surprise the general response is "are you kidding?!" because the quant side is obvious.

As for the qualitative question, it's explained by your comments above and I lived those myself. For many/most people who have had a career spanning decades that earned a reasonable or ample amount, there is a huge level of security in knowing the equation which is basically salary=safety. Whether or not one gets up every morning smiling or snarling, at the end of the week/fortnight/month there is a deposit of funds into the bank account. Predictable and safe. Not to mention one's time is predictably occupied, colleagues and customers form a predictable net of human interaction, and most of life's options are predictably structured around work. When you take a break it's for a planned vacation from work. When you get sick you go to a doctor that is supported by insurance from work. And so on--you know what to expect pretty much every day.

Life may not be lots of fun but it is structured and that for many folks is a huge advantage. The unknown IS scary, no doubt about it. Retirement in particular feels like a door that only swings one way. If you have any agency in the matter it is a huge risk to step through that door knowing your decision is irrevocable.

Although I wasn't laid off, my work situation had become so unpleasant and the economics of leaving so compelling that although it was scary to go, finally the tipping point came and it felt more agonizing to stay. Still, the first couple of months were worrisome until I realized viscerally that retirement didn't mean shutting off the flow of money or that life wouldn't be predictable. It just meant that income shifted so that instead of coming from salary it was going to come from pension, social security and investments. And I had to set up all the predictable ways life needed to be managed instead of having those choices made for me.

It was incredibly reassuring to simply reframe my thinking. There is nothing inherently more solid about retirement income than salary. Jobs can end, companies can close, layoffs can loom. Investments can tank, social security might be cut, and mistakes can be made. But guess what-the quants are telling you something important about the financial part of the equation. You will be ok even if things don't go perfectly. And as for arranging life-health insurance is still available, you can still take great vacations and so on. You just have to become the person to put in the time and energy to set it all up, that's all. You're now your own HR manager as well as boss.

What can't be known till you experience it for yourself is how joyful and happy you will feel once your life settles into a routine that you create, not one that's created for you. Those vacations are a lot more fun when you can go whenever you want for however long you want and enjoy the experience knowing there's no backlog of email and work waiting for you when you return. It's amazingly wonderful to structure your days and your time the way you want to instead of being yoked to a company's schedule. It's priceless to know that you don't have to deal with obnoxious people or soul killing projects any more to keep that income stream flowing.

So as difficult as it might be psychologically to let go, have faith that you will look back from the other side of the decision and say "wow, this is a pretty great way to live". From one who has BTDT, I can assure you it is!
Last edited by pennywise on Sat Nov 02, 2019 1:34 pm, edited 2 times in total.

Ready3Retire
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Ready3Retire » Sat Nov 02, 2019 8:22 am

Pennywise - I found your post very helpful with my angst about retiring after nearly 40 yrs of steady emloyment. End of 2020 CY is my plan. Thanks!

EnjoyIt
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by EnjoyIt » Sat Nov 02, 2019 8:46 am

pennywise wrote:
Sat Nov 02, 2019 7:40 am
Random Poster wrote:
Thu Oct 31, 2019 3:49 pm

I'm scared. I'm afraid of failure.

It is one thing to plan to leave work, it is another thing to actually do it.

Likewise, it is one thing to anticipate leaving work at a particular point in time of your own choosing, and it is another thing to have that point in time moved to an earlier date that results in a reshuffling of one's plans or projections.

There is security in working in a job one dislikes. There is security in sending money to one's investment account on a regular basis. There is security in the routine and the mundane.

There doesn't seem to be a lot of security in the unknown.
RP, I think you are here seeking reassurance about a qualitative issue-will you be ok as your entire life changes-from a large group that is composed primarily of quantitatively minded folks.

So we've got a question that combines financial issues (quant) with emotional issues (qual) and no surprise the general response is "are you kidding?!" because the quant side is obvious.

As for the qualitative question, it's explained by your comments above and I lived those myself. For many/most people who have had a career spanning decades that earned a reasonable or ample amount, there is a huge level of security in knowing the equation which is basically salary=safety. Whether or not one gets up every morning smiling or snarling, at the end of the week/fortnight/month there is a deposit of funds into the bank account. Predictable and safe. Not to mention one's time is predictably occupied, colleagues and customers form a predictable net of human interaction, and most of life's options are predictably structured around work. When you take a break it's for a planned vacation from work. When you get sick you go to a doctor that is supported by insurance from work. And so on--you know what to expect pretty much every day.

Life may not be lots of fun but it is structured and that for many folks is a huge advantage. The unknown IS scary, no doubt about it. Retirement in particular feels like a door that only swings one way. If you have any agency in the matter it is a huge risk to step through that door knowing your decision is irrevocable.

Although I wasn't laid off, my work situation had become so unpleasant and the economics of leaving so compelling that although it was scary to go, finally the tipping point came and it felt more agonizing to stay. Still, the first couple of months were worrisome until I realized viscerally that retirement didn't mean shutting off the flow of money or that life wouldn't be predictable. It just meant that income shifted so that instead of coming from salary it was going to come from pension, social security and investments. And I had to set up all the predictable ways life needed to be managed instead of having those choices made for me.

It was incredibly reassuring to simply reframe my thinking. There is nothing inherently more solid about retirement income than salary. Jobs can end, companies can close, layoffs can loom. Investments can tank, social security might be cut, and mistakes can be made. But guess what-the quants are telling you something important about the financial part of the equation. You will be ok even if things don't go perfectly. And as for arranging life-health insurance is still available, you can take still take great vacations and so on. You just have to become the person to put in the time and energy to set it all up, that's all. You're now your own HR manager as well as boss.

What can't be known till you experience it for yourself is how joyful and happy you will feel once your life settles into a routine that you create, not one that's created for you. Those vacations are a lot more fun when you can go whenever you want for however long you want and enjoy the experience knowing there's no backlog of email and work waiting for you when you return. It's amazingly wonderful to structure your days and your time the way you want to instead of being yoked to a company's schedule It's priceless to know that you don't have to deal with obnoxious people or soul killing projects any more to keep that income stream flowing.

So as difficult as it might be psychologically to let go, have faith that you will look back from the other side of the decision and say "wow, this is a pretty great way to live". From one who has BTDT, I can assure you it is!
What a great post. Thanks for sharing. May I ask, at what age did you finally call it quits? How long have you been retired? How long did it take you to decompress after you finally left your employment?

Also, for OP benefits, what percent of your wealth have your expenses been?

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by retiredjg » Sat Nov 02, 2019 9:04 am

Pennywise, what a great post and probably one of the most helpful so far. :happy

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by tennisplyr » Sat Nov 02, 2019 9:09 am

visualguy wrote:
Thu Oct 31, 2019 12:04 pm
At your age, just focus on finding another job if you lose your current job. Don't obsess about whether you have enough to last you for the rest of your life and your wife's life (which could be 50+ years). You should be able to find another job. You definitely have enough not to stress too much about the situation. Just keep your career on track, or get it back on track.

+1. I found jobs after layoffs in my 50s...stay positive.
Those who move forward with a happy spirit will find that things always work out.

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by tibbitts » Sat Nov 02, 2019 9:53 am

Random Poster wrote:
Thu Oct 31, 2019 10:05 am
bloom2708 wrote:
Thu Oct 31, 2019 9:27 am
I would just rent if you end up somewhere.

Don't rush and buy a house just because you can. It anchors you down. Stay flexible. At least until "new normal" takes hold.
I appreciate this comment.

I am seriously wondering whether it would be better to buy a house now in order to "fix" a large portion of our living expenses or if it would be better to keep renting even if that means that our annual spending is higher than it might be with a house. I'd like to run some anticipated numbers to see what comes out better: obviously, a house comes with upkeep, property taxes, and insurance costs that are higher than what renters insurance costs, but if the total of that is less than what you'd pay in rent, wouldn't buying make more sense even if you reduce your cash holdings?

We aren't sure to where we should move, but we have a few location ideas. Some are cheaper than others, and some have very little rental inventory.

bloom2708 wrote:
Thu Oct 31, 2019 9:27 am
You didn't mention kids. If it is just you and the spouse, the world is your oyster.
No kids that I am aware of.
You say no kids now, but many Boglheads are just starting to consider the possibility of kids at your age (not my recommended strategy, but it's what they do.) So saying you have none now - that you're aware of - is not that same as saying you won''t.

Unlike most here I would also feel somewhat uncomfortable with your situation, although I'm early-retiring now with less than you have. But it's only ten months early for my employment (61 vs. 62), so I have twenty years and one person less to finanace than you already do. That might not be completely rational, in that with an inflation-adjusted smaller amount back in the '80s or '90s, I would have been fine with your situation at your age. At that point my perspective (yes, even after having small investments during the '70s bear market) wouldn't have led me to believe that future returns could be as poor as I envision as somewhat likely today.

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Wannaretireearly » Sat Nov 02, 2019 10:10 am

Great posts and thread. OP, focus on the 'Qualitative factors' regarding what you would do with free time/early retirement. Bucket list, fun jobs, volunteering etc.

I'm starting to think the same way, but am about 10 years away. We can still find another job, but either way, the quant side of the equation needs to be figured out over the next few months/years.

A lot of us in a similar boat. In our 40's and need to plan for early 50s retirement (not the $, cos we've largely got that plan covered with help/guidance here!)
Buy Low, Sell High

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by JGoneRiding » Sat Nov 02, 2019 11:25 am

Random Poster wrote:
Thu Oct 31, 2019 3:49 pm
marcopolo wrote:
Thu Oct 31, 2019 2:39 pm
So, what is really driving this question?

Not long ago you started a thread (viewtopic.php?f=1&t=292873&p=4798664#p4798664) about your fear of quitting, maybe the layoff is really a blessing so you don't have to fret over quitting.
I'm scared. I'm afraid of failure. I'm worried that I'll make a mistake and lose a bunch of money and not be able to get it back. I'm concerned that my wife gets sick and I won't be able to afford her health care bills because I picked the wrong insurance plan, or because I didn't save enough, or because I got selfish and left the working life too early.

It is one thing to plan to leave work, it is another thing to actually do it.

Likewise, it is one thing to anticipate leaving work at a particular point in time of your own choosing, and it is another thing to have that point in time moved to an earlier date that results in a reshuffling of one's plans or projections.

There is security in working in a job one dislikes. There is security in sending money to one's investment account on a regular basis. There is security in the routine and the mundane.

There doesn't seem to be a lot of security in the unknown.

But it seems like the majority of respondents believe that we will be okay. That is comforting.
I get it. I am a worrier too. I plan to quit at 1.5 mil and I have 2 kids.

I have found it helpful to keep a notebook of goals and plans. Write out worried likely hood and how to counter it.

As long as you have a health insurance plan you will be able to afford care. The worst plan out there is still going to be able to provide any care you need because other than Medicare parts b there is always a max. Just make sure the plan includes your doctor.

For invest worry write out your plan and follow it. Long term poor rate of return is just as problematic as loosing 50% if stocks in a drop so you need to split the difference. Follow the bogle path

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by visualguy » Sat Nov 02, 2019 1:17 pm

pennywise,

The view and approach you present make sense for someone in, say, their 60s, but not really at 42/40 when more than half their life, and most of their adult life, is still (most likely) ahead of them.

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Random Poster » Sat Nov 02, 2019 1:39 pm

bhsince87 wrote:
Thu Oct 31, 2019 7:55 pm

My advice going forward:

Let your management know you might be open to a severance package.
How do you do that without running the risk of essentially being fired the next day? What do you say? Are there some magic words to use?

If I mention to my boss “hey, if there is a severance or early retirement offer, please put my name on the list,” isn’t that basically tipping them off that I’m looking to leave and may already have one foot out the door?

And if so, why wouldn’t they just tell me to leave now and save themselves the hassle of having to pay me to do so?

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Random Poster » Sat Nov 02, 2019 1:44 pm

bluebolt wrote:
Thu Oct 31, 2019 2:03 pm
Random Poster wrote:
Thu Oct 31, 2019 9:54 am
Startingover2019 wrote:
Thu Oct 31, 2019 8:45 am
I need to know what kind of furniture people are buying for 40k. Serious question because I have filled up a 3,000 SF house full of furniture for like 8k. But I don’t like a lot of extra stuff. How much house are you buying and where do you buy this furniture from?
Well, we currently rent a 1 bedroom apartment.

If we were to buy a house, it would presumably be a 3 bedroom one. Which would require purchasing two new beds ($2K each, maybe?), some bedside tables ($1K, total?), probably a new couch ($2K, I guess?), some regular tables ($1K?), perhaps some chest or drawers or whatever it is called for the dining room (1K?), probably some rugs ($2K?), likely some window treatments of some sorts (who knows how much that costs), maybe some outdoor seating ($3K?), and probably a lot of paint and the like, or even new flooring ($5K?).

And then we'd need outdoor equipment, like a mower, some shovels, a rake, hoses, and so on. Just the basic stuff that pretty much every homeowner has but likely no apartment dweller does. All of that will likely cost at least $5K.

I'm not sure what the total amount of everything would (or even should) be, but I'm sure that it all adds up quickly.
You don't need to buy all of those things right away and can spread the cost over months or years.

Furniture for unused/guest bedrooms can be added in over time. Same with rugs and window treatments. Heck, I had those disposable paper window shades in place for a long time before I bought real window treatments.

I would guess I spent less than $1K on all the essential things I needed when I moved from an apartment to a condo a few years ago. A couple of ladders, hoses, a few tools, lawn mower, trimmer, blower, rake, shovel, gardening tools.

I spent $400 on a nice outdoor dining set that still looks good today. Certainly no need to buy that right away.
I was thinking more about this last night. We also need to budget for potentially having to buy a washer and dryer, maybe a refrigerator, and those sorts of things.

There are a lot of posts on here about how expensive it is to set up a house for the first time and the purchase price of the house is just the beginning. I’d rather over-budget and have too much than under budget and have to, metaphorically speaking, sleep on the floor and cut the grass with scissors.

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Random Poster » Sat Nov 02, 2019 1:45 pm

Ivygirl wrote:
Thu Oct 31, 2019 6:32 pm
It seems to me this is not a financial problem that needs solving, but a malign spell that needs snapping. It's a ghost story for Halloween or any other day.

Pardon me, OP, but I believe that you have made money a god and have been bringing it tribute for a long time hoping it will look upon you favorably and grant the security you want. But money does not love you and will never have enough tributes, and it doesn't even possess the power to confer the security it keeps promising. It's scamming you. It's lying.

The love of money is the root of all kinds of evil. Really. Withhold its tribute and stop loving it and see if that spell doesn't snap.
You are probably more correct than you imagined.

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Random Poster » Sat Nov 02, 2019 1:48 pm

pennywise wrote:
Sat Nov 02, 2019 7:40 am
It was incredibly reassuring to simply reframe my thinking. There is nothing inherently more solid about retirement income than salary. Jobs can end, companies can close, layoffs can loom. Investments can tank, social security might be cut, and mistakes can be made. But guess what-the quants are telling you something important about the financial part of the equation. You will be ok even if things don't go perfectly. And as for arranging life-health insurance is still available, you can still take great vacations and so on. You just have to become the person to put in the time and energy to set it all up, that's all. You're now your own HR manager as well as boss.
This is very enlightening. Thank you.

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by MotoTrojan » Sat Nov 02, 2019 1:50 pm

Random Poster wrote:
Sat Nov 02, 2019 1:39 pm
bhsince87 wrote:
Thu Oct 31, 2019 7:55 pm

My advice going forward:

Let your management know you might be open to a severance package.
How do you do that without running the risk of essentially being fired the next day? What do you say? Are there some magic words to use?

If I mention to my boss “hey, if there is a severance or early retirement offer, please put my name on the list,” isn’t that basically tipping them off that I’m looking to leave and may already have one foot out the door?

And if so, why wouldn’t they just tell me to leave now and save themselves the hassle of having to pay me to do so?
Also curious. If the manager is smart though I wager it’s in their best interest to hold onto employees that wouldn’t otherwise have left. It’s expensive to replace someone, although I guess if they knew you were leaving they’d sever one less person and take the chance you stay.

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by stoptothink » Sat Nov 02, 2019 1:55 pm

Random Poster wrote:
Sat Nov 02, 2019 1:44 pm
bluebolt wrote:
Thu Oct 31, 2019 2:03 pm
Random Poster wrote:
Thu Oct 31, 2019 9:54 am
Startingover2019 wrote:
Thu Oct 31, 2019 8:45 am
I need to know what kind of furniture people are buying for 40k. Serious question because I have filled up a 3,000 SF house full of furniture for like 8k. But I don’t like a lot of extra stuff. How much house are you buying and where do you buy this furniture from?
Well, we currently rent a 1 bedroom apartment.

If we were to buy a house, it would presumably be a 3 bedroom one. Which would require purchasing two new beds ($2K each, maybe?), some bedside tables ($1K, total?), probably a new couch ($2K, I guess?), some regular tables ($1K?), perhaps some chest or drawers or whatever it is called for the dining room (1K?), probably some rugs ($2K?), likely some window treatments of some sorts (who knows how much that costs), maybe some outdoor seating ($3K?), and probably a lot of paint and the like, or even new flooring ($5K?).

And then we'd need outdoor equipment, like a mower, some shovels, a rake, hoses, and so on. Just the basic stuff that pretty much every homeowner has but likely no apartment dweller does. All of that will likely cost at least $5K.

I'm not sure what the total amount of everything would (or even should) be, but I'm sure that it all adds up quickly.
You don't need to buy all of those things right away and can spread the cost over months or years.

Furniture for unused/guest bedrooms can be added in over time. Same with rugs and window treatments. Heck, I had those disposable paper window shades in place for a long time before I bought real window treatments.

I would guess I spent less than $1K on all the essential things I needed when I moved from an apartment to a condo a few years ago. A couple of ladders, hoses, a few tools, lawn mower, trimmer, blower, rake, shovel, gardening tools.

I spent $400 on a nice outdoor dining set that still looks good today. Certainly no need to buy that right away.
I was thinking more about this last night. We also need to budget for potentially having to buy a washer and dryer, maybe a refrigerator, and those sorts of things.

There are a lot of posts on here about how expensive it is to set up a house for the first time and the purchase price of the house is just the beginning. I’d rather over-budget and have too much than under budget and have to, metaphorically speaking, sleep on the floor and cut the grass with scissors.
Still, very easy to do all <$10k. There is no way we spent even $8k on all furniture, appliances, tools and yard care stuff, etc. when we bought our home 4yrs ago and we have a 4-person family. With your assets, I wouldn't spend a second thinking/worrying about how much it may cost to "set up" a new home. Sure you could spend $100k, but if you don't have extravagant tastes it will literally be a rounding error.

pennywise
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by pennywise » Sat Nov 02, 2019 1:59 pm

EnjoyIt wrote:
Sat Nov 02, 2019 8:46 am

What a great post. Thanks for sharing. May I ask, at what age did you finally call it quits? How long have you been retired? How long did it take you to decompress after you finally left your employment?
Thank you for your kind words.

I had starting thinking about retirement when I turned 60 a couple of years ago. As the work environment got more negative and the financial picture got more clear my timeline kept inching back from full retirement age and eventually I decided to leave the day after I turned 62 which was at the end of August. I actually retired 2 months earlier because logistics changed (sold house, relocated) and it made no difference financially that I was 61 and 10 months old when I became liberated :D .

Therefore since I have completed my first quarter, I consider myself past retirement orientation and officially a retiree trainee. It took me a long time to actually hit send on that email to the boss for all the reasons in my post. And in truth even though I knew intellectually that everything was in place, for the first couple of months I rather too often considered with brief pangs how much money in salary and benefits I'd left on the table and whether or not I'd still find a place in the world to be needed and useful.

But surprisingly quickly as I got our payout streams going I realized that even with a lowered income we still were going to be living on about the same, or a little more, take home 'pay'. So I started to relax. I found volunteer work that is meaningful and rewarding so I started to have fun. And maybe most pleasantly as I experienced life without tight schedules and stress I started to enjoy my days in a way I hadn't in years, actually decades.

Now I am another of those people singing the chorus of how great life is after retirement and how very few of the worries I had about life post-retirement have come to pass. As I noted it can be incredibly scary to let go of the known present and embrace the uncertain future.

But it can also be so rewarding and hopefully my notes from the other side will be helpful for others in the same place emotionally.

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by marcopolo » Sat Nov 02, 2019 2:04 pm

Random Poster wrote:
Sat Nov 02, 2019 1:44 pm
bluebolt wrote:
Thu Oct 31, 2019 2:03 pm
Random Poster wrote:
Thu Oct 31, 2019 9:54 am
Startingover2019 wrote:
Thu Oct 31, 2019 8:45 am
I need to know what kind of furniture people are buying for 40k. Serious question because I have filled up a 3,000 SF house full of furniture for like 8k. But I don’t like a lot of extra stuff. How much house are you buying and where do you buy this furniture from?
Well, we currently rent a 1 bedroom apartment.

If we were to buy a house, it would presumably be a 3 bedroom one. Which would require purchasing two new beds ($2K each, maybe?), some bedside tables ($1K, total?), probably a new couch ($2K, I guess?), some regular tables ($1K?), perhaps some chest or drawers or whatever it is called for the dining room (1K?), probably some rugs ($2K?), likely some window treatments of some sorts (who knows how much that costs), maybe some outdoor seating ($3K?), and probably a lot of paint and the like, or even new flooring ($5K?).

And then we'd need outdoor equipment, like a mower, some shovels, a rake, hoses, and so on. Just the basic stuff that pretty much every homeowner has but likely no apartment dweller does. All of that will likely cost at least $5K.

I'm not sure what the total amount of everything would (or even should) be, but I'm sure that it all adds up quickly.
You don't need to buy all of those things right away and can spread the cost over months or years.

Furniture for unused/guest bedrooms can be added in over time. Same with rugs and window treatments. Heck, I had those disposable paper window shades in place for a long time before I bought real window treatments.

I would guess I spent less than $1K on all the essential things I needed when I moved from an apartment to a condo a few years ago. A couple of ladders, hoses, a few tools, lawn mower, trimmer, blower, rake, shovel, gardening tools.

I spent $400 on a nice outdoor dining set that still looks good today. Certainly no need to buy that right away.
I was thinking more about this last night. We also need to budget for potentially having to buy a washer and dryer, maybe a refrigerator, and those sorts of things.

There are a lot of posts on here about how expensive it is to set up a house for the first time and the purchase price of the house is just the beginning. I’d rather over-budget and have too much than under budget and have to, metaphorically speaking, sleep on the floor and cut the grass with scissors.
You seem to be having some trouble with proportionality. Yes, you may have to spend a few hundred, or even a few thousand dollars on these types of things. But, you have OVER $4M! How much does your portfolio fluctuate everyday? Would you even notice when you spent $500 for a new dryer.

It seems a lot of people worry so much that they pre-emptively "sleep on the floor and cut the grass with scissors." metaphorically speaking, while sitting on a pile of money they will never spend.
Once in a while you get shown the light, in the strangest of places if you look at it right.

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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Random Poster » Sat Nov 02, 2019 5:16 pm

marcopolo wrote:
Sat Nov 02, 2019 2:04 pm
You seem to be having some trouble with proportionality. Yes, you may have to spend a few hundred, or even a few thousand dollars on these types of things. But, you have OVER $4M! How much does your portfolio fluctuate everyday? Would you even notice when you spent $500 for a new dryer.
The total may be over $4 million, but if we buy a house, we certainly won’t still have $4 million.

The taxable account only has $2.8 million in it, with the stock market at record highs. I don’t consider the IRAs and 401k (which would get rolled over to an IRA) to be accessible, although I’m aware that it technically may be or that you could “retrieve” the interest the bond funds in those accounts generate by selling some stock from the taxable account, selling an equivalent amount from the bond fund in the IRA, and buying stock in that account. The IRAs should be the back-up, or reserve, or Plan B account, to be touched in a worst-case scenario or when we reach 60 or later.

So in my mind, yes, the numbers are what they are, but they aren’t the real numbers, if that makes any sense.

You shouldn’t count the $490k in cash because that is earmarked for a house, a replacement car, furniture, moving expenses, and ideally at least 2 years of living expenses, so if I lose my job, burning down the $490k (without finding a replacement job quickly) would mean that those purchases can’t happen, or the price thereof will have to be reduced. And once the money has been spent, it is gone and it might not ever come back, so, yes, I am going to notice spending $500 on anything.

The real number is $2.8 million, at best, which probably should be discounted by at least 10 or 15 percent to account for a market drop off, which makes it $2.38 million, and pulling up to $75,000 a year from that, well, I just don’t know. That seems like a high withdrawal rate, but maybe it will work?

I just feel like once the job goes away, the options start becoming more limited, doors start closing quickly, and decisions have to be made rapidly in order to preserve what we’ve got and not waste it on, say, mindless travel or apartment rent or whatever. Not that these things are necessarily a waste of money, but once it is spent, it is gone, and with no paycheck and only interest and dividends coming in, it seems like we have to be more mindful of what the money is spent on. And to ensure that we have enough of it.

marcopolo
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by marcopolo » Sat Nov 02, 2019 5:32 pm

Random Poster wrote:
Sat Nov 02, 2019 5:16 pm
marcopolo wrote:
Sat Nov 02, 2019 2:04 pm
You seem to be having some trouble with proportionality. Yes, you may have to spend a few hundred, or even a few thousand dollars on these types of things. But, you have OVER $4M! How much does your portfolio fluctuate everyday? Would you even notice when you spent $500 for a new dryer.
The total may be over $4 million, but if we buy a house, we certainly won’t still have $4 million.

The taxable account only has $2.8 million in it, with the stock market at record highs. I don’t consider the IRAs and 401k (which would get rolled over to an IRA) to be accessible, although I’m aware that it technically may be or that you could “retrieve” the interest the bond funds in those accounts generate by selling some stock from the taxable account, selling an equivalent amount from the bond fund in the IRA, and buying stock in that account. The IRAs should be the back-up, or reserve, or Plan B account, to be touched in a worst-case scenario or when we reach 60 or later.

So in my mind, yes, the numbers are what they are, but they aren’t the real numbers, if that makes any sense.

You shouldn’t count the $490k in cash because that is earmarked for a house, a replacement car, furniture, moving expenses, and ideally at least 2 years of living expenses, so if I lose my job, burning down the $490k (without finding a replacement job quickly) would mean that those purchases can’t happen, or the price thereof will have to be reduced. And once the money has been spent, it is gone and it might not ever come back, so, yes, I am going to notice spending $500 on anything.

The real number is $2.8 million, at best, which probably should be discounted by at least 10 or 15 percent to account for a market drop off, which makes it $2.38 million, and pulling up to $75,000 a year from that, well, I just don’t know. That seems like a high withdrawal rate, but maybe it will work?

I just feel like once the job goes away, the options start becoming more limited, doors start closing quickly, and decisions have to be made rapidly in order to preserve what we’ve got and not waste it on, say, mindless travel or apartment rent or whatever. Not that these things are necessarily a waste of money, but once it is spent, it is gone, and with no paycheck and only interest and dividends coming in, it seems like we have to be more mindful of what the money is spent on. And to ensure that we have enough of it.
Even after pretending you don't have money that you do (401k, IRAs), and then discounting what is left by 15%, your WR is still only 3.15%. Many would consider that close to a perpetual rate. In fact, you still have you IRA and 401k.
Someday you will get Soc Sec.

You could stick that $2.38M into TIPs, and it would take you until about age 75. You would the have all your retirement accounts, and Soc Sec.

None of this will change your worrying, because as many have commented, it is not a financial issue.

If you can't see yourself living without an income from a job, then go find another one, if this one even does actually go away. It seems to me that you are borrowing a lot of worry.

If I recall correctly from another post, you are a lawyer, based on your success to date, I would assume a pretty successful one, what makes you think you would have trouble finding another job?
Once in a while you get shown the light, in the strangest of places if you look at it right.

mathwhiz
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by mathwhiz » Sat Nov 02, 2019 6:27 pm

People are incredulous at your posts because you have OPTIONS.

Are you saying you are so non-marketable that you cannot find another job in your industry even at 50% of your current salary? You can trade income for 40 hour weeks and a better work/life balance. You can open up your own LLC and consult part-time for added income. You must have skills that are transferable to other fields. It's not like you are suddenly disabled and cannot work, right?

You also have control over your expenses. You can move to a low cost of living area in a no income tax state. You can slash your housing budget by 50% to 250k. There are countless nice places to live in this country where $250k will buy you a beautiful house in a beautiful area. They may not be in cosmopolitan metros on the coasts but flyover country has plenty of nice places to live too.

Cash
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Cash » Sat Nov 02, 2019 8:22 pm

Startingover2019 wrote:
Thu Oct 31, 2019 8:45 am
Random Poster wrote:
Thu Oct 31, 2019 7:58 am
Jags4186 wrote:
Thu Oct 31, 2019 7:34 am
While part of me wants to ask if this is a serious questions, assuming you are being serious, it seems you are more than fine. I don’t understand what an additional $135k - $175k ontop of the $4.3 million you already have is going to do for you.
Security and optionality, mostly.

I'd like to have $625K or so in cash and maybe use some of that to buy, say, a $400K house with a bit leftover for furniture. As it stands now, with $490K, after setting aside $30K for a future car, $40 for furniture, and $75K to $150K for safe living expenses, the maximum spend on a house is something around $270K or so. Not horrible, but it does limit the choices a bit.
I need to know what kind of furniture people are buying for 40k. Serious question because I have filled up a 3,000 SF house full of furniture for like 8k. But I don’t like a lot of extra stuff. How much house are you buying and where do you buy this furniture from?
https://www.dwr.com/home

stoptothink
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by stoptothink » Sat Nov 02, 2019 8:49 pm

Cash wrote:
Sat Nov 02, 2019 8:22 pm
Startingover2019 wrote:
Thu Oct 31, 2019 8:45 am
Random Poster wrote:
Thu Oct 31, 2019 7:58 am
Jags4186 wrote:
Thu Oct 31, 2019 7:34 am
While part of me wants to ask if this is a serious questions, assuming you are being serious, it seems you are more than fine. I don’t understand what an additional $135k - $175k ontop of the $4.3 million you already have is going to do for you.
Security and optionality, mostly.

I'd like to have $625K or so in cash and maybe use some of that to buy, say, a $400K house with a bit leftover for furniture. As it stands now, with $490K, after setting aside $30K for a future car, $40 for furniture, and $75K to $150K for safe living expenses, the maximum spend on a house is something around $270K or so. Not horrible, but it does limit the choices a bit.
I need to know what kind of furniture people are buying for 40k. Serious question because I have filled up a 3,000 SF house full of furniture for like 8k. But I don’t like a lot of extra stuff. How much house are you buying and where do you buy this furniture from?
https://www.dwr.com/home
"Wire baskets" for $200+, single wooden chairs for $200+, totally unusable tiny bookcases for $300 :shock:. Like anything else, furnishing a home costs as much as you want it to. OP sounding like they'll be eating dinner off a milk crate if they don't buy some insanely overpriced home furnishings.

HEDGEFUNDIE
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by HEDGEFUNDIE » Sat Nov 02, 2019 8:54 pm

stoptothink wrote:
Sat Nov 02, 2019 8:49 pm
Cash wrote:
Sat Nov 02, 2019 8:22 pm
Startingover2019 wrote:
Thu Oct 31, 2019 8:45 am
Random Poster wrote:
Thu Oct 31, 2019 7:58 am
Jags4186 wrote:
Thu Oct 31, 2019 7:34 am
While part of me wants to ask if this is a serious questions, assuming you are being serious, it seems you are more than fine. I don’t understand what an additional $135k - $175k ontop of the $4.3 million you already have is going to do for you.
Security and optionality, mostly.

I'd like to have $625K or so in cash and maybe use some of that to buy, say, a $400K house with a bit leftover for furniture. As it stands now, with $490K, after setting aside $30K for a future car, $40 for furniture, and $75K to $150K for safe living expenses, the maximum spend on a house is something around $270K or so. Not horrible, but it does limit the choices a bit.
I need to know what kind of furniture people are buying for 40k. Serious question because I have filled up a 3,000 SF house full of furniture for like 8k. But I don’t like a lot of extra stuff. How much house are you buying and where do you buy this furniture from?
https://www.dwr.com/home
"Wire baskets" for $200+, single wooden chairs for $200+, totally unusable tiny bookcases for $300 :shock:. Like anything else, furnishing a home costs as much as you want it to. OP sounding like they'll be eating dinner off a milk crate if they don't buy some insanely overpriced home furnishings.
How else would one spend one’s tech salary?

FWIW, I prefer https://www.roomandboard.com

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willthrill81
Posts: 13939
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Location: USA

Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by willthrill81 » Sat Nov 02, 2019 9:14 pm

marcopolo wrote:
Sat Nov 02, 2019 5:32 pm
Random Poster wrote:
Sat Nov 02, 2019 5:16 pm
marcopolo wrote:
Sat Nov 02, 2019 2:04 pm
You seem to be having some trouble with proportionality. Yes, you may have to spend a few hundred, or even a few thousand dollars on these types of things. But, you have OVER $4M! How much does your portfolio fluctuate everyday? Would you even notice when you spent $500 for a new dryer.
The total may be over $4 million, but if we buy a house, we certainly won’t still have $4 million.

The taxable account only has $2.8 million in it, with the stock market at record highs. I don’t consider the IRAs and 401k (which would get rolled over to an IRA) to be accessible, although I’m aware that it technically may be or that you could “retrieve” the interest the bond funds in those accounts generate by selling some stock from the taxable account, selling an equivalent amount from the bond fund in the IRA, and buying stock in that account. The IRAs should be the back-up, or reserve, or Plan B account, to be touched in a worst-case scenario or when we reach 60 or later.

So in my mind, yes, the numbers are what they are, but they aren’t the real numbers, if that makes any sense.

You shouldn’t count the $490k in cash because that is earmarked for a house, a replacement car, furniture, moving expenses, and ideally at least 2 years of living expenses, so if I lose my job, burning down the $490k (without finding a replacement job quickly) would mean that those purchases can’t happen, or the price thereof will have to be reduced. And once the money has been spent, it is gone and it might not ever come back, so, yes, I am going to notice spending $500 on anything.

The real number is $2.8 million, at best, which probably should be discounted by at least 10 or 15 percent to account for a market drop off, which makes it $2.38 million, and pulling up to $75,000 a year from that, well, I just don’t know. That seems like a high withdrawal rate, but maybe it will work?

I just feel like once the job goes away, the options start becoming more limited, doors start closing quickly, and decisions have to be made rapidly in order to preserve what we’ve got and not waste it on, say, mindless travel or apartment rent or whatever. Not that these things are necessarily a waste of money, but once it is spent, it is gone, and with no paycheck and only interest and dividends coming in, it seems like we have to be more mindful of what the money is spent on. And to ensure that we have enough of it.
Even after pretending you don't have money that you do (401k, IRAs), and then discounting what is left by 15%, your WR is still only 3.15%. Many would consider that close to a perpetual rate. In fact, you still have you IRA and 401k.
Someday you will get Soc Sec.

You could stick that $2.38M into TIPs, and it would take you until about age 75. You would the have all your retirement accounts, and Soc Sec.

None of this will change your worrying, because as many have commented, it is not a financial issue.

If you can't see yourself living without an income from a job, then go find another one, if this one even does actually go away. It seems to me that you are borrowing a lot of worry.

If I recall correctly from another post, you are a lawyer, based on your success to date, I would assume a pretty successful one, what makes you think you would have trouble finding another job?
:thumbsup

$2.38 million at a 0% real return (which you can be guaranteed to beat with TIPS right now) would provide the OP with the desired $75k for almost 32 years. SS benefits alone at age 70 will probably be at least $40k for them if they didn't make any more income from employment. The OP is absolutely golden from a financial perspective.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

AtlantaP
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by AtlantaP » Sat Nov 02, 2019 9:40 pm

I just want to say you are not alone. My spouse was just laid off from Megacorp after almost 20 years with no warning (high performer, no issues, etc). The only sin was not wanting to move up further in the company - loved the job and was good at it, but turned down an opportunity for advancement that was a shift into a role unrelated to the current job. Not the same industry, but think the same difference as from selling clothes to having to be the fashion designer - two totally different things (hoping this gives an idea of the analogy I'm going for).

We're your age (barely 40), with a 2 million dollar net worth - where ~25% of our net worth is a paid off house. While I'm employed at 135K and can cover our bills, and can easily transfer healthcare to my plan, I'm losing sleep, feel sick to my stomach, feel an unbearable pressure that the world is on my shoulders (we help some less fortunate family members), I do technically know (hope?) that we should be ok. On a bare bones budget our cash savings alone should cover us for 10+ years even if I weren't working, which obviously I'll keep doing. My spouse is interested in taking an undetermined amount of time off, possibly never going back to work, and I'm doing my best to be supportive and not share how much that scares me.

Not sure of the point of this. Maybe to share that your post and fears, and those of people responding to you, give me hope that maybe our situation isn't that bad, even though we have half the net worth? At any rate big hugs and lots of empathy.

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RickBoglehead
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by RickBoglehead » Sun Nov 03, 2019 7:25 am

Been laid off, or fired, several times. Stood in unemployment lines back when you had to. Dealt with things being very tight. If simple math shows that you don't have an issue, and that doesn't take the stress away, then professional counseling would be the next step. Life is too short to be stressed out all the time.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

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CyclingDuo
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by CyclingDuo » Sun Nov 03, 2019 7:54 am

AtlantaP wrote:
Sat Nov 02, 2019 9:40 pm
While I'm employed at 135K and can cover our bills, and can easily transfer healthcare to my plan, I'm losing sleep, feel sick to my stomach, feel an unbearable pressure that the world is on my shoulders (we help some less fortunate family members), I do technically know (hope?) that we should be ok. On a bare bones budget our cash savings alone should cover us for 10+ years even if I weren't working, which obviously I'll keep doing. My spouse is interested in taking an undetermined amount of time off, possibly never going back to work, and I'm doing my best to be supportive and not share how much that scares me.
While being supportive, share your fears with your spouse. It's nice to say you can be the sole breadwinner in what was prior a dual income household, but speak openly at the appropriate time (after your spouse has gone through a few weeks of reflection).

After I moped around for a few weeks following my last day of work from being terminated, one day I asked my spouse while I was sitting on the couch and staring at my laptop what I was going to do. My spouse looked at me and said "You sure as heck are not going to be sitting on the couch!" which was a simple, very effective message that snapped me out of it and got me headed in a better direction.

Don't be afraid to have that conversation - especially since you are losing sleep, feeling sick to your stomach, and feel like you have unbearable pressure on your shoulders. That's not healthy, and your spouse will recognize this if you share it. Allow the process some time to unfold, but keep open communication through it all as you are both going through different things at the moment.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

Mako52
Posts: 112
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Mako52 » Sun Nov 03, 2019 8:35 am

CobraKai wrote:
Fri Nov 01, 2019 9:20 am
How did you make all that money at your age? You should be giving us advice lol.
This. At age 42, I don't see many ways for people to be worth 4M unless they 1) got very lucky on stock options, 2) inherited a lot, 3) crushed it with their own business or 4) have impeccable ability to time the market. That said, nothing wrong with any, or combination, of those.

Someone else can run a simulation based on market returns since 2000, but you'd have to save $100k+ per year since you started working to amass that kind of wealth.

OP, you won't find solutions to your fear of failure on a public discussion board. I'd recommend seeking out someone who can help you understand what's driving that fear, and offer you better ways to find perspective and solutions.

Dottie57
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Re: Possible Layoff: Need Assurance That We Will Be Okay

Post by Dottie57 » Sun Nov 03, 2019 8:41 am

sg2060 wrote:
Fri Nov 01, 2019 11:13 am
CrazyCatLady wrote:
Fri Nov 01, 2019 10:39 am
The lack of empathy in this thread sets my teeth on edge. Yes, the OP has more money than most of us will have, and yes I think his anxiety steams from a lot more than money issues. Having said that, why is it acceptable to mock him or discount his concerns, just because he is FI? I personally think his concerns are as valid as someone who posts they are 60 and have $50,000 saved (even if not as drastic). FWIW, jealous is not a good look on anyone...
I don't take the responses as jealousy. In my opinion, his fears are symptomatic of an unhealthy relationship toward money at 42. He can use this time as an opportunity to correct / work on the relationship (religion, this forum, psychologist, internal reflection, etc.) or it can exacerbate and become worse as he ages. That would be unfortunate given his circumstances because he has the opportunity to go through life as very few do.
Very much agree. I think some of the comments reflect a surprise that OP is worried. OP has done a superb job financially and I hope he can start to relax. He is well off and should weather this layoff well.

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