The axe falls and I am prepared. What's next?

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Topic Author
KlangFool
Posts: 16096
Joined: Sat Oct 11, 2008 12:35 pm

The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 6:17 pm

Folks,

So, it happened. I will be laid off by the end of June.

The basic financial stuff:

A) 3 months severance pay

B) 1 year subsidized medical insurance.

C) 1 year COBRA

D) 110K to 120K of the Emergency Fund

E) 1.35 to 1.4 million 60/40 portfolio

F) Late 50+ years old.

G) Annual expense of about 50K to 60K per year. (Total before wife's income)

H) My wife will continue working at 15K per year with good medical and dental insurance.

I) I had crossed the second bend points for Social Security. So, social security income for me and my wife combined is about 3K to 4K per month.

My question is

1) Is it really worthwhile for me to continue working? I worked in the IT area. If I want to stay in this area, I have to study 10 to 20 hours per week just to keep up with the latest technology.

2) If I do contract work, how much should I get paid before it is worthwhile for me to work?

A) I only plan to work 20 hours per week. Between unemployment and the $600 per week, I will get about $900 per week. Unless I am paid at $90 per hour or higher, it may not be worthwhile for me to work

3) Any other comment/feedback as to how do you decide whether you should continue working or just retire.

KlangFool
Last edited by KlangFool on Fri May 22, 2020 6:22 pm, edited 2 times in total.

Ferdinand2014
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Re: The axe falls and I am prepared. What's next?

Post by Ferdinand2014 » Fri May 22, 2020 6:20 pm

Expenses total or after wife’s income?
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

Topic Author
KlangFool
Posts: 16096
Joined: Sat Oct 11, 2008 12:35 pm

Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 6:21 pm

Ferdinand2014 wrote:
Fri May 22, 2020 6:20 pm
Expenses total or after wife’s income?
Total.

KlangFool

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willthrill81
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Location: USA

Re: The axe falls and I am prepared. What's next?

Post by willthrill81 » Fri May 22, 2020 6:24 pm

KlangFool wrote:
Fri May 22, 2020 6:17 pm
Folks,

So, it happened. I will be laid off by the end of June.

The basic financial stuff:

A) 3 months severance pay

B) 1 year subsidized medical insurance.

C) 1 year COBRA

D) 110K to 120K of the Emergency Fund

E) 1.35 to 1.4 million 60/40 portfolio

F) Late 50+ years old.

G) Annual expense of about 50K to 60K per year.

H) My wife will continue working at 15K per year with good medical and dental insurance.

My question is

1) Is it really worthwhile for me to continue working? I worked in the IT area. If I want to stay in this area, I have to study 10 to 20 hours per week just to keep up with the latest technology.

2) If I do contract work, how much before it is worthwhile for me to work?

A) I only plan to work 20 hours per week. Between unemployment and the $600 per week, I will get about $900 per week. Unless I am paid at $90 per hour or higher, it may not be worthwhile for me to work

3) Any other comment/feedback as to how do you decide whether you should continue working or just retire.

KlangFool
First, while I'm sorry to hear about that, you're going to be perfectly fine.

1. As long as your wife keeps working, your $60k of expenses less $15k means you would need $45k from your portfolio of $1.4 million, a withdrawal rate of 3.2%, which is perfectly reasonable for an early retiree with a 60/40 AA. If you added your EF to that, your withdrawal rate would only be 3%, which has been the approximate perpetual withdrawal rate for the worst starting periods in history. So no, you don't have to keep working, at least not in IT. Yes, if your wife lost her job, you would then have to buy health insurance until you reach 65, but you'll also be getting SS benefits down the road, which adds another layer of security to your position. You're in great shape! :beer

2. Again, with a 3% withdrawal rate, it's not necessary for you to keep working unless you want to.

3. In your position, I wouldn't even think about going back to work unless it was purely for the fun involved. It definitely wouldn't be for money.

Have you considered moving elsewhere, possibly where the cost of living is lower? Lots of IT jobs are in HCOL areas.
“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

Katietsu
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Re: The axe falls and I am prepared. What's next?

Post by Katietsu » Fri May 22, 2020 6:26 pm

The part of your analysis that is a bit misleading is the $900 a week in employment. First, depending on the state and how the severance is paid, you may not be immediately eligible for unemployment. Second, and perhaps more significantly, the extra $600 a week is only guaranteed through July. I do not know if the severance package can impact the PUA.

I am surprised that you are considering retire without much of a cushion, particularly if you do not count on wife’s income. I was under the impression from your previous posts that you preferred to be a bit more conservative.

Sorry you have been laid off. Glad you planned for the possibility.

bigfry
Posts: 24
Joined: Sat Mar 21, 2020 2:24 pm

Re: The axe falls and I am prepared. What's next?

Post by bigfry » Fri May 22, 2020 6:29 pm

willthrill81 wrote:
Fri May 22, 2020 6:24 pm
KlangFool wrote:
Fri May 22, 2020 6:17 pm
Folks,

So, it happened. I will be laid off by the end of June.

The basic financial stuff:

A) 3 months severance pay

B) 1 year subsidized medical insurance.

C) 1 year COBRA

D) 110K to 120K of the Emergency Fund

E) 1.35 to 1.4 million 60/40 portfolio

F) Late 50+ years old.

G) Annual expense of about 50K to 60K per year.

H) My wife will continue working at 15K per year with good medical and dental insurance.

My question is

1) Is it really worthwhile for me to continue working? I worked in the IT area. If I want to stay in this area, I have to study 10 to 20 hours per week just to keep up with the latest technology.

2) If I do contract work, how much before it is worthwhile for me to work?

A) I only plan to work 20 hours per week. Between unemployment and the $600 per week, I will get about $900 per week. Unless I am paid at $90 per hour or higher, it may not be worthwhile for me to work

3) Any other comment/feedback as to how do you decide whether you should continue working or just retire.

KlangFool
First, while I'm sorry to hear about that, you're going to be perfectly fine.

1. As long as your wife keeps working, your $60k of expenses less $15k means you would need $45k from your portfolio of $1.4 million, a withdrawal rate of 3.2%, which is perfectly reasonable for an early retiree with a 60/40 AA. If you added your EF to that, your withdrawal rate would only be 3%, which has been the approximate perpetual withdrawal rate for the worst starting periods in history. So no, you don't have to keep working, at least not in IT. Yes, if your wife lost her job, you would then have to buy health insurance until you reach 65, but you'll also be getting SS benefits down the road, which adds another layer of security to your position. You're in great shape! :beer

2. Again, with a 3% withdrawal rate, it's not necessary for you to keep working unless you want to.

3. In your position, I wouldn't even think about going back to work unless it was purely for the fun involved. It definitely wouldn't be for money.

Have you considered moving elsewhere, possibly where the cost of living is lower? Lots of IT jobs are in HCOL areas.
I agree with willthrill. Based on your expenses and current portfolio you could cover yearly expenses with a safe and conservative withdrawal rate. I would not continue working in your current situation.
Keep it simple, stupid.

whereskyle
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Joined: Wed Jan 29, 2020 10:29 am

Re: The axe falls and I am prepared. What's next?

Post by whereskyle » Fri May 22, 2020 6:30 pm

Sorry to read this, KlangFool. I don't have particular advice on deciding whether you should continue working. I would say it's more about doing what you want to do rather than how much money you need. I know for a fact many would be grateful to be in your financial position and you have been smart enough with your finances that you can reasonably consider retirement. Thanks for all the advice, and see you around the forum!
"I am better off than he is – for he knows nothing, and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle

sixtyforty
Posts: 449
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Location: USA

Re: The axe falls and I am prepared. What's next?

Post by sixtyforty » Fri May 22, 2020 6:31 pm

Looks okay to me, especially if you factor in SS. I'm sure you've already run on the retirement calculator/planners and they probably tell you the same thing. Enjoy retirement.
"Simplicity is the ultimate sophistication" - Leonardo Da Vinci

jibantik
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Re: The axe falls and I am prepared. What's next?

Post by jibantik » Fri May 22, 2020 6:33 pm

Enjoy your retirement!

Ferdinand2014
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Joined: Mon Dec 17, 2018 6:49 pm

Re: The axe falls and I am prepared. What's next?

Post by Ferdinand2014 » Fri May 22, 2020 6:34 pm

It seems you are good. Especially if your wife can continue to provide health insurance until Medicare kicks in.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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Thrifty Femme
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Re: The axe falls and I am prepared. What's next?

Post by Thrifty Femme » Fri May 22, 2020 6:36 pm

KlangFool wrote:
Fri May 22, 2020 6:17 pm
Folks,

So, it happened. I will be laid off by the end of June.

The basic financial stuff:

A) 3 months severance pay

B) 1 year subsidized medical insurance.

C) 1 year COBRA

D) 110K to 120K of the Emergency Fund

E) 1.35 to 1.4 million 60/40 portfolio

F) Late 50+ years old.

G) Annual expense of about 50K to 60K per year. (Total before wife's income)

H) My wife will continue working at 15K per year with good medical and dental insurance.

I) I had crossed the second bend points for Social Security. So, social security income for me and my wife combined is about 3K to 4K per month.

My question is

1) Is it really worthwhile for me to continue working? I worked in the IT area. If I want to stay in this area, I have to study 10 to 20 hours per week just to keep up with the latest technology.

2) If I do contract work, how much should I get paid before it is worthwhile for me to work?

A) I only plan to work 20 hours per week. Between unemployment and the $600 per week, I will get about $900 per week. Unless I am paid at $90 per hour or higher, it may not be worthwhile for me to work

3) Any other comment/feedback as to how do you decide whether you should continue working or just retire.

KlangFool
Sorry to read this but glad you are prepared. Is your $90 per hour estimate W2 or 1099? What is the cost of living in your area? Trying to assess if your salary rate is realistic.

User avatar
tvubpwcisla
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Joined: Sat Nov 09, 2019 10:09 am

Re: The axe falls and I am prepared. What's next?

Post by tvubpwcisla » Fri May 22, 2020 6:37 pm

Sorry to hear about being laid off. It is nice the company provided you with some sort of package. If I was in your position, I would find another job but only something that I liked and for a company I believed in. Since you don't have to work, you have the freedom to pick and choose.

Good luck with everything!

:sharebeer
The secret to building wealth is to keep expenses low, stay 100% stocks, become an expert in your craft, consistently buy the market, have multiple income streams, and always find a reason to smile.

Copernicus
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Re: The axe falls and I am prepared. What's next?

Post by Copernicus » Fri May 22, 2020 6:40 pm

Ferdinand2014 wrote:
Fri May 22, 2020 6:34 pm
It seems you are good. Especially if your wife can continue to provide health insurance until Medicare kicks in.
That's the critical factor.

Bfwolf
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Re: The axe falls and I am prepared. What's next?

Post by Bfwolf » Fri May 22, 2020 6:41 pm

Sorry to hear about the layoff, Klangfool. I concur with the majority. As long as your wife keeps working, you are in good shape to retire. At some point maybe you'll get bored and start something on the side that brings in a little extra cash too, but it's not necessary. Once SS kicks in, it's going to cover most of your expenses.

MathIsMyWayr
Posts: 1644
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Location: CA

Re: The axe falls and I am prepared. What's next?

Post by MathIsMyWayr » Fri May 22, 2020 6:43 pm

KlangFool wrote:
Fri May 22, 2020 6:17 pm
F) Late 50+ years old.

My question is

1) Is it really worthwhile for me to continue working? I worked in the IT area. If I want to stay in this area, I have to study 10 to 20 hours per week just to keep up with the latest technology.

2) If I do contract work, how much should I get paid before it is worthwhile for me to work?

A) I only plan to work 20 hours per week. Between unemployment and the $600 per week, I will get about $900 per week. Unless I am paid at $90 per hour or higher, it may not be worthwhile for me to work

3) Any other comment/feedback as to how do you decide whether you should continue working or just retire.

KlangFool
Sorry for the news.

1) Why not? Studying and learning is always good. Life is a process of experience. Studying and learning is an active part of experience. Game is not over until it is over!

Topic Author
KlangFool
Posts: 16096
Joined: Sat Oct 11, 2008 12:35 pm

Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 6:43 pm

Katietsu wrote:
Fri May 22, 2020 6:26 pm
The part of your analysis that is a bit misleading is the $900 a week in employment. First, depending on the state and how the severance is paid, you may not be immediately eligible for unemployment. Second, and perhaps more significantly, the extra $600 a week is only guaranteed through July. I do not know if the severance package can impact the PUA.

I am surprised that you are considering retire without much of a cushion, particularly if you do not count on wife’s income. I was under the impression from your previous posts that you preferred to be a bit more conservative.

Sorry you have been laid off. Glad you planned for the possibility.
Katietsu,

I do not understand your statement.

1) With my EF, I do not need to withdraw any money from my portfolio for at least 2 years without my wife's income.

<<The part of your analysis that is a bit misleading is the $900 a week in employment. First, depending on the state and how the severance is paid, you may not be immediately eligible for unemployment.>>

2) I was unemployed for more than 1 year a few years ago. And, the severance is a lump sum. I am immediately eligible for unemployment benefits. I am reverifying this again.

3) I have 3 safety cushions:

A) My wife's income with excellence medical insurance

B) Social security income in a few years that I can withdraw if I have to that will cover 50% of more of my annual expense.

C) Unemployment benefits for both me and my wife if necessary.

In summary, I do not have to withdraw from my portfolio for about 2 to 3 years. And, after that, I am a few years from 62 years old. Then, my annual withdrawal can drop to about 30K per year.

KlangFool

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simplesimon
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Re: The axe falls and I am prepared. What's next?

Post by simplesimon » Fri May 22, 2020 6:45 pm

KlangFool wrote:
Fri May 22, 2020 6:17 pm
1) Is it really worthwhile for me to continue working? I worked in the IT area. If I want to stay in this area, I have to study 10 to 20 hours per week just to keep up with the latest technology.
Did you like working? Is the latest technology interesting to you?

Do you have to work in IT? Could you do something else where skills are transferable?

What would you do if you aren't working?

nigel_ht
Posts: 625
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Re: The axe falls and I am prepared. What's next?

Post by nigel_ht » Fri May 22, 2020 6:47 pm

Sorry about being laid off.

FIREing with $1.4M at 50 feels a little lean to me. 3.5% withdrawal rate is $49K but you do get $15K from your wife's salary. So you're probably fine.

If the market tanks again you'll be eating into your EF which will have to get replenished.

I dunno, IT is still in demand unless you moved into management like many technical people do in their 50s. Then you may have to study to regain skills if you want to do contract work. I'd start a consulting LLC over the next 3 months while looking for a $90/hr gig. Study a couple hours a day. Maybe get some kind of cyber cert from the local university. Maybe not a spendy Cisco Cyber ones. Write it off taxes this year if you can.

Topic Author
KlangFool
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Joined: Sat Oct 11, 2008 12:35 pm

Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 6:49 pm

MathIsMyWayr wrote:
Fri May 22, 2020 6:43 pm
KlangFool wrote:
Fri May 22, 2020 6:17 pm
F) Late 50+ years old.

My question is

1) Is it really worthwhile for me to continue working? I worked in the IT area. If I want to stay in this area, I have to study 10 to 20 hours per week just to keep up with the latest technology.

2) If I do contract work, how much should I get paid before it is worthwhile for me to work?

A) I only plan to work 20 hours per week. Between unemployment and the $600 per week, I will get about $900 per week. Unless I am paid at $90 per hour or higher, it may not be worthwhile for me to work

3) Any other comment/feedback as to how do you decide whether you should continue working or just retire.

KlangFool
Sorry for the news.

1) Why not? Studying and learning is always good. Life is a process of experience. Studying and learning is an active part of experience. Game is not over until it is over!
Not if you are a Tier 4 / SME person studying to do a job.

<<Game is not over until it is over!>>

Not if you had played one of the biggest and most complex games in your life. And, everything else that you will be doing going forward is a child game as compared to what you had did before.

KlangFool
Last edited by KlangFool on Fri May 22, 2020 7:00 pm, edited 1 time in total.

Topic Author
KlangFool
Posts: 16096
Joined: Sat Oct 11, 2008 12:35 pm

Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 6:52 pm

simplesimon wrote:
Fri May 22, 2020 6:45 pm
KlangFool wrote:
Fri May 22, 2020 6:17 pm
1) Is it really worthwhile for me to continue working? I worked in the IT area. If I want to stay in this area, I have to study 10 to 20 hours per week just to keep up with the latest technology.
Did you like working? Is the latest technology interesting to you?

Do you have to work in IT? Could you do something else where skills are transferable?

What would you do if you aren't working?
simplesimon,

<<Could you do something else where skills are transferable?>>

It does not work that way. There are a cheaper and younger alternative when the experience does not matter.

<<What would you do if you aren't working?>>

I have no problem learning other stuff for fun.

KlangFool

bigskyguy
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Re: The axe falls and I am prepared. What's next?

Post by bigskyguy » Fri May 22, 2020 6:52 pm

First and foremost, my sincere condolences. I am a very infrequent poster, but a persistent and consistent listener/observer. I very much appreciate your understandable and reasoned postings, and for my sake hope that they continue.
I suspect you have a solid handle on your finances, and as to whether or not your decision will be forced upon you rather than chosen by you. Assuming that your choice of return/not return to employment is not solely dependent upon your finances, I'll give you some personal insights based upon my n=1 experience.
At age 61, following 36 years of work in my chosen field, I had the opportunity to 1.) retire early, 2.) continue full throttle, or 3.) take a lesser role at a lower level of work intensity (and lower compensation). We (working spouse) were financially comfortable, albeit not completely secure. I chose door number 3, cutting my hours in half and my salary by a bit more. Planned to work to 65 but ended up going on to 69. Glad I did, kept me mentally sharp, physically active, and personally productive. Now the rest of the story. As I now approach age 71, the last two years have included 3 substantive illnesses requiring surgeries (all age related), all fortunately resolved. And while I have recovered relatively well, I will say that I have lost more than a step or two as a result. Now the world throws COVID-19 at us, and all of the planned retirement journeys have been put on extended hold.
Moral of the story is that life will indeed throw wrenches in our well thought out plans. In considering your options/opportunities going forward, financial circumstances must be considered, but doing so, while necessary, is far from sufficient. At age 59, life expectancy should carry you for 25 more years. That being said, your finances circumstances appear serviceable, so what is it that you and your family want going forward? And resolve to live for now as well as for the future.
I suspect it's going to be a tough employment market, at least for the short term. Fortunately you appear to be reasonably well positioned, so my sincere advice is to use this opportunity to chart a future course that works for all of you.
You and your family are in my thoughts.

Normchad
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Re: The axe falls and I am prepared. What's next?

Post by Normchad » Fri May 22, 2020 6:53 pm

Klangfool, I’m so sorry this has happened to you. For years, you’ve been advising all of us that this could happen at any time, and I thank you for that sage advice.

Based on the numbers, it looks like you should be okay. The health coverage is a definite blessing.

On the other hand, demand for tech workers is huge. I’m sure you could find another gig if you wanted it. It might take a while given current world events, but it will end eventually.

If you wanted to do contract work, my contractors typically get between 80-120$ per hour.

sailaway
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Re: The axe falls and I am prepared. What's next?

Post by sailaway » Fri May 22, 2020 6:54 pm

We are in a similar economic position and I honestly don't don't what we would do if DH were laid off tomorrow. We can't embrace our retirement travel plans right now, so it might be worth looking for work in the meantime. But perhaps DH would just work on some side projects he has been considering.

What does retirement look like for you?

Dicast
Posts: 35
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Re: The axe falls and I am prepared. What's next?

Post by Dicast » Fri May 22, 2020 6:55 pm

I think you have planned well. The biggest part to me would be the unexpected large amount of time off from retirement. If you can develop a plan for your time that gives you fulfillment, then you should forget about going back to work. If you find your work meaningful then I'd try to get another job. I've been working towards a goal FI date for when I'm 45. The only problem I have noticed with my plan is that I'll probably miss my job if I actually retire..so I think I'll just keep working anyway.

Topic Author
KlangFool
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Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 6:56 pm

nigel_ht wrote:
Fri May 22, 2020 6:47 pm
Sorry about being laid off.

FIREing with $1.4M at 50 feels a little lean to me. 3.5% withdrawal rate is $49K but you do get $15K from your wife's salary. So you're probably fine.

If the market tanks again you'll be eating into your EF which will have to get replenished.

I dunno, IT is still in demand unless you moved into management like many technical people do in their 50s. Then you may have to study to regain skills if you want to do contract work. I'd start a consulting LLC over the next 3 months while looking for a $90/hr gig. Study a couple hours a day. Maybe get some kind of cyber cert from the local university. Maybe not a spendy Cisco Cyber ones. Write it off taxes this year if you can.
nigel_ht,

<<Study a couple hours a day. Maybe get some kind of cyber cert from the local university. Maybe not a spendy Cisco Cyber ones. Write it off taxes this year if you can.>>

With 30+ million unemployed, there would be plenty of folks going that route. In any case, why would I abandon my home field with 30+ years of experience and compete with the younger folks in a brand new area that I have no competitive advantage?

KlangFool

lostcoast
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Re: The axe falls and I am prepared. What's next?

Post by lostcoast » Fri May 22, 2020 7:01 pm

Bummer about being laid off, I hope all the best to you.
I decided to retire in 2012 in my mid 50's as my business hit rock bottom and I had had enough.
Like you I had around 1.4m+ and EM of 1.5 years and my wife was still working (60k/yr.)and our expenses were also in the 60k range.
Fast forward to today we are in much better shape due to the market rising during the last 8 years.
Retirement has been good for me even tho I did return to work for a short period of time. 3 months in 2015.
My wife retired in mid 2015 and probably could not have lasted another year so great for her.
What is interesting at this point in time I don't feel as confident as I did when I retired.
If I had to I could (maybe) return to part time work but doubt I would.
With the world all upside down I worry more today than I did for the 1st 7 years.
Last edited by lostcoast on Fri May 22, 2020 7:25 pm, edited 1 time in total.

MathIsMyWayr
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Re: The axe falls and I am prepared. What's next?

Post by MathIsMyWayr » Fri May 22, 2020 7:02 pm

KlangFool wrote:
Fri May 22, 2020 6:49 pm
MathIsMyWayr wrote:
Fri May 22, 2020 6:43 pm
KlangFool wrote:
Fri May 22, 2020 6:17 pm
F) Late 50+ years old.

My question is

1) Is it really worthwhile for me to continue working? I worked in the IT area. If I want to stay in this area, I have to study 10 to 20 hours per week just to keep up with the latest technology.

2) If I do contract work, how much should I get paid before it is worthwhile for me to work?

A) I only plan to work 20 hours per week. Between unemployment and the $600 per week, I will get about $900 per week. Unless I am paid at $90 per hour or higher, it may not be worthwhile for me to work

3) Any other comment/feedback as to how do you decide whether you should continue working or just retire.

KlangFool
Sorry for the news.

1) Why not? Studying and learning is always good. Life is a process of experience. Studying and learning is an active part of experience. Game is not over until it is over!
Not if you are a Tier 4 / SME person studying to do a job.

<<Game is not over until it is over!>>

Not if you had played one of the biggest and most complex games in your life. And, everything else that you will be doing going forward is a child game as compared to what you have done before.

KlangFool
A typical sequence of graduate-level math and physics courses/studies:
1) Introduction to ... > 2) Advanced ... > back to 3) Introduction to ... > 4) Advanced ... and on and on ...

Topic Author
KlangFool
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Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 7:07 pm

Folks,

1) Due to COVAD-19 and my age, I probably would only take a job/project that I can work from home.

2) I probably work part-time and/or project basis.

3) And, the job/project has to interesting and lucrative enough for me to consider.

I am looking for opinions from those that had gone down the same path.

KlangFool

hudson
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Re: The axe falls and I am prepared. What's next?

Post by hudson » Fri May 22, 2020 7:09 pm

Klangfool,

Getting laid off is hard to swallow. I'm sorry. It looks you got an ok severance.
I've been reading your posts for years; it looks like you followed your plan and you're ready.
If it was me, and I wasn't at full retirement age (FRA) yet, I would go after another job just like I was in my 20s.
I got an IT job when I was in my 50s. It can be done. I would take a non IT job if and IT job wasn't working out. You already know how it works. It's good to have a job when looking for a job.
My plan was always to work at least until FRA.
There's somebody out there that needs your skills and help. They just don't know about you yet.

Triple digit golfer
Posts: 5146
Joined: Mon May 18, 2009 5:57 pm

Re: The axe falls and I am prepared. What's next?

Post by Triple digit golfer » Fri May 22, 2020 7:11 pm

Sorry to hear, but you are well prepared.

At the high end of $60k a year, your withdrawal rate is 4% even without your wife's income. How much would medical insurance be if your wife was unemployed?

That 4% will drop to less than 2% once you take SS.

I say enjoy your retirement!

mortfree
Posts: 2253
Joined: Mon Sep 12, 2016 7:06 pm

Re: The axe falls and I am prepared. What's next?

Post by mortfree » Fri May 22, 2020 7:12 pm

Sorry to hear.

Will you stop your 401k contributions for the remaining paychecks or doesn’t it matter?

How are you feeling about having a mortgage now - any change in your opinion?

Topic Author
KlangFool
Posts: 16096
Joined: Sat Oct 11, 2008 12:35 pm

Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 7:13 pm

MathIsMyWayr wrote:
Fri May 22, 2020 7:02 pm
KlangFool wrote:
Fri May 22, 2020 6:49 pm
MathIsMyWayr wrote:
Fri May 22, 2020 6:43 pm
KlangFool wrote:
Fri May 22, 2020 6:17 pm
F) Late 50+ years old.

My question is

1) Is it really worthwhile for me to continue working? I worked in the IT area. If I want to stay in this area, I have to study 10 to 20 hours per week just to keep up with the latest technology.

2) If I do contract work, how much should I get paid before it is worthwhile for me to work?

A) I only plan to work 20 hours per week. Between unemployment and the $600 per week, I will get about $900 per week. Unless I am paid at $90 per hour or higher, it may not be worthwhile for me to work

3) Any other comment/feedback as to how do you decide whether you should continue working or just retire.

KlangFool
Sorry for the news.

1) Why not? Studying and learning is always good. Life is a process of experience. Studying and learning is an active part of experience. Game is not over until it is over!
Not if you are a Tier 4 / SME person studying to do a job.

<<Game is not over until it is over!>>

Not if you had played one of the biggest and most complex games in your life. And, everything else that you will be doing going forward is a child game as compared to what you have done before.

KlangFool
A typical sequence of graduate-level math and physics courses/studies:
1) Introduction to ... > 2) Advanced ... > back to 3) Introduction to ... > 4) Advanced ... and on and on ...
MathIsMyWayr,

I am an engineer. After you had built several multi-billion level system, the smaller system at 1 million or smaller is nothing to us.

Engineers are judged by what we built and designed. They are not formulas and theories.

KlangFool

Chuck107
Posts: 137
Joined: Tue Sep 04, 2012 11:47 pm

Re: The axe falls and I am prepared. What's next?

Post by Chuck107 » Fri May 22, 2020 7:14 pm

Sorry to hear about the axe dropping.

I will not comment on your portfolio as others way more competent than I have already and most likely will still comment.
It sounds like you are in good shape portfolio wise.

Retirement... How do you feel about suddenly NOT having to wake up to an alarm clock, dragging yourself out the door, commuting, dealing with the drama of the day, go home wash rinse and repeat again tomorrow and the next day etc etc?

Find something new and fun, hobbies, or just kick back and live day to day.

It's a matter of personality, some can do it, some dives 'em nuts.

I retired at 50, took me 3 months to adjust, then it was like I realized I was free.

Been free for 16 yrs now, love every min of it :beer
Last edited by Chuck107 on Fri May 22, 2020 7:16 pm, edited 1 time in total.

Topic Author
KlangFool
Posts: 16096
Joined: Sat Oct 11, 2008 12:35 pm

Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 7:15 pm

Triple digit golfer wrote:
Fri May 22, 2020 7:11 pm
Sorry to hear, but you are well prepared.

At the high end of $60k a year, your withdrawal rate is 4% even without your wife's income. How much would medical insurance be if your wife was unemployed?

That 4% will drop to less than 2% once you take SS.

I say enjoy your retirement!
Triple digit golfer,

The 60K is assuming full cost medical insurance if my wife is unemployed.

KlangFool

Topic Author
KlangFool
Posts: 16096
Joined: Sat Oct 11, 2008 12:35 pm

Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 7:18 pm

Chuck107 wrote:
Fri May 22, 2020 7:14 pm
Sorry to hear about the axe dropping.

I will not comment on your portfolio as others way more competent than I have already and most likely will still comment.
It sounds like you are in good shape portfolio wise.

Retirement... How do you feel about suddenly NOT having to wake up to an alarm clock, dragging yourself out the door, commuting, dealing with the drama of the day, go home wash rinse and repeat again tomorrow and the next day etc etc?

Find something new and fun, hobbies, or just kick back and live day to day.

It's a matter of personality, some can do it some dives 'em nuts.

I retired at 50, took me 3 months to adjust, then it was like I realized I was free.

Been free for 16 yrs now, love every min of it :beer
Chuck107,

<<How do you feel about suddenly NOT having to wake up to an alarm clock, dragging yourself out the door, commuting, dealing with the drama of the day, go home wash rinse and repeat again tomorrow and the next day etc etc?>>

I worked from home full-time or mostly full-time for the last 10+ years. So, I have zero or close to zero commuting. And, I have a flexible schedule. I can choose when to work. Basically, I get this from my job too.

KlangFool

User avatar
ram
Posts: 1551
Joined: Tue Jan 01, 2008 10:47 pm
Location: Midwest

Re: The axe falls and I am prepared. What's next?

Post by ram » Fri May 22, 2020 7:22 pm

Our healthcare group has multiple hospitals, some acquired recently. Some of these hospitals use old technology. It has been announced that all hospitals will be on brand new technology from 2023.
In the meanwhile we have retained some wise old men to keep the old technology functioning. The young hotshots do not know these old platforms.

Could there be such an opportunity for you?
Ram

Topic Author
KlangFool
Posts: 16096
Joined: Sat Oct 11, 2008 12:35 pm

Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 7:22 pm

mortfree wrote:
Fri May 22, 2020 7:12 pm
Sorry to hear.

Will you stop your 401k contributions for the remaining paychecks or doesn’t it matter?

How are you feeling about having a mortgage now - any change in your opinion?
mortfree,

I have a few hundred thousand in my taxable account. So, I would not stop my 401K contribution.

<<How are you feeling about having a mortgage now - any change in your opinion?>>

No change.

1) I believe we are heading toward long-term high or hyperinflation. The mortgage would be a very good hedge.

2) My PITI is much lower than market rent. I am just looking at the mortgage as paying a fixed rent.

KlangFool

Chuck107
Posts: 137
Joined: Tue Sep 04, 2012 11:47 pm

Re: The axe falls and I am prepared. What's next?

Post by Chuck107 » Fri May 22, 2020 7:23 pm

KlangFool wrote:
Fri May 22, 2020 7:18 pm
Chuck107 wrote:
Fri May 22, 2020 7:14 pm
Sorry to hear about the axe dropping.

I will not comment on your portfolio as others way more competent than I have already and most likely will still comment.
It sounds like you are in good shape portfolio wise.

Retirement... How do you feel about suddenly NOT having to wake up to an alarm clock, dragging yourself out the door, commuting, dealing with the drama of the day, go home wash rinse and repeat again tomorrow and the next day etc etc?

Find something new and fun, hobbies, or just kick back and live day to day.

It's a matter of personality, some can do it some dives 'em nuts.

I retired at 50, took me 3 months to adjust, then it was like I realized I was free.

Been free for 16 yrs now, love every min of it :beer
Chuck107,

<<How do you feel about suddenly NOT having to wake up to an alarm clock, dragging yourself out the door, commuting, dealing with the drama of the day, go home wash rinse and repeat again tomorrow and the next day etc etc?>>

I worked from home full-time or mostly full-time for the last 10+ years. So, I have zero or close to zero commuting. And, I have a flexible schedule. I can choose when to work. Basically, I get this from my job too.

KlangFool
Sounds like you are just a step or two away from full retirement?
Should be an easier adjustment. If you don't feel you will miss it.
Question is have you just been working for the money? Or is it something you enjoy doing anyway?

Topic Author
KlangFool
Posts: 16096
Joined: Sat Oct 11, 2008 12:35 pm

Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 7:25 pm

ram wrote:
Fri May 22, 2020 7:22 pm
Our healthcare group has multiple hospitals, some acquired recently. Some of these hospitals use old technology. It has been announced that all hospitals will be on brand new technology from 2023.
In the meanwhile we have retained some wise old men to keep the old technology functioning. The young hotshots do not know these old platforms.

Could there be such an opportunity for you?
ram,

There should be opportunities for me. But, it may not be worthwhile for me to take it. Those are the questions that I am trying to work out.

KlangFool

BH+
Posts: 82
Joined: Sat Aug 31, 2019 5:15 pm

Re: The axe falls and I am prepared. What's next?

Post by BH+ » Fri May 22, 2020 7:26 pm

KlangFool wrote:
Fri May 22, 2020 7:07 pm

...3) And, the job/project has to interesting and lucrative enough for me to consider...


KlangFool
I would not discount the value of relevant work that would generate a meager income while still keeping you in the lower tax brackets. That lightly taxed income could reduce the stress on your savings and at the same time keep you in the game for further opportunities. You can always throw the towel in later.

Topic Author
KlangFool
Posts: 16096
Joined: Sat Oct 11, 2008 12:35 pm

Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 7:27 pm

Chuck107 wrote:
Fri May 22, 2020 7:23 pm
KlangFool wrote:
Fri May 22, 2020 7:18 pm
Chuck107 wrote:
Fri May 22, 2020 7:14 pm
Sorry to hear about the axe dropping.

I will not comment on your portfolio as others way more competent than I have already and most likely will still comment.
It sounds like you are in good shape portfolio wise.

Retirement... How do you feel about suddenly NOT having to wake up to an alarm clock, dragging yourself out the door, commuting, dealing with the drama of the day, go home wash rinse and repeat again tomorrow and the next day etc etc?

Find something new and fun, hobbies, or just kick back and live day to day.

It's a matter of personality, some can do it some dives 'em nuts.

I retired at 50, took me 3 months to adjust, then it was like I realized I was free.

Been free for 16 yrs now, love every min of it :beer
Chuck107,

<<How do you feel about suddenly NOT having to wake up to an alarm clock, dragging yourself out the door, commuting, dealing with the drama of the day, go home wash rinse and repeat again tomorrow and the next day etc etc?>>

I worked from home full-time or mostly full-time for the last 10+ years. So, I have zero or close to zero commuting. And, I have a flexible schedule. I can choose when to work. Basically, I get this from my job too.

KlangFool
Sounds like you are just a step or two away from full retirement?
Should be an easier adjustment. If you don't feel you will miss it.
Question is have you just been working for the money? Or is it something you enjoy doing anyway?
Chuck107,

1) I am an engineer. I do not just work for money.

2) I save 1 year of expense every year. I always make much more than I needed.

3) So, the answer is I want both and I do not settle for less.

KlangFool

Topic Author
KlangFool
Posts: 16096
Joined: Sat Oct 11, 2008 12:35 pm

Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 7:29 pm

BH+ wrote:
Fri May 22, 2020 7:26 pm
KlangFool wrote:
Fri May 22, 2020 7:07 pm

...3) And, the job/project has to interesting and lucrative enough for me to consider...


KlangFool
I would not discount the value of relevant work that would generate a meager income while still keeping you in the lower tax brackets. That lightly taxed income could reduce the stress on your savings and at the same time keep you in the game for further opportunities. You can always throw the towel in later.
BH+,

I had been there and done that. The only kind of contract work that I can get is $65 to $100 per hour and above. And, that was a few years ago. Anything less than that, I had applied and I received no offer.

KlangFool

Compound
Posts: 779
Joined: Mon May 26, 2014 1:32 pm

Re: The axe falls and I am prepared. What's next?

Post by Compound » Fri May 22, 2020 7:31 pm

KlangFool wrote:
Fri May 22, 2020 6:17 pm
Folks,

So, it happened. I will be laid off by the end of June.

The basic financial stuff:

A) 3 months severance pay

B) 1 year subsidized medical insurance.

C) 1 year COBRA

D) 110K to 120K of the Emergency Fund

E) 1.35 to 1.4 million 60/40 portfolio

F) Late 50+ years old.

G) Annual expense of about 50K to 60K per year. (Total before wife's income)

H) My wife will continue working at 15K per year with good medical and dental insurance.

I) I had crossed the second bend points for Social Security. So, social security income for me and my wife combined is about 3K to 4K per month.

My question is

1) Is it really worthwhile for me to continue working? I worked in the IT area. If I want to stay in this area, I have to study 10 to 20 hours per week just to keep up with the latest technology.

2) If I do contract work, how much should I get paid before it is worthwhile for me to work?

A) I only plan to work 20 hours per week. Between unemployment and the $600 per week, I will get about $900 per week. Unless I am paid at $90 per hour or higher, it may not be worthwhile for me to work

3) Any other comment/feedback as to how do you decide whether you should continue working or just retire.

KlangFool
KlangFool — you’ve been preparing for this yourself while constantly telling your fellow Bogleheads to prepare for this possibility. The numbers you present in your post are a testament to your preparation.

I don’t think you need to work for money anymore — with two caveats to consider. Your wive’s excellent healthcare coverage is key! Without that, your expenses would go up significantly and may push you into an unsustainable situation. The other consideration is sequence of returns risk. It’s a particularly volatile time for the market. A big downturn at the start of retirement could hurt.

A non-monetary consideration that I haven’t seen mentioned (or maybe missed): Do you enjoy working for work’s sake? Is it interesting? Do you enjoy getting out of the house and working on common projects with colleagues?

Best of luck to you KlangFool.

User avatar
The Man with the Axe
Posts: 20
Joined: Sat Dec 21, 2019 2:05 pm

Re: The axe falls and I am prepared. What's next?

Post by The Man with the Axe » Fri May 22, 2020 7:36 pm

Very sorry to hear about your job. We have enjoyed your many thoughtful posts on this forum.

Good luck with whatever comes next!

Chuck107
Posts: 137
Joined: Tue Sep 04, 2012 11:47 pm

Re: The axe falls and I am prepared. What's next?

Post by Chuck107 » Fri May 22, 2020 7:37 pm

KlangFool wrote:
Fri May 22, 2020 7:27 pm
Chuck107 wrote:
Fri May 22, 2020 7:23 pm
KlangFool wrote:
Fri May 22, 2020 7:18 pm
Chuck107 wrote:
Fri May 22, 2020 7:14 pm
Sorry to hear about the axe dropping.

I will not comment on your portfolio as others way more competent than I have already and most likely will still comment.
It sounds like you are in good shape portfolio wise.

Retirement... How do you feel about suddenly NOT having to wake up to an alarm clock, dragging yourself out the door, commuting, dealing with the drama of the day, go home wash rinse and repeat again tomorrow and the next day etc etc?

Find something new and fun, hobbies, or just kick back and live day to day.

It's a matter of personality, some can do it some dives 'em nuts.

I retired at 50, took me 3 months to adjust, then it was like I realized I was free.

Been free for 16 yrs now, love every min of it :beer
Chuck107,

<<How do you feel about suddenly NOT having to wake up to an alarm clock, dragging yourself out the door, commuting, dealing with the drama of the day, go home wash rinse and repeat again tomorrow and the next day etc etc?>>

I worked from home full-time or mostly full-time for the last 10+ years. So, I have zero or close to zero commuting. And, I have a flexible schedule. I can choose when to work. Basically, I get this from my job too.

KlangFool
Sounds like you are just a step or two away from full retirement?
Should be an easier adjustment. If you don't feel you will miss it.
Question is have you just been working for the money? Or is it something you enjoy doing anyway?
Chuck107,

1) I am an engineer. I do not just work for money.

2) I save 1 year of expense every year. I always make much more than I needed.

3) So, the answer is I want both and I do not settle for less.

KlangFool
In that case I wish you the best settling in with a new adventure, and I hope you find one soon.
Congrats on having a fine portfolio to help reduce the stress.

BH+
Posts: 82
Joined: Sat Aug 31, 2019 5:15 pm

Re: The axe falls and I am prepared. What's next?

Post by BH+ » Fri May 22, 2020 7:37 pm

KlangFool wrote:
Fri May 22, 2020 7:29 pm
BH+ wrote:
Fri May 22, 2020 7:26 pm
KlangFool wrote:
Fri May 22, 2020 7:07 pm

...3) And, the job/project has to interesting and lucrative enough for me to consider...


KlangFool
I would not discount the value of relevant work that would generate a meager income while still keeping you in the lower tax brackets. That lightly taxed income could reduce the stress on your savings and at the same time keep you in the game for further opportunities. You can always throw the towel in later.
BH+,

I had been there and done that. The only kind of contract work that I can get is $65 to $100 per hour and above. And, that was a few years ago. Anything less than that, I had applied and I received no offer.

KlangFool
Those rates seem excellent to me. If you find something flexible that you can tailor to your situation, you will be fine whether you take it or leave it.

Topic Author
KlangFool
Posts: 16096
Joined: Sat Oct 11, 2008 12:35 pm

Re: The axe falls and I am prepared. What's next?

Post by KlangFool » Fri May 22, 2020 7:39 pm

Compound wrote:
Fri May 22, 2020 7:31 pm
KlangFool wrote:
Fri May 22, 2020 6:17 pm
Folks,

So, it happened. I will be laid off by the end of June.

The basic financial stuff:

A) 3 months severance pay

B) 1 year subsidized medical insurance.

C) 1 year COBRA

D) 110K to 120K of the Emergency Fund

E) 1.35 to 1.4 million 60/40 portfolio

F) Late 50+ years old.

G) Annual expense of about 50K to 60K per year. (Total before wife's income)

H) My wife will continue working at 15K per year with good medical and dental insurance.

I) I had crossed the second bend points for Social Security. So, social security income for me and my wife combined is about 3K to 4K per month.

My question is

1) Is it really worthwhile for me to continue working? I worked in the IT area. If I want to stay in this area, I have to study 10 to 20 hours per week just to keep up with the latest technology.

2) If I do contract work, how much should I get paid before it is worthwhile for me to work?

A) I only plan to work 20 hours per week. Between unemployment and the $600 per week, I will get about $900 per week. Unless I am paid at $90 per hour or higher, it may not be worthwhile for me to work

3) Any other comment/feedback as to how do you decide whether you should continue working or just retire.

KlangFool
KlangFool — you’ve been preparing for this yourself while constantly telling your fellow Bogleheads to prepare for this possibility. The numbers you present in your post are a testament to your preparation.

I don’t think you need to work for money anymore — with two caveats to consider. Your wive’s excellent healthcare coverage is key! Without that, your expenses would go up significantly and may push you into an unsustainable situation. The other consideration is sequence of returns risk. It’s a particularly volatile time for the market. A big downturn at the start of retirement could hurt.

A non-monetary consideration that I haven’t seen mentioned (or maybe missed): Do you enjoy working for work’s sake? Is it interesting? Do you enjoy getting out of the house and working on common projects with colleagues?

Best of luck to you KlangFool.
Compound,

<<Your wive’s excellent healthcare coverage is key! your expenses would go up significantly and may push you into an unsustainable situation.>>

1) My employer insurance is the backup for the next 2 years.

2) The 60K accounts for expensive medical insurance.

<<Do you enjoy working for work’s sake? Is it interesting?>>

I only do interesting work. Anything simpler would be done by cheaper and younger alternative.

<<Do you enjoy getting out of the house >>

I do not get out of the house with my job. I worked from home.

<<and working on common projects with colleagues? >>

At my level, I only work with smart people.

KlangFool

tealeaves
Posts: 129
Joined: Sun Apr 29, 2018 1:21 pm

Re: The axe falls and I am prepared. What's next?

Post by tealeaves » Fri May 22, 2020 7:46 pm

A good friend of mine is in a similar position. I've helped him with his taxes so I know a bit about his finances. Mid fifties, just laid off; more of a tech project manager in recent years but still with good development skills. Investable assets a bit greater (roughly $2.3M) but also with higher annual expenses - around $80K including health care and taxes. 50:50 portfolio. Wife works part time for about $1K per mo. He is looking hard for work (perhaps consulting) not because he would find it fulfilling, but simply because he would not feel secure enough at this withdrawal rate at this age (he has talked about working until 60 with a "magic number" of $2.75M). Another factor is that he has a grown child whom he'd like to help out if she needed it and/or leave an inheritance. Hard to say with these things what's OK or not OK or what's too optimistic or pessimistic. It's important for all of us to do what we need in order to feel secure.

User avatar
canadianbacon
Posts: 119
Joined: Sun Nov 10, 2019 10:04 pm

Re: The axe falls and I am prepared. What's next?

Post by canadianbacon » Fri May 22, 2020 7:51 pm

KlangFool wrote:
Fri May 22, 2020 7:25 pm
ram,

There should be opportunities for me. But, it may not be worthwhile for me to take it. Those are the questions that I am trying to work out.

KlangFool
I think others have posted similar sentiments, but I think at this point the answer to your question is not financial but philosophical. What do you want to do with the time you have left?
Bulls make money, bears make money, pigs get slaughtered.

dcabler
Posts: 1375
Joined: Wed Feb 19, 2014 11:30 am

Re: The axe falls and I am prepared. What's next?

Post by dcabler » Fri May 22, 2020 7:52 pm

KlangFool wrote:
Fri May 22, 2020 6:17 pm
Folks,

So, it happened. I will be laid off by the end of June.

The basic financial stuff:

A) 3 months severance pay

B) 1 year subsidized medical insurance.

C) 1 year COBRA

D) 110K to 120K of the Emergency Fund

E) 1.35 to 1.4 million 60/40 portfolio

F) Late 50+ years old.

G) Annual expense of about 50K to 60K per year. (Total before wife's income)

H) My wife will continue working at 15K per year with good medical and dental insurance.

I) I had crossed the second bend points for Social Security. So, social security income for me and my wife combined is about 3K to 4K per month.

My question is

1) Is it really worthwhile for me to continue working? I worked in the IT area. If I want to stay in this area, I have to study 10 to 20 hours per week just to keep up with the latest technology.

2) If I do contract work, how much should I get paid before it is worthwhile for me to work?

A) I only plan to work 20 hours per week. Between unemployment and the $600 per week, I will get about $900 per week. Unless I am paid at $90 per hour or higher, it may not be worthwhile for me to work

3) Any other comment/feedback as to how do you decide whether you should continue working or just retire.

KlangFool
I've watched your posts over the years and you're a pretty conservative guy: belts, suspenders, elastic waistband + some velcro. I think you'll be fine.

I'm also late 50's, semiconductor industry. Wife not working, but expenses about a little over 2x what you show on your high end. But Portfolio a little over 2X yours and I've felt for a while now that I'm fine if what happened to you happens to me.

Only question - can you explain points B and C? Does C mean that they will pay for your Cobra for 1 year? And does B mean that they will subsidize your health insurance for the next 12 months after the 1 year of Cobra? If so, that's actually pretty sweet.

Where I live contract work is highly variable anywhere from $60 to probably $90 at the high end. But that's in my industry, not yours. Question is how long does your unemployment last and does it make sense to study during that time, then switch over to contracting after unemployment runs out? Then again, I think you're probably fine even if you never go back to work, but you might consider getting an IT job with the local or state government if all else fails.

Cheers and best of luck!
Last edited by dcabler on Fri May 22, 2020 7:54 pm, edited 1 time in total.

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