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

[KlangFool]

If you have the skills you think you have, you can find a $60k job easy. In your neck of the woods, $100k jobs should be easy. Your attitude of "I only want to work on billion dollar systems" is silly. You're not that special. Million dollar systems take hard work and can present interesting challenges too.

But, because you saved well, you don't have to take a job you don't want and can retire instead.

You probably should.

HomerJ,

<<If you have the skills you think you have, you can find a $60k job easy. In your neck of the woods, $100k jobs should be easy.>>

Have you actually tried this before? Please remember I was unemployed for more than 1 year a few times. The last time was only a few years ago. I did apply for those 60K to 80K jobs. I had no offer. Meanwhile, I had job offer in the 120K to 150K range. At the 60K to 80K range, they have cheaper and younger alternatives.

My statement is based on my actual job-hunting experience.

<<Your attitude of "I only want to work on billion dollar systems" is silly. You're not that special. Million dollar systems take hard work and can present interesting challenges too. >>

Your pay is based on the complexity of the system that you work with. The employer will go with a cheaper and younger alternative for a simpler system. This is the fact of life. This is not my attitude. This is the reality presented to me while I was job hunting.

KlangFool

[KlangFool]

The reason is that you would have to pay of off out of your portfolio. By not paying it off you would have an extra $300K in your portfolio so it would need to be invested so that you have enough to pay off the balance some day as well as the interest and taxes. There are a lot of moving parts that would need to come together to make it work out well when you can't pay off the mortgage out of future wages.

Watty,

I can pay off the 300K mortgage at any time if my 60/40 portfolio cannot beat the 3.49%. I have enough money in my taxable account to do that. But, at this time, I believe the reward/return will far exceed the 3.49%.

KlangFool

[KlangFool]

Folks,

I am asking two separate questions:

A) Under what financial condition, it is rewarding for me to take on part-time project work. At this moment, it looks like anything less than $90 per hour is not worthwhile.

B) Under what non-financial condition, would you go back to work?

KlangFool

[bampf]

Klang,

I don't have a lot of advice for you but I would like to tell you I a am grateful for your words of wisdom and your advice. Your posts have caused me to evaluate how and why I do things. I haven't always agreed with you but I have always appreciated your point of view and your position. You have been remarkably consistent and I am in the position I am financially in no small part because of your discourse and your advice. I am confident in your skills to navigate the challenges you are facing and I wish you well.

I think if I were in your position (when I am in your position) I would be most worried about what I am doing every day. I don't really know how to relax and not stress about the future and the post accumulation phase. I look forward to listening to you as you navigate the next leg of your journey.

Regardless, you have helped me and changed my financial future. I am grateful

Best wishes, although I suspect with your grit and determination those wishes are not needed. Thanks again for sharing your journey and your wisdom.

Regards,

--Bampf

[sergeant]

Folks,

I am asking two separate questions:

A) Under what financial condition, it is rewarding for me to take on part-time project work. At this moment, it looks like anything less than $90 per hour is not worthwhile.

B) Under what non-financial condition, would you go back to work?

KlangFool

A. Don't work for less than $90 an hour.
B. It doesn't matter what I say, you obviously have your own criteria and will disagree with any other suggestion.
Good luck. You should retire.

[aarondearu]

You could refinance your mortgage to a lower rate.
There are 30 year mortgages under 3% with $0 closing costs right now.

[HomerJ]

If you have the skills you think you have, you can find a $60k job easy. In your neck of the woods, $100k jobs should be easy. Your attitude of "I only want to work on billion dollar systems" is silly. You're not that special. Million dollar systems take hard work and can present interesting challenges too.

But, because you saved well, you don't have to take a job you don't want and can retire instead.

You probably should.

HomerJ,

<<If you have the skills you think you have, you can find a $60k job easy. In your neck of the woods, $100k jobs should be easy.>>

Have you actually tried this before? Please remember I was unemployed for more than 1 year a few times. The last time was only a few years ago. I did apply for those 60K to 80K jobs. I had no offer. Meanwhile, I had job offer in the 120K to 150K range. At the 60K to 80K range, they have cheaper and younger alternatives.

My statement is based on my actual job-hunting experience.

<<Your attitude of "I only want to work on billion dollar systems" is silly. You're not that special. Million dollar systems take hard work and can present interesting challenges too. >>

Your pay is based on the complexity of the system that you work with. The employer will go with a cheaper and younger alternative for a simpler system. This is the fact of life. This is not my attitude. This is the reality presented to me while I was job hunting.

KlangFool

Your experience is not my experience.

It doesn't matter anymore. Retire. Enjoy life. You've earned it.

[Carpenterant]

1. Keep working
2. Find a job if you like

I know that doesn’t answer your questions in the context you asked, but, I think it applies. I’m kinda surprised you’re asking such specific questions with how matter of fact and prepared you come across.

[Chadnudj]

Seems like you'd be primed for a consulting gig, KlangFool.

I'm sure there are headhunters out there that could bring you opportunities that you could weigh in your field -- short term projects that you could pick and choose from, based on time commitment, pay, ability to work from home, etc.

I'd at least explore that -- maybe something will tickle your fancy.

But as for the money side -- you're fine. Just need to be sure you have what you want to do in retirement lined up.

[bampf]

1. Keep working
2. Find a job if you like

I know that doesn’t answer your questions in the context you asked, but, I think it applies. I’m kinda surprised you’re asking such specific questions with how matter of fact and prepared you come across.

Being told you are not employed anymore is humbling even if you are prepared for it. It is natural to seek solace or validation. Regardless of who you are and how prepared you are being told that your service is no longer wanted or valued stings.

I would suggest that we all keep in mind that the vast majority of us hold a world view of ourselves based on our value to society and our employers. I would also suggest that people temper their response predicated on the uncertainty of the future. We shall all be there one day. A bit of empathy and perhaps not so strident a response is in order.

[liberty53]

Sorry KlangFool,

You haven't done the hard work on your requirements/specifications for your life through the next period of time.

It's probably unwise to work those so soon after getting the bad news - but you do need to work them beyond the vague requirements discussed so far in this thread.

After the first few levels of requirements are finished look at the current gaps and decide how you are going to satisfy those requirements.

You at least need the top level requirements in place before this thread will really help - assuming you are soliciting it.

I'm late 50's and retired a few years back. I'm now back in a job with a decent role and it's a lot of pressure. Took a modest pay cut from my peak salary. I'm questioning why I went back to work and may revert the change fairly soon - I don't want to be punching all the time.

Crazy Times!

[2pedals]

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 am sorry that this has happened. I think you are in a decent financial situation and you can do what whatever you want. I think you need to do some job searching to know if it will be worthwhile for you. You will figure out the answer to your question only if you do so work looking around. What's wrong with working longer to shore up your savings and secure your retirement so you have a bigger buffer for unexpected events, if you can find an amicable job? If you want to go back into the work force it should be obvious.

[Carpenterant]

1. Keep working
2. Find a job if you like

I know that doesn’t answer your questions in the context you asked, but, I think it applies. I’m kinda surprised you’re asking such specific questions with how matter of fact and prepared you come across.

Being told you are not employed anymore is humbling even if you are prepared for it. It is natural to seek solace or validation. Regardless of who you are and how prepared you are being told that your service is no longer wanted or valued stings.

I would suggest that we all keep in mind that the vast majority of us hold a world view of ourselves based on our value to society and our employers. I would also suggest that people temper their response predicated on the uncertainty of the future. We shall all be there one day. A bit of empathy and perhaps not so strident a response is in order.

I appreciate the prudent response. I’d add that sometimes we make things more complex then they need to be.

If we go much deeper then that I’m afraid we’ll be projecting too much.

[JD2775]

This almost seems cruel to me. You are the one person on this board who is constantly reminding people how important it is to be prepared financially for these exact situations, and then it turns around and knocks on your front door. Sorry to hear this KlangFool, but if anyone on this board is prepared for this I have no doubt it is you. Good luck.

[Watty]

A) Under what financial condition, it is rewarding for me to take on part-time project work. At this moment, it looks like anything less than $90 per hour is not worthwhile.

Instead of looking at it in dollar terms you might look at it in terms of what economists call "opportunity cost". For example a teenager might have enough money to have a pizza or a movie but not both. In terms of "opportunity cost" choosing to go to the movie does not cost $12, it costs not having the pizza.

If you get a do some work then consider what you would do with the money from the job. For example if you work for another year then you might buy an RV, buy a nicer house, or donate the money to a charity you support. You can then decide if that is worth the trade off or not.

[clown]

Sorry to hear that -- but good for you for being prepared.

In my mind, you have plenty of assets and you are taking only small slips from your portfolio (in excess of interest and dividends earned). So the choice is pretty simple. If you absolutely love working, then seek another job. If not, then enjoy your retirement.

[orhkaf]

Sorry for the loss.

I’d look at the next three months as a “paid vacation” and use it to collect my thoughts and assess how I want to move forward in life.

Can you afford to retire? Sure why not. It would be a sweeter retirement if you left the workforce on your own terms however.

Good luck to you.

[novice111]

i'm a novice, can offer no advice.
But wanted to say, thanks for your posts and hope you keep posting.
Good wishes to you

[Bfwolf]

Folks,

I am asking two separate questions:

A) Under what financial condition, it is rewarding for me to take on part-time project work. At this moment, it looks like anything less than $90 per hour is not worthwhile.

B) Under what non-financial condition, would you go back to work?

KlangFool

A) From the perspective of meeting your spending needs, the answer is a job with pay approaching infinity. Your spending needs are already met. OK, maybe not at 100% certainty, but high enough. Obviously in the real world, add'l money would be of benefit to you because you could spend above and beyond your spending needs. Or donate the money to the charity of your choice. That has value. But only YOU can decide how much value that has. It's hard to imagine you'd choose to work purely for the money for $10 an hour but hard to imagine you'd turn down $10,000 an hour. Is $90 an hour the magic number? You tell us.

B) Under what non-financial condition would *I* go back to work? If I didn't need money, I wouldn't work. Work to me has always been about the money--I'd always rather be doing something else. But that's me. You're you. You've said on this thread you derived some enjoyment from your work--that it wasn't purely about the money. So again, only you can answer the question. I think the critical question here is: do you think you can replace the enjoyment you got from work appropriately in retirement? If so, then it sounds like there should not be a non-financial condition under which you'd go back to work.

[desiderium]

Folks,

I am asking two separate questions:

A) Under what financial condition, it is rewarding for me to take on part-time project work. At this moment, it looks like anything less than $90 per hour is not worthwhile.

B) Under what non-financial condition, would you go back to work?

KlangFool

KlangFool,

Like many others, I have enjoyed your perspective, so thanks.

I would suggest exploring the startup world. Find some young dreamers you can help with your broad experience. It will amuse you and make you feel younger. Work for equity and view it like your annual lottery ticket.

Best of luck

[Luckywon]

Folks,

I am asking two separate questions:

A) Under what financial condition, it is rewarding for me to take on part-time project work. At this moment, it looks like anything less than $90 per hour is not worthwhile.

B) Under what non-financial condition, would you go back to work?

KlangFool

Could you explain how your unemployment benefits would be affected by part time work? It would seem to me that you should determine the marginal rate you will really be earning, between your pay and the reduction in unemployment benefits as an important determinant of whether or not it is worth your time to work.

[midareff]

Sorry to hear the news KF. I'd try to work a few more years to add to the cushion if I could since bad things can happen to good people, and in a few years your human capital will have depreciated away.

[market timer]

Getting laid off is a great way to retire. You don't have to second guess your decision, and you get a severance and unemployment benefits.

I agree that you should not really look for any work at this time. If I were in your position, I'd focus on hobbies that could potential generate income, but where income is not the primary objective. It might be good to take off your IT hat and try something completely different.

[dcabler]

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!

dcabler,

<<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. >>

They pay for 1 year of subsidized medical insurance and then it switches to 1 year of COBRA.

<<Question is how long does your unemployment last and does it make sense to study during that time,>>

Normal unemployment lasted for 26 weeks. The $600 per week lasted until July unless the government extends it again.

<<you might consider getting an IT job with the local or state government if all else fails. >>

This does not work. They will go for a cheaper and younger alternative.

KlangFool

Depends on what you're willing to accept pay-wise. I don't buy the "younger alternative" having known plenty of people who've moved out of the private sector into govt jobs.

[LiveSimple]

Folks,

I am asking two separate questions:

A) Under what financial condition, it is rewarding for me to take on part-time project work. At this moment, it looks like anything less than $90 per hour is not worthwhile.

B) Under what non-financial condition, would you go back to work?

KlangFool

KlangFool, I am mostly in your same situation, in IT, same age group may be a few years younger, similar portfolio size, potential similar work style, similar responsibilities at work as individual contributor/ senior technical resource.

In my experience We wanted to relocate where we want to retire, hence was looking for jobs passively. Realized finding a new job is hard due to age, technology changes and culture.

I went for interviews that were lower than my current pay grade, after all interviews no offer. But there are calls for a higher pay grade positions, so you keep your LinkedIn open for opportunities so let the calls come in. You never know you may get am interesting job in an area you like.

As I have realized, time is money, or time and money are related, if you want money you have to give up time, if you want time you have to give up money, pick one.

I remember my neighbor retiring at 55, 20 years ago meet him this week he is 75, he also shared that retiring at 55 was his best decision, have workers, saved and retired well. If he had worked a few more years he may have made money but lost time as well.


So see you if you can make the economics work with containment and enjoy life.if the right opuurunity shows up take it.

Are you retiring where you are ? Or you have a different location in the plans.

[Nastywarnob]

Klangfool,
Another comment to echo what many others have said...your posts have always resonated and I truly commiserate with your situation.
You have a good portfolio position, but could be better. You could take time to look for the next right position, but you’d be “on the hook” to work diligently to keep the skills fresh while looking for a potential unicorn. At this point in your career, you want a challenging, fulfilling work effort where you partner with smart, capable people as opposed to the various flotsam and jetsam you can get on small, remedial projects.

A key piece of detail that is missing that could certainly provide you additional flexibility: What kind of equity do you have in your home? I view $300K debt and supporting payments as a large overhead. I view HCOL areas as a long term non-starter. I view an enormous house in a MCOL/LCOL as maintenance and risk overhead I don’t need. Where I will live as I consider retirement is a significant way to position myself for a far better likelihood of success. I’m not going to recommend that you to keep working, nor am I going to recommend you to retire. I am only going to recommend that you look at everything to see what the true cost of living could be, and from where flexibility could come.

I’m in my early 50’s in tech...I know the specter of ageism is real...I think about these considerations and factors all the time. The good news is that you are dealing from a position of strength. I’m in a similar position portfolio-wise as you (although have kids colleges on the horizon)...but the considerations you have called out are similar to mine as I lay out potential action plans for possible career events. Good luck to you, although you’ve already tilted the odds in your favor....the question is not whether your ultimate outcome will be favorable at this point...only how favorable it will be.

[tonyclifton]

KlangFool-

I've learned and reflected a lot from your posts. Here are three areas to consider:

1. Double-check the cost of COBRA. In the state where I live, when I needed it...COBRA required me to pay my share of my medical costs ($75 per month) plus my employers share of the medical costs ($458). So my single plan goes from costing $900 per year out of pocket to $6,396 per year. Also, I remember there were some other catches about out of pocket costs - bottom line, it was really expensive. Check into the Obamacare private exchange or going onto your spouse's plan. Where I live the Obamacare exchange has way more affordable options than COBRA (and it is the same insurance provider).

2. Your severance package may include career counseling. Now a days this is way more than resume writing. A career counselor could help look at your network and identify transferable skills. You might be surprised that you could find a job that provided a lot of enjoyment and benefits. If the career counseling that is offered is no good maybe consider spending a few thousand for an executive coach. I've done both and their return on investment is huge.

3. Take some time to adjust. Working anywhere for a long time and then stopping is a big adjustment. Seems like your money situation is fine which buys you time.

Good luck!

[MikeG62]

Folks,

I am asking two separate questions:

A) Under what financial condition, it is rewarding for me to take on part-time project work. At this moment, it looks like anything less than $90 per hour is not worthwhile.

At the moment, I believe the $600 Federal top-off only extends to the end of July. After that, it appears you UI would be cut by 2/3rds. So if your $90 per hour figure is correct when including it, then the tripwire becomes $30 per hour if/once it ends. Since that's only roughly two months away (and assuming the $600 top-off is not renewed) I think you'll be looking at a different breakeven point in a few months time. Could be more financially compelling to consult at that time. Your call though as I am not advising one way or the other. It does appear to me that you have the financial wherewithal to retire now if you want to do that.

B) Under what non-financial condition, would you go back to work?

KlangFool

I fully retired from a career in finance at age 53 in 2016. My DW was a SAHM for the 23 years prior and never returned to working outside the home once our oldest daughter was born. So we were both then retired at that point. There are no non-financial conditions that would cause me to want to go back to work. Prior to the pandemic, we had a busy life filled with lots of travel and entertainment. I look forward to returning to that life once this pandemic passes. Even now during quarantine I'd rather being doing what I do every day than working in any capacity. In fact, I'd point out that shortly after I retired I turned down several opportunities to consult at hourly rates in the range of $500+/- per hour. So while it would have been financially lucrative for me to return to working, the thought of someone else's problems becoming my problems (which was the case for most of my career) was unappealing to me even at those hourly rates of compensation. Way too many other fun and interesting things to do than deal with other peoples problems (problems I did not create) and do it under their timelines.

I say all of this to suggest that this decision is up to you. Are you ready to retire? Are there enough interesting things for you to do being full-time retired (while your wife is working and once she retires) that you'd chose not to work at all over part time consulting? Does your $60K annual spend figure include a healthy amount for discretionary spend? Keep in mind that discretionary spend "may" be quite different for you as a retired person than you as a working person. Again, I say may because this is person dependent.

Hope that is responsive to the questions you were asking. Good luck with this decision.

[winterfan]

Sorry to hear about your job loss. We are in a similar position. However, we still have a kid in elementary school. If my kids were older (preferably done with college), I'd hang it up. It seems like you are fine financially.

[Deadwood]

I agree with Calvin and Hobbes. You ask a question about what you should do but seem to scoff at the idea of doing anything other than simply retiring right now, so it seems like you have your answer.

Fortunately, because of your ultra-conservative outlook, it looks like you’ll be just fine

I agree. You already know the answer. You have enough money. Semi-retire. Look for occasional contract work that inspires you.

You are well prepared.

Best of luck.

-DW

[panhead]

As for a contracting position, if you find one that meets all of your criteria, work from home, etc, I think you can be flexible on the income.

panhead,

Somehow, that is not consistent with my experience. It is normally the reverse in my case. If I ask too little, I will not get the job/contract. For the size and kind of project that I deal with, the amount that I charged is too insignificant to matter. If I asked too little, I am probably not good enough.

KlangFool

I completely agree with this. Cost is perceived value. My point is that you could come in at $75-$80 (call it median salary) an hour for something that interests you, and $150-200 for something that doesn't. The raw numbers are obviously location and industry specific, but I'm sure you have a feel for what they should be. Hey, and if you don't get either of em', you're still good.

To your point: I've seen colleagues bids rejected before because they are too low, so we both know this happens.

[dandinsac]

Folks,

I am asking two separate questions:

A) Under what financial condition, it is rewarding for me to take on part-time project work. At this moment, it looks like anything less than $90 per hour is not worthwhile.

B) Under what non-financial condition, would you go back to work?

KlangFool

KlangFool,

First of all.. thank you for commenting and helping me to think through issues. You helped me get my finances in a much better place!

My $0.02...

For the next few months, work that results in you losing unemployment needs to be very well paid. It should be comparable to your current salary. After unemployment stops, starting contract work for any amount allows you to set up a business. Tech stuff you will buy anyway like cellphones, laptops, software, etc. become business expenses. Ongoing Internet and cellular bills are business expenses as well. It also allows you to defer income in an IRA. Besides wrapping expenses that you’re going to spend anyway into a business, it also allows you to defer taxes. To get started, I would price yourself under market with a limit on hours/week. (Maybe $70-75/hour?) Try to determine if project work is good for you. Set a goal to get the business set up and get some work in 2020.

Use the remaining month and the next couple of months to refine specific technical areas that you would want to work at for the 20 hours/week. I see contract work, especially technical work, fall into three broad areas... expert, surge or emergency.

Expert resources would be paid well, but likely will be overtaken by others who gain the same skills and knowledge. Large consulting companies love to sell these resources.

Surge resources would be technical “bodies” who can relied upon when extra work is required for a short period of time to support upgrades, new proposals, release testing, write documentation, etc.

Emergency resources would be called for data security breaches, hardware failures, etc. If you can qualify as an emergency resource, I’d try to find companies willing to pay a small monthly amount to have you “on call”. For example, $300/month for up to 6 billable hours. You guarantee to respond 24x7, but if there are no emergencies, they pay you anyway. Those gigs are hard to find, but great if you can.

For the other part of your question (non-financial)... If you enjoy doing technical work, consider finding volunteer work in an area that you find meaningful. Staying in the mix will help keep your skills relevant and it may lead to paid work as well. You may also get some of the same tax deductions to offset your income.

Good luck!

[toocold]

Sorry to hear about the layoff. Looking at your finances, you can retire if you want. The question is what will you do with your life?

The approach that I took, since I am in a similar situation to yours, is see what is out there. If there is something that you'd enjoy, take it. If not, pass.

I still get executive recruiter calls and I pass on 95% of the opportunities.

[KlangFool]

Folks,

I am asking two separate questions:

A) Under what financial condition, it is rewarding for me to take on part-time project work. At this moment, it looks like anything less than $90 per hour is not worthwhile.

B) Under what non-financial condition, would you go back to work?

KlangFool

Could you explain how your unemployment benefits would be affected by part time work? It would seem to me that you should determine the marginal rate you will really be earning, between your pay and the reduction in unemployment benefits as an important determinant of whether or not it is worth your time to work.

Luckywon,

Because of the nature of my work and pay, any part-time that I would have taken would make enough money that I receive no unemployment benefit. At $60 to $100 per hour, it does not take many hours for this to be true. That was my experience a few years ago. It may be different this time.

KlangFool

[LSLover]

It looks like COBRA should be available for at least 18 months...

https://www.dol.gov/sites/dolgov/files/ ... nsumer.pdf

[KlangFool]

It looks like COBRA should be available for at least 18 months...

https://www.dol.gov/sites/dolgov/files/ ... nsumer.pdf

Thanks for the information. I will reconfirm this with the employer.

KlangFool

[HueyLD]

KF,

What did your wife say about early retirement?

Best of luck to you and yours.

[KlangFool]

KF,

What did your wife say about early retirement?

Best of luck to you and yours.

HueyLD,

She had seen me working too hard to keep my job for too long that she said I should take it easy. I don't need a job.

KlangFool

[Dave55]

KF you prepared well for this day. Work if you are inspired to do so.

Dave

[KlangFool]

Folks,

Consolidating my response to all the posts:

1) I have 100K in my home equity that I am not counting. In my neighborhood, this is a small townhouse. So, it is a 400K house.

2) Not likely to move unless we are forced to because my in-law family lives here.

3) I am a technical person. So, I am only hired to solve a tough technical interesting problem that most people had failed to solve. The kind of problem/project that I deal with falls into two groups:

A) Architecture design -> It takes weeks or months

B) Very tough network/system problem that many people had failed to fix over months. So, it is an emergency but it is not as urgent as need to be solved in days.

And, by the nature of my job/project, most people at my level worked remotely.

4) My kids had graduated from college and found jobs. My daughter graduated two weeks ago.

5) I did not think or plan my high-level requirement because I was just trying to keep my job and pay her way through college. Now, it is done.

KlangFool

[lostdog]

Klangfool,

Sorry about your lay off. It looks like you'll be fine. Is there anything outside of IT that looks fun to you? Some sort of fun hobby that you can work part time and enjoy?

I was also in IT. I was mainly concentrated on the routing and switching. I also administered Windows servers and backups for many years. The stress was very high especially doing the upgrade and security patches in the middle of the night. High stress when the network was down.

I'm early retired in my mid 40's. The wife works with full health benefits. I had to quit due to health issues. I'm fully recovered and am very healthy. I doubt that I'll find IT work again. I've been messing around with some hobbies and having fun with physical fitness. The physical fitness hobby has increased my quality of life immensely with a very positive physical and mental health. Coming from sitting in a high stress office all day to doing hobbies you enjoy and physical fitness you'll notice your quality of life will be different.

I hope it all works out for you. Based on the numbers it looks like you'll have your freedom.

[MisterMister]

In my late 40s, also as an IT engineer, I found myself unemployed at a rare time when finding an IT position was somewhat difficult. After a number of months I found a fledgling software company which needed my skills, but could not pay market rates. I happily accepted a 35% cut to become re-employed and built my salary back up in the coming years. The money was still better than most people are fortunate enough to earn.

Fast forward to my middle sixties a few years ago. I was again laid off. My PF was about 20% less than yours but I was a hair away from FRA so I knew I could draw SS if I needed it (I didn't in the short term). Given my age, I did not file for unemployment. I knew that doing so was illegal without a clear intention to diligently seek employment--and I didn't have that intention. I could not have dreamed at the time that a couple years later my wife would lose her own modest employment due to a global pandemic, but that's exactly what happened.

Were I in your situation my biggest concern would be healthcare coverage. In the past there were a few opportunities for me to be on my wife's coverage but I was always reluctant to do so for fear that doing so would somehow jeopardize her job. My wife is currently on ACA and without subsidies it would be quite expensive. My expenses are almost identical to yours. I fully expect to be paying at least 30% of my budget in healthcare costs in the next few years once my income makes me ineligible for subsidies. So consider in your planning at least the possibility that you might need to provide health coverage for yourself for some number of years. Continuing significant increases in cost seem inevitable to me as an outcome from the epidemic.

I feel you have already decided to retire and are mostly looking for evidence that it is the right decision. Nothing wrong with that; you've worked hard and prepared well for your future. Good luck.

[KlangFool]

KlangFool-

I've learned and reflected a lot from your posts. Here are three areas to consider:

1. Double-check the cost of COBRA. In the state where I live, when I needed it...COBRA required me to pay my share of my medical costs ($75 per month) plus my employers share of the medical costs ($458). So my single plan goes from costing $900 per year out of pocket to $6,396 per year. Also, I remember there were some other catches about out of pocket costs - bottom line, it was really expensive. Check into the Obamacare private exchange or going onto your spouse's plan. Where I live the Obamacare exchange has way more affordable options than COBRA (and it is the same insurance provider).

2. Your severance package may include career counseling. Now a days this is way more than resume writing. A career counselor could help look at your network and identify transferable skills. You might be surprised that you could find a job that provided a lot of enjoyment and benefits. If the career counseling that is offered is no good maybe consider spending a few thousand for an executive coach. I've done both and their return on investment is huge.

3. Take some time to adjust. Working anywhere for a long time and then stopping is a big adjustment. Seems like your money situation is fine which buys you time.

Good luck!

tonyclifton,

1) I was unemployed for more than 1 year a few times. So, I know the actual cost of COBRA. For some employers, they actually list the employer's cost at your normal payslip. You could calculate this number at any time. It is your cost plus employer's cost and 3% extra as overhead.

2) At my level, it is useless. People hire people. I get my job/project from unsolicited offer over Linkedin.

3) Being unemployed for more than 1 year a few times gave me plenty of practice. But, it still does not make it any easier.

Thanks.

KlangFool

[printer86]

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

Sorry to hear about your layoff. Your finances are ok, but getting some additional income can do nothing but help. And, with your technical skills, you should have a fair chance in finding some gigs. I like the plan you stated in the above post. You just need to be assertive in your project/consulting effort. Good luck.

[KlangFool]

In my late 40s, also as an IT engineer, I found myself unemployed at a rare time when finding an IT position was somewhat difficult. After a number of months I found a fledgling software company which needed my skills, but could not pay market rates. I happily accepted a 35% cut to become re-employed and built my salary back up in the coming years. The money was still better than most people are fortunate enough to earn.

Fast forward to my middle sixties a few years ago. I was again laid off. My PF was about 20% less than yours but I was a hair away from FRA so I knew I could draw SS if I needed it (I didn't in the short term). Given my age, I did not file for unemployment. I knew that doing so was illegal without a clear intention to diligently seek employment--and I didn't have that intention. I could not have dreamed at the time that a couple years later my wife would lose her own modest employment due to a global pandemic, but that's exactly what happened.

Were I in your situation my biggest concern would be healthcare coverage. In the past there were a few opportunities for me to be on my wife's coverage but I was always reluctant to do so for fear that doing so would somehow jeopardize her job. My wife is currently on ACA and without subsidies it would be quite expensive. My expenses are almost identical to yours. I fully expect to be paying at least 30% of my budget in healthcare costs in the next few years once my income makes me ineligible for subsidies. So consider in your planning at least the possibility that you might need to provide health coverage for yourself for some number of years. Continuing significant increases in cost seem inevitable to me as an outcome from the epidemic.

I feel you have already decided to retire and are mostly looking for evidence that it is the right decision. Nothing wrong with that; you've worked hard and prepared well for your future. Good luck.

MisterMister,

1) FYI. I budgeted 20K per year for my annual medical expense.

2) My severance comes with 2 years of medical coverage -> 1 year subsidized and 1 year COBRA.

3) My wife has a part-time local government job with good medical and dental insurance.

KlangFool

[CyclingDuo]

Folks,

I am asking two separate questions:

A) Under what financial condition, it is rewarding for me to take on part-time project work. At this moment, it looks like anything less than $90 per hour is not worthwhile.

B) Under what non-financial condition, would you go back to work?

KlangFool

Condolences, KlangFool on this news. You have been preparing yourself for it ever since your previous layoffs. In addition, you have bounced back financially from all the losses you took from the industry specific stocks you held back in the early 2000's. There is plenty of experience and wisdom that was gained through the past 20 years - much of which you have shared with many of us over the years posting here.

Yes, your original post certainly was a divided fork in the road that pointed out the two questions. You also asked for those who have been through it at this age, what they have done regarding taking the route of capitulation retirement or not.

A. Financially you have things in fairly good order. The college educations for your kids and your mortgage stand out as raison d'être for continuing to milk your human capital - IMO - at some level. I always look at it in this way: For every $10K you could bring in each year using your human capital, it is as if you had an additional $250K in your portfolio (using the 4% SWR). $10K, $20K, $30K, $40K, $50K, etc... doesn't sound like much to you based on your posts above, but it does provide some flexibility and holds off the need for you having to tap your nest egg - or as much of it as if you weren't bringing in an income. Be it one year at a time, or for several years. Only you can decide if you are going to let pride stand in the way of it's an all or nothing compensation situation. If you are not willing, then financially you play out the hand you are holding and be fine with it. If you still have some savings goals financially that you wanted to hit - then at some point you will find a way to increase your household income to reach those goals. Either you or your spouse - or both - could find a way into bring in more than just her $15K. It might currently be too close to the sting to focus on this, but the time will come and you'll know it.

B. Adaptability is a key element if you have a desire to put your human capital to work again - even if it is not for the money, but for the challenge, engagement, sense of purpose, sense of identity, social aspect, routine, etc... . Some of these things are more important than money, and you will have to come to terms with yourself if any of those items are important to your psyche and well being. You know my story from this thread (viewtopic.php?t=273092). Although two years ago at the age of 56 when I got the news at the end of February and worked until the end of May 2018 before finishing my last day, I did spend the majority of the entire month of June 2018 on the couch staring into what seemed like a vacant space or void on the wall. That didn't feel good to me and my spouse quipped that I wasn't going to stay on the couch. That was my non-financial condition or reason that was more for my psyche, relationship, and self-identity that got me going to not accept the capitulation retirement (even though we had the nest egg and my spouse's income to cover us). In short, I wasn't ready. So I clawed my way back by piecing together some part-time incomes from totally different industries. The non-financial addition of firing up my drive, sense of purpose/identity, and keeping me challenged helped me transition through it all over the past two years. Not everyone needs that, but I did.

In spite of the current narrative being Covid-19, it will not last forever. If you go to the link above that had lots of links and articles surrounding losing a job in your 50's (of which you are well aware) - not to mention losing multiple jobs of which some of the data and links discuss, I would be very proactive about lining up at least something before the end of June that keeps you engaged and brings in some income even if it means you eventually make the decision not to work because of your financial situation in a few months or by the end of the year. This will help you transition a lot better than if you just pull the plug and sit it out for months or longer. The data shows that at our ages in the late 50's - the longer your down time is, the harder it is to get employed. Although a challenging time with the number of layoffs (especially the millions and millions in the service industry), I wouldn't let that stop you from exploring.

Again, sorry for the layoff. It's good that you are in a position to be fine either way. Dive deep into your psyche to see what you really want.

CyclingDuo

[KlangFool]

Folks,

I am asking two separate questions:

A) Under what financial condition, it is rewarding for me to take on part-time project work. At this moment, it looks like anything less than $90 per hour is not worthwhile.

B) Under what non-financial condition, would you go back to work?

KlangFool

Condolences, KlangFool on this news. You have been preparing yourself for it ever since your previous layoffs. In addition, you have bounced back financially from all the losses you took from the industry specific stocks you held back in the early 2000's. There is plenty of experience and wisdom that was gained through the past 20 years - much of which you have shared with many of us over the years posting here.

Yes, your original post certainly was a divided fork in the road that pointed out the two questions. You also asked for those who have been through it at this age, what they have done regarding taking the route of capitulation retirement or not.

A. Financially you have things in fairly good order. The college educations for your kids and your mortgage stand out as raison d'être for continuing to milk your human capital - IMO - at some level. I always look at it in this way: For every $10K you could bring in each year using your human capital, it is as if you had an additional $250K in your portfolio (using the 4% SWR). $10K, $20K, $30K, $40K, $50K, etc... doesn't sound like much to you based on your posts above, but it does provide some flexibility and holds off the need for you having to tap your nest egg - or as much of it as if you weren't bringing in an income. Be it one year at a time, or for several years. Only you can decide if you are going to let pride stand in the way of it's an all or nothing compensation situation. If you are not willing, then financially you play out the hand you are holding and be fine with it. If you still have some savings goals financially that you wanted to hit - then at some point you will find a way to increase your household income to reach those goals. Either you or your spouse - or both - could find a way into bring in more than just her $15K. It might currently be too close to the sting to focus on this, but the time will come and you'll know it.

B. Adaptability is a key element if you have a desire to put your human capital to work again - even if it is not for the money, but for the challenge, engagement, sense of purpose, sense of identity, social aspect, routine, etc... . Some of these things are more important than money, and you will have to come to terms with yourself if any of those items are important to your psyche and well being. You know my story from this thread (viewtopic.php?t=273092). Although two years ago at the age of 56 when I got the news at the end of February and worked until the end of May 2018 before finishing my last day, I did spend the majority of the entire month of June 2018 on the couch staring into what seemed like a vacant space or void on the wall. That didn't feel good to me and my spouse quipped that I wasn't going to stay on the couch. That was my non-financial condition or reason that was more for my psyche, relationship, and self-identity that got me going to not accept the capitulation retirement (even though we had the nest egg and my spouse's income to cover us). In short, I wasn't ready. So I clawed my way back by piecing together some part-time incomes from totally different industries. The non-financial addition of firing up my drive, sense of purpose/identity, and keeping me challenged helped me transition through it all over the past two years. Not everyone needs that, but I did.

In spite of the current narrative being Covid-19, it will not last forever. If you go to the link above that had lots of links and articles surrounding losing a job in your 50's (of which you are well aware) - not to mention losing multiple jobs of which some of the data and links discuss, I would be very proactive about lining up at least something before the end of June that keeps you engaged and brings in some income even if it means you eventually make the decision not to work because of your financial situation in a few months or by the end of the year. This will help you transition a lot better than if you just pull the plug and sit it out for months or longer. The data shows that at our ages in the late 50's - the longer your down time is, the harder it is to get employed. Although a challenging time with the number of layoffs (especially the millions and millions in the service industry), I wouldn't let that stop you from exploring.

Again, sorry for the layoff. It's good that you are in a position to be fine either way. Dive deep into your psyche to see what you really want.

CyclingDuo

CyclingDuo,

Both of my kids graduated from college and had found jobs. My daughter just graduated a few weeks ago.

KlangFool

[Longdog]

Klangfool,

I, too, have read many of your posts over the years and found them very thoughtful, logical, and insightful. As a fellow engineer, to me they clearly were written from the logical perspective of an engineer. Based on the frequency with which you mention your career, I get the impression that you place a lot of your sense of self in your role and skills as an engineer. If that is true, will you be happy not being an engineer anymore? Will "former engineer" or "retired engineer" feel okay to you?

Best of luck with your decision!

[getthatmarshmallow]

Oh, Klangfool. I'm sorry to hear this but you'll be fine. If I were you, I'd find something to retire *to* quickly, or consult in IT. You don't need the money, but you need a purpose.

[smitcat]

Folks,

I am asking two separate questions:

A) Under what financial condition, it is rewarding for me to take on part-time project work. At this moment, it looks like anything less than $90 per hour is not worthwhile.

B) Under what non-financial condition, would you go back to work?

KlangFool

A. Don't work for less than $90 an hour.
B. It doesn't matter what I say, you obviously have your own criteria and will disagree with any other suggestion.
Good luck. You should retire.

Agreed- you cannot supply new ideas to folks that have completely ridged views on their opportunities.