Definition of one more year (OMY).

[flyingaway]

We have been discussing about one more year (OMY) many times, notably by The Timelord and others. I would like to have a clear definition of OMY if you don't mind.
First, you have to reach financial Independence (FI), with whatever your number is.
(1) If you have FI and do not want to retire, are you defautly considered as doing OMY?
Or, (2) if you have FI, are considering retirement, but for various reasons, decided to stay put. However, you may retire at any time or until reach certain buffers? In other words, you are delaying retirement on a year by year basis.
I'm in the second situation and consider that as OMY.

[AlohaJoe]

There is no clear definition and I'm not sure why it matters that there is one.

[sailaway]

For us, we reached our original number, but decided we might not want to be so minimalist for another 40-50 years. And it is much easier to save more now than work menial jobs throughout our 60s.

However, for us, it is OMM, one more million. Or, as I say, we are transitioning from MMM to bogleheads.

[flyingaway]

There is no clear definition and I'm not sure why it matters that there is one.

I think the mindset is different.

[KlangFool]

OP,

FI is not retirement. FI means that you do not need a job to sustain your current lifestyle.

You get to choose to

A) Keep a job.

B) Working part-time.

C) Not working

D) Working on a non-paying job.

OMY mean that you choose (A) when you are FI. It is your life and your choice. FI gives you the freedom to choose. What you choose is none of our business.

KlangFool

[Mike Scott]

It seems to come up most often in discussions of postponing retirement dates whether it is moving the goal posts, a fear of risk, fear of change, not knowing how to actually cope with such a big life event... Everyone has their individual circumstances to consider and I don't see how hashing out a specific definition makes any difference.

[KlangFool]

There is no clear definition and I'm not sure why it matters that there is one.

I think the mindset is different.

flyingaway,

I disagreed. In my opinion and observation of my family members, it is more of a case of people that has nothing to retire to. Some folks occupied most of their lives working and they have nothing else to live for. They do not know what to do with their free time if they are not working.

A) My older brother and older sister early retired at 49 years old. They traveled all over the world and check out the foods and scenery.

B) One of my family member work in the finance industry. He is a frugal person. His children are going to inherit 7 figures. But, he has no hobby and nothing else to do with his lives. So, he keeps on working.

These OMY phenomena tend to infect folks working in the finance world. It is less prevalent among technical folks.

KlangFool

[flyingaway]

It seems to come up most often in discussions of postponing retirement dates whether it is moving the goal posts, a fear of risk, fear of change, not knowing how to actually cope with such a big life event... Everyone has their individual circumstances to consider and I don't see how hashing out a specific definition makes any difference.

At least, those have FI and enjoy their work and do not plan to retire any time soon, are not doing OMY, IMHO.

[averagedude]

For alot of us blue collar types, OMY isn't a phenomenon unless it is for financial reasons. When you have worked at the lug nut factory for 40 years, you are ready to retire if you have the financial means to do so.

[fposte]

As I get closer to retirement, I can feel how my ambivalence could bring on OMY syndrome--I like my job, and I'll be retiring early mostly for health reasons. However, I have to give a year's notice for retirement and I'll have to handle the search for my replacement, since there's nothing else at my employer like it. I suspect that without that significant advance notice structure, I could end up delaying at the last minute.

[DrGoogle2017]

There is no clear definition and I'm not sure why it matters that there is one.

I think the mindset is different.

flyingaway,

I disagreed. In my opinion and observation of my family members, it is more of a case of people that has nothing to retire to. Some folks occupied most of their lives working and they have nothing else to live for. They do not know what to do with their free time if they are not working.

A) My older brother and older sister early retired at 49 years old. They traveled all over the world and check out the foods and scenery.

B) One of my family member work in the finance industry. He is a frugal person. His children are going to inherit 7 figures. But, he has no hobby and nothing else to do with his lives. So, he keeps on working.

These OMY phenomena tend to infect folks working in the finance world. It is less prevalent among technical folks.

KlangFool

There’s a difference in OMY results in $5 million or OMY results in $50k. This is one reason why the folks in the finance field has a hard time letting go.

[Svensk Anga]

One more year in some cases is a logical result of some employment specifics:

1.) OMY of accredited service on the pension. There is no credit for a half year.
2.) OMY to gain vesting service and another birthday to put one in a better place on the early retirement pension discount schedule.
3.) OMY to get to a logical retirement date. For example, the date that one earns another year's allotment of vacation.
4.) OMY to acquire another lump sum benefit: bonus, stock vesting, employer HSA contribution.
5.) OMY to get to the point where one can max out available tax advantaged plan space for the year.
6.) For some, employment is year to year, with mid-year retirement frowned upon. My DW as an educator was in this spot. It was always a given that she would retire at the end of a school year.

So I think for many, the retire or not decision comes down to doing it on the optimum date as defined above this year, or wait until that date next year, with little chance of it happening in between.

[flyingaway]

There is no clear definition and I'm not sure why it matters that there is one.

I think the mindset is different.

flyingaway,

I disagreed. In my opinion and observation of my family members, it is more of a case of people that has nothing to retire to. Some folks occupied most of their lives working and they have nothing else to live for. They do not know what to do with their free time if they are not working.

A) My older brother and older sister early retired at 49 years old. They traveled all over the world and check out the foods and scenery.

B) One of my family member work in the finance industry. He is a frugal person. His children are going to inherit 7 figures. But, he has no hobby and nothing else to do with his lives. So, he keeps on working.

These OMY phenomena tend to infect folks working in the finance world. It is less prevalent among technical folks.

KlangFool

KlangFool,

I know you like to argue with people. I'm not talking about if one should do OMY or not.
I just want to know what is considered as OMY. For your example B, the person has no intention to retire any time soon, he is not doing OMY, in my opinion.

[Marseille07]

OMY can happen on all kinds of reasons.

I just updated (OMY'ed) myself upon realizing ACA portion was probably underestimated at 6k/year, now 10k/year.

Another big factor is inflation, as prices may have inflated between when you planned your estimates vs when you're actually retiring.

[flyingaway]

OMY can happen on all kinds of reasons.

I just updated (OMY'ed) myself upon realizing ACA portion was probably underestimated at 6k/year, now 10k/year.

Another big factor is inflation, as prices may have inflated between when you planned your estimates vs when you're actually retiring.

It seems that you are not ready, since you are not financial independent.

I don't consider it to be OMY. If you retire, in my opinion, it would be pre-matured (based on your information that you don't have the needed 10k/year for ACA).

[Marseille07]

OMY can happen on all kinds of reasons.

I just updated (OMY'ed) myself upon realizing ACA portion was probably underestimated at 6k/year, now 10k/year.

Another big factor is inflation, as prices may have inflated between when you planned your estimates vs when you're actually retiring.

It seems that you are not ready, since you are not financial independent.

I don't consider it to be OMY. If you retire, in my opinion, it would be pre-matured (based on your information that you don't have the needed 10k/year for ACA).

I appreciate your time, but I wasn't really asking for my portfolio review. I was just stating what could contribute to OMY.

[sailaway]

For us, it means we have achieved our stated goals, but don't feel particularly confident about our ability to predict the next few decades, either in terms of the economy nor our desires as we age.

I imagine this is harder for high income and for particularly young retirees. Each year still makes a significant impact and the golden handcuffs often do their job quite well. The next milestone is right over that ridge, surely we will walk away then...

[humblecoder]

KlangFool,

I know you like to argue with people. I'm not talking about if one should do OMY or not.
I just want to know what is considered as OMY. For your example B, the person has no intention to retire any time soon, he is not doing OMY, in my opinion.

Maybe I am not one of the "cool kids", but I have no clue what is meant or implied by the phrase "one more year" other than the literal definition. That is, "I will be retiring in 365 days from now".

Am I missing something?

[Marseille07]

KlangFool,

I know you like to argue with people. I'm not talking about if one should do OMY or not.
I just want to know what is considered as OMY. For your example B, the person has no intention to retire any time soon, he is not doing OMY, in my opinion.

Maybe I am not one of the "cool kids", but I have no clue what is meant or implied by the phrase "one more year" other than the literal definition. That is, "I will be retiring in 365 days from now".

Am I missing something?

Yes. The nuance here is your planned retirement date approaches and you decide not to retire and keep working for OMY. This is actually the opposite of counting down your retirement date and pulling the trigger on schedule.

[crossbow]

As I get closer to retirement, I can feel how my ambivalence could bring on OMY syndrome--I like my job, and I'll be retiring early mostly for health reasons. However, I have to give a year's notice for retirement and I'll have to handle the search for my replacement, since there's nothing else at my employer like it. I suspect that without that significant advance notice structure, I could end up delaying at the last minute.

Really, would your company cease to exist if you decided not to/physically are unable to go in to work tomorrow? Interested to know what it is that you do

[crossbow]

There is no clear definition and I'm not sure why it matters that there is one.

I think the mindset is different.

flyingaway,

I disagreed. In my opinion and observation of my family members, it is more of a case of people that has nothing to retire to. Some folks occupied most of their lives working and they have nothing else to live for. They do not know what to do with their free time if they are not working.

A) My older brother and older sister early retired at 49 years old. They traveled all over the world and check out the foods and scenery.

B) One of my family member work in the finance industry. He is a frugal person. His children are going to inherit 7 figures. But, he has no hobby and nothing else to do with his lives. So, he keeps on working.

These OMY phenomena tend to infect folks working in the finance world. It is less prevalent among technical folks.

KlangFool

There’s a difference in OMY results in $5 million or OMY results in $50k. This is one reason why the folks in the finance field has a hard time letting go.

The person on a $5M salary would probably have a bigger nest egg than the one on a $50K salary. Probably 100x bigger. So...

[Tingting1013]

My father is 60 and has saved up a few million. He could retire tomorrow and be fine.

But he just joined the executive team of a startup and has options that could be worth $50M upon an IPO in 2-3 years. So he works.

You tell me, is that OMY?

[GG1273]

I'm two weeks into my OMY!

Decision wasn't $ based to stay on it was WFH - I was tired of the office and all things associated with it. But WFH changed that and not being able to really go anywhere was second reason.

There is some talk of returning to office in Sept of this year. I want to see what that entails. It might end up being One More Half Year.

[humblecoder]

KlangFool,

I know you like to argue with people. I'm not talking about if one should do OMY or not.
I just want to know what is considered as OMY. For your example B, the person has no intention to retire any time soon, he is not doing OMY, in my opinion.

Maybe I am not one of the "cool kids", but I have no clue what is meant or implied by the phrase "one more year" other than the literal definition. That is, "I will be retiring in 365 days from now".

Am I missing something?

Yes. The nuance here is your planned retirement date approaches and you decide not to retire and keep working for OMY. This is actually the opposite of counting down your retirement date and pulling the trigger on schedule.

Thanks for the explanation. It would have been nice if the OP defined OMY up front!

So the original question is whether someone who technically could retire from a financial standpoint but they weren't planning on retiring. Are they considered to be a OMYer?

To be blunt, who cares? We are all individuals with our own motivations. The decision to work or retire is based upon our own unique circumstances. Why do we have to put them into these neat categories?

[Marseille07]

So the original question is whether someone who technically could retire from a financial standpoint but they weren't planning on retiring. Are they considered to be a OMYer?

I think that would be FI but not OMY because OMY only happens on people planning to retire and couldn't / decided not to.

[Scott S]

My father is 60 and has saved up a few million. He could retire tomorrow and be fine.

But he just joined the executive team of a startup and has options that could be worth $50M upon an IPO in 2-3 years. So he works.

You tell me, is that OMY?

Would he have retired if it weren't for this new opportunity? It doesn't sound like it.

Saying that someone with no immediate plans to retire is doing "OMY" is pretty nonsensical.

[BogleFanGal]

My OMY definition: you have enough, but you haven't yet had enough (of the BS, the grind, whatever) to confidently make the break you kinda, sorta, pretty much still want to make.

[Starfish]

For me it's not OMY but OMM (one more million) in today's financial climate.

[Tingting1013]

My father is 60 and has saved up a few million. He could retire tomorrow and be fine.

But he just joined the executive team of a startup and has options that could be worth $50M upon an IPO in 2-3 years. So he works.

You tell me, is that OMY?

Would he have retired if it weren't for this new opportunity? It doesn't sound like it.

Saying that someone with no immediate plans to retire is doing "OMY" is pretty nonsensical.

This is a complex question that requires further explication.

1. Someone who could retire financially but chooses to work for non-financial reasons
2. Someone who could retire financially but chooses to work for a lottery-like payoff
3. Someone who could retire but chooses to work to pad out the nest egg just a little bit

OMY is often thought of as just #3 but I submit there are at least these other two flavors as well.

[Scott S]

My father is 60 and has saved up a few million. He could retire tomorrow and be fine.

But he just joined the executive team of a startup and has options that could be worth $50M upon an IPO in 2-3 years. So he works.

You tell me, is that OMY?

Would he have retired if it weren't for this new opportunity? It doesn't sound like it.

Saying that someone with no immediate plans to retire is doing "OMY" is pretty nonsensical.

This is a complex question that requires further explication.

1. Someone who could retire financially but chooses to work for non-financial reasons
2. Someone who could retire financially but chooses to work for a lottery-like payoff
3. Someone who could retire but chooses to work to pad out the nest egg just a little bit

OMY is often thought of as just #3 but I submit there are at least these other two flavors as well.

If the person doesn't plan to retire in a year, NONE of them apply. That's the whole thrust of the phrase: "I'll work for one more year, then I'll retire."

Warren Buffett isn't OMY, Charlie Munger isn't OMY, Ray Dalio isn't OMY, Tim Cook isn't OMY, they're just working.

[Marseille07]

My father is 60 and has saved up a few million. He could retire tomorrow and be fine.

But he just joined the executive team of a startup and has options that could be worth $50M upon an IPO in 2-3 years. So he works.

You tell me, is that OMY?

Would he have retired if it weren't for this new opportunity? It doesn't sound like it.

Saying that someone with no immediate plans to retire is doing "OMY" is pretty nonsensical.

This is a complex question that requires further explication.

1. Someone who could retire financially but chooses to work for non-financial reasons
2. Someone who could retire financially but chooses to work for a lottery-like payoff
3. Someone who could retire but chooses to work to pad out the nest egg just a little bit

OMY is often thought of as just #3 but I submit there are at least these other two flavors as well.

If the person doesn't plan to retire in a year, NONE of them apply. That's the whole thrust of the phrase: "I'll work for one more year, then I'll retire."

Warren Buffett isn't OMY, Charlie Munger isn't OMY, Ray Dalio isn't OMY, Tim Cook isn't OMY, they're just working.

That's my understanding as well. What the poster above described is FI, not OMY.

[jeroly]

My take on OMY is that somebody has made a plan to retire at point in time X, but when they get close to X they get nervous or more conservative than when they made their original plan and revise the plan to retire at X+1.

They could be thinking "Oh, now things are different and I can't rely on 4% being a SWR anymore - I need to get my nest egg bigger so I can do a 3.5% WR"

They could be thinking "I now want to leave an estate of size Y for my heirs, so I need an extra Z in the bank before I retire"

They could be thinking "I have underestimated A, B, or C expenses, so I need to save more to cover them"

They could be thinking "I am now worried about the market crashing right after I retire - I need to have a bigger buffer"

etc.

[fposte]

As I get closer to retirement, I can feel how my ambivalence could bring on OMY syndrome--I like my job, and I'll be retiring early mostly for health reasons. However, I have to give a year's notice for retirement and I'll have to handle the search for my replacement, since there's nothing else at my employer like it. I suspect that without that significant advance notice structure, I could end up delaying at the last minute.

Really, would your company cease to exist if you decided not to/physically are unable to go in to work tomorrow? Interested to know what it is that you do

Funny you posted this today—I actually had a meeting this morning about the likelihood of closing the place down with my retirement, which I’ve given a hard date for of the end of July. It’s not a company but a long term unit in a university with a respected product in the field; it’s no longer able to be self-supporting and COVID budgets make new support unlikely. The decision will be made (above my level) in a month or two, which isn’t ideal, as if they do decide to hire a successor they won’t be in place by the time I go.

[radiowave]

We have been discussing about one more year (OMY) many times, notably by The Timelord and others. I would like to have a clear definition of OMY if you don't mind.
First, you have to reach financial Independence (FI), with whatever your number is.
(1) If you have FI and do not want to retire, are you defautly considered as doing OMY?
Or, (2) if you have FI, are considering retirement, but for various reasons, decided to stay put. However, you may retire at any time or until reach certain buffers? In other words, you are delaying retirement on a year by year basis.
I'm in the second situation and consider that as OMY.

OP, I agree with the general sentiment above, that OMY is the ability to retire and have the financial resources to maintain same lifestyle with a combination of SS, pensions and portfolio drawdown. The OMY implies additional financial or profession goals to achieve.

I am an n=1 so not sure how actionable my answer will be but my extra past year allowed me to achieve additional goals:

- pay off the mortgage
- reduce my retirement healthcare costs by becoming Medicare eligible
- defer SS to point where SSx2 + pensions x 2 will cover all expected baseline expenses
- achieve a SWR of close to 0
- added an addition year to accumulation phase to improve investments and cash position

As stated above, this is a set of goals unique to my spouse and I, but does illustrate a threshold concept that allowed us to achieve the above goals that added additional value to retirement opposed to retiring a year or so earlier which I could have done. As of today, I retire in 7 weeks.

[hi_there]

There is no clear definition and I'm not sure why it matters that there is one.

I think the mindset is different.

flyingaway,

I disagreed. In my opinion and observation of my family members, it is more of a case of people that has nothing to retire to. Some folks occupied most of their lives working and they have nothing else to live for. They do not know what to do with their free time if they are not working.

A) My older brother and older sister early retired at 49 years old. They traveled all over the world and check out the foods and scenery.

B) One of my family member work in the finance industry. He is a frugal person. His children are going to inherit 7 figures. But, he has no hobby and nothing else to do with his lives. So, he keeps on working.

These OMY phenomena tend to infect folks working in the finance world. It is less prevalent among technical folks.

KlangFool

There’s a difference in OMY results in $5 million or OMY results in $50k. This is one reason why the folks in the finance field has a hard time letting go.

The person on a $5M salary would probably have a bigger nest egg than the one on a $50K salary. Probably 100x bigger. So...

Usually more than that. The $50k would typically save 0% to 10% of take home pay. The $5 million guy can afford to invest a much higher percentage after tax.

[Shackleton]

OMY can happen on all kinds of reasons.

I just updated (OMY'ed) myself upon realizing ACA portion was probably underestimated at 6k/year, now 10k/year.

Another big factor is inflation, as prices may have inflated between when you planned your estimates vs when you're actually retiring.

What made you decide to resurrect a 2 year old thread that had little original value and had run its short course, and add absolutely nothing new or of value to it? I’m genuinely curious of the mindset that does this.

[Marseille07]

OMY can happen on all kinds of reasons.

I just updated (OMY'ed) myself upon realizing ACA portion was probably underestimated at 6k/year, now 10k/year.

Another big factor is inflation, as prices may have inflated between when you planned your estimates vs when you're actually retiring.

What made you decide to resurrect a 2 year old thread that had little original value and had run its short course, and add absolutely nothing new or of value to it? I’m genuinely curious of the mindset that does this.

? I added new contributing factors of OMY to the thread. If you think they're nothing, to each their own. I don't respect your opinion.

[Bogle7]

In other pressing issues.
How many angels can you fit on the head of a pin?

Me, I am more of a one-more-month guy.

[NancyABQ]

One more year in some cases is a logical result of some employment specifics:

1.) OMY of accredited service on the pension. There is no credit for a half year.
2.) OMY to gain vesting service and another birthday to put one in a better place on the early retirement pension discount schedule.
3.) OMY to get to a logical retirement date. For example, the date that one earns another year's allotment of vacation.
[...]

So I think for many, the retire or not decision comes down to doing it on the optimum date as defined above this year, or wait until that date next year, with little chance of it happening in between.

FWIW, at my previous employer (a national lab with a nice pension plan which has since been cut back) we used to call it "WOTM" which stood for "Working On The Multiplier". It applied to people who were pension/retirement eligible, but were still working in order to bulk up the pension numbers. Generally it also meant that person wasn't working very hard, since it was highly unlikely they would get fired for poor performance (hence saying somebody was in WOTM mode was not a compliment...). People almost always retired at the beginning of the new year, right after the yearly raises kicked in, and right after the new allotment of vacation accrual.


I am officially in "One More Year" mode, because financially I could have retired a couple years ago, but I am currently working part-time from home (different employer) in a low-stress job. So I haven't really found a reason to pull the ripcord. And then with COVID, I wouldn't be able to do many of the things I'd like to do anyway, so why rush it? And then if I let it get past ~mid-year, there is a year-end bonus it would be silly to give up. This might be the year though. Been giving it a lot of thought.... I am front-loading the 401K to max it out by ~July....

[flyingaway]

I think I am also officially in OMY. I am considering to retire at the end of this year or next year. My unemployed son makes my situation a little bit complicated. One voice tells me to get out to enjoy life, another void tells me that the market is going to tank soon. So I re-evaluate my situation almost day by day.

[flyingaway]

KlangFool,

I know you like to argue with people. I'm not talking about if one should do OMY or not.
I just want to know what is considered as OMY. For your example B, the person has no intention to retire any time soon, he is not doing OMY, in my opinion.

Maybe I am not one of the "cool kids", but I have no clue what is meant or implied by the phrase "one more year" other than the literal definition. That is, "I will be retiring in 365 days from now".

Am I missing something?

OMY means that you have enough, but you hesitate to retire. Not necessarily work for another 365 days.