Early retirement, quit, or something else?
October 19, 2023 5:10 AM Subscribe
I am considering leaving my current employer. I've been looking for another comparable job for nearly six months without success. (I'm highly specialized in my field, and geographically limited to the Mid-Atlantic, ideally DC/MD/VA, for family reasons, so it's a very very small pond.) So I'm thinking of chucking it and retiring early. What do I need to know.
Single, no kids. I doubt that will change in the foreseeable future. My workplace is sucking all the joy out of my life, and I learned yesterday instead of a COLA, our new comp model will involve a massive pay cut (10% in nominal dollars, probably closer to 20-25% in real terms) over the next three years. We are also being told we now need to request time off 5 years in advance. Not 5 months. FIVE. YEARS. I suspect this is a ploy to get people not to use their paid time off.
My contract requires six months' notice (standard in this field). I have about two years' savings in ready cash. I am under 40, though, so my biggest concern is health insurance. No major health problems right now, but that can change. My assets are too high for Medicaid or Marketplace subsidies. Are there group plans for early retirement?
All the FIRE calculators are giving me estimates of 50+ years drawing on my nest egg, assuming current rate of spending. But how are people planning for long term needs (assisted living, skilled nursing?) As a single woman, I know that I'm going to carry the burden of my parents' old age, and I won't have family to rely on when it's my time.
If you retired early, how do you fill your days? I envision endless vacation, but I'm sure that's not the reality for most. I would like to have more time for creative pursuits.
If I leave and then decide to go back to work for the right opportunity, how to explain a resume gap? For that matter, how to explain my reasons for leaving if I do find another job in the next few months? How do I tell my employer I'm leaving without burning that bridge? (Yes I know it's supposed to be just business, but people here STILL talk about the guy who left 7 years ago, so....)
Single, no kids. I doubt that will change in the foreseeable future. My workplace is sucking all the joy out of my life, and I learned yesterday instead of a COLA, our new comp model will involve a massive pay cut (10% in nominal dollars, probably closer to 20-25% in real terms) over the next three years. We are also being told we now need to request time off 5 years in advance. Not 5 months. FIVE. YEARS. I suspect this is a ploy to get people not to use their paid time off.
My contract requires six months' notice (standard in this field). I have about two years' savings in ready cash. I am under 40, though, so my biggest concern is health insurance. No major health problems right now, but that can change. My assets are too high for Medicaid or Marketplace subsidies. Are there group plans for early retirement?
All the FIRE calculators are giving me estimates of 50+ years drawing on my nest egg, assuming current rate of spending. But how are people planning for long term needs (assisted living, skilled nursing?) As a single woman, I know that I'm going to carry the burden of my parents' old age, and I won't have family to rely on when it's my time.
If you retired early, how do you fill your days? I envision endless vacation, but I'm sure that's not the reality for most. I would like to have more time for creative pursuits.
If I leave and then decide to go back to work for the right opportunity, how to explain a resume gap? For that matter, how to explain my reasons for leaving if I do find another job in the next few months? How do I tell my employer I'm leaving without burning that bridge? (Yes I know it's supposed to be just business, but people here STILL talk about the guy who left 7 years ago, so....)
I think you should hand in your notice and start a sabbatical. It is completely normal to leave a job, and you shouldn't think twice about leaving for personal reasons. Don't badmouth them and you will be fine. I don't know that I would start thinking this as retirement at the moment. Once you are out of the dumpster fire and you see how you feel about your days you can decide what you want to do next (whether that's a paid or unpaid activity).
One of the big challenges with leaving the workplace at any age, is that our jobs can give us quite a lot more than money - status, intellectual or creative stimulation, a shared endeavour, personal contact. When you leave the workplace at an atypical life stage, one of the things that is hard to organically create is connections with others who are at the same life stage as you because those people are (almost by definition) at work for a lot of the time. I would focus on this element really heavily even in your sabbatical. It's not too hard to find things to do. It's harder to find people you like to do them with.
posted by plonkee at 5:37 AM on October 19, 2023 [10 favorites]
One of the big challenges with leaving the workplace at any age, is that our jobs can give us quite a lot more than money - status, intellectual or creative stimulation, a shared endeavour, personal contact. When you leave the workplace at an atypical life stage, one of the things that is hard to organically create is connections with others who are at the same life stage as you because those people are (almost by definition) at work for a lot of the time. I would focus on this element really heavily even in your sabbatical. It's not too hard to find things to do. It's harder to find people you like to do them with.
posted by plonkee at 5:37 AM on October 19, 2023 [10 favorites]
I agree with other comments: it sounds like the right time to give notice, take a sabbatical, and consider next steps. It's not an all or nothing decision. You can see how you feel after one month, after six months, etc.
If/when you go back to work (which I bet you will sooner than you think), you will say, "[EMPLOYER] was making some changes that really didn't work for me - across the board pay cuts, and asking us to request time off five years in advance, for a start - so it felt like a good opportunity to take some time off to consider my next move."
This, plus people who I know who have done this will add something like "I hadn't been able to take a vacation of more than five days in years, so I took the opportunity to do some traveling/take care of family/volunteer/whatever."
My assets are too high for Medicaid or Marketplace subsidies.
My limited understanding is that the Obamacare/marketplace subsidies are based on income, not assets. So people who retire early with large nest eggs will sometimes manage their "income" (meaning dividends, taxable withdrawals, etc.) to stay under the line allowing them to get a subsidized plan. There are descriptions of this in discussions at places like r/financialindependence that can explain it better than I did.
Also, when you say the calculators show your nest egg lasting 50+ years, is that incorporating Social Security? For some reason, people often leave that out of their calculations, meaning that their nest egg looks less adequate than it is.
posted by Dip Flash at 6:25 AM on October 19, 2023 [4 favorites]
If/when you go back to work (which I bet you will sooner than you think), you will say, "[EMPLOYER] was making some changes that really didn't work for me - across the board pay cuts, and asking us to request time off five years in advance, for a start - so it felt like a good opportunity to take some time off to consider my next move."
This, plus people who I know who have done this will add something like "I hadn't been able to take a vacation of more than five days in years, so I took the opportunity to do some traveling/take care of family/volunteer/whatever."
My assets are too high for Medicaid or Marketplace subsidies.
My limited understanding is that the Obamacare/marketplace subsidies are based on income, not assets. So people who retire early with large nest eggs will sometimes manage their "income" (meaning dividends, taxable withdrawals, etc.) to stay under the line allowing them to get a subsidized plan. There are descriptions of this in discussions at places like r/financialindependence that can explain it better than I did.
Also, when you say the calculators show your nest egg lasting 50+ years, is that incorporating Social Security? For some reason, people often leave that out of their calculations, meaning that their nest egg looks less adequate than it is.
posted by Dip Flash at 6:25 AM on October 19, 2023 [4 favorites]
I did this last year: didn't hate my job or anything, just wanted to do something different, so I moved abroad. Five months in my former employer asked me back as a contractor, which I grabbed with both hands, and I've been doing that part-time for the past year, which has been ideal. See, the cold hard fact for me was that once I got over all the fun and excitement of living in a new place, I noticed my sense of self-worth declining and - even though on paper I've been successful/ hard-working enough to be able to take this kind of extended break - I kind of felt like a bum. I shouldn't have/ I'm not, but that's just how it played out for me. And even though I've got a bunch saved up and could go for a pretty long time without earning, $'s going out and none coming in (thanks, stock market) just never sat well with me .
I am extremely suspicious of the idea that you retire in your sixties and then magically know how to transition from a lifetime of work to a lifetime of leisure, so overall I've viewed this whole exercise as a dry run, and if you can do that and see how it plays out for you, then I would say it'll be an extremely important exercise to do now, as it'll put you in much better stead for what to expect from your real retirement.
posted by 7 Minutes of Madness at 6:46 AM on October 19, 2023 [4 favorites]
I am extremely suspicious of the idea that you retire in your sixties and then magically know how to transition from a lifetime of work to a lifetime of leisure, so overall I've viewed this whole exercise as a dry run, and if you can do that and see how it plays out for you, then I would say it'll be an extremely important exercise to do now, as it'll put you in much better stead for what to expect from your real retirement.
posted by 7 Minutes of Madness at 6:46 AM on October 19, 2023 [4 favorites]
We are also being told we now need to request time off 5 years in advance. Not 5 months.
If you do quit, be sure to have some fun with this before you go. "Yes, in 2030, I'm going to need to take off Jan 23. A few days later, so sorry about that, I meant Feb 23 in 2030. A few days later, so sorry about that. I will need Fed 23 & 24 off. " A few days later: "so sorry, that's 2029. " and just keep changing the days.
posted by The_Vegetables at 7:41 AM on October 19, 2023 [6 favorites]
If you do quit, be sure to have some fun with this before you go. "Yes, in 2030, I'm going to need to take off Jan 23. A few days later, so sorry about that, I meant Feb 23 in 2030. A few days later, so sorry about that. I will need Fed 23 & 24 off. " A few days later: "so sorry, that's 2029. " and just keep changing the days.
posted by The_Vegetables at 7:41 AM on October 19, 2023 [6 favorites]
Lurk on FIRE forums a bit. They'll have info about healthcare options in your state and ideas on how to manage finances and a sense of worth.
And remember this doesn't need to be permanent. You can always go back to work if you want.
(Also, this is wild to me; so someone they just hired would not be able to take off a single day until after they worked there five years?)
(If these changes are taking place within the next six months, they are changing the terms of your contract. Since you are unhappy I personally would leave without six months notice; nobody can make you stay; but I understand your concern about burning bridges.)
posted by metasarah at 8:14 AM on October 19, 2023
And remember this doesn't need to be permanent. You can always go back to work if you want.
(Also, this is wild to me; so someone they just hired would not be able to take off a single day until after they worked there five years?)
(If these changes are taking place within the next six months, they are changing the terms of your contract. Since you are unhappy I personally would leave without six months notice; nobody can make you stay; but I understand your concern about burning bridges.)
posted by metasarah at 8:14 AM on October 19, 2023
To answer your basic questions:
-The ACA subsidies in most states are based on income, not assets, at least for now. There is always talk amongst R's to asset or work test any subsidy, but you can cross that bridge when you get to it.
-For end of life care, either plan to have a nugget of your nest egg left for end of life (25-50%) or recognize that it's going to be medicaid like thousands of other Americans. Hopefully the way your parents go (physical vs mental) will help inform what type of end of life care needs you'll have, but it's always some kind of surprise.
-As for what to do, I live in the land of software wealth so early retirees aren't uncommon. They usually get into outdoor sports through their 40s and then settle into quieter hobbies as they age (although some are still climbing mountains at 60+). Mountaineering, skiing,rock climbing, all give you that feeling of incremental success that work always did, and have strong communities.
-Some people realize they liked working just not that job and either go back to a different company or level, or try something new. Nonprofits, accounting, education, medicine...if you're willing to be entry level again your maturity and cross functional skills will be valued. Look up "Coast Fire" for easy jobs that bring in some side income if that calls to you.
posted by Narrow Harbor at 8:28 AM on October 19, 2023 [4 favorites]
-The ACA subsidies in most states are based on income, not assets, at least for now. There is always talk amongst R's to asset or work test any subsidy, but you can cross that bridge when you get to it.
-For end of life care, either plan to have a nugget of your nest egg left for end of life (25-50%) or recognize that it's going to be medicaid like thousands of other Americans. Hopefully the way your parents go (physical vs mental) will help inform what type of end of life care needs you'll have, but it's always some kind of surprise.
-As for what to do, I live in the land of software wealth so early retirees aren't uncommon. They usually get into outdoor sports through their 40s and then settle into quieter hobbies as they age (although some are still climbing mountains at 60+). Mountaineering, skiing,rock climbing, all give you that feeling of incremental success that work always did, and have strong communities.
-Some people realize they liked working just not that job and either go back to a different company or level, or try something new. Nonprofits, accounting, education, medicine...if you're willing to be entry level again your maturity and cross functional skills will be valued. Look up "Coast Fire" for easy jobs that bring in some side income if that calls to you.
posted by Narrow Harbor at 8:28 AM on October 19, 2023 [4 favorites]
If you want something more than a FIRE calculator so you can feed it a bunch of other inputs like long term care, etc, check out Projection Lab, which you can use for free without saving data
posted by Runes at 8:46 AM on October 19, 2023 [3 favorites]
posted by Runes at 8:46 AM on October 19, 2023 [3 favorites]
FIRE is not a once and done thing. You can retire, unretire, partially retire. You can have an income in the time you FIRE, or you can reduce your expenses if your circumstances change. Hence why the terms CoastFI and BaristaFI (where you get a Starbucks job, purely for getting health insurance, more relevant in the US).
Try this calculator that accounts for fluctuating income and expenses: https://engaging-data.com/will-money-last-retire-early/
posted by moiraine at 9:33 AM on October 19, 2023 [1 favorite]
Try this calculator that accounts for fluctuating income and expenses: https://engaging-data.com/will-money-last-retire-early/
posted by moiraine at 9:33 AM on October 19, 2023 [1 favorite]
I quit my job in my mid-40's. Spent two years figuring out what I wanted to do next. Went back to school for a degree that enabled me to do meaningful (to me) work, self-employed, on a schedule of my own choosing. The income is not great but if you already have enough to retire, then whatever slows down the rate that draw down savings will give you more wiggle room in the future.
So I vote that you take a sabbatical, rather than retire, and give yourself permission to figure out what you want to do next if you don't have make money the highest priority.
posted by metahawk at 9:58 AM on October 19, 2023 [2 favorites]
So I vote that you take a sabbatical, rather than retire, and give yourself permission to figure out what you want to do next if you don't have make money the highest priority.
posted by metahawk at 9:58 AM on October 19, 2023 [2 favorites]
Is freelance consulting in your field an option?
Is there any work that you would happily do if it was fine to just earn enough for day-to-day expenses and not worry about long-term savings of any kind? (Your question doesn't say what the state of your retirements savings is; I'm going to assume it's good enough that you can technically retire on it.)
As a single woman, I know that I'm going to carry the burden of my parents' old age
Financially too? If so, have you been factoring that in to your calculations?
Yes I know it's supposed to be just business, but people here STILL talk about the guy who left 7 years ago, so....
Sabbatical, or, hell, a lie: gotta help family for a while, have a health thing I need to deal with, really hate to be leaving, will miss all this so much, etc.
posted by trig at 9:58 AM on October 19, 2023 [1 favorite]
Is there any work that you would happily do if it was fine to just earn enough for day-to-day expenses and not worry about long-term savings of any kind? (Your question doesn't say what the state of your retirements savings is; I'm going to assume it's good enough that you can technically retire on it.)
As a single woman, I know that I'm going to carry the burden of my parents' old age
Financially too? If so, have you been factoring that in to your calculations?
Yes I know it's supposed to be just business, but people here STILL talk about the guy who left 7 years ago, so....
Sabbatical, or, hell, a lie: gotta help family for a while, have a health thing I need to deal with, really hate to be leaving, will miss all this so much, etc.
posted by trig at 9:58 AM on October 19, 2023 [1 favorite]
It sounds like what you need first of all is a break. All of the people suggesting sabbatical are worth listening to here. You're not happy, you know you don't have a future with that company, so start with that as a baseline. Take a few months off and do things! You said you'd like more time for creative pursuits, well, go indulge that for a little while. Are there other things you want to do? Maybe a long road trip, or a backpacking trip somewhere? Remember that if you have the chance to do things, you should, because you never get lost time back. (Therapists who have worked with people who were dying say that one of the most common regrets they hear is "why did I work so much?") Most people need a reset at some time. If you need one and you have the ability to do that, do it.
posted by azpenguin at 2:14 PM on October 19, 2023 [2 favorites]
posted by azpenguin at 2:14 PM on October 19, 2023 [2 favorites]
I'm in the US and employed under conventional terms so I'm weirded out by the six months notice. But I presume you have an employment contract.
If they have just changed how you can book your PTO in such an extensive manner, they've radically changed the terms of the contract, so check if you have the right to simply not accept the new terms and leave immediately.
Also check if you have any grounds to claim constructive dismissal, wherever you are, because this does seem like layoffs by proxy.
posted by How much is that froggie in the window at 11:40 PM on October 19, 2023 [3 favorites]
If they have just changed how you can book your PTO in such an extensive manner, they've radically changed the terms of the contract, so check if you have the right to simply not accept the new terms and leave immediately.
Also check if you have any grounds to claim constructive dismissal, wherever you are, because this does seem like layoffs by proxy.
posted by How much is that froggie in the window at 11:40 PM on October 19, 2023 [3 favorites]
This thread is closed to new comments.
If/when you go back to work (which I bet you will sooner than you think), you will say, "[EMPLOYER] was making some changes that really didn't work for me - across the board pay cuts, and asking us to request time off five years in advance, for a start - so it felt like a good opportunity to take some time off to consider my next move."
And just don't worry about "burning that bridge" - you never want to work at an employer that treats you like this again, right? Put in your six months TODAY.
Do Marketplace subsidies look at assets where you live? Where I am it's just about income. But also: you can afford health insurance.
Take some time off. I promise you can go back to, if not the exact same kind of job, a job that will support you in the style to which you are accustomed, if (as it sounds like) you've saved 40x your spending before age 40.
posted by mskyle at 5:24 AM on October 19, 2023 [7 favorites]