Author Topic: Bad Work Situation Pushing me into retirement.  (Read 2839 times)

medinaj2160

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Bad Work Situation Pushing me into retirement.
« on: March 22, 2023, 09:19:37 AM »
Things are getting difficult at work and I am feeling like pulling the plug and retire but I do not feel ready because everything changed in last 2 weeks. My company eliminated 10 people in a team 12 and I now have a crazy work load and I am being forced to go back to the office which I am not a fun off after really enjoying working from home for a few years after Covid. I am 38 and my wife 39 and we have two kids 7 and 4.

Our portfolio is essentially my 401K and everything else on a single stock.

Assets:
House: $330K
Cars: $80k

Emergency funds: $12k

Debt: $124k @ 3.5%

Tax Filing Status: Married

Tax Rate: 12% Federal, 7% State

State of Residence: South Carolina

Age: 38 and 39

Total Portfolio: $1.75M

Taxable
$270k

His 401K:
$284k
81% Fidelity 500 Index (FXAIX)
10% Fidelity International Index (FSPSX)
9% Vanguard International Growth Admiral (VWILX)
Company match? 4%

His Roth IRA at E-trade
$190k

Traditional IRA at E-trade
$400k

Her Roth IRA at E-trade
$70k

Her Roll-Over IRA at E-trade
$300k

Her Traditional IRA at E-trade
$230k


Contributions

New annual Contributions
$8000 his 401k (also specify any employer matching contributions)

We have been tracking our expense and using a case study excel sheet from MMM all our expenses come out to $53,356 using Obamacare for the healthcare. I currently make $2700 bi-weekly and wife has side jobs here and there in which she makes $1200 a month from time to time. I think being able to pull out $65,000-60,000 would be great and as needed we can lower our needs.

I can sell the stock at any time and it would not be subject to any taxes.

Questions:

1. What should I do with my 401k and $1.4M in cash after selling the stock if I decide to pull the trigger? What funds?
2. Does it look like we have enough?
3. Should I start roll overs ASAP? or try to wait until next year when I should have lower income. I don't have enough for 5 years of expenses in my after tax.
4. I will probably speak to my employer to get a layoff to be able to use the severance to repay the debt around $30k I assume. I can also sell one of the cars that should wipe out $60k of the debt. I made a bad decision and bought an expensive car when the market was at AH and my portfolio was worth a lot more.

Thanks

Laura33

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Re: Bad Work Situation Pushing me into retirement.
« Reply #1 on: March 22, 2023, 10:01:54 AM »
A few thoughts:

1.  You have six figures in a single stock???  You need to change that, now -- particularly if you're looking to be able to quit.  A single-stock portfolio is highly aggressive.  You can take that risk if you're willing to work longer if things go into the shitter; your job is a safety net.  But once that safety net goes away, you need a much more balanced portfolio.  I personally like a general total stock market index fund, but if you want to make things super-simple, you can just look at a target date fund for now (with a very short-term retirement date).  Once you no longer have a job, you'll have plenty of time to research asset allocations.  IOW, you don't need to know everything right now.  You just need to know enough to make sure you have a sufficient safety net to address your changed circumstances and give yourself enough time/space to learn the rest.

2.  What do you mean you don't have enough in taxable funds to cover the next 5 years?  You've been spending around $50K, and you have more than $250K in taxable accounts, so even if those investments don't grow at all, you're covered.  Plus you have Roths that you could likely access as needed.  And why do you think you need more than the $53K than you've been spending?   I mean, it's great that you'd like to be able to spend $65K instead of $53K, but is that extra $$ worth continuing to work in a highly stressful situation? 

3.  You may need a job, but you don't need this job.  Regardless of whether you can FIRE forever and ever, you clearly have more than ample fuck-you money.  Again, you don't have to know everything and decide everything right now.  You can walk away from this job today and not having to worry about money for literally years while you're figuring out what's next.  So do that.  Side note:  there is ample evidence that stress interferes with good decisionmaking -- the stress hormones put you in fight-or-flight mode, which shuts down the rational part of your brain.*  So the best thing you can do to ensure you make the best decision is to not try to make a permanent decision now.  Get yourself out of your current situation, give yourself some time to decompress.  Then think about what comes next. 


*And the best part of this is that you can actually feel perfectly normal and think you're making perfectly rational decisions -- then you look back later and go "what the fuck was I thinking?"  Ask me how I know. 

ixtap

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Re: Bad Work Situation Pushing me into retirement.
« Reply #2 on: March 22, 2023, 10:20:56 AM »
They are convinced they will need more than they are spending now because the posted on bogleheads first. That place will mess with your mind if you live on anything less than $100k. I have seen posters refer to higher spending than OP as condemning yourself to poverty.

I agree with @Laura33 that this is a very good time to tender your resignation, take some time to recover, then look at the big picture. I also agree that diversifying would be an excellent idea. VTSAX and chill.

I am not sure why you expect to negotiate a severance if they just did a reduction in force. But, hey, more power to you if you can.


reeshau

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Re: Bad Work Situation Pushing me into retirement.
« Reply #3 on: March 22, 2023, 03:13:14 PM »

I can sell the stock at any time and it would not be subject to any taxes.


I don't get how this is possible.  You have sheltered $1.4M, somehow?

Options: taxable, based on exercise price

Deferred comp: taxable, on withdrawal

Share grants: taxable capital gain, based on grant price

medinaj2160

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Re: Bad Work Situation Pushing me into retirement.
« Reply #4 on: March 22, 2023, 03:23:04 PM »

I can sell the stock at any time and it would not be subject to any taxes.


I don't get how this is possible.  You have sheltered $1.4M, somehow?

Options: taxable, based on exercise price

Deferred comp: taxable, on withdrawal

Share grants: taxable capital gain, based on grant price

After tax is tax free because I had a huge lost last year :(  and we will be caring a deduction until I die. The other assets in our traditional IRA's and 401K sure they might be taxable but since we are pulling out around $60k via rollovers for a family of four that we shouldn't have a tax liability.

Am I wrong here?

Cassie

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Re: Bad Work Situation Pushing me into retirement.
« Reply #5 on: March 22, 2023, 04:13:16 PM »
It really sounds like you need a break. I would quit and give yourself time to decompress before you make any decisions. Definitely don’t leave so much money in one stock.

Finances_With_Purpose

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Re: Bad Work Situation Pushing me into retirement.
« Reply #6 on: March 22, 2023, 08:36:12 PM »
...
*And the best part of this is that you can actually feel perfectly normal and think you're making perfectly rational decisions -- then you look back later and go "what the fuck was I thinking?"  Ask me how I know.

I'll ask...sounds like there's too good of a story there to pass up: what happened?

And to op: I agree with everything @Laura33 said here.  Sell the one stock and then decide what to do when you're not as stressed. 

You need a job, but not this job.  Take some leave and figure out what's next for you.  There's an excellent book on that (called Now What?) by Laura Berman Fortgang.  Or you could just decide to retire.  But you're going to be fine in any situation. 
« Last Edit: March 22, 2023, 08:38:05 PM by Finances_With_Purpose »

Finances_With_Purpose

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Re: Bad Work Situation Pushing me into retirement.
« Reply #7 on: March 22, 2023, 08:38:50 PM »

I can sell the stock at any time and it would not be subject to any taxes.


I don't get how this is possible.  You have sheltered $1.4M, somehow?

Options: taxable, based on exercise price

Deferred comp: taxable, on withdrawal

Share grants: taxable capital gain, based on grant price

Qualified small business exception to capital gains would be my guess, and it's in company stock/RSUs where he works...though it's just a guess.

I was wrong, per op's second post.  He's carrying over a large loss.  Op, that's a big enough dollar amount that I would definitely ask your CPA (and if you don't have one, get one).     
« Last Edit: March 22, 2023, 08:40:22 PM by Finances_With_Purpose »

Zamboni

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Re: Bad Work Situation Pushing me into retirement.
« Reply #8 on: March 23, 2023, 12:31:24 AM »
Yes, your work situation sounds ridiculous.

Take some paid vacation, if you have any accrued, while you regroup and decide what to do next. If you don't have vacation (or even if you do), then take paid sick leave, because what they have done has probably literally cooked your brain and made you feel sick. Mental health is health. You have put yourself into the good position of just being able to quit if that is what you decide to do after taking some time off. Edited to add that this may turn into to a story for the "Epic FU Money" thread, so be sure to go there to share if you end up walking away from this job.

Was this job reasonable and rewarding before the most recent layoffs?
« Last Edit: March 23, 2023, 12:33:11 AM by Zamboni »

Metalcat

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Re: Bad Work Situation Pushing me into retirement.
« Reply #9 on: March 23, 2023, 06:39:40 AM »
The world of work is vast.

There is an astronomical number of options between staying in this job and quitting forever and never making another cent.

You sound burnt out and fucked up. Leave your job. Get less fucked up. Then figure out what you want to do with your life.

You don't need to decide the rest of your future today, you just need to decide if you want to stay in this specific job any longer.

Laura33

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Re: Bad Work Situation Pushing me into retirement.
« Reply #10 on: March 23, 2023, 09:20:20 AM »
...
*And the best part of this is that you can actually feel perfectly normal and think you're making perfectly rational decisions -- then you look back later and go "what the fuck was I thinking?"  Ask me how I know.

I'll ask...sounds like there's too good of a story there to pass up: what happened?

That darn house fire.  Short version:  neighbor knocked on the door to tell me the house is on fire.  I walked back inside my burning house to sign off on a videoconference (after all, it would be rude to just disappear without telling them).  I didn't think to grab a purse, credit card, or the file labeled "important documents" that was literally 2 feet away from me (and designed for just such an emergency).  Or shoes.  But dangit, I remembered my iced tea and the iPad (hey, I was only halfway through a library book).  Then, as I was standing in the middle of the road barefoot in March, waiting for the fire trucks, the same neighbor offered me shoes.  I turned her down. 

The thing was, I was calm the entire time and felt very under control; zero sense of panic, no crying, nothing beyond a somewhat detached, wow, look, there's a guy with a chainsaw on my roof.  I can even remember exactly what I was thinking when I made each of those decisions, and they felt completely logical at the time.  It's just that looking back after the crisis had passed, they made no sense whatsoever.  To me, that was the freakiest part: the fact that I felt 100% normal and under control, and yet was making completely irrational decisions.

lhamo

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Re: Bad Work Situation Pushing me into retirement.
« Reply #11 on: March 23, 2023, 09:24:23 AM »
Put me in the "leave the sucky job now and figure out the rest once your brain and body are back to a healthier state" camp.

A book I found extremely helpful when I was agonizing over whether to leave my last job was "Necessary Endings" by Henry Cloud.  Has a lot of the same main ideas as his more famous book "Boundaries", but without so much overt Christianity and also more oriented toward professional rather than personal boundaries.

"The No Asshole Rule" is also a good one.  That helped confirm for me that leaving a prior org that was even more toxic was the right choice.

medinaj2160

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Re: Bad Work Situation Pushing me into retirement.
« Reply #12 on: March 23, 2023, 09:52:38 AM »
The world of work is vast.

There is an astronomical number of options between staying in this job and quitting forever and never making another cent.

You sound burnt out and fucked up. Leave your job. Get less fucked up. Then figure out what you want to do with your life.

You don't need to decide the rest of your future today, you just need to decide if you want to stay in this specific job any longer.

Maybe I should have not said "into retirement" on the title because a lot people seem to consider that I am saying not to earn any income ever anymore. My wife has the potential of earning some income here and there.

ixtap

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Re: Bad Work Situation Pushing me into retirement.
« Reply #13 on: March 23, 2023, 10:40:46 AM »
The world of work is vast.

There is an astronomical number of options between staying in this job and quitting forever and never making another cent.

You sound burnt out and fucked up. Leave your job. Get less fucked up. Then figure out what you want to do with your life.

You don't need to decide the rest of your future today, you just need to decide if you want to stay in this specific job any longer.

Maybe I should have not said "into retirement" on the title because a lot people seem to consider that I am saying not to earn any income ever anymore. My wife has the potential of earning some income here and there.

I take more umbrage with the "pushing." You are in a bad work situation and your nest egg gives you options for how to deal with that. Push back and let them fire/let you go if they don't like it. Leave today.... You are not restricted to the good old "find a job before you leave a job" because you have been living far enough below your means to save up and this also means that you can look for work to fill gaps, rather than replace your old salary.


Finances_With_Purpose

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Re: Bad Work Situation Pushing me into retirement.
« Reply #14 on: March 23, 2023, 10:42:31 PM »
...
*And the best part of this is that you can actually feel perfectly normal and think you're making perfectly rational decisions -- then you look back later and go "what the fuck was I thinking?"  Ask me how I know.

I'll ask...sounds like there's too good of a story there to pass up: what happened?

That darn house fire.  Short version:  neighbor knocked on the door to tell me the house is on fire.  I walked back inside my burning house to sign off on a videoconference (after all, it would be rude to just disappear without telling them).  I didn't think to grab a purse, credit card, or the file labeled "important documents" that was literally 2 feet away from me (and designed for just such an emergency).  Or shoes.  But dangit, I remembered my iced tea and the iPad (hey, I was only halfway through a library book).  Then, as I was standing in the middle of the road barefoot in March, waiting for the fire trucks, the same neighbor offered me shoes.  I turned her down. 

The thing was, I was calm the entire time and felt very under control; zero sense of panic, no crying, nothing beyond a somewhat detached, wow, look, there's a guy with a chainsaw on my roof.  I can even remember exactly what I was thinking when I made each of those decisions, and they felt completely logical at the time.  It's just that looking back after the crisis had passed, they made no sense whatsoever.  To me, that was the freakiest part: the fact that I felt 100% normal and under control, and yet was making completely irrational decisions.

Wow.  What a story!  Thank you for entertaining my curiosity.

But to be fair to you...that's a tremendous crisis.  And for whatever it's worth, I could see myself doing something similar. 

The only reason that I might not is that we live under the spectre of constant fire danger here, particularly where I live (with only one road in or out), so we have a fire grab list and have practiced a few times when fires were near.  Not fun. 

JupiterGreen

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Re: Bad Work Situation Pushing me into retirement.
« Reply #15 on: March 24, 2023, 07:19:33 AM »
...
*And the best part of this is that you can actually feel perfectly normal and think you're making perfectly rational decisions -- then you look back later and go "what the fuck was I thinking?"  Ask me how I know.

I'll ask...sounds like there's too good of a story there to pass up: what happened?

That darn house fire.  Short version:  neighbor knocked on the door to tell me the house is on fire.  I walked back inside my burning house to sign off on a videoconference (after all, it would be rude to just disappear without telling them).  I didn't think to grab a purse, credit card, or the file labeled "important documents" that was literally 2 feet away from me (and designed for just such an emergency).  Or shoes.  But dangit, I remembered my iced tea and the iPad (hey, I was only halfway through a library book).  Then, as I was standing in the middle of the road barefoot in March, waiting for the fire trucks, the same neighbor offered me shoes.  I turned her down. 

The thing was, I was calm the entire time and felt very under control; zero sense of panic, no crying, nothing beyond a somewhat detached, wow, look, there's a guy with a chainsaw on my roof.  I can even remember exactly what I was thinking when I made each of those decisions, and they felt completely logical at the time.  It's just that looking back after the crisis had passed, they made no sense whatsoever.  To me, that was the freakiest part: the fact that I felt 100% normal and under control, and yet was making completely irrational decisions.

Wow. This is a powerful story. I can totally see this happening as work becomes our number one focus in life. I wonder how many of us are currently in this frame of mind and how to see it without having to endure a fire. I am glad you are okay despite this experience.

OP push back on your boss but also make an exit plan. If they are downsizing you should probably assume you'll be caught up in it at some point.

Shuchong

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Re: Bad Work Situation Pushing me into retirement.
« Reply #16 on: March 24, 2023, 07:08:01 PM »
I read the Bogleheads version of this post, which was highly entertaining. 

1. What should I do with my 401k and $1.4M in cash after selling the stock if I decide to pull the trigger? What funds?

I'd do a blend of Total Stock and Total Bond (Vanguard, Fidelity, take your pick).  Probably 80-20, but your risk tolerance is up to you.  But whatever you do: pull the trigger!  I am in complete agreement with all the Bogleheads, and with @Laura33 below: from Bogleheads post history seems like most of your wealth is not only in one stock, it is in Tesla stock.  Do not retire and plan to never work again while that is the case.  Sounds like Tesla got you rich.  Great!  Good for you.  Now sell it and buy a diversified portfolio and stay rich. 

2. Does it look like we have enough?

Eh. Maybe?  You've got young kids, and hopefully a long life ahead of you.  With full appreciation of the irony: unexpected expenses are bound to come up.  Here's the thing: I totally understand all-or-nothing thinking, but the decision to quit doesn't have to mean that you then retire forevermore.  Take a long break, and see how things go, and if they don't go well (monetarily, mentally, whatever), then go back to work.  You have human capital to backstop your money, which puts you in a far better position than a 70-year old retiree if things go south. 

And you might find that after a decompression period there are other things you want to do that people will pay you for.  Full disclosure: I was not working most of last year.  My circumstances were much different -- I was out on disability and did a whole lot of nothing because, you know, disability -- but I am back to work now and much more aware of the benefits of having tough by semi-solvable problems to occupy my mind and my days.  Your work situation seems super toxic, and you have the money saved up to get out of it, so do that.  Once that fire is put out, figure out next steps.   

3. Should I start roll overs ASAP? or try to wait until next year when I should have lower income. I don't have enough for 5 years of expenses in my after tax.

I would wait until next year.  $270k (in taxable)/$60k (draw per year) = 4.5, so you have almost 5 years.  Plus your wife earns some on the side.  Plus if you need to you can always do something to bring in a bit of money yourself.  Plus you might get severance. However, if you're planning to get healthcare through the ACA, game out whether Roth conversions will put you above the income cap you need.   

Newday

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Re: Bad Work Situation Pushing me into retirement.
« Reply #17 on: April 02, 2023, 12:31:53 AM »
Dude!!! You got your FU Money, this means you have options.. This is exactly whey we save money - so we have options when we need.

Quit that damn job that's messing with you and take a break for 6 months. You will figure out what next once you have detoxed all that stress due to continuous exposure to toxicity.

And oh yeah, big yes on that diversification of stocks. This is a huge risk you are sitting on. IF you are very attached to that one stock, maybe keep 10-20% of that and diversify the rest.

I wonder what kind of severance your company gave for people who were eliminated. What if you pushed back on going back to work - will they eliminate you and give you a decent severance package. IF yes, take it and invest it and enjoy a break.