The button has been pushed!

[Melf]

I pushed the button a couple minutes ago.  It was scary!  The button in question was to submit the company survey indicating that I'm interested in taking a severance package.  My company just recently announced pending job cuts and sent the survey to selected employees to find folks interested in taking an enhanced severance package.  I had been hoping to FIRE this year and also hoping to receive the email survey since this package was announced.  I got it last night.

I pulled it up first thing this morning, filled in the few bits of info and then let the window sit there for over 2.5 hours before I got the nerve up to push the button.  I still have at least a couple weeks to go back in and change my mind if I choose to do so.  I guess that made the decision a little easier.  I didn't think that it would be this hard to commit to it though.  I've been working toward getting out for several years now and wanted to be gone by now.  I've been with this company for almost 24 years now and I'm just burnt out on it. 

It's not hard work at all.  It can be stressful at times.  I don't enjoy it any more.  I am a salaried employee and have a very flexible schedule.  I work from home most of the time.  I get lots of vacation if I can manage to take it.  I'm making around 100K a year and get a decent bonus most years.  I'm 50 years old and I just don't enjoy the job enough to want to stay any longer!

I haven't analyzed and tracked my finances  nearly as closely as some do around here in preparation for FIRE.  I consider myself to be FI though.  I track everything with Personal Capital.  Below are a couple of numbers:

Total net worth:  673K
Total invested: 629K (330K in 401k, 46K in Roth IRA & 251K in Taxable Acct)
Total cash: 44K (6K owed for dental work)
Total debt: 0

My expenses are projected to be 23K-24K as best I can project so I think I'm in decent shape as far as the 4% rule.  I should get about 42 weeks of pay as my severance so that would pad the numbers above by a little.  I also qualify for a pension from where I started with the company.  It should be equivalent to around 19.5K per year starting at age 65 (15 years away) or the lump sum value is around 270K now.  There's also Social Security if it's still viable when I'm eligible and that should be a decent amount from projections I've seen.

It's a very hard decision to make to walk away from a well-paying job.  There's no guarantee that they will even let me go either.  We don't normally see job cuts in my work group.  I escaped the last one back in 2002 I think.  It's just a waiting game now!  Maybe I won't chicken out before the deadline!

[RosieTR]

Wow, 42 weeks of pay as severance?!? That's like getting almost a year off, paid!

But yeah, I'm sure it's scary, too! Not much to add but sending good thoughts to get through the scary time.

[MandalayVA]

As someone your age and facing a layoff (also with a nice severance package) I'm rooting for you!

[BTDretire]

If that is $19.4k at the end of 15 years,
you need to look at the lump sum $270k.
$270k with a 7% growth rate for 15 years is
$764k. 4% of $764k is $30,560.
You need to decide how safe is my $19.4k
with the company, could it go bankrupt in 15 years?
 Can I earn 7% over the next 15 years. Even earning 5%
puts you ahead at $22,760 vs $19.4k.
I assume you can move the lump sum without paying any taxes. 

[Melf]

Thanks guys.  After looking at more severance documentation, it looks like I might be capped at 30 weeks severance but they are paying out at 130% so that puts me close to 3/4 of a year of salary plus a few weeks of PTO that I should get paid for as well so still it doesn't look too bad for someone who was looking to get out anyway.

Qmavam:  Thanks for the info on the pension.  I've been considering the lump sum.  Fifteen years is quite a long time to wait with hopes of no one pulling the rug from under a company pension.  This is a large telecom provider that's been around under various names for 100 years.  Technology is changing though so who knows how much longer any company will last.  I'll have to check into how the lump sum payout works and if it can be done without being taxed.

[FINate]

Telecoms are in for trouble long term. Voice, SMS, cable...it's all just bits traveling over generic pipes, and people and technology are starting to figure this out. In other words, their business has been commoditized. They were able to survive the demise of landlines and long-distance for a while by charging outrageous prices for cell plans, but that's quickly coming to an end with low cost carriers such as Republic Wireless, Google Fi, and others. Products such as Google Fiber, and in many cases municipalities putting in their own fiber networks, are going to decimate their home/busineess internet revenue.

If you can get a lump sum pension payment tax and penalty free by rolling it over into an IRA then I would do it.

[toodleoo]

Man, I gotta get a job at a large company...

[tonysemail]

Congrats!  You sound like you're in an excellent position to cross the finish line :)

[Bicycle_B]

Telecoms are in for trouble long term. Voice, SMS, cable...it's all just bits traveling over generic pipes, and people and technology are starting to figure this out. In other words, their business has been commoditized. They were able to survive the demise of landlines and long-distance for a while by charging outrageous prices for cell plans, but that's quickly coming to an end with low cost carriers such as Republic Wireless, Google Fi, and others. Products such as Google Fiber, and in many cases municipalities putting in their own fiber networks, are going to decimate their home/busineess internet revenue.

If you can get a lump sum pension payment tax and penalty free by rolling it over into an IRA then I would do it.

+1.  Earlier in life I lost half my retirement nest egg due to collapse of a large telecom's retirement investment.  It was required stock purchase, not a defined benefit pension; stock collapsed. 

Congrats on bold button pushing!

[CanuckExpat]

I would also be inclined to take the lump sum, as long as it was relatively tax favorable and the numbers worked out decent.
You will get a decent annuity at 65 anyways from Social Security, which will most likely still be around in some form or other.

[Hotstreak]

Total net worth:  673K
Total invested: 629K (330K in 401k, 46K in Roth IRA & 251K in Taxable Acct)
Total cash: 44K (6K owed for dental work)
Total debt: 0

I also qualify for a pension from where I started with the company.  It should be equivalent to around 19.5K per year starting at age 65 (15 years away) or the lump sum value is around 270K now.  There's also Social Security if it's still viable when I'm eligible and that should be a decent amount from projections I've seen.

Assuming you can roll over your pension to an IRA, and you receive 0.75 x annual salary = $75,000 as severance, this is what you would look like after the layoff:

Total net worth:  1,010K
Total invested: 897K (600K in IRA, 46K in Roth IRA & 251K in Taxable Acct)
Total cash: 113K (after dental work is paid)
Total debt: 0

So congratulations, you're a millionaire.  Have fun in retirement!

[frugalmaybe]

If that is $19.4k at the end of 15 years,
you need to look at the lump sum $270k.
$270k with a 7% growth rate for 15 years is
$764k. 4% of $764k is $30,560.
You need to decide how safe is my $19.4k

i think that qualifies as a no-brainer.

[arebelspy]

Current invested assets + lump sum + severance - taxes should put you just under 1MM.  As long as your spending is < 40k annually, you should be pretty good to go (with social security helping ensure it).  Congrats!

[No Name Guy]

When I saw the thread title, I thought the nukes would be landing in under 30 minutes.  :-)

Joke aside, congrats OP.

[GetItRight]

Seems like a good severance package. If your spend is under $25k as you project, I think you'll be fine. So congrats? Wish it was me!

[Schaefer Light]

Man, I gotta get a job at a large company...

The downside of working for a large company is exactly what's happening to the OP...the threat of mass layoffs.

[Schaefer Light]

Telecoms are in for trouble long term. Voice, SMS, cable...it's all just bits traveling over generic pipes, and people and technology are starting to figure this out. In other words, their business has been commoditized. They were able to survive the demise of landlines and long-distance for a while by charging outrageous prices for cell plans, but that's quickly coming to an end with low cost carriers such as Republic Wireless, Google Fi, and others. Products such as Google Fiber, and in many cases municipalities putting in their own fiber networks, are going to decimate their home/busineess internet revenue.

If you can get a lump sum pension payment tax and penalty free by rolling it over into an IRA then I would do it.

The companies that deliver the pipes to the end user will still be around, though.  They'll start charging more for broadband to make up for the lost revenue on telephone and video.  Based on the OP's location and the timing of a recent announcement, I'm pretty sure he works for a company that does deliver this "last mile" connection to the customer.  It sucks to be in one of the groups on the legacy (i.e. telephone service) side of the house right now, though.

[Livingthedream55]

Sounds fabulous - rooting for you that your company approves your request!!

[Melf]

Thanks for all of the encouragement and well wishes.  It is a waiting game at this point to see what happens as far as selection for the severance package.  It's at least a couple more weeks before the deadline to change my response on the survey.  After that it will be up to those in charge to decide who can go and who can stay.  I have no idea who many employees were sent the survey and no idea how many might be interested other than myself.  It's a tough decision unless you're somewhat prepared for it.

As Schaeffer Light and FINate mentioned, I do work for what was once a local telco but we are somewhat of an international provider of sorts with recent acquisitions.  Declining revenues from land lines and increasing competition to provide high speed data services is getting tough.  We're trying to compete and keep up though. Things are changing rapidly and I'm glad to get out now if given the opportunity.  Unfortunately my work group is pretty small so my manager could very well sabotage my efforts to escape.  I'll stay on a little longer and keep building the stash if that happens so no big deal.

[dividendman]

Man, I gotta get a job at a large company...

The downside of working for a large company is exactly what's happening to the OP...the threat of mass layoffs.

Also the fact that it is soul destroying.

[aperture]

Congratulations Melf!  The real work for you now may be to imagine what life can hold for you now that the monkey is off your back.  Scary and exciting.  May I suggest taking a look at Dr. Doom's quit series: https://livingafi.com/2015/03/09/building-a-vision-of-life-without-work/

Good luck and best wishes, Ap.

[Melf]

Wanted to provide a little update on my RE status since my original post.  I've been approved to receive the severance package that my company is offering.  Originally I thought I'd be working until mid-December if approved.  I found out yesterday that the company wants everyone that's leaving off of the books by 11/11.  That means about a week and half to go!  I was a little shocked but I'm ready to be gone already so I got over it quickly. 

It would have been nice to bank 2 or 3 more paychecks into savings but no big deal I guess.  I'm working on my 401K catch-up contributions now so my last paycheck ended up being $285 with over $3100 going to the 401K.  I guess my next paycheck will be about the same but it will get me to $24K for my contribution for the year.  I guess it will also help when my severance lump sum payment hits in a few weeks since my AGI for the year will be lower. 

I don't know the numbers yet but it should be 39 weeks of pay at 130% plus 3 weeks of unused vacation.  I'm thinking it will be just over 100K before taxes.  I've still got the pension lump sum to deal with as well.  I think I was mistaken on the value in my original post.  Lump sum value when I turn 65 in 15 years should be around $270K.  I think if I take a lump sum now it will only be about $137K.  Still not sure that I trust the pension to be there in another 15 years if I wait so I'm hoping I can take the lump sum now and roll it into my Roth IRA tax free.

Hopefully everything gets sorted out within the next couple weeks with no surprises.  At this point I'm ready to decompress for a while and then figure out where to go from there.  I'll provide an update again soon.  I'm looking forward to being part of the Class of 2016!

[Northwestie]

Ha!  Looking forward to your posts in the already FIREd group!

[Stash Engineer]

Congrats and well done!

[FINate]

Congrats! Welcome to the club!

[ghsebldr]

I've heard of OMY but not OMpaycheck. lol  Congrats

[Cannot Wait!]

When I saw the thread title, I thought your boss had pushed your last button and you were quitting.   So much nicer to be able to leave with such a sweet package!
Congrats!

[arebelspy]

I've been approved to receive the severance package that my company is offering.

Congratulations!  :D

You're going to enjoy this Thanksgiving and subsequent holiday season.  :)

[Metric Mouse]

Wanted to provide a little update on my RE status since my original post.  I've been approved to receive the severance package that my company is offering.  Originally I thought I'd be working until mid-December if approved.  I found out yesterday that the company wants everyone that's leaving off of the books by 11/11.  That means about a week and half to go!  I was a little shocked but I'm ready to be gone already so I got over it quickly. 

It would have been nice to bank 2 or 3 more paychecks into savings but no big deal I guess.  I'm working on my 401K catch-up contributions now so my last paycheck ended up being $285 with over $3100 going to the 401K.  I guess my next paycheck will be about the same but it will get me to $24K for my contribution for the year.  I guess it will also help when my severance lump sum payment hits in a few weeks since my AGI for the year will be lower. 

I don't know the numbers yet but it should be 39 weeks of pay at 130% plus 3 weeks of unused vacation.  I'm thinking it will be just over 100K before taxes.  I've still got the pension lump sum to deal with as well.  I think I was mistaken on the value in my original post.  Lump sum value when I turn 65 in 15 years should be around $270K.  I think if I take a lump sum now it will only be about $137K.  Still not sure that I trust the pension to be there in another 15 years if I wait so I'm hoping I can take the lump sum now and roll it into my Roth IRA tax free.

Hopefully everything gets sorted out within the next couple weeks with no surprises.  At this point I'm ready to decompress for a while and then figure out where to go from there.  I'll provide an update again soon.  I'm looking forward to being part of the Class of 2016!

Thanks for the update!  Sounds like you'll have more than enough to start the next stage of your life. Congrats!

[DA]

Congrats!  And take dat lump sum! 

[Bicycle_B]

Way to go Melf!

[Melf]

Are you sure you can roll the lump sum pension into a Roth IRA? You should make sure that you won't be taxed on the proceeds and consider a traditional IRA instead if that avoids the taxes

I'm not sure about the specifics on the lump sum payment yet.  I've just got a company document from last year at this point that says "You have the option to roll the lump-sum distribution to an IRA or to another tax-qualified plan, including  the company-sponsored 401(k) plan."  I would prefer to roll it straight to Vanguard into my current Roth IRA.  I don't mind having to start a traditional IRA if that's what it takes and roll into that.  I guess I could roll it into my company 401(k) and then roll that entire account to Vanguard as I plan to do at some point also.

I did verify the lump sum amount today though.  It's only about 137K as opposed to the 270K mentioned in my original post.  That original number was based on a lump-sum payment at age 65 so I'm a little bummed about that.  I'll probably still take the lump-sum payment now rather than risk losing all of it at some point over the next 15 years.

[Melf]

Thanks Moustaches!  I have already maxed my Roth IRA contribution for 2016.  Once I'm out the door I'll kick off the process for the pension lump sum since I can do it online.  Hopefully I'll be able to see what my roll-over options are at that point.  I'll then call Vanguard to start whatever may be needed from their end.  I definitely don't want to roll it into my company 401(k) unless that is my only option.  I figure this should go pretty smoothly since the company would prefer to have my pension liability off of the books anyway.

[Slee_stack]

Some peeps get all the luck!

Haha, yes a layoff is normally stressful (I've been thru a big one), but I'd have taken the offer with even less than the solid savings the OP has.

I am jealous and excited.  Enjoy your windfall Melf!  The forced timing may very well do you more good than the bonus cash!

[arebelspy]

The forced timing may very well do you more good than the bonus cash!

Good point!  So many people get stuck for "just a little longer."

What are your plans for the next few weeks/months?  :)

[daschtick]

Congratulations!  I am in a similar situation with my work, as I am 49, and have been working for the same company for 27 years.  I can definitely sympathize with feeling burnt out, as I have come to that realization about myself also.  I did recently move into a new area, and I am working on a lower stress, yet somewhat fun project right now, but we just experienced layoffs again last week.  Honestly, while people were freaking the F out, I was fantasizing about what I would do, and sort of hoping to be set free myself.

If my company were to make the same offer, I would be hitting the button myself, as the severance package is definitely a deal maker!  It would be very easy to walk out of the door with a $100k bonus to take a different job, potentially making considerably less, doing something I really enjoy, instead of continuing along another few years.

Right now, I am planning to work until 55 in order to ensure that I have enough income during my daughter's college years, and to qualify for retiree health insurance, after which both my wife and I will be pulling the plug together (unless the offer me a 'package').

[Melf]

What are your plans for the next few weeks/months?  :)

I'm planning on trying to take it easy at least for a few months.  I'll probably play a lot more tennis and maybe bump the golf up to twice a week if it doesn't bust the budget.  I think I'll start riding my bicycle a little more often too since I don't plan to be in a hurry.   I've got a lot of little projects around the house that I'll hopefully tackle as well.  I live with my girlfriend who owns her house.  We've been talking about selling this place and getting a small place in the mountains away from the hustle and crowds here in the Raleigh area.  She's been having health issues and was just in a pretty bad accident a couple weeks ago.  A lady ran a red light and hit her in the drivers side rear door.  Totaled her car but fortunately she didn't have any injuries other than bruising and soreness.  Even more of a reason to try to get out of this area.  I'll also try to make it back to Kentucky to visit with my parents for Thanksgiving or Christmas.  I haven't spent very much time with either of them since I left there over 30 years ago.  They are both in their early 70's and I know they won't be around forever.  I've also got a motorcycle that I plan to ride a lot more often and maybe do some motorcycle camping again like I used too.  If I get bored then I'll find a part-time job walking dogs or do a little volunteer work.  I've also got three grown children that I could spend a little more time with.  It seems as though the list is getting long.  I may have trouble fitting it all in!

Thanks to all of you for the well wishes so far.  I'll try to keep the updates coming over the next few weeks as things get finalized and I get accustomed to my new life.  I hope others get as lucky as I seem to have gotten recently in pursuit of FIRE!

[Melf]

Roll the pension lump sum into a traditional IRA to begin with.  Then you can start Roth laddering it next year when you don't have employment income.   If you keep the rollovers under the appropriate thresholds, you can greatly reduce or even eliminate any taxes on the conversions.  This is what I will be doing with my remaining taxable retirement accounts starting in 2018 (2017 is a wash due to large capital gains on our apartment sale).

Thanks Ihamo!  I've yet to figure out my strategy going forward as far as my accounts go.  I do want to make the most of what I've got to optimize my tax situation and hopefully ACA subsidies as well.  I'm sure I'll be digging for information from the forum soon and probably posting more questions on the stuff that confuses me.

I see you are in the Seattle area.  My girlfriend is originally from there.  She still has a sister there and other family as well.  We plan on making an extended visit again once we get settled down.  I think her sister lives North of Seattle now....maybe the Everett/Snohomish area.  It's a beautiful area, especially out on the Olympic Peninsula.

[MonkeyJenga]

Congratulations! I have a friend at my old job who refused to apply for a promotion to a safe job when layoffs were heading her way. She had been at the company for over 15 years and wanted OUT. Got the max severance and found a new job a month later.

[radram]

I pushed the button a couple minutes ago.  It was scary!  The button in question was to submit the company survey indicating that I'm interested in taking a severance package.  My company just recently announced pending job cuts and sent the survey to selected employees to find folks interested in taking an enhanced severance package.  I had been hoping to FIRE this year and also hoping to receive the email survey since this package was announced.  I got it last night.

I pulled it up first thing this morning, filled in the few bits of info and then let the window sit there for over 2.5 hours before I got the nerve up to push the button.  I still have at least a couple weeks to go back in and change my mind if I choose to do so.  I guess that made the decision a little easier.  I didn't think that it would be this hard to commit to it though.  I've been working toward getting out for several years now and wanted to be gone by now.  I've been with this company for almost 24 years now and I'm just burnt out on it. 

It's not hard work at all.  It can be stressful at times.  I don't enjoy it any more.  I am a salaried employee and have a very flexible schedule.  I work from home most of the time.  I get lots of vacation if I can manage to take it.  I'm making around 100K a year and get a decent bonus most years.  I'm 50 years old and I just don't enjoy the job enough to want to stay any longer!

I haven't analyzed and tracked my finances  nearly as closely as some do around here in preparation for FIRE.  I consider myself to be FI though.  I track everything with Personal Capital.  Below are a couple of numbers:

Total net worth:  673K
Total invested: 629K (330K in 401k, 46K in Roth IRA & 251K in Taxable Acct)
Total cash: 44K (6K owed for dental work)
Total debt: 0

My expenses are projected to be 23K-24K as best I can project so I think I'm in decent shape as far as the 4% rule.  I should get about 42 weeks of pay as my severance so that would pad the numbers above by a little.  I also qualify for a pension from where I started with the company.  It should be equivalent to around 19.5K per year starting at age 65 (15 years away) or the lump sum value is around 270K now.  There's also Social Security if it's still viable when I'm eligible and that should be a decent amount from projections I've seen.

It's a very hard decision to make to walk away from a well-paying job.  There's no guarantee that they will even let me go either.  We don't normally see job cuts in my work group.  I escaped the last one back in 2002 I think.  It's just a waiting game now!  Maybe I won't chicken out before the deadline!

Congratulations on your achievement. I definitely understand the burnout issue.  I am 18 months past FIRE, and just now getting to feel like myself. Next is to discover the new me :)

Perhaps you can share some more details regarding your path.

With a $100K salary and $24k in spending, were you saving $75k? With recent growth in the market, you could have been at $0 about 6 or 7 years ago to reach your current net worth. Is that how it happened for you? If so, I bet those other 18 years of earnings have quite a few stories.

[Melf]

With a $100K salary and $24k in spending, were you saving $75k? With recent growth in the market, you could have been at $0 about 6 or 7 years ago to reach your current net worth. Is that how it happened for you? If so, I bet those other 18 years of earnings have quite a few stories.

I would honestly have to think about where all of the money went.  LOL.  I've only been making the big bucks for maybe 10 years or so and never really payed the much attention to hard core saving until a few years ago.  Keep in mind also that Uncle Sam has been getting his share with me filing Single every year too!

Going back as far as 1999 I was pretty much broke and in debt.  I was married with 3 kids but my wife had just left me when I took a job transfer within the state.  She spent everything we had as quickly as it came in except for what little I put into my 401K in the early years.  I was on my own from then but had to set up a new home for myself.  I figured I needed room for the kids every other weekend that I had them so I rented apartments bigger than what I really needed.  I also paid a lot of child support and other stuff related to the kids over those next years.  I did save though and bought a small house in 2001.  I ended up selling it for a small profit after several years and that added to my savings.

After the child support ended and my pay kept increasing, I kept saving and tried not to waste too much money even though I never really payed that much attention to it.  I found this forum a few years back and that was when I seriously started considering retiring early.  I'm sure I'd still be working away like I've always done had it not been for MMM and all of the great examples and inspiration I've gotten here.  I wish I had some exciting stories to account for all of that money that I've made but I just don't!

[radram]

With a $100K salary and $24k in spending, were you saving $75k? With recent growth in the market, you could have been at $0 about 6 or 7 years ago to reach your current net worth. Is that how it happened for you? If so, I bet those other 18 years of earnings have quite a few stories.

I would honestly have to think about where all of the money went.  LOL.  I've only been making the big bucks for maybe 10 years or so and never really payed the much attention to hard core saving until a few years ago.  Keep in mind also that Uncle Sam has been getting his share with me filing Single every year too!

Going back as far as 1999 I was pretty much broke and in debt.  I was married with 3 kids but my wife had just left me when I took a job transfer within the state.  She spent everything we had as quickly as it came in except for what little I put into my 401K in the early years.  I was on my own from then but had to set up a new home for myself.  I figured I needed room for the kids every other weekend that I had them so I rented apartments bigger than what I really needed.  I also paid a lot of child support and other stuff related to the kids over those next years.  I did save though and bought a small house in 2001.  I ended up selling it for a small profit after several years and that added to my savings.

After the child support ended and my pay kept increasing, I kept saving and tried not to waste too much money even though I never really payed that much attention to it.  I found this forum a few years back and that was when I seriously started considering retiring early.  I'm sure I'd still be working away like I've always done had it not been for MMM and all of the great examples and inspiration I've gotten here.  I wish I had some exciting stories to account for all of that money that I've made but I just don't!

I have heard divorce is financial devastation. Great turn-around story. Congratulations on all your success.