Author Topic: Voluntary Furlough  (Read 2280 times)

penguintroopers

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Voluntary Furlough
« on: April 03, 2020, 02:59:45 PM »
Topic Title: Should I volunteer to go on furlough?

Life Situation: I (26F) am married to husband (25M). Married filing jointly, no dependents. We live in PA (relevant for later concerns in notes section).

Gross Salary/Wages: Myself: $1806 Husband: $2385, both paid bi-weekly. *for furlough salary: expected regular UC is $450 to $550. I cant calculate it well because my highest quarter was probably last spring when I was earning shift differential and a ton of OT, and we switched pay systems in June and don't have online access to those old records. I'm expecting to land around 500/week, +$600 bonus = $1100, or $2200 bi weekly to compare directly)

Individual amounts of each Pre-tax deductions 401k, HSA, FSA, IRA, insurance, etc

Mostly moot for the discussion (I think) but I'll include them anyway
Husband Retirement: roughly $10k
My retirement: roughly $7k
HSA: $2000

$250k life insurance on each of us, I think I have around $50k additional on myself at work.

Other Ordinary Income: None

Qualified Dividends & Long Term Capital Gains: None

Rental Income, Actual Expenses, and Depreciation: None

Adjusted Gross Income: Last year was $81500

Taxes: Federal, state/local, and FICA.  Fed: $9k, state $3k, local $1k

Current expenses:
Listed in per month
Rent: $1020
Food: $250
Student loans (both of us): $550
Insurance (auto, renters, life): $150
Utilities + Internet: $150
Personal (his + hers): $200 (split between us)
Gas + Tolls: $75
Misc: $100

Total: $2495

Expected ER expenses: don't think this is relevant right now

Assets: Amount & description - include current asset allocation plan if you have one

Cash on hand: $11500
Anticipated cash from canceled cruise: $2850

Liabilities:

Student Loans: His ($11k, payment $330) and hers ($18K, payment $210). All federally insured loans, private loans are paid off. Both are a collection of smaller loans that I don't want to break down into individuals because its not relevant. Interest is paused at 0% (regularly 3.1-4.4%, varies between loans) until September. Payments can also be paused if needed. We've been paying these suckers off like no tomorrow... we were originally at $103K in August 2018, so to be below $30k is amazing. Also, you could probably see where all of our money was going since retirement is so tiny, income is so high, and our expenses are so low... yea. Its been going to Sallie Mae.

Taxes: we underpaid 2019 by around $900 (federal), which means we probably underpaid state some too. Both are postponed until July 15th.

No mortgage, credit cards paid in full every month, no car loan.

Specific Question(s):

Alright, so given all that's above, does anyone have any recommendations or advice for us?

Job in question is mostly okay.

It comes with a super unmustacian 60 mile round trip commute (please don't facepunch me. Husband walks to work from our apartment to balance us out).
It's (almost) my dream job. It sometimes upsets me because I am overqualified for the position with my education, and am regularly stunted my management when I put forward a desire to build my skills in different sections of my department. I've been there for 2.5 years and there are functions I have the education to do, but management wont acknowledge my masters degree and do the short "training" I would require to be signed off on performing those duties.
I am getting somewhere with promotions, and have been "on track" to receive one for eight months now. I've been given additional responsibility with no change in compensation, and can't really do much about the situation as that's the mo of the company. They dangle the title and slight pay increase as incentive to perform those tasks for at least 9 months to a year, year and a half. I have this perception that if I get too many years with "company" without having some promotion my resume would look weird.
I have been searching for employment elsewhere for around 18 months. In that time frame I have applied to two jobs. The first was around 14 months ago that lead to an interview, but a coworker of mine got the position. Second position was 2 months ago and I was eliminated from consideration due to a glitch and I didn't feel like fighting for the position as it wasn't fully desires anyway.
We have a high likelihood of leaving the area (and potentially entire state) early spring of 2022.
As I am getting older I'm leaning more towards wanting a more family friendly career. Working in a lab does not give much flexibility in leave. Also, considerations of what I can/cannot do has to be considered during pregnancy.

Furlough period is initially 8 weeks. I can be called to return earlier. I could potentially not be called until 12 weeks. At 12 weeks, "company" will begin layoffs and has assured employees that layoffs would not be determined by furloughed employees first. I believe I would continue employment after workforce reduction. Company initially handled COVID by reducing us to 35 hours/week last week, and now 30 hours/week this week. Staff is being reduced by 40%, and I'm probably on the side that would not be chosen to be furloughed, hence me believing I could return at that 12 week point.

UC is expected to last 16 weeks.

Perks:
Time off would give me a lot of opportunity to contemplate future career options I didn't really have time to consider before or have continuing education opportunities online.
The emotional toll at work has been getting to me, so time off would help alleviate anxiety.
Husband has been fully remote for 3 weeks now, so I'm our only point of contact and me staying home would make us totally isolated except for grocery store trips.
Husband's salary would cover all of our expenses and still have $900/mo surplus without UC

Concerns:
PA already has 1 million applicants and the length of time to receive benefits could be at least a month. From what I see normal processing is 2-4 weeks, and we just saw the applications overload the system. I fully expect to be put in the system and have to wait for around 2 months.
Me staying home would delay our pay-off-student-debt goal (assuming UC doesn't go through at all).
Husband's engineering firm is doing ok on work, but a long construction pause could affect business. Other firms are saying they're having problems and are beginning furloughs but husband's boss has stated things are looking fine at their firm at the moment.

As for the ethical concerns of taking the UC in the first place, my husband and I are confident that our taxes over our lifetime will more than compensate society compared to this period of time. We do have a feeling that we are more fortunate and should pay in more and will continue to do so. Also, other coworkers aren't in a position as fortunate as ours, so I feel like me staying on "to achieve financial goals and pay off debt" vs their "I can't make it without my paychecks coming consistently" is a little selfish. For us going into furlough and claiming UC will just make our spreadsheet look sad for a month or two. For them it could be very stressful and have longer lasting effects.

Peachtea

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Re: Voluntary Furlough
« Reply #1 on: April 03, 2020, 07:20:10 PM »
Depending on your states laws you might not be eligible for unemployment for a voluntary furlough. Because you have to be “willing and able to work” to get UI and if you chose to go be furloughed your not willing to work. So that’s something to look into and consider.

penguintroopers

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Re: Voluntary Furlough
« Reply #2 on: April 03, 2020, 07:29:50 PM »
Depending on your states laws you might not be eligible for unemployment for a voluntary furlough. Because you have to be “willing and able to work” to get UI and if you chose to go be furloughed your not willing to work. So that’s something to look into and consider.

Already taken into account, I am still eligible.

Laura33

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Re: Voluntary Furlough
« Reply #3 on: April 09, 2020, 08:13:02 AM »
Personally, I would stay at the job.  This crisis is something that no one in the US has dealt with before, which means things are changing so fast within companies that even a well-meant statement that things are fine could end up being completely wrong next week if a couple of big projects cancel.  Hell, my own firm was looking at its best year ever as of a month ago; now we're all taking paycuts even assuming we get one of those forgivable CARES loan, and will need to be laying off ASAP if we don't. 

You have done an awesome job of paying down those loans, but now you need to switch gears a bit to solidify your shit-hits-the-fan position.  Take full advantage of the new law to stop paying as much as you can on the student loans (I haven't been following that part much so I don't know the details).  Throw all of that extra income into an emergency fund that will allow you to live at least 6 months with zero income.  I know, I know, that's a lot longer than is typically recommended or that you will probably ever need.  But from what I am seeing with my clients, there's not going to be an immediate bounce-back; it's going to take some time just to get back to normal, much less start in on many of the projects that had been giving us work. 

And on the bright side, if (when) the world doesn't totally go to hell, you'll at least have plenty of cash to do whatever you want with -- fund a move; pay off the loans in one swell foop; take a good, long parental leave; max out your retirement accounts; etc.

Also, never ever ever believe anyone who says that layoffs won't start with furloughed workers.  First, I offer you Dilbert:

https://dilbert.com/strip/2000-08-18

Second, even assuming they actually mean what they are saying, the reality is out of sight, out of mind.

maisymouser

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Re: Voluntary Furlough
« Reply #4 on: April 09, 2020, 09:00:38 AM »
Personally, I would stay at the job.  This crisis is something that no one in the US has dealt with before, which means things are changing so fast within companies that even a well-meant statement that things are fine could end up being completely wrong next week if a couple of big projects cancel.  Hell, my own firm was looking at its best year ever as of a month ago; now we're all taking paycuts even assuming we get one of those forgivable CARES loan, and will need to be laying off ASAP if we don't. 

You have done an awesome job of paying down those loans, but now you need to switch gears a bit to solidify your shit-hits-the-fan position.  Take full advantage of the new law to stop paying as much as you can on the student loans (I haven't been following that part much so I don't know the details).  Throw all of that extra income into an emergency fund that will allow you to live at least 6 months with zero income.  I know, I know, that's a lot longer than is typically recommended or that you will probably ever need.  But from what I am seeing with my clients, there's not going to be an immediate bounce-back; it's going to take some time just to get back to normal, much less start in on many of the projects that had been giving us work. 

And on the bright side, if (when) the world doesn't totally go to hell, you'll at least have plenty of cash to do whatever you want with -- fund a move; pay off the loans in one swell foop; take a good, long parental leave; max out your retirement accounts; etc.

Also, never ever ever believe anyone who says that layoffs won't start with furloughed workers.  First, I offer you Dilbert:

https://dilbert.com/strip/2000-08-18

Second, even assuming they actually mean what they are saying, the reality is out of sight, out of mind.

+1. ESPECIALLY if you plan to have kids in your future. You theoretically have plenty of off-time now (and if you don't think you do, just wait until you have a kid). Make as much as you can prior to having a mini mustache, it only gets waaaaaay harder from there. You say it's "almost" your dream job. Take advantage of working in a place that doesn't suck as long as you can, as much as you can.

Also, I wouldn't bank on actually receiving any $ from UI until months down the line at this rate. The system is overwhelmed and there will be a huge delay in processing.

If you are strictly looking at this from a stress point of view and that's the main reason you want to take the furlough, I would suggest you address that more directly than just trying to 'take a break'. What are steps you would take on this front if COVID weren't giving you an option to take furlough? I would also suggest pushing harder on the job search if this isn't a great fit- applying for 2 jobs doesn't exactly qualify as hard-core job searching. Sure, it's not a great time to job search, but you may as well submit apps anyway- maybe you'll find the perfect job a year from now from a company who hung onto an application.

Finances_With_Purpose

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Re: Voluntary Furlough
« Reply #5 on: April 13, 2020, 11:51:38 PM »
Personally, I would stay at the job.  This crisis is something that no one in the US has dealt with before, which means things are changing so fast within companies that even a well-meant statement that things are fine could end up being completely wrong next week if a couple of big projects cancel.  Hell, my own firm was looking at its best year ever as of a month ago; now we're all taking paycuts even assuming we get one of those forgivable CARES loan, and will need to be laying off ASAP if we don't. 

You have done an awesome job of paying down those loans, but now you need to switch gears a bit to solidify your shit-hits-the-fan position.  Take full advantage of the new law to stop paying as much as you can on the student loans (I haven't been following that part much so I don't know the details).  Throw all of that extra income into an emergency fund that will allow you to live at least 6 months with zero income.  I know, I know, that's a lot longer than is typically recommended or that you will probably ever need.  But from what I am seeing with my clients, there's not going to be an immediate bounce-back; it's going to take some time just to get back to normal, much less start in on many of the projects that had been giving us work. 

And on the bright side, if (when) the world doesn't totally go to hell, you'll at least have plenty of cash to do whatever you want with -- fund a move; pay off the loans in one swell foop; take a good, long parental leave; max out your retirement accounts; etc.

Also, never ever ever believe anyone who says that layoffs won't start with furloughed workers.  First, I offer you Dilbert:

https://dilbert.com/strip/2000-08-18

Second, even assuming they actually mean what they are saying, the reality is out of sight, out of mind.

@Laura33 , you read my mind.  You even had a perfect Dilbert reference to make the point.  I stand impressed.

She's spot on.  Voluntary furlough = eager to leave = see ya later.  Plus, even if they're shooting you straight, who knows if they'll be able to bring anyone back in twelve weeks.  I can guarantee you who doesn't, though: the people offering you this furlough.  Nobody knows at this point.  And, like Laura mentioned, the signs out there aren't reassuring, especially not for a rapid-fire recovery, as opposed a slower-building one.   

Don't put yourself in that place if you need the income and you can avoid it.  Ride it out as long as you can instead.  Right now, you still have UI and other things to fall back on if your employer struggles later.  (You can't lay off 40% of your workforce and be in a good place.)  If you pull that parachute cord now, you lose it for a while. 

With saving money, the worst case here is that you'll have spare cash while everyone else is still poor and there are deals to be had.  So stay the course.  This is an extremely easy call, career-wise and financially. 

Much Fishing to Do

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Re: Voluntary Furlough
« Reply #6 on: April 14, 2020, 06:34:45 AM »
I agree with the comments to date.  Now is probably not the time to play with your job status if you are currently working and getting paid. 

I think this situation might open up an opportunity for those closer to FI with severance packages or even just using Unemployment to glide to the finish line.  Or even someone half-way to FI it wouldn't be that great a risk to give this a shot just to take a break, realizing that break may become much longer than one planned on (which is not exactly a disaster if you're sitting on 10x annual spending, e.g.)

But if you're looking to be working for the next few years I think its gonna be like 2008 where you want to not take any chances with your status (here putting yourself in a group that will likely be cut before another) b/c, even if "the economy" does recover quickly, it may be a few years before people are actually substantively hiring again.