pre-FIRE checklist

[With This Herring]

Inspired by this post regarding losing FSA money, make sure you have a plan to use up the remaining balance in your FSA BEFORE you leave your job.

[CowboyAndIndian]

Your company (usually big companies) have a contract with Microsoft for their software. Employees can buy Microsoft product thru a "Home Use Program"

A full version of office is just $9.95. There are limits, 1 every year or so.

So, get your software before you FIRE!

http://www.microsofthup.com/hupus/hup.aspx?culture=en-US&WT.mc_id=HUPUS7

[AussieCat]

This great, obviously some practical differences between countries, but I think the mental health aspects are so important.  We're not even there yet, and I  find myself second guessing and worrying about motives/selfishness/that I'll be lazy and unproductive. The psychology is fascinating!

[CloserToFree]

Thanks for compiling all this - I'm finding it helpful!

[gardenarian]

Wow, that seems overwhelming to me! I really didn't do any of this and survived - and thrived!

[Exflyboy]

Great list!  Thank you for compiling.  I would add:

Implement Income Stream.  Set dividends and capital gains from taxable account to automatically transfer to bank account. 

Oooh!.. I was just thinking about this today in fact.

Here in Oregon we get taxed on all after tax dividends as regular income, no matter if they are Qdivs or not.

As our rental income + this after tax dividend income (which is less than our annual spend)  is subject to State income tax we might as well have this dividend income piped directly to our bank accounts.

[tag]

Damn this is a helpful thread. Thank you to all who have contributed.

[dividendman]

Could I ask why you would do this, I'm not extremely familiar with HELOC's but trying to learn the benefits (and any drawbacks) that might apply from this tactic. Thanks!

Just to be clear - what you want to do is set up a HELOC so that you can draw on it in case of emergency, you don't want to actually have a big new loan.  The way mine worked, I got a credit line of $60k but just borrowed 5k.  The rest is still available now even though I retired a couple years ago.

To add here, if you don't own a home you may still want the flexibility of an unsecured line of credit. I'm planning to FIRE in August and got one for 90k. Sure the interest is high (~11%), but it is only to be used in emergencies.

It is very difficult to get these if you're not working.

[vatacvalves]

the good to share

[Clean Shaven]

Rereading this as my planned FIRE date approaches...

Another item to perhaps consider:  since I am going to use an ACA health insurance plan that will come with a high deductible, I am considering adding "med pay" (medical payments) coverage to my auto insurance.  I called my insurer, and it's an added cost of about $50/ year for $5,000 limits.  I'm generally healthy and don't use much health care, so my thought is that a car accident is one of the more-likely ways in which I might end up incurring a lot of health care expenses suddenly -- med pay would cover all (or most) of the ACA deductible in that instance.

Just food for thought for anyone in similar pre-FIRE circumstances.

[Clara Smith]

Thanks, Exhale,
your list of information was very helpful. I will surely follow your guidance. :)

[Pylortes]

“Vacation days: Check policy to see how this is paid out when you leave. Use up what you can't cash out.“

Just to add a bit more on this- many companies have a certain day of the month where they grant/allocate vacation or PTO days for that month, so it behooves you to possibly retire right after that date.  For example, my company grants me 18 hours of PTO hours (equivalent to 2.25 days) every month on the 16th for that month.  As such, when picking a retirement date I will almost certainly retire sometime between the 16th and the 31st of the month so I can get a little extra PTO payout. 

[pecunia]

Thanks for putting this together.  One of the other posters made a point to tell me that he didn't think I was ready to FIRE.  This will help.

[Exhale]

Thank you to everyone who has added their wisdom and tips. Also, I'm glad to hear that it's been helpful to folks. Gathering all of it together in one place has been useful for me. It's been a great help to see what can be done in advance, deadlines to watch for, etc.

[eco mom]

A suggestion for under Social Networks or Work...
Ask for LinkedIn (or other written) recommendations from colleagues, and return the favor, in case you should decide to work casually in the future in your field.

[K-ice]

Done - thank you for the tips. I'm not a home owner so if anyone else has more suggestions, please let me know.

I'm not a renter but a landlord. I don't think anyone answered so I will give it a shot.

You may want to renegotiate your lease. Perhaps lock into a 2y lease if you plan to stay where you are. Double check your roommate policy as if you plan to keep your place but travel more you may want a roommate.

[Dibdab]

I plan to retire at age 56 end of May pending my house sale.  Signed up for Obamacare silver plan.  However, did not qualify for premium subsidy because I, "can get health insurance through my employer" right now even though I will only make around $22000 this year .  This does not seem right, because I will soon lose that coverage as the document healthcare.gov made me submit from my employer states.  Does anyone know if I can somehow update  my info at healthcare.gov so I would qualify for subsidy  after I finally quit job?

[Eurotexan]

I’m still a few years away from FIRE but this is great stuff!

One word of caution, be careful when taking work product with you.

- Copy future-useful documents from work computer - Excel templates you created, etc.

 Our employee handbook explicitly prohibits this and there could be legal consequences. The intended purpose of the language is to prevent company information going with employees and to their new jobs at competitors but some legal departments may have a blanket rule, regardless of what the employee does after they leave.

Just want to make sure we can ride into the sunset without being chased by briefcase carrying lawyers!

[Threshkin]

I plan to retire at age 56 end of May pending my house sale.  Signed up for Obamacare silver plan.  However, did not qualify for premium subsidy because I, "can get health insurance through my employer" right now even though I will only make around $22000 this year .  This does not seem right, because I will soon lose that coverage as the document healthcare.gov made me submit from my employer states.  Does anyone know if I can somehow update  my info at healthcare.gov so I would qualify for subsidy  after I finally quit job?

ACA Subsidies are tricky to understand.  I had a similar issue.  I initially took COBRA because my FIRE year income was too high to qualify.  Later I wanted to cancel COBRA during open enrollment and move over to ACA.  My income was low enough but if I cancelled COBRA, I would not qualify for subsidies.  I had to wait until it expired naturally and then I could sign up for ACA and get subsidies as at was a qualifying event.  In our case that cost us about an extra $5K in premiums for the year.  Expensive but cheaper than paying for ACA without the subsidies.

Talk to your local ACA advisor.  They might understand the options.

[Dibdab]

Thanks.  It worked out better calling healthcare.gov than trying to figure out the convoluted questionnaire.  I observe many in my FIRE 2019 cohort with same issue.  Seeing as my FIRE date keeps changing, delayed due to my house sale contingencies it is nice OBAMACARE is flexible so that I can update my enrollment. 

[cangelosibrown]

Definitely not widely applicable, but alongside getting your professional certifications renewed while still working, make sure you max out any needed Continuing Education requirements for your certification. My company pays for plenty, offers plenty, and has some freely available on the company intranet. For my professional certification, you can roll over CE hours one year. That means that I'm now finishing up hours I need to study in 2020, which means it would be Jan. 2022 before my certification lapses due to lack of Continuing Education.

[FIREstache]

I initially took COBRA because my FIRE year income was too high to qualify.  Later I wanted to cancel COBRA during open enrollment and move over to ACA.  My income was low enough but if I cancelled COBRA, I would not qualify for subsidies.  I had to wait until it expired naturally and then I could sign up for ACA and get subsidies as at was a qualifying event. 

Interesting.  That's not what I've read previously.  While cancelling COBRA is not a qualifying event, you should have been able to enroll in a marketplace plan during open enrollment and qualify for subsidies that you otherwise meet the requirements for, but you stated you were not able to qualify for subsidies when canceling COBRA even during open enrollment despite having a low enough income.  Also, noted that you stated that you spoke with an advisor who confirmed it.

Some related references or discussion:
https://www.verywellhealth.com/cobra-obamacare-subsidy-1738953
https://www.bogleheads.org/forum/viewtopic.php?t=202698

Edit: Previous MMM thread on topic:
https://forum.mrmoneymustache.com/post-fire/getting-aca-coverage/

[pecunia]

If you don't qualify for subsidies, is it better to keep COBRA or to get a Marketplace plan?  My employer is providing gold COBRA.  I'm putting money aside to get 18 months of that.  If I go at the end of the year, the ACA thing should be stabilized in 18 months.  Actually, I think there will be legislation to make it better by then.  Both Democratic and Republican constituents of elected officials want this thing fixed. 

Does the bargaining power of employers get better plans than those of the Marketplace?  I think so.

Can they raise the cost of COBRA on anything but a yearly basis?

[FIREstache]

If you don't qualify for subsidies, is it better to keep COBRA or to get a Marketplace plan?

That depends on your COBRA plan, and may also depend on whether you actually have to use it.  Through my work, I can get COBRA for much less than a silver plan without subsidies.  And if I actually have to use the insurance, my COBRA plan would have a much lower deductible / out of pocket cost.

[pecunia]

Thanks - The COBRA plan is better than I have purchased myself from the marketplace.  I'm quite sure the premium will be higher as my employer told me roughly what he is paying.  I'm thinking to stick with it.

[Threshkin]

For us going on COBRA was roughly the same cost as a un-subsidised and roughly equivalent Marketplace plan.  Having literally no change to our healthcare insurance was one less thing to deal with immediately post-FIRE.

But the last year on the COBRA work plan from UHC was a major PIA.  We kept getting billed for preventative items that we had confirmed in advance would be no cost.  Then it would take many months to get them to correct the billing error.  One time we were even threatened with collections for a charge that was under active dispute.  That one took over 10 months of hassle before they credited the entire amount.

Post COBRA we moved over to a Kaiser bronze plan.  It is like night and day.  While we have still gotten billed incorrectly a couple of times it has only taken a single phone call and a couple of days to correct the issue.  Kaiser is also much more proactive and conservative regarding what test and procedures we should have and what are not necessary. 

For example, We recently went in for our annual physicals.  I subsequently received a small bill for the blood draw.  I called them up to ask why and they told me they would investigate.  Two days later I was informed that not only had they corrected that charge but that they had also checked my DW's record and found a couple of incorrect charges that they had also credited.  I had not event received the bills for those visits yet.

Another example:  Last year, I unexpectedly received a colon cancer screening test kit (stool sample) in the mail.  Included with the kit was a letter very clearly stating that this was a preventative test and there would be no charge.  I received it automatically because of my age. 

These are just a couple of examples of the type of customer service we receive from Kaiser.  we are very satisfied customers.

[BeanCounter]

The list of things under Health in this post are fantastic. Thank you for pulling this together.

10.5 months to go. I've got a lot of shit to get done on this list!

[Roots&Wings]

“Vacation days: Check policy to see how this is paid out when you leave. Use up what you can't cash out.“

Just to add a bit more on this- many companies have a certain day of the month where they grant/allocate vacation or PTO days for that month, so it behooves you to possibly retire right after that date.  For example, my company grants me 18 hours of PTO hours (equivalent to 2.25 days) every month on the 16th for that month.  As such, when picking a retirement date I will almost certainly retire sometime between the 16th and the 31st of the month so I can get a little extra PTO payout.

There was a thread somewhere about running out your vacation time (instead of taking the payout). By running out the time, you get the full value of the payout + employer benefits (e.g. 401k match, healthcare coverage), which can be a better financial decision than taking the payout. Many thanks to original poster of that thread, I hadn't considered run out vs payout previously.

[caracarn]

Just saw this and think it will come in handy as I head into FIRE in the next decade or so if all stays on track.  Thanks for pulling this together!

[Joan-eh?]

following!

thank you for this! what a community and thanks for leadership

[couponvan]

I wanted to follow up on the FSA medical spending for pre-FIRE. The rules allow you to spend ALL the FSA monies in the year you leave before having them withheld from your paycheck. So, if you are planning FIRE earlier in the year (say March/April), you can go ahead and spend your full FSA amounts without ever having them withheld from your paycheck. Consider it a FIRE bonus.  The company uses prior year FSA funds that were not spent to cover the excess for people who quit after spending more than contributed. It's a benefits loophole to be utlized. 

So if you have a lot of dental/eye items that need to be taken care of, max the FSA for the year, get it all done in January/February and then FIRE.  Thousands of "free" medical covered.

[xbdb]

While not a necessity by any means, I picked up a retirement count down clock from Amazon https://www.amazon.com/gp/product/B07GPC1RFG a few months before I FIRED. I kept it on my nightstand so the first thing I saw in the morning is that I was one day closer. Made be grin from ear to ear! I only wish I had thought of it a lot earlier!

[Roots&Wings]

Adding this gem from @Sun Hat:

One thing that I regret not doing more of was reaching out to work contacts to let them know how much I appreciated working with them. Once retired, I didn't have access to the network where I had their contact info, so that opportunity was lost to me. The people that I did reach out to really appreciated it because while they were mentoring, collaborating or working with me they were also living their own lives and might not have realized how they had a positive impact on me. Whether it's an email, phone call, thank-you note or taking someone out to lunch, it's a graceful way to exit.

I also regret that I didn't slash one guy's tires. Either way, seize the moment.

Lastly, retirement is fun. No matter what you plan to do with your time, prepare for it with cardio and core strength.

[JoJo]

While not a necessity by any means, I picked up a retirement count down clock from Amazon https://www.amazon.com/gp/product/B07GPC1RFG a few months before I FIRED. I kept it on my nightstand so the first thing I saw in the morning is that I was one day closer. Made be grin from ear to ear! I only wish I had thought of it a lot earlier!

I'm pretty sure there's an app for that :)

[bye-bye Ms. FancyPants]

Thanks for sharing this! We hit our number this year, but I'm very nervous I am overlooking something. This will help!

[Fru-Gal]

PTF

[Fru-Gal]

Here's a pre-FIRE item, 1 month before FIRE: I just cancelled 2 streaming services (for personal entertainment) and 1 online service (that I was expensing for my job). While I may eventually use that professional service again, I certainly can get by without it (or by using the free version) for a few months.

[mtnrider]

I found this list quite valuable, and wanted to contribute some additional items from my list.

Work

• Make sure you hit any matching charitable donations your company provides.
• Some workplaces have a Donor Advised Fund.  Be sure to use it if your access will be closed off.
• I'd include getting a copy of working record, if your company provides this.
• Someone added to exercise stock options.  I'd also add to be sure you aren't leaving easily reached RSUs on the table.
• Stop your ESPP contributions.
• Check into what to do with your HSA  Most companies start charging you to hold the account after you leave.
• You might try to game the FSA if you're planning to leave early in the year.
• Make a last check on the employee discounts your company provides (eg Dell, Apple if you need a computer).

Other Planning

• How will home dynamics change?   People living with you, or who spend a lot of time with you, will know you're not working.  It's probably useful to talk with them about expectations well before the FIRE moment, especially if they are still working.  Who's going to sweep the floors?  Will they be OK with you jetting off leaving them alone?
• I saw several "What to tell other people" threads.  To the "when/if/how" in the OP, I'd add to write down "what" you'll tell them you're doing now so you have a consistent story for them, and for you.
• Create a schedule for how you'll plan to use your Think about how to spend your time post-FIRE.  I'd suggest proposing a schedule for yourself to do the things you've always wanted to do.  It could be as simple as spend 10-2 painting.  This could help you when people - or you - start trying to add demands to your time.  "I'd love to, but I'm already scheduled for ..." 
• Be aware of how ending work will affect the credit card/bank bonus game.

Post-FIRE Activities

• The list already has Explore different activities that interest you.  I'd expand this and say to write down a list of the things you want to do post-FIRE and show some progress on them.  Some of that progress might be to build social networks, as is already listed.  Or get some education in the field you're interested in.  Try as much out as you can, while you still have options.

Of these, I'd say the most important one is talking about how the home and family dynamics will change.  Second would be to create a plan on how to use your time. 

Edit: clarified how a schedule and/or planning might work *for you*.

[boarder42]

I found this list quite valuable, and wanted to contribute some additional items from my list.

Work

• Make sure you hit any matching charitable donations your company provides.
• Some workplaces have a Donor Advised Fund.  Be sure to use it if your access will be closed off.
• I'd include getting a copy of working record, if your company provides this.
• Someone added to exercise stock options.  I'd also add to be sure you aren't leaving easily reached RSUs on the table.
• Stop your ESPP contributions.
• Check into what to do with your HSA  Most companies start charging you to hold the account after you leave.
• You might try to game the FSA if you're planning to leave early in the year.
• Make a last check on the employee discounts your company provides (eg Dell, Apple if you need a computer).

Other Planning

• How will home dynamics change?   People living with you, or who spend a lot of time with you, will know you're not working.  It's probably useful to talk with them about expectations well before the FIRE moment, especially if they are still working.  Who's going to sweep the floors?  Will they be OK with you jetting off leaving them alone?
• I saw several "What to tell other people" threads.  To the "when/if/how" in the OP, I'd add to write down "what" you'll tell them you're doing now so you have a consistent story for them, and for you.
• Create a schedule for how you'll plan to use your time post-FIRE.  This could help you when people start trying to add demands to your time.  "I'd love to, but I'm already scheduled for ..." 
• Be aware of how ending work will affect the credit card/bank bonus game.

Post-FIRE Activities

• The list already has Explore different activities that interest you.  I'd expand this and say to write down a list of the things you want to do post-FIRE and show some progress on them.  Some of that progress might be to build social networks, as is already listed.  Or get some education in the field you're interested in.  Try as much out as you can, while you still have options.

Of these, I'd say the most important one is talking about how the home and family dynamics will change.  Second would be to create a plan on how to use your time.

Some great points at the top with respect to matching donations.

But

Creating plans and schedules is overkill. And unnecessary for most. Even MMM has issues with creating schedules and obligations.

If you need to plan and structure to this level why leave work at all?

And the whole come up with a story about what you're doing just fucking tell people you retired. It's freeing for you.  it's educational for some. 

Coming up with a plan to lie or twist the truth isn't good for yourself and your own psyche.  If you're considering this maybe reconsider why you're thinking this is necessary.

BE PROUD OF WHAT YOU ACCOMPLISHED AND SHARE IT WITH THE WORLD!!!!!

[mtnrider]

Creating plans and schedules is overkill. And unnecessary for most. Even MMM has issues with creating schedules and obligations.

If you need to plan and structure to this level why leave work at all?

It probably depends what you intend to do post-FIRE, so a schedule and plans might not be right for everyone. Your plan is to hang out and do whatever hits your fancy next?  A fine plan.  :)

I've found that schedules and plans are what allow me to be free to be creative and to build things.  See Cal Newport's "Deep Work".  Yes, it has "work" in the title!  (You can google for "should creative people have a schedule?" if you're curious to read more.)

So for me, I might have a plan to code for 4 hours in the morning, when I'm freshest.  Then I'd schedule in time to do chores, take the bike out for a spin.  And free time for the rest of the day.  I might schedule in time to watch TV with my SO.  Someone else might want to paint for 4 hours.  Or paint all day on Mondays.  I don't find the schedule to be "work" as much as self accountability and organization.

But I'd totally get that if someone is coming from a place where schedules were imposed on them, they might want to rebel against them.  But they're just a tool, they can be used for good or evil.

And the whole come up with a story about what you're doing just fucking tell people you retired. It's freeing for you.  it's educational for some. 


Coming up with a plan to lie or twist the truth isn't good for yourself and your own psyche.  If you're considering this maybe reconsider why you're thinking this is necessary.

BE PROUD OF WHAT YOU ACCOMPLISHED AND SHARE IT WITH THE WORLD!!!!!

No need to lie.  Deciding to proudly exclaim that you're retired to anyone who asks is indeed a valid choice!  But I personally don't want to have a 10 minute conversation about FIRE when someone asks me "what I do".  This I've read multiple threads about on this forum, so I'm not the only one. 

To put this into my perspective, I could tell people "I'm retired".  Or I could tell them "I'm developing an app".  Or even, "I'm taking some time to cycle the US."  All could be true.

[GreenSheep]

The above couple of posts make think of Gretchen Rubin's "Four Tendencies." You can take the quiz at the link below to find out which one you are. Basically, it's a question of whether you respond to inner or outer expectations, or both or neither. I'm an Upholder, so I LOVE schedules, lists, and rules. If it's on the calendar, it's going to happen. But a Rebel actually resents a to-do list or a calendar full of stuff, so they're better off leaving things up in the air and making decisions based on "What kind of person am I / do I want to be?" rather than "What's on the to-do list?"

This stuff has set off so many light bulbs for me about why some things work for me and some don't, why other people have a completely different idea of how something should be done, etc. There are good and bad things about each Tendency, and it can make work and personal relationships so much easier if you know someone else's tendency (which is pretty easy to figure out if you know someone even a little bit).

https://quiz.gretchenrubin.com/

[boarder42]

I'm a questioner. Took that a few years ago.

[mtnrider]

It's an interesting framework.  See also this thread about the four tendencies  I'll resurrect it.