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General Discussion => Post-FIRE => Topic started by: Exhale on February 21, 2016, 12:15:31 PM

Title: pre-FIRE checklist
Post by: Exhale on February 21, 2016, 12:15:31 PM
This is a collection of pre-FIRE checklist info I've been copying from the MMM Forum and some other places. I apologize for not having the sources (I hadn't originally planned to post this info). I do know know that a bunch of it came from Nords (thank you Nords!). Please note that this info is in no way exhaustive. I'm sharing it in case other folks approaching FIRE find it useful. I especially welcome anyone who is FIRE to add to (or correct!) this information. Note: I'm adding suggestions to this list along with the name of the generous person who shared it.

Work
- Records: Make sure all your administrative records are correct and transferred (if necessary). Records to check include: pension record, 401(k) contributions, COBRA, disability insurance
- Sick leave: Check policy to see how this is paid out when you leave
- Vacation days: Check policy to see how this is paid out when you leave. Use up what you can't cash out.
- Decide when/how you'll give notice
- Establish non-work-email for clients/coworkers w/whom you have become personally friendly (With This Herring)
- Copy future-useful documents from work computer - Excel templates you created, etc. (With This Herring)
- Copy internet bookmarks from work computer (With This Herring)
- Document all key processes/procedures for the benefit of who will take over your role (lhmao)
- Live non-work focused life by limiting working extra hours or ruminating about work-related matters (lhamo)

Other planning
- Finalize estate planning documents (will, POA, Health Care Directive, trust documents, etc.)
- Decide if/when/how you'll tell family/friends/co-workers
- Consider replacing your car(s) before you retire.
- IRA: "...show at least enough taxable income to equal the amount you want to contribute to your IRA for that year. "So if you want to contribute $5500, make sure you have earned at least $5500. Quit just before you hit 25% tax bracket. Easy money in low brackets, plus get your capital gains and dividends tax free for the year."
- 401(k): "If you want to max it out for the year you will probably need to set a pretty aggressive contribution rate in the beginning of the year. It won't help you get any more match but it will help with your taxes."
- Get a HELOC on residential property with substantial equity (loan is easier to get when employed) (notquitefrugal)

Calculations
- Income test: Live for a year at the planned post-FIRE level to be sure it's enough
- Track you spending (flyingaway)
- Research and plan post-FIRE insurance options/costs: health, long-term care, life, home, auto (step-in-time)
- Estimate social security earnings given stop work date and different SS start dates
- Forecast taxes, model scenarios, optimize conversions/capital gain harvesting w/Taxcaster or other. (step-in-time)
- Get 2nd Opinion(s): Have a free session w/financial advisor, Vanguard, etc. to ensure you have not overlooked something important. (step-in-time)
- Confirm retirement income projections on different calculators (FIRECALC, Fidelity Retirement Income Planner)
- Figure out cash flow plan for years between retirement date and access traditional retirement accounts
- Finalize Withdrawal Strategy: Where/when withdrawals will occur. (step-in-time)

Housing
- If you have a mortgage rate, check into refinancing one more time. This will be more difficult. (chasesfish)
- If you are planning to move/buy, if you need a mortgage, buy as a 2nd home prior to quitting work. You're only required to be employed through the day of closing, then turn in your notice afterwards. (chasesfish)

Health
- If you can, get fit, quit smoking, etc. so you can use any employers benefits to help you in this process
- Max out all the company's medical/dental benefits (same for dependents)
- Get physicals, a full skin exam, bloodwork, other tests, prescriptions, etc. (same for dependents and pets)
- Get dental cleaning, full set of x-rays and check condition of fillings/dental work (same for dependents and pets)
- Schedule necessary or optional-but-desired surgical procedures for the work wind-down period in order to benefit from insurance and paid sick leave/disability leave. (lhamo)
- Consider entering therapy (especially if covered by insurance) to deal with any issues related to work/family before you FIRE -- these things can hit hard once you no longer have work occupying much of your time (lhamo)
- Read Dr. Doom's blog, World Enough & Time: On Creativity and Slowing Down by Christian McEwan, and items from https://evgeniagotfi.wordpress.com/2015/06/30/how-to-quit-your-job/ (https://evgeniagotfi.wordpress.com/2015/06/30/how-to-quit-your-job/) (Evgenia)

Social Networks & Post-FIRE activities
- Start building or reinforcing connections with people you can spend time with during typical working hours post-FIRE.  Especially if you are FIREing at a comparatively young age and most of your existing social circle will be continuing to work. (lhamo)
- Explore different activities that interest you, build social networks/peer groups related to those activities. (lahamo)

One year before
- Pre-load CD ladder - See https://livingafi.com/2014/05/18/drawdown-part-3-strategy/ (CowboyAndIndian)

One month before
- Ask, "What I will do next Tuesday?" (followed by a set of activities or projects that are interesting and draw you away from employment). As in "OK, say your last day is a Friday; I bet you'll take Monday to do nothing. I can picture you doing nothing for less than a day. What will you do starting that Tuesday?" Frugal-Investor writes: "I built a list that I ended up calling the Eight Challenges. The list was made up of specific goals I wanted to achieve like getting great veggies from my garden and getting certified with my dog as a therapy dog team... Each challenge was was specific but the ground they covered together was quite broad....Because it was specific, it gave me structure...It became a transition plan or work rebound approach. After about 6 months (perhaps decompression?), the list became less of a focus. (Frugal-Investor)
- Implement Income Stream - Set dividends/capital gains from taxable acct to automatically transfer to bank acct. If you have deferred compensation, file paperwork for regular payments from the acct. "I would keep track of taxable account dividends to know what you can expect to get monthly and quarterly. Your retirement plan administrator will have rules for setting up 457(b) withdrawals.  They tend not to be all that flexible.  Generally, if you set nothing up, you will receive all of it as a lump sum and owe income tax on the entirety, a scenario to avoid." (PhysicianOnFIRE)

Final Steps to FIRE
- Give notice
- Finish projects/Train new employee(s) - Be strict with yourself about limiting extra hours at work
- Make sure that sick leave/vacation day payouts, retirement contributions, etc. are being processed correctly

And then...
- Take a guilt-free detox period (many say it can take six months to detox and find your new pace/activities)


More specialized notes:
- If interested in charitable giving, consider optimizing tax benefit while still earning income (CanuckExpat)
- Licenses/certificates: renew if easier to do while still employed
- Accountants:  If you prepared your personal income tax returns with the firm's software, make sure that you have copies of ALL of them at home and that any versions you leave behind are at least password-protected if they cannot be deleted entirely. (With This Herring)
Title: Re: pre-FIRE checklist
Post by: flyingaway on February 21, 2016, 01:42:55 PM
Track spending? although this could go to your Calculations -> Income Test.
Title: Re: pre-FIRE checklist
Post by: Exhale on February 21, 2016, 04:54:31 PM
Thank you flyingaway and lhamo! I've added your suggestions to the list. lhamo, I especially appreciated the reminder and concrete steps for transitioning to a "non-work-focused lifestyle."
Title: Re: pre-FIRE checklist
Post by: Nords on February 28, 2016, 09:41:30 AM
Thanks, Exhale!  I still get requests for a pre-retirement checklist, and I'll send readers here...
Title: Re: pre-FIRE checklist
Post by: Exhale on March 01, 2016, 07:31:39 PM
Thanks, Exhale!  I still get requests for a pre-retirement checklist, and I'll send readers here...

Thank you for the great info that you share with us! As you can see, this list is more civilian focused, but there's a significant amount of overlap.
Title: Re: pre-FIRE checklist
Post by: Felicity on March 11, 2016, 08:09:51 AM
This is great!

Can this be a sticky thread on the Post-FIRE board?
Title: Re: pre-FIRE checklist
Post by: Exhale on March 11, 2016, 08:06:42 PM
Great question. I don't know how that gets decided - by the moderators perhaps?
Title: Re: pre-FIRE checklist
Post by: PhysicianOnFIRE on March 12, 2016, 06:18:47 PM
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.  If you have deferred compensation, such as 457(b), file paperwork for regular payments from the account. 
Title: Re: pre-FIRE checklist
Post by: Zamboni on March 12, 2016, 06:49:29 PM
Following and seconding (thirding?) that this be pinned by a mod.
Title: Re: pre-FIRE checklist
Post by: Exhale on March 12, 2016, 10:37:47 PM
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.  If you have deferred compensation, such as 457(b), file paperwork for regular payments from the account.

Great comment PhysicianOnFIRE - thank you! How far in advance do you recommend doing this?
Title: Re: pre-FIRE checklist
Post by: Roots&Wings on March 13, 2016, 08:21:51 AM
This is a great resource, thanks for compiling! A couple other items on my list from other sites:

Finalize Withdrawal Strategy: Where/when withdrawals will occur.

Review Your Insurance Coverage: Life insurance that was appropriate when your savings or kids were small may be a wasteful expense now. Alternatively, it may be appropriate to raise the liability limits on your home and auto insurance policies and consider an umbrella policy as your assets grow. You should also understand long-term care insurance and if/how it fits into your overall financial plan.

Tax Planning: Forecast taxes, model withdrawal scenarios, and plan to optimize Roth conversions and/or capital gain harvesting (https://www.kitces.com/blog/end-of-year-roth-conversions-and-capital-gains-harvesting-paying-taxes-to-save-taxes/) using free Taxcaster (https://turbotax.intuit.com/tax-tools/calculators/taxcaster/) or other.

Get Other Opinions: Schedule a free planning session with work financial advisor, Vanguard, etc to ensure you have not overlooked something important.
Title: Re: pre-FIRE checklist
Post by: soccerluvof4 on March 13, 2016, 10:20:00 AM
Great thread and yes I agree as well be awesome to have a moderator pin it!
Title: Re: pre-FIRE checklist
Post by: PhysicianOnFIRE on March 13, 2016, 06:21:21 PM
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.  If you have deferred compensation, such as 457(b), file paperwork for regular payments from the account.

Great comment PhysicianOnFIRE - thank you! How far in advance do you recommend doing this?

Could be done in the last month of employment. 

I would keep track of taxable account dividends to know what you can expect to get monthly and quarterly. 

Your retirement plan administrator will have rules for setting up 457(b) withdrawals.  They tend not to be all that flexible.  Generally, if you set nothing up, you will receive all of it as a lump sum and owe income tax on the entirety, a scenario to avoid.
Title: Re: pre-FIRE checklist
Post by: notquitefrugal on March 14, 2016, 08:40:10 PM
One I have read elsewhere: Get a HELOC on any residential property you own which has substantial equity. It will be easier to obtain while you are still employed.

The one I got from Penfed on my old house had no minimum draw and I only paid a few hundred bucks for an appraisal (which I found useful anyway, as it had been several years since I bought the house).
Title: Re: pre-FIRE checklist
Post by: Exhale on March 20, 2016, 10:29:11 AM
Thank you PhysicianOnFIRE and notquitefrugal - the list has been updated to reflect your excellent information.
Title: Re: pre-FIRE checklist
Post by: CowboyAndIndian on March 20, 2016, 06:19:30 PM
Start preloading the CD ladder for your withdrawal.

Title: Re: pre-FIRE checklist
Post by: Mrs. Pomodoro on March 23, 2016, 06:57:49 PM
Thank you so much for putting together this list! I'm considering pulling the plug soon and it gives me a solid starting point of things to consider.
Title: Re: pre-FIRE checklist
Post by: albireo13 on March 25, 2016, 06:42:20 PM
Consider replacing uour car(s) before you retire.
That way you are starting off with cars which hopefully will
last awhile.
Title: Re: pre-FIRE checklist
Post by: Bolshevik Artizan on April 02, 2016, 07:47:40 PM
Completely agree re: detox period. Four months in and I'm only just relaxing now. :-0
Title: Re: pre-FIRE checklist
Post by: JoJo on April 21, 2016, 05:18:38 PM
Great list.

I'd love it if someone did a FIRE checklist for retiring abroad/being nomadic and sticky that.  I'm planning to do this is a year and there seem to be lots of logistics - how do I keep a valid drivers license, health care, mailing address, taxes, etc.
Title: Re: pre-FIRE checklist
Post by: PhysicianOnFIRE on April 22, 2016, 07:47:25 AM
Consider replacing uour car(s) before you retire.
That way you are starting off with cars which hopefully will
last awhile.

Great idea and something I've thought about. Starting with late model used cars rather than old beaters is a good way to avoid overspending in the first few years of early retirement.
Title: Re: pre-FIRE checklist
Post by: Evgenia on April 22, 2016, 11:38:03 AM
Chiming in to emphasize the mental health aspects of FIRE (+1 to "Consider entering therapy (especially if covered by insurance) to deal with any issues related to work/family before you FIRE -- these things can hit hard once you no longer have work occupying much of your time (lhamo)").

Prior to our pulling the trigger on FIRE, I was so consumed with financial checking and rechecking that I gave not an iota of thought to anything mental or emotional. And the transition wasn't easy. There were some resources I found especially helpful:
* Dr. Doom's blog has a great deal of information on this (he saw a therapist), and it helped me immensely.
* The single most helpful book (which I think I heard about from Dr. Doom) was World Enough & Time: On Creativity and Slowing Down, by Christian McEwan. It may not sound like it applies, but trust me, it does. I really needed it sooner than I found it, but better late than never.
* I listed readings and videos that helped me with the transition here, which can all be summarized as "things that helped me start thinking about myself and my life in a new way." Knocking down the lifelong frames and constructs of "employee" and "productive member of society" and such were a LOT more work than I thought: https://evgeniagotfi.wordpress.com/2015/06/30/how-to-quit-your-job/
Title: Re: pre-FIRE checklist
Post by: RedmondStash on May 10, 2016, 06:07:06 PM
Great thread. Commenting to follow.
Title: Re: pre-FIRE checklist
Post by: Frugal_is_Fab on May 13, 2016, 02:01:01 PM
Wow , this is great.  Thanks for posting it.   I'm in my last year Pre-FIRE!  Yippeee!
Title: Re: pre-FIRE checklist
Post by: Frugal_is_Fab on May 13, 2016, 02:22:01 PM
I am doing something that some Pre FIRE folks might be interested in.    Because my husband is taking a voluntary layoff in November which will result in a lump sum payment of about 40 weeks pay for severance, our taxes will be INSANE for 2016 but very low in 2017.   We live in the high tax state of California.    I am planning to have about $10000 over withheld for my California taxes.    The Cal taxes withheld will be an itemized deduction for 2016 but when refunded in 2017 will become income for that year.  Fed marginal tax bracket will be 33% in 2016 and 25% in 2017.    I look at this as an 8% tax free return on that money which would be hard to beat with any other short term investment.   
Something to think about if you have a similar situation.

Does anyone see "holes" in this plan?
Title: Re: pre-FIRE checklist
Post by: jan62 on May 13, 2016, 03:50:52 PM
great thread thankyou, hope it gets stickied --  (only other thing I thought of was cancelling income protection insurance)
Title: Re: pre-FIRE checklist
Post by: rahby1us on May 17, 2016, 09:10:35 AM
One I have read elsewhere: Get a HELOC on any residential property you own which has substantial equity. It will be easier to obtain while you are still employed.

The one I got from Penfed on my old house had no minimum draw and I only paid a few hundred bucks for an appraisal (which I found useful anyway, as it had been several years since I bought the house).

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!
Title: Re: pre-FIRE checklist
Post by: Frugal-Investor on May 19, 2016, 12:21:02 PM
One additional thing to consider adding to the: "One Month Before" section of your excellent list.

What I will do next Tuesday (followed by a set of activities or projects that are interesting and draw you away from employment). Here's the story behind this list.

When I talked with my younger brother about my intent to step away from my job, he guessed that I'd be unlikely to return to the world of employment. He didn't ask me what I would do with my time, but rather said: "OK, say your last day is a Friday; I bet you'll take Monday to do nothing. I can picture you doing nothing for less than a day. What will you do starting that Tuesday?"

From his question, I built a list that I ended up calling the Eight Challenges. The list was made up of specific goals I wanted to achieve like getting great veggies from my garden and getting certified with my dog as a therapy dog team so I could do literacy work at a local school. Each challenge was was specific but the ground they covered together was quite broad -- the antithesis of my work. Because it was specific (x push-ups, y sit-ups, z swim work-outs each week), it gave me structure right when I eliminated employment as the main framework in my day-to-day life. It became a transition plan or work rebound approach. After about 6 months (perhaps decompression?), the list became less of a focus. Some of you familiar with balanced scorecards may guess that the challenge list had that origin and I think you could be right.
Title: Re: pre-FIRE checklist
Post by: notquitefrugal on May 22, 2016, 08:08:21 PM
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!

As noted, it's easier to qualify for and obtain the HELOC when you have earned income you can show. If you're asking what you would use it for, a few things come to mind. Unplanned expenditures, and even planned ones like home renovations, vehicle replacement, etc... If you took out a large chunk of money from your portfolio to do those things, it could trigger capital gains (if in a taxable account) or income tax (if in a tax-deferred account). It can be more economical to take a draw on the HELOC to pay for whatever, then pay it off over the course of several years.
Title: Re: pre-FIRE checklist
Post by: georgicus on May 28, 2016, 01:35:58 AM
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.
Title: Re: pre-FIRE checklist
Post by: Exhale on July 15, 2016, 07:46:00 PM
Many thanks to everyone for the additional ideas. They've been added to the list!
Title: Re: pre-FIRE checklist
Post by: Exhale on July 15, 2016, 07:46:43 PM
Start preloading the CD ladder for your withdrawal.

Where would you you suggest this be placed in the list? Thanks!
Title: Re: pre-FIRE checklist
Post by: CowboyAndIndian on July 16, 2016, 06:49:08 AM
Start preloading the CD ladder for your withdrawal.

Where would you you suggest this be placed in the list? Thanks!

The idea of a CD ladder is to prevent selling funds when the markets are low.

So, my suggestion is that this should be done atleast a year before FI.

Dr. Doom has a nice article on the drawdown strategy here https://livingafi.com/2014/05/18/drawdown-part-3-strategy/

Title: Re: pre-FIRE checklist
Post by: With This Herring on September 07, 2016, 06:26:50 PM
Possibilities:
Title: Re: pre-FIRE checklist
Post by: MandalayVA on September 08, 2016, 01:15:17 AM
Following.
Title: Re: pre-FIRE checklist
Post by: Exhale on September 13, 2016, 06:57:57 PM
Possibilities:
  • Establish non-work-email contact with clients/coworkers/vendors with whom you have become personally friendly
  • Copy any future-useful documents from work computer as applicable (useful Excel templates that you created, etc.)
  • Copy internet bookmarks from work computer
  • Accountants:  If you prepared your personal income tax returns with the firm's software, make sure that you have copies of ALL of them at home and that any versions you leave behind are at least password-protected if they cannot be deleted entirely.
[/i]

Good points - adding them to the list - thank you!
Title: Re: pre-FIRE checklist
Post by: CanuckExpat on September 15, 2016, 04:21:25 PM
If you are interested in charitable giving, consider optimizing tax benefit while still earning income. Discussed a bit in this thread: http://forum.mrmoneymustache.com/post-fire/charitable-giving/
Title: Re: pre-FIRE checklist
Post by: Exhale on September 18, 2016, 09:08:44 PM
If you are interested in charitable giving, consider optimizing tax benefit while still earning income. Discussed a bit in this thread: http://forum.mrmoneymustache.com/post-fire/charitable-giving/

Thank you - added!
Title: Re: pre-FIRE checklist
Post by: Mother Fussbudget on November 10, 2016, 01:09:35 PM
For you techies, some suggestions generously liberated from cobweb site leavingmicrosoft.com (http://leavingmicrosoft.com).

Check your social security benefits (USA workers) - sign-up for an online account at socialsecurity.gov/myaccount (http://socialsecurity.gov/myaccount).  See the earnings the government thinks you've earned over the past few years.  If there are mistakes, contact them and fix it. See the estimated social security retirement check you might receive when you reach 65-to-70.  Read "Get What's Yours" by Larry Kotlikoff to learn more about getting the most out of SSN.
Buy computer gear - using a company laptop / desktop machine?  Time to get something you can use at home / on-the-road. Find out where your company's out-of-service PC's go (ex: PC-Recycle) and buy a similar used machine.
Forward your mail - any 'snail mail' going to the office should be given your home address.  Any on-line accounts using the 'work email' address - update them to your personal email.
Remember your friends - write down your friends names, email addresses, and phone numbers while you still have access to the corporate email server.  Hard-copy or soft-copy.
Look at COBRA insurance rates - compare to other health insurance plans available to you via ACA, corporate alumni groups, CostCo, etc.
Ask HR about 'Rule of 55' 401k options - (55+) does your 401k plan support distributions under the 'Rule of 55' (distribute funds to yourself without penalty from 401k if quit/fired/retire the year you turn 55 or later)?  Some do, some don't.  401k distributions are taxed at post-FIRE tax rate. For those between 55 & 59-1/2, this can bridge expense funding until penalty free IRA withdrawals are available.

Health club - convert that corporate sponsored health club membership into a personal one.  Or, pick up a used bike and some free weights from CraigsList.
Exercise stock options - you generally have 60-to-90 days to exercise company stock options after leaving employment. YMMV.
Join Alumni groups - keep in touch with former co-workers.  Many companies have 'alumni groups' you can join for things like discounts on company products, philanthropic volunteer opportunities, etc. Also social media (i.e. FaceBook/LinkedIn) has 'Alumni groups' for most companies.
Balance - find balance in your life. Many yoga, or Tai-Chi classes available for next to nothing.
Title: Re: pre-FIRE checklist
Post by: Red Badger on December 10, 2016, 03:57:18 PM
A small note from an ex-road warrior.I see a lot of these posts are not just FI, but also ditching the corporate beast. Be mindful of your SO. Several years ago, I negotiated a work from home arrangement when not travelling. I was 100+ nights on the road at that time. Then, in 2015, my travel dropped to less than 25 nights out. Suddenly, I was home week in and week out, and initially, stressed out my stay at home SO a LOT.

We converted an extra bedroom to a home office (really, just a place for me to be out of her way). These days, my big job is to make breakfast for us, then head to the home office (or, weather permitting, the deck) and stay the hell out of her way.

My point is, if you are soon leaving FT work and going to be home for a while, plan for some adjustments.

I have given retirement notice - leaving June - July 2017. My own plan is to work PT until SS at 62 (a little over 2 years away,  once I exit) at an active job - no sitting at a desk staring into a screen. I really don't need the money, but want to be active and would be OK if I got paid for it.

Eisenhower said it best, "Plans are useless, planning is essential."
Title: Re: pre-FIRE checklist
Post by: CanuckExpat on December 13, 2016, 02:10:37 PM
A small note from an ex-road warrior.I see a lot of these posts are not just FI, but also ditching the corporate beast. Be mindful of your SO.
...
My point is, if you are soon leaving FT work and going to be home for a while, plan for some adjustments.
...
Eisenhower said it best, "Plans are useless, planning is essential."

This is a good point, and I'll add for those relevant: consider the impact on you if you have children at home when you quit your job
I hadn't thought ahead to realize that quitting/retiring while you have children at home means spending a lot of time with them, that can be tiring depending on how you interact with toddlers. A little forethought would have made that clear, but in the excitement of quitting my job, I hadn't thought about it.

Something worth considering.
Title: Re: pre-FIRE checklist
Post by: BuffaloStache on December 16, 2016, 03:16:17 PM
This is a good point, and I'll add for those relevant: consider the impact on you if you have children at home when you quit your job
I hadn't thought ahead to realize that quitting/retiring while you have children at home means spending a lot of time with them, that can be tiring depending on how you interact with toddlers. A little forethought would have made that clear, but in the excitement of quitting my job, I hadn't thought about it...

I'm still a long way from FIRE, but I think this is an excellent point. Once you leave work you'll be spending a lot more time with your kids, family, etc., so be sure to think about that ahead of time and get ready for it.
Title: Re: pre-FIRE checklist
Post by: tonysemail on December 16, 2016, 03:21:48 PM
A small note from an ex-road warrior.I see a lot of these posts are not just FI, but also ditching the corporate beast. Be mindful of your SO.
...
My point is, if you are soon leaving FT work and going to be home for a while, plan for some adjustments.
...
Eisenhower said it best, "Plans are useless, planning is essential."

This is a good point, and I'll add for those relevant: consider the impact on you if you have children at home when you quit your job
I hadn't thought ahead to realize that quitting/retiring while you have children at home means spending a lot of time with them, that can be tiring depending on how you interact with toddlers. A little forethought would have made that clear, but in the excitement of quitting my job, I hadn't thought about it.

Something worth considering.

what change would you make in the last year before FIRE?
would you really work OMY to pay for something like after school care?
Title: Re: pre-FIRE checklist
Post by: CanuckExpat on December 16, 2016, 06:28:16 PM
what change would you make in the last year before FIRE?

Good question, I don't want to speak too much for Red Badger, but perhaps I'd generalize along the lines of "Think about how you will spend time with other family members at home, and how your relationships may change"? Or so..
Or more specifically: Consider child care alternatives or implications, etc.

It's more a feelings and how you spend your time question, but worth considering.

would you really work OMY to pay for something like after school care?

A little less actionable, but something I'd wondered. A moot point in our case, but for me it would have been working long enough until we could also fund daycare, at which point we wouldn't need daycare anymore..
Title: Re: pre-FIRE checklist
Post by: money_bunny on January 05, 2017, 05:48:29 PM


Consider entering therapy (especially if it is covered by insurance) to deal with any mental health issues related to work/family before you FIRE -- these things can hit hard once you no longer have work occupying much of your time


Thank you for putting this in there.
Title: Re: pre-FIRE checklist
Post by: Dicey on January 08, 2017, 10:33:41 AM
PTF. I've been FIRE for four years, but DH is still working. He loves his job and is earning towards a nice pension and, more importantly, nice healthcare benefits. There is plenty here for me to work on as we approach his retirement date.

I can really see how much easier it is if spouses retire in sequence, not at the same time.
Title: Re: pre-FIRE checklist
Post by: Exhale on January 20, 2017, 11:09:41 PM
These are great points. I didn't really see a way to add the to the pinned checklist, but am glad there here for folks to read and consider. I think FIRE home and social life are extremely important elements that often don't get the attention and trials runs needed. I used to think that I'd settle down in one place and foster dogs, but after more than a year of considering van dwelling and going back-and-forth on whether I want to do it, I think I'll end up spending a few years on the road. (Easy since I don't own property or have SO and/or kids.) I'm interested to see what that adventure will bring to my social life.
Title: Re: pre-FIRE checklist
Post by: chasesfish on January 22, 2017, 06:54:23 PM
Can you add a section about housing?

If you have a mortgage rate, check into refinancing one more time.  This will be more difficult.

If you are planning to move/buy, if you need a mortgage, buy as a 2nd home prior to quitting work.  You're only required to be employed through the day of closing, then turn in your notice afterwards.
Title: Re: pre-FIRE checklist
Post by: Exhale on January 29, 2017, 07:58:46 PM
Done - thank you for the tips. I'm not a home owner so if anyone else has more suggestions, please let me know.
Title: Re: pre-FIRE checklist
Post by: Frugal_is_Fab on February 07, 2017, 06:54:31 PM
Hi, I just wanted to post a mea-culpa to this post about paying extra state tax.  I got nailed with alternative minimum tax to the point that it didn't even pay to itemize.  Really shot myself in the foot.  DONT DO THIS!
Title: Re: pre-FIRE checklist
Post by: With This Herring on February 17, 2017, 07:35:53 PM
Inspired by this post regarding losing FSA money (http://forum.mrmoneymustache.com/ask-a-mustachian/nobody's-perfect-what-money-mistakes-have-you-made-lately/msg1436913/#msg1436913), make sure you have a plan to use up the remaining balance in your FSA BEFORE you leave your job.
Title: Re: pre-FIRE checklist
Post by: CowboyAndIndian on February 21, 2017, 07:18:49 AM
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
Title: Re: pre-FIRE checklist
Post by: AussieCat on April 09, 2017, 03:06:42 AM
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!
Title: Re: pre-FIRE checklist
Post by: CloserToFree on May 15, 2017, 08:00:53 AM
Thanks for compiling all this - I'm finding it helpful!
Title: Re: pre-FIRE checklist
Post by: gardenarian on May 15, 2017, 04:26:02 PM
Wow, that seems overwhelming to me! I really didn't do any of this and survived - and thrived!
Title: Re: pre-FIRE checklist
Post by: Exflyboy on June 25, 2017, 01:20:54 AM
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.
Title: Re: pre-FIRE checklist
Post by: tag on July 10, 2017, 01:38:27 PM
Damn this is a helpful thread. Thank you to all who have contributed.
Title: Re: pre-FIRE checklist
Post by: dividendman on July 10, 2017, 02:17:23 PM
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.
Title: Re: pre-FIRE checklist
Post by: vatacvalves on September 14, 2017, 03:47:26 AM
the good to share
Title: Re: pre-FIRE checklist
Post by: Clean Shaven on January 30, 2018, 04:40:53 PM
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.
Title: Re: pre-FIRE checklist
Post by: Clara Smith on February 02, 2018, 11:57:03 PM
Thanks, Exhale,
your list of information was very helpful. I will surely follow your guidance. :)
Title: Re: pre-FIRE checklist
Post by: Pylortes on February 16, 2018, 05:12:24 PM
“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. 
Title: Re: pre-FIRE checklist
Post by: pecunia on May 28, 2018, 09:02:45 AM
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.
Title: Re: pre-FIRE checklist
Post by: Exhale on May 28, 2018, 09:26:56 AM
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.
Title: Re: pre-FIRE checklist
Post by: eco mom on October 15, 2018, 09:45:15 PM
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.
Title: Re: pre-FIRE checklist
Post by: K-ice on March 09, 2019, 10:33:56 AM
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.
Title: Re: pre-FIRE checklist
Post by: Dibdab on April 09, 2019, 04:00:42 AM
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?
Title: Re: pre-FIRE checklist
Post by: Eurotexan on April 17, 2019, 09:17:51 AM
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!
Title: Re: pre-FIRE checklist
Post by: Threshkin on May 14, 2019, 04:17:30 PM
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.
Title: Re: pre-FIRE checklist
Post by: Dibdab on May 19, 2019, 07:34:32 AM
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. 
Title: Re: pre-FIRE checklist
Post by: cangelosibrown on May 19, 2019, 09:08:25 AM
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.
Title: Re: pre-FIRE checklist
Post by: FIREstache on May 19, 2019, 02:12:26 PM
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/


Title: Re: pre-FIRE checklist
Post by: pecunia on May 19, 2019, 07:35:01 PM
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?
Title: Re: pre-FIRE checklist
Post by: FIREstache on May 20, 2019, 03:23:18 PM
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.
Title: Re: pre-FIRE checklist
Post by: pecunia on May 24, 2019, 06:01:08 PM
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.
Title: Re: pre-FIRE checklist
Post by: Threshkin on June 13, 2019, 12:22:23 PM
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.
Title: Re: pre-FIRE checklist
Post by: BeanCounter on July 16, 2019, 07:36:44 AM
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!
Title: Re: pre-FIRE checklist
Post by: Roots&Wings on October 28, 2019, 06:59:13 AM
“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.
Title: Re: pre-FIRE checklist
Post by: caracarn on January 07, 2020, 09:27:42 AM
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!
Title: Re: pre-FIRE checklist
Post by: Joan-eh? on February 08, 2020, 03:48:02 PM
following!

thank you for this! what a community and thanks for leadership
Title: Re: pre-FIRE checklist
Post by: couponvan on November 05, 2020, 10:23:38 AM
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.