Since FIRE is mostly a waiting game, we often pass the time pondering questions that are so academic as to be essentially hypothetical, like how our plans would change if Obamacare goes away, or what we would do if our house burns down in a wildfire. Today’s post is about another one that I’ve been spending waaaaaaaay too much time thinking about — put it in the daydream category. What hypothetical questions or daydreams do you find yourself lingering on these days?
The current debate in the ONL house is when to quit our jobs. Barring a major market correction, we feel pretty good that we’ll hit our magic numbers ahead of schedule next year, possibly as early as Q2 of 2017. And this was after deciding about a year and a half ago that we’d quit at the end of 2017 even if we didn’t hit the number. So it almost feels like we’re double ahead, even if that’s not a thing. (Can we make it a thing?)
The question that follow is: Okay, we’re ahead. So what? Does that change anything? We each go back and forth on this, between maximizing our financial cushion by finishing out 2017 as originally planned and maximizing our time by quitting as soon as we can — all of which is entirely hypothetical at this point, because we really won’t know anything until this year’s year-end bonuses are announced — but somehow we never go back and forth at the same time. I’ll be thinking about sticking out the year because I am more risk-averse and want a bigger cushion while Mr. ONL feels like our assumptions are too conservative and we can quit. And then we’ll trade positions (where we are currently and have been for a while — I just want out! But Mr. ONL is being more practical). It’s like the when to quit seesaw — one of us is up while the other is down, and we haven’t yet figured out how to get to a place of balance on this question.
We had assumed, because of our incomes being so heavily weighted toward year-end bonuses (really it’s deferred compensation, and “bonus” is just short hand, but it all does happen at year’s end), that we’d have to stick it out until the end of 2017. Then we heard the potentially game-changing rumor that both of our employers may give us prorated bonuses if we leave earlier than year end. While that is crazy awesome news, it has also created a lot of unnecessary hand-wringing, because suddenly a question that had felt settled (when to quit) is unsettled. Yippee.
The Cascade of Questions
But of course before we can quit, we have to give notice. And that brings with it a whole bunch of other questions:
- How much notice should we give?
- Should we leave our end date up to our employers?
- Should we offer to quit gradually, maybe working part-time for a bit?
- Do we need to wait until we have every penny we need to give notice, or can we plan on some prorated bonus to top us off?
- Etc., etc., etc.
This is how we’re currently thinking about all of it. Hypothetically, of course.
How Much Notice Is Just Right?
First, there’s the question of relevance once we give notice, and not wanting to either rush the transition or stretch it out too long. We’ve learned a lot from Mr. Fire Station‘s recent announcement of his early retirement, and his retirement itself. It was heartening, for example, to see that he got pulled into some meetings and discussions because people wanted to pick his brain while they still could. But other pieces of his work wound down quickly. Unlike his situation, we’re in client work, which has a lot more entanglements, and which would require more in the way of hand-offs and transitions — there would be a hand-off on every project and with every client, not just one hand-off for each of us. We’ll definitely need to give more than two weeks’ notice for that reason alone, and it may need to be more like two to three months.
Should We Offer Flexibility?
Of course, since we’re not quitting our jobs to take other ones, we probably won’t have a hard stop, and we could theoretically say to our employers that we’re game to stick around for whatever period they feel like they need from us, especially given our long tenures at our organizations (both upward of a decade). But do we want to make that offer, and risk having things stretch out? Or do we say something like we’re willing to stay up to three months more, but we’re happy to make it shorter, so we build in some outer limit? Or do we offer some other arrangement, like having a longer notice period, but going down to half days or two days a week?
Wait Until We Don’t Need Another Penny?
This is of course the real question, and gets at that prorated bonus question. While we’ve gotten some very good advice that we’ll never regret quitting as soon as we can, we don’t want to rush things and end up with an insufficient cushion to last us through the first 18 years of our early retirement (we’re good on the age 60+ part either way), or a too-small emergency fund, or no slush fund to make some updates to our house (assuming we don’t downsize) or to buy a travel trailer.
Though we’d always assumed that our final year-end bonuses would push us over the tipping point into magic number land, as well as do some functional things like help us build up our cash buffer, the possibility that we may give notice before year-end bonus time has us thinking very differently about all of it. Before, we assumed we’d find out about our bonus amounts, and then give notice. Done. But now, we’re wondering if instead we give notice and then try to negotiate for as much of a prorated bonus as possible. It’s a tough bargaining position to be in, and all we can really use as leverage is how long we stay, offering to stay long enough to ensure smooth transitions if we can get the bonus we feel we’re due. But even that feels kind of icky, and isn’t the way we want to go out, given how close we feel to our companies’ leadership. We’re all about going out on good terms, with lots of good vibes all around.
But regardless of what we try to bargain for, we’re both pretty set that we wouldn’t give notice in anticipation of hitting our magic number at some date within our notice period, or in anticipation of a partial bonus. Instead, if we’re going to leave our jobs sooner than end of 2017, we’ll only give notice once we have every single penny banked that we need to live a long and minimally stressful retirement. So that if they say, “Great! You can leave tomorrow!” we’re not screwed and scrambling.
More Reconsideration to Come
All of these questions are ones we can’t act on for at least a year, probably longer. So I’m sure we’ll be revisiting this topic plenty! In the meantime, tell us: How are you thinking about your eventual departure, if you’re still working? Any lessons learned from those of you who are already retired? Any snippets from your resignation letter that you’ve been drafting in your head for a while now that you’d care to share? (I’ve written that letter in my head at least 20 times!) And back to that question at the start of this post: Any other hypothetical or daydreamy questions you find yourself stuck on these days? Let’s chat about all of it in the comments!