As we get closer and closer to our retirement date, the idea that we are actually going to retire early is becoming real. Not that we ever thought we wouldn’t do it, but saving up to never have to work again is such a big goal, one that takes such a long time to accomplish, that for most of the time we’ve been saving, the goal itself has been a bit abstract. It’s like trying to imagine crossing the finish line of a marathon before you’ve learned how to run a mile yet. (That was also my experience training to run a marathon, by the way, as a non-runner. I know when I first started, I couldn’t actually picture myself going that distance. I could barely picture running a mile without stopping.)
But month by month, we watch that ticker count down and our account balances go up (lately a lot faster than planned). And it’s slowly dawned on us that this is really happening. We’re really doing what we set out to do, and we’re close to earning our freedom for good.
As that realization sinks in, we’re slowly shifting into what we’re calling tactical mode. For years, we’ve been planning our investment strategy (short version: index funds and a rental property), putting contingency plans into place, and pondering the big questions like what kind of people we want to be now and in retirement.
But now that we’re getting closer, we’re creating a different kind of to do list, mapping out everything we need to do before we pull the plug on our careers sometime next year.
We’ve got lofty aspirations for our early retirement, but to get around to writing novels and climbing big walls in remote places, we have to have the basic elements of our life and health in order. And that means taking care of some checklist tasks before we leave our work. Here’s what our pre-retirement to do list looks like. Let us know in the comments if you think we’re missing anything!
Switch our health insurance — We’re currently insured through our employers, and will need to switch over to health insurance on the Affordable Care Act exchange (or at least that’s what we plan to do, assuming there are still insurers left on it by the time we enroll). We’re hoping to keep our post-retirement income under key thresholds to keep our health care costs affordable and predictable, and have been doing research to get a sense of what that coverage might look like. But given how much plans have been jumping in price each year, and how many major insurers are dropping out of the exchanges, it’s hard to know what our options will be next year.
Take care of preventive health care — Even though we anticipate having good health coverage in retirement, we’re not wasting time using our preventive benefits now. We just got a whole bunch of vision stuff taken care of (full work-ups at the ophthalmologist, not just optometrist, plus new contacts/glasses/sunglasses), and we have dental care scheduled so we can get as many fully-covered cleanings and exams as possible before that coverage ends. (Not expecting dental coverage in retirement.) And though we’ve fessed up to being cheapskates about doctor visits, we’re committing to getting all of our preventive medical check-ups and labs done before we quit.
Determine our withdrawal strategy — We expect our finances to continue evolving in retirement. We’re going to have to learn how to budget at least a little bit, and also expect to evolve on how much we end up spending. But we’ll need at least a starting strategy for how and when we’ll sell shares, in addition to cashing out the dividends that we currently reinvest. We plan to have a few years’ expenses in cash at the time we quit, so we don’t have to have this completely figured out the day we leave our careers, but the intent behind the cash cushion is to buffer against market dips, not to buy time while we decide our withdrawal plan. So we have some homework to do. (Input welcome if you’ve read something that makes a strong case for one approach over another!)
Pick a cell phone plan — I have a work-paid iPhone, and I’ll be honest… I get a little twitchy whenever I think about having to give it up. I know people love Republic Wireless, but I’m not totally there yet on having only a couple of phone choices. Fortunately, the budget-friendly wireless market seems to be exploding right now, so we wouldn’t be surprised if there are more options out there next year. I don’t know that we’d be willing to pay full price for a new iPhone, but if work let me buy mine for cheap (it will be over a year old by the time we quit), then that might sway us to consider a plan with a carrier that lets you bring your own phone.
Buy computers — On the subject of technology, we’re actually totally work-reliant when it comes to computers. Mr. ONL has an iPad Mini and I have a Kindle Fire, but neither of those can serve as full-time computers, and our laptops are both work-provided. We’ve started exploring options, and are still at the very early stages. Mac or PC? Full-powered laptops or netbooks? Laptop-tablet hybrids? (That’s probably not even what those Surface things are called, but that’s how little research we’ve done.) I suspect we’ll probably get one full-featured laptop so we can do things like edit video (foreshadowing!), and one much cheaper option since Mr. ONL does less RAM-heavy stuff than I do.
Determine impacts of our quit date — We’ve been in our jobs so long and policies have changed so many times in the meantime that we aren’t actually sure of our companies’ 401(k) vesting policies, COBRA rules, sick leave pay-out policies, etc. We need to do some stealth research to figure out if any of those things should affect what we call our last day.
Pay off the house — This is definitely happening, so it’s only on the should-do list because it’s not technically mandatory for us. But we want to keep our retirement incomes low for health insurance purposes, and that would be tough to do if we were taking out enough value from our investments to make mortgage payments. With as ahead of schedule as we are currently, we’re thinking we could pay off the house this year even, depending on how year-end bonuses shake out, but Mr. ONL finally admitted that he doesn’t want to do that because then, every week in 2017, I’ll ask, “Why can’t we retire yet?” Ha!
Move our 401(k)s — We can’t wait to get our true retirement accounts out of the expensive hands of Fidelity and Merrill Lynch. We can’t technically do this before we retire, but will do it as soon as we possibly can afterward. Stay tuned for a full post on this!
Cancel home phone service — Because we both work from home, we have the fastest cable internet and two cable phone lines. We’ll be cutting the phone service and re-evaluating our internet bandwidth needs shortly before we quit. Though, because we cut the cord and rely on internet for TV, we’re not eager to slow the pipe. We do plan, though, to keep our Google Voice numbers that we currently use for work, so that we’re still reachable beyond our cell phones — that’s a free service, after all.
Wish List Tasks
Buy an RV — We have big terrestrial travel plans, especially our endless winter idea, and that would be so much more comfortable in a vehicle with walls (and an indoor toilet) than in a tent. The last time we wrote about it, we were leaning toward a small travel trailer, but now we’re leaning toward a micro class C RV. That could change again, of course, but we’d love if the stars aligned to bring us a lightly used, low mileage RV in the model we like best for a super low price. ;-)
Take an expensive trip or two — My mileage account should top 1 million miles this year, and Mr. ONL has another half million more, so we’ll be able to travel in retirement even if we mismanage all of our money and have a lot less to spend than we plan. But there are lots of places on the planet that are terrible for budget travelers — Iceland, Australia and Japan come to mind. We’d love to visit one or more of them while we still have big cashflow coming in each month.
Already Checked Off the List
Review our insurance policies — Earlier this year we did a full insurance review and added umbrella liability insurance. (If you’ve saved a lot, you should consider doing this too! Because contrary to what Rihanna sings, you can’t stand under my um-ber-ella. You need your own.) But we’re glad we took the time to make sure we had the right levels of coverage on our home, rental property and cars.
What did we miss? What is on your pre-retirement to do list, if you’re in the planning stages? For those who’ve already retired, what else should we add to our list? We’re all ears!
A photo note: We’ve been a bit obsessed with clouds lately, and the feature image is from a storm that passed by yesterday. If you like the photos we feature here (always original, never stock!), you can see lots more by following us on Instagram.