We’ve become so accustomed to prepping for early retirement that whenever we now remember how soon it’s all going down, we feel a moment of panic at how much we still have to do before we retire early at the end of the year. (Picture a hamster suddenly speeding up in its wheel. Or maybe a cartoon character with its hair on fire. That’s how I feel when I realize this is actually happening, and soon. Like every time I see the countdown ticker in the blog sidebar, and jump just a little in my chair.)
Some of what’s on our to do list is financial, and that’s mostly passive: just letting a few more months of pay plus a year-end bonus pile up. A lot of it is mostly about getting our affairs in order, which sounds awfully morbid when I put it in those terms, but is about doing things we’re in a position to do now but might not be able to do as much next year, like see doctors without financial peril, for example. (Still holding our breath on that whole health care thing. Sure would be nice if the Senate would actually tell us all what they’re cooking up for us.)
The good thing is, despite the mild panic that’s omnipresent these days, we’ve also accepted that we’re probably not going to get all of this done before we quit, and we’re okay with that. (Hooray for acceptance!)
But we know we have a better chance of getting as much of it done as possible if we make a list, so here it is!
This is three lists, really. The list of what we need to get done before we quit at the end of the year (okay, what we hope to get done), what we need to do in fairly short order after we quit, and — to celebrate some successes — what we’ve already checked off the list. Here goes.
To Do Before We Retire Early… in Only Six Months
Deep breaths, deep breaths. This list is the longest, and feels the most daunting, but if we focus on just a few a month, we should be able to get it all done.
Top up the cash accounts — We have always intended to retire with at least two years of expenses on hand as liquid cash, a key part of our conservative planning strategy. So we’re putting more of our earnings into cash savings each month than we have in the past, and we’ll top things off when we get our parting bonus or bonuses.
Cram on health care — We don’t know what our health care situation will be next year, or if we’ll even be able to afford to go to the doctor for anything non-urgent. So we want to go into next year with fully-inspected bodies and squeaky clean teeth. We still have a few things to get checked out before the docs hand us those metaphorical inspection certificates.
Make a decision on next year’s health insurance — I hate thinking about this one most of all, because here we are in June, and we still have no wild idea what options we’ll have for health care next year. Even if the ACA is going away, it would be nice to know if a new law will take effect immediately, if it will phase in over a few years meaning we can still buy an exchange plan in the interim, etc. But we know none of that. So we may end up buying COBRA, we may just pay rack rate for a crappy plan direct from an insurer, or we might possibly have an exchange plan as an option. Can someone please work on getting us an answer, at least, before the year is over?
Lock down our withdrawal strategy — Mr. ONL is kind of a Darrow Kirkpatrick fanboy, and has spent hours with his posts like this one on the best withdrawal strategies. We’re still polishing up our approach, and when we have that all locked down, maybe we can even get Mr. ONL to break his blog silence and write a post on it! (You could offer him some additional encouragement in the comments — he reads all of them.) ;-)
Choose a new cell plan for both of us and a phone for me — Mr. ONL owns his phone, but I need to replace my work-provided iPhone which, let’s be honest, is really like an extension of my body. Will I decide that I can’t live without an iPhone? Decide to pay the big bucks for that incredible looking Pixel? Defy expectations and go with some low-feature, barely-smart phone? Stay tuned! And then we’ll finally get Mr. ONL off his spendy Verizon plan and figure out the best option for what we need.
Explore a HELOC — I feel nauseous even writing this, because I hate debt so so so so much. But enough of you have wisely suggested we consider opening a home equity line of credit on the house while we still have W-2 income, something that will become much harder to do after we quit. So we’ll consider it. But guaranteed that if we go through with it, I will throw up in my mouth a little bit.
Buy a few odds and ends — There are some random things we want to buy before we quit, including a few clothing staples that need replacing, along with some random stuff for around the house like a patio umbrella. There’s nothing huge on our list, just things we don’t want to come out of next year’s spending plan.
Register our business entity — Now that we have accepted that we will earn some money in retirement, we want to be sure that we’re being smart about how to deal with it. We’ve decided that means registering a business entity, both for tax reasons, and to add credibility to any consulting gigs we may decide to pursue. Expect a longer, detailed post on this, but we’re in the midst of figuring out exactly how we want to register it — as an LLC, an S-corp, an LLC structured as an S-corp, a sole proprietorship, or something else entirely — as well as where.
Book our first big trip — It’s very nearly time to pull the trigger on our first big international trip, the first we’ll ever have taken where we don’t have to come back home for something in particular. I came back from our trip to Japan borderline obsessed with the country and really want to go back for longer, both to ski more places and to check out the parts of the country we missed, like everywhere that isn’t Tokyo. While we’d like to travel cheaply, and Japan isn’t cheap (but also doesn’t have to be nearly as expensive as it’s often made out to be), we’ve decided to do a lot of international air travel our first year, while I still have United status, which gives us more options on award tickets, plus just an overall more civilized experience. After we lose status, we’ll do more road trip travel around the continent.
To Do Right After We Retire Early
It goes without saying that the biggest to do list item after we retire early is to chill the heck out for a good long time, whether that detox period is a few months or a whole year. But in addition to that general approach right after we quit, we have a few other things to take care of:
Set up our multi-account banking system — We’ve never jived especially well with budgets, but we decided a few years ago that we’d create a system for ourselves in retirement using multiple checking accounts, that would allow us to set aside money for big ticket fixed expenses like property tax and car insurance, to make sure that we don’t come up short when the big bills come due. We’re very well accustomed to living on the remainder that sits in our checking account, so we’re less worried about the standard monthly spending. But for the big stuff, we want to continue hiding money from ourselves, which has been one of the biggest secrets of our financial success.
Track new spending levels — We weirdly expect our grocery bill to go up a little bit in retirement, mostly just because I’ll be home a lot more of the time, instead of on the road for work where someone else is paying for my sustenance. Our budget assumptions account for some expansion there, but we’ll be keeping a close eye on that line item, and adjusting our spending plan accordingly. Same goes for any other line items that shift upward or downward unexpectedly once we’re not working.
Rejigger our home internet plan — Right now we pay for two phone lines and the fastest cable internet, because we work from home. After we quit, we can cancel the phone lines, and then reassess potential internet options and costs. Though we’re enthusiastic cord-cutters, we do not plan to skimp on internet. If anything, cutting the cord makes us feel more reliant on a fast internet connection. So we won’t become those virtuous folks who eschew internet at home. We’ll instead be those a-holes complaining about how we had a movie buffer once three weeks ago.
Rollover our 401(k)s — We have a whole 401(k) rollover strategy mapped out, based on retaining the liability protection our retirement accounts currently enjoy. We just have to put that plan into action.
Decide whether to buy an RV — We know we want some kind of adventure vehicle setup that will let us camp for extended periods, especially in the winter when we plan to chase powder for weeks at a time. We just can’t decide if we want a small class C (an actual vehicle with a bed over the cab), or an ultralight trailer like an R-Pod. There’s no real time limit on this because we’re still perfectly happy car camping like we always have, at least in the summer, but we’d like to have whatever thing we decide to buy available for our use before too much time passes in retirement.
Book a few more trips — To make the most of that airline status while we’ve got it, we’ll book a few more trips for 2018 and big adieu to 1K status. Though I will hit 1 million miler status after not too many more years, which will give us lifetime gold status and at least let us sit in economy plus. The years in between losing 1K and getting lifetime gold, though, may be a little shock to the system.
Already Checked Off the To Do List
While we have a bunch of things yet to do, some of which we’ve put off thus far, we have gotten several things wrapped up in advance of pulling the plug, in addition to stuff we’d checked off as of the last update, including:
Pay off the house! — I know, I know. I promised to shut up about it. But seriously, it’s still !!!!!!! Paying off the house allows us to live dirt cheap in retirement if we need to, though of course we hope not to need to. It’s a huuuuuge comfort, though, to know that we can survive just fine on less than half of what we hope to spend in our dirtbag years of early retirement, before we get to those swankier traditional retirement years.
Schedule property tax payments — We had always escrowed our property taxes before we got rid of the mortgage, but that option is gone now. (Sniff, sniff. We’ll miss you, escrow.) We now had property tax payments set up, and next year we may set up a separate account just to ensure we always have enough cash in hand to pay that bill.
Buy me a computer — I’ve had a work computer for as long as I can remember, so the last laptop I actually owned was my college graduation present, a now-stone age Macbook that may possibly weigh 30 pounds. But we recently bought me an HP Spectre 360 convertible laptop that I love so much. I can gush all about it if you’re curious, but no need to give HP anymore free advertising here than I’ve already given them!
Cram (some) health care — We have more health care stuff we still want to do, but we have taken care of some big items that were top priority. Pat on the back, us. Now get to work on the rest of those appointments!
Take care of costly vet care — We have little dogs who you guys will meet when we unmask ourselves, and while little dogs are budget-friendly in many ways (they eat less food, they are unlikely to have the hip and joint problems that plague bigger dogs, they are more portable for travel and require less boarding, etc.), they tend to need costly dental care. We recently took our guys in for the big deal cleanings, which set us back a few grand, and made us glad we don’t have to absorb that cost next year or for the next few.
Do a full budget assumption review — Being ardent non-budgeters, there’s always been something a little odd about suddenly adhering to a budget in retirement. I talked about our account approach above that we hope will give us enough structure but not too much, but we still have to base our numbers on something. To ensure those numbers are rooted in reality, we recently did a big pass through on all of our fixed bills (utilities, insurance, etc.) to update everything with the latest actual costs.
What’s On Your To Do List?
We’re all at different points in the journey, of course, but what’s on your to do list for the year? Anything big that feels daunting to check off? Share it here and we can all offer you some encouragement. Anything you’ve already checked off and want a virtual high five? Lay it on us. Anything we should have on our to do list but aren’t thinking of? Please please please clue us in! It’s thanks to great input here that we’ve added a few of our tasks — and we’re grateful for that info! Wherever your head is on this stuff, let’s chat about it in the comments!
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