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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Categories: gearing up
Wow! Your retirement feels so real with this post! I’m sure it’s felt so real to you guys for quite a while! That’s smart that you plan to travel while you still have status. Are you planning on taking purely ski trips? Or will you do some general sightseeing as well?
We are currently in the process of *starting* to get our house ready to sell in two years and it’s just plumb overwhelming. The first thing we’re doing is having the roof replaced (joy) so I’m hoping once that’s done, I’ll be somehow magically inspired to start on the rest!! :)
It feels both super real and not at all real. ;-) Ask me again in late January! Haha. And definitely not planning to do only ski trips. As we learned this past winter, the ski trip itself is great, but schlepping skis is NOT great. I’m such a devoted carry-on-only traveler that having to deal with checked bags to take skis was NOT my cup of tea. ;-)
And good luck with prepping your house to sell. I’m sure the roof is a major pain to replace, but such a good thing to know you’ll be selling a house in solid shape!
Have you considered life insurance options yet? 🤔
Oh yeah, we’re all squared away there. We’re going to let go of our employer life coverage, keep our separate term policies that go into our 50s and 60s (and not renew those when they expire most likely, because we don’t really need that money anymore), and then keep all of our other policies (umbrella, homeowners, auto, etc.). And all the other good stuff in our estate plan (https://ournextlife.com/2015/10/07/planning-for-a-long-life-and-planning-for-the-worst-our-estate-planning-approach/).
It is exciting to read your posts as you near retirement! We are far off from retirement, but hearing you outline the actions/steps you need to take over the next SIX MONTHS is very motivating!
At the moment, Mr. Adventure Rich and I are working to “settle down” our finances after a crazy year. In the past 12 months, he received and accepted a job offer, we packed and moved across the country, he started said job as I transitioned to working remotely, we bought a house, and we have had to adjust to a new style of living with seasons (read: we didn’t need a snow plow in California… now we do!). Its been a whirlwind so we are working to get back into a routine and rhythm with our finances.
Thanks! And yeah, no kidding, you guys have had an eventful year! I think settling down with your finances is a great and important goal. Good luck getting into a new groove!
Various thoughts on the lists (though I’m sure there’s nothing new here):
Good to see COBRA’s an option. Is it a super expensive option? Seems like it might at least be a serviceable back-up plan that you can count on.
I’m an Android person, but if an iPhone is “like an extension of your body”, there are some affordable options. Plans through MVNOs should get you most anything you need under $45/mo. and the physical phones are so bad if you resist the need to upgrade all the time. The difference between the a very good option and the best option is likely to be just a few dollars a month.
Having a HELOC available doesn’t necessarily mean having debt. If you think of it as an extra safety net, another layer of insurance, you might be able to stomach it easier.
It almost sounds that retiring earlier is putting more stress on you (the hamster wheel thing). The ship has probably sailed on when to announce your plans, but it occurred to me that this seems to be a self-imposed deadline. Would the world end if you delayed it a month to catch up on some of these things if they are really stressing you out?
We don’t know the exact cost of our COBRA option because we don’t want to reveal that we need that info, but we suspect it’s crazy expensive.
Thanks for that reminder on an iPhone option. I will focus more on that question this fall!
Yeah, good way to think about the HELOC. I know there are perfectly good reasons to have one.
And re: the hamster wheel, this is just me. I would be panicking whenever we decide to quit, even if we had $100 million in the bank. So it’s better NOT to slide it back, and just to rip off the bandaid. ;-)
There are few things in life I love more than a good to-do list! I make them habitually, and I too include things I’ve already completed. It’s just so satisfying seeing that decisive check-mark! ✅
It’s insane you still don’t know what your healthcare situation will be next year. It’s only a few months away! Hopefully you won’t need to resort to COBRA, right? I recall being flabbergasted at how expensive it was, when it was last offered to me. I initially though the price quoted was for a year, but it turned out to be the monthly premium. Um, nope! I guess it’s useful for some people that it exists as an option, but it certainly wouldn’t be practical for most.
Yeah, health care is super frustrating. Of course, I’m not really complaining because we will be fine — this is far, far worse for people who can’t afford health care and for whom this all may get worse. But yeah, we’d like to know what the heck is going on. ;-)
I highly recommend having the separate accounts for big ticket items like property taxes and insurance, as you mentioned. Our credit union allows us to have multiple separate accounts, so I have set up several of them (property/tax, vacation, home reno, and new car fund for our next new vehicle–my goal is to remain debt-free). I set up automatic transfers, so I don’t even have to think about it.
Also, we switched to Consumer Cellular. They offer affordable plans with no contract, and they offer discounted phones, including the iPhone and others. We have been with them about a year, and have been pleased with them.
Good luck on the list!
Yeah, I’m 100% on board with the separate accounts and automated payments. Why think about that stuff if you don’t have to?? And good to know on Consumer Cellular — we’ll check them out!
So many things I can relate to. When my work iPhone gets handed in, I am going with Republic wireless. I am willing to check out an android.
For health care, we are buying a Christian health sharing plan via Medishare. Obamacare was far too expensive and didn’t come close to make the cut.
COBRA is a great deal if you’re single and sick, far cheaper than ACA plans of similar deductibles.
I am also considering a 10 year HELOC, but have no plans to pay off our low interest mortgage.
Our two years of safety include bond funds plus 54k of PG stock. I am about 5-6k short on bonds right now but if the rally continues I’ll sell more stocks soon to close this gap.
For our retirement, I intend to “simulate” a paycheck. Every 1st and 15th auto transfers will go from savings to checking. When I sell investments (quarterly), I plan on having the money be deposited on savings first. This makes it easier on the wife who has no interest in tracking our investments, but gives her the comfort of a pretend paycheck.
Good luck
We will likely simulate a paycheck as well, just to help us manage cashflow. And to help things feel slightly more normal during our major life transition! I’ll be curious to know if you guys keep doing that — we don’t know if we’ll still need the fake paycheck a few years down the road, but definitely want to use that strategy to help us make the leap.
I retired April 1 and have learned the “to do” list goes on and on, just with different things. I did get a new iphone just prior to retirement and love it. I use it for so many things. The camera is great, music when walking, pedometer program, note pad, etc. Remember to move your contact list from your work phone onto your new phone or lap top. I almost forgot that “no brainer.” I am currently consolidating accounts and updating legal documents such as wills and powers of attorney. I’m also on a de-cluttering mission consigning and donating things I don’t need. Lastly, I wanted to say I just returned from 2 weeks in Japan – my 3rd vacation there. Awesome. When you plan your next trip I suggest buying the Japan Rail pass and going to Sapporro if you haven’t been there yet. We stayed at the JR Tower and it was so convenient to everything.
I fully expect that to be true for us, too. The list will never end — it will just change! ;-) And good tips — I’ve already moved my phone backup to my personal laptop, and am transitioning files gradually. But you’re right to remind folks that that’s important to do!
Re: Japan, we flew into Sapporo to ski this year, but didn’t spend much time in the city itself. On our future list!
My takeaway from this post is that doggie dentists are really, really, really expensive.
In other news, while it might look like there’s a lot for your to crank through in the next few months, the list of things you’ve already taken care of has to make you feel amazing! It’s right around the corner, huh? So exciting!
Oh yeah. Small dog dentistry is necessary, but costly. We’ve spent almost nothing on the dogs for the last two years, though, so no complaints.
And thanks for focusing on the positive! Yes, we are getting a lot done on other fronts!
Good luck with the health care issues. Sorry that Congress is having really poor timing on making really bad decisions. McConnell previously said that he wants to pass the AHCA through the Senate by the July 4 recess or else give up on it. I don’t know if he’s planning to stick to that, but if so you may get some clarity one way or the other soon.
Sigh. Who knows. I doubt we’ll get clarity anytime soon, but of course we’ll be fine. This is most frustrating for folks who have many fewer resources than us and will have actual negative health outcomes as a result of all this uncertainty.
Very comprehensive list! I’ll note this one for future reference as we get closer.
Dear Mr. ONL, please write the drawdown plans post. Go on, do it!!
Phyician on Fire just did one and Fritz (Retirement Manifesto) and us are publishing our posts on the same topic this week.
Would be great to see more plans to be able to learn from each other on this important subject.
Thanks for nudging Mr. ONL! ;-) I’ll keep an eye out for your post — and glad you are still posting occasionally! Hi to Mrs. PIE!
Hi to you too!
I wish I could post a screenshot of my texts just now with Mr. PIE. Truncated version:
Him: Mrs ONL says “Hi”
Me: Huh?
Me: Oh, via blog comments!
Me: Duh!
Him: Blog post, she’s not here!!!
Me: That would just be weird!
LOL — That totally made my day. ;-) Sorry I couldn’t say hi in person!
Looking forward to the withdrawal breakdown – am always intrigued how people handle taking money out of their nest egg – I get the Mrs to chime in every once in awhile :) but let me know how you convince him to
Haha — I’ll let you know! ;-) And yeah, thinking about actually drawing down the accounts definitely still gives me the heeby jeebies, so you know having a well-reasoned plan is super important to me!
Great list with many things thatvwe did right after retirement. I just didn’t anticipate the lonlieness and feeling of loss that went along with retirement.
So glad you brought this up, because people do not talk about this reality enough! I wrote this post on the subject (https://ournextlife.com/2016/07/20/friends/), but I’d love to know if you have any other thoughts, having actually lived through the transition!
I wrote a post called the Golden Years on my site, EmbracingLife.blog. You might want to read it and follow my blog as well. Thanks for your inout in the hubby….it’s starting to work!
So glad you’re seeing some progress! ;-)
I did a blog on choosing the right rig. It may have some tips you haven’t already considered. https://fulltimetumbleweed.wordpress.com/2014/05/12/tips-for-choosing-your-rig/
Thanks for sharing. It comes down to: we don’t want to pull a trailer on ice and snow in the winter (we also don’t have a good towing truck and don’t want to spend money on one), but also don’t want to keep moving our camp all the time as we’d have to with a class C because it would be our vehicle. Current leading contender: small class C plus a scooter on the back. ;-)
I don’t like budgets either. I was recently surprised to read in Your money or your life that even they don’t like budgets. Yet you have specific accounts for specific purposes. Sounds like an undercover budget. And aren’t they hard to manage? And easy to micromanage?
I think it’s a semantic difference. Any contained spending could be considered a budget, but in our case at least (and I think YMOYL too), we will have separate accounts for certain knowable large expenses but then have a big main account for the bulk of spending across many categories. Very different from a traditional budget.
Y’all can do it! Sorry about the healthcare stuff. I wish it weren’t so tumultuous. :/ Also, as far as the phones go, I’ve had a lot of success with Google Fi (I switched to them from Verizon). It does mean you have to transition to Android, but I got Mr. Picky Pincher to make the switch and he’s never gone back to Apple.
Thanks for sharing your experience with Google Fi! I love my iPhone, but I know I could adapt to a new system if I had to. Just need to figure out the best combo!
Debt = hedge against sequence of returns risk. Perhaps that will alleviate your nausea? It’s a hedging strategy, that’s it. It doesn’t mean you are a failure if you have to tap into it. It’s simply bridging the gap if stocks drop precipitously, and they will from time to time over the next 60 years. That and the Dave Ramsey school of finance is not based in true finance theory or optimization. Yes, it’s helpful for the “masses” of people who spend more than they earn but not mature FIRE folks like you and Mr. ONL.
Orthodontic care. Went ahead and pulled the plug on that for my kiddo, though I would have liked to wait another 6 months.
Health care. Don’t get me started. My completely non-expert opinion – they aren’t going to figure anything out anytime soon. I don’t have to stress about health care since I access through my partner’s employer, but I am wondering now if Cobra is the best option.
Corporation. If I end up doing any consulting on the side, I’m setting up an S-Corp. There are a lot of reasons to do it that way, even though it’s a tad bit more complicated than an LLC (and it’s not really that complicated). Bottom line though, it is less expensive than an LLC even with setting things up with a payroll provider.
I’m currently testing out Google FI (since Friday). So far, I’m having a hard time using the Android phone, just because the only smart phone I’ve had has been an iDevice. My partner has Republic Wireless and has had it for a year, and he likes it and it’s slightly less expensive than Google FI (he averages $15-$18/month). Google FI has advantages like calling and texting included when traveling internationally. I did figure out how to get all the background stuff that sucks data to stop running when I’m not on Wifi, so that’s a positive. I bought a $250 Nexus phone and honestly I think it will be fine. I’ve put myself on a data diet when I’m not on wifi, however.
First few months of the year, I tracked my expenditures to make sure they were where I should be. Other than spending money at hotels in Mammoth instead of using my travel points (took your advice there), I seemed to be pretty close to where I should be. I have been examining my grocery bills lately and noticing that there are some frivolous things happening nearly each time I go since I apparently like to treat myself. I’m hoping a bit more discipline there in two weeks cuts out the extra stuff.
Good luck!
I’m not a Dave Ramsey person at all, but as we’ve discussed many times, not everything has to be about optimization. ;-) If we gave a flip about that, we’d keep working and become gazillionaires! Haha. I sleep better with less debt, and that counts for a whole lot in our book. That said, you’ve won, we’re going to check out the HELOC, barfing all the way. ;-)
Not a zero sum game. :) I split the difference and paid well ahead on my mortgage which given the way the stock market has gone, was a super crappy decision but it helps me sleep better at night too. 10 years or less and it will be paid off and I can live a bit differently.
It’s clear that was a good decision for you, which is what matters. ;-)
Sounds like you have a good handle on things.Here are a few things we did when the DH retired at 60 in 2015. (He tried to retire at 59, but his boss refused to believe he was serious for about seven months. We had to move half way across the country before he finally posted the DH’s position and cajoled the DH into working remotely until it was filled.)
1.Healthcare–When we first planned our early retirement, we had intended to enroll in some college courses and sign up for student health insurance. It was an elegant solution because we love to learn new things as well. Unfortunately, Obamacare threw a monkey wrench in that plan since student insurance went the way of the dodo as soon as the exchanges opened up. So we bit the bullet and paid for COBRA for 18 months. Yeah, it was like buying a new refrigerator each month, but we still enjoyed Cadillac coverage. We’re on an Obamacare plan now and to be honest with the high deductibles,it’s like having no insurance at all. The moral of this story is: Stay healthy & use BlinkHealth.com & GoodRX.com to minimize the cost of medications.
2. Kudos for hiding money from yourself. We also use a multi-account strategy and transfer in a budgeted amount monthly. We have about a year and a half worth of income squirreled away as a safety net in addition to our rental income. We also have an “in case of emergency break glass” stock account worth another couple of years’ worth of living expenses. We won’t tap the DH’s 401Ks until he turns 70 1/2.
3. Travel–Yes, please! Since the DH retired, we’ve taken 3 cruises (14 days in the Caribbean, 7 to Mexico & Central America, 30 days to Tahiti & back). In September, we’re off to Alaska & next January (and I still can hardly believe it!) we’ll board a ship for a 94 day trip around the world! (I’m blogging about it at http://www.RoundTheWorldWriter.blogspot.com)
You are definitely not the first person who has shared what astronomical sums you’ve spent on health care. It is SUCH a frustration that this is all still up in the air. But your travel — WOW. Your RTW cruise sounds so incredible — so excited for you on your behalf!
I think it would be a clear separation from work for both of you if you were to shed the iPhones and go with those snazzy looking Pixels. I’d wait for the Pixel 2 to come out though. Once you get on the Android train you can shed Verizon and go with an awesome phone plan like Google FI. International data at the normal rate will come in handy for those trips you plan to take! (or T-Mobile. But I love Google FI!)
I keep hearing mixed things about Google Fi — some people seem super frustrated with it. You’ve had nothing but good times, though?
At the beginning, before they added US Cellular, I would get dropped calls when moving around. Now that they added that, I haven’t had any major issues. Sometimes I have to force it to switch carriers, but that’s not often and is easy to do. Well worth it for the ease of use overseas and the low cost!
That’s great. Thanks for sharing that! And I know I could Google this, but since you’re an expert, do you know if it can ride on AT&T or Verizon? Those are the only networks that work around our house, so that’s a big concern. At home we can use wifi, of course, but in the immediate area and trails, we don’t want to be in a perma-dead zone!
Unfortunately, I think the only domestic carriers are Sprint, T-Mobile, and US Cellular :(
Ah, gotcha. Thanks for saving me a spin around Google! ;-) We’ll do more looking into this, and maybe see if we can recruit some neighbors with those carriers to tell us what their coverage is like!
If you want to continue to use your Iphone, your best value is Cricket wireless. They are fully owned by AT&T and are their “discount” brand. They use the exact same cell towers as AT&T, but the prices are much lower. Since AT&T is available where you live, this will work great for you.
They are definitely on our list to check out! “My” iPhone isn’t really mine, and I have no reason to think my company will let me keep it (though who knows, they might), so the cost of a new phone is also a potential factor.
I asked my company to keep my Iphone after I left and they said no. That’s just my experience though.
Yeah, no idea what will happen!
Busy times ahead…! As the saying goes: retired people never have time.
We use a budget now that hides all money we set aside for big yearly bills like property tax. We do this with our income.
I am curious to read how you will implement the withdrawal strategy: monthly or yearly? ANd how will you deal with left over money?
Ping me when not too far from Brussels. 😎
You already know I am a big fan of hiding money, and it will for sure continue in retirement. ;-) Withdrawals will be quarterly or monthly, definitely not yearly. Too much weight on that one day’s share prices! But we’ll share more about that soon. And of course we’ll let you know when we are in your neck of the woods! :-D
One I see missing that might be applicable is a will update. Does anything in your current estate planning change with an employment or account change (I what goes in trusts and the like). We’re redoing our will this year actually.
Great point, and something we should add to the list. Though for our own sanity, we’ll probably tackle that next year, not this year. Good thing is, since we don’t have kids, there’s nothing major to mess up on that front. ;-)
You said you were taking a class at the local community college. Look to see if they provide a health care option. You might get lucky and end up with equal to better healthcare than you have at your corporate job for less money.
I did look into this! The only thing they offer is care at the student clinic, not general health care coverage, and that especially doesn’t help us because we’re nowhere near the main campus/clinic. :-(
That’s too bad. Here you can get full on BCBS PPO that is as good as any corporate plan I’ve ever had!
That’s pretty sweet. I know this changed in a lot of places after the ACA kicked in, so maybe if the ACA goes away, we’ll have more community college health plan options again?
So exciting!!!
Two things first:
(1) YES OF COURSE MR. ONL SHOULD BREAK HIS BLOG SILENCE. We don’t bite (much).
(2) omg talk to me about phones and plans. We’re on the leaner side of plans with $4/mo/phone, but I’ve researched all sorts of options. I even just recently upgraded my phone to one with 64 GB (up from 8 GB), which is especially huge considering the OS takes up ~4 GB. I love getting into details and figuring out everyone’s individual needs 😀
For our planning, one of the key things will be figuring what to do with all our stuff. We rent, and we aren’t particularly attached to our current geographic location. As we’re looking to do a fair bit of travel, we could sell most things, and/or look into long term storage options…it’s all very much in the air right now.
Oh he reads the comments, so he knows you guys rock. ;-) And since you’re a cell pro, want to just figure out what we should do?! Haha. But seriously, if we live in an area with good AT&T and Verizon network coverage, but crap with everyone else, and with an intent to travel lots internationally, what feels like our best option? Only if you know off the top of your head. Not worrying about what phones we’d be using.
As for your dilemma, everyone I’ve read on the subject of long-term storage vs. selling everything who had a storage space said they eventually got rid of all that stuff anyway, and then regretted having paid for the storage. So why not save a step? ;-)
Haha, yeah, we’re leaning towards just getting rid of most things…a ways away from now, so plenty of time to ruminate!
So for AT&T I’d definitely suggest Air Voice Wireless, which also happens to be what we have. They have some decent international options, depending on where exactly you’re planning on traveling, too! For Verizon deals, Cricket Wireless is about your best bet, but, eh. The site “Technical Meshugana” is pretty awesome and a great resource in general.
Depending on how long you’ll stay in one place, it might make sense to just not turn data on (nor use SMS), or to get a country-specific SIM card. We typically get a new SIM card in that country if we truly need a phone, just so others can call us easily, without them worrying about charges.
We use Google Voice numbers, though, so even halfway across the world we can text as long as we have Wi-Fi — no plan required!
For Japan specifically, I’ve heard getting a hotspot is actually cheaper than a cell plan — some people will get a hotspot instead of a traditional wired router — two birds, one stone in that case. 😃
Wait, you can text from a Google Voice number?! How do I not know this?!?! (D’oh! Time to look stuff up.) We’ve also rented a pocket wifi when traveling, most recently in Japan, which gave us data, which we care about more than calls (plus there’s always Skype). So I can definitely endorse that approach!
Thanks for the great info on cell plans! I have lots to explore now!
Oh yes! 😀
Majority of the time I don’t turn on data, and I give everyone my Google voice number, meaning I can “text” for essentially free (w/Wi-Fi), or I can turn data on if need be (way cheaper than pay as you go texting).
Let me know what you end up deciding (#nerd)!
Okay, I need to figure out how to do this! Thanks for the nudge! :-)
I am also a fan of Darrow, as I was introduced to his retirement calculator reviews a couple years ago. As engineers, I found that we shared similar views on many things. He was able to accomplish retiring at 50, though mine has been delayed by a couple untimely layoffs. Oh, for earlier FU money, but thankful now for FI. Mr. ONL, please post about your withdrawal thoughts. Ours are flexible with respect to types of asset accounts, but I’ll get into some of that.
After reaching the end of our last Verizon contract, we switched or iPhones to Sprint for ~$30/mo/phone at 16GB data, which we share also with one of our sons. We hate Sprint for it’s poor coverage, but we leverage wifi calling whenever we can.
We’ll likely change carriers again, but for now we’ll bank the savings.
Regarding banking, we have been with Schwab Bank for several years now, as we also have brokerage investments there also. It was good for international ATM access without fees. We haven’t had separate banks accounts for each other, but did set up a separate brokerage account for rent related expenses after we sold our home. All the payments are electronic, so it works well and keeps our landlord at arms length from our bank account. That might work for you for you in replacing your escrow account.
I set up an LLC when I was doing engineering consulting/contract work, but then almost immediately was hired as a regular employee. I have maintained it, and may use it again in the future.
On rollovers after retirement, you have different issues than we do. We are both >55, so we’ll have penalty-free access to 401(k), 401(a), and 403(b) funds if we choose. Rollovers would make them subject to 10% withdrawal penalties until age 59.5. We’ll likely not rollover until 59.5. However, some plans may charge fees for withdrawal transactions, so we might only do annual withdrawals to minimize the fees. I’m still sorting out when to withdraw from tax deferred accounts vs rollovers vs. living off taxable accounts. RMDs loom at age 70.5, about the same time we plan for SS to kick in. I hate the idea of being told how much I must take out, especially if it is more than is needed for living expenses. At some point the gov’t will get it’s taxes. It is our job to manage within our tax system.
We are struggling to know the future with heathcare/insurance. Before Obamacare, I thought direct primary care might provide some of the answers for efficient delivery of healthcare, but one of the pioneers of it in Seattle recently went under. The medical share plans seem a viable option for some, or international medical tourism like Gocurrycracker, and I think Kaiser Permanente will likely survive and provide good care/insurance options. As I mentioned on an earlier thread, we may continue part time work for employer benefits to beat the uncertainty. I also need to look into health insurance through my LLC. I don’t know if it is treated any differently than individual plans.
We are definitely game to try some medical tourism, but that only helps for predictable, planned care that we can schedule in the future, not for if we get sick, need emergency care, etc. And we’re not willing to be uninsured, so there’s much still TBD on that front!
I didn’t realize that if you’re over 55 and do a rollover, you lose your ability to access your funds without penalty. That’s worth understanding better. Good you guys are thinking about that.
As for banking, we’re with USAA who we’re totally happy with on the banking side. (Less so for mortgages and investments, but that’s not relevant here.) Our accounts are totally free, they reimburse ATM fees anywhere in the world, and they have generally excellent service. Not anyone can get USAA, but if you’re eligible, we highly recommend banking with them. ;-)
The penalty-free access >55 is only if you retire from that company after 55. Older 401(k)s from previous employers might as well be considered for rollover, especially if you have better investment options outside the company plans.
Okay, that makes more sense! I was wondering how there was this giant loophole out there that no one was talking about! ;-)
yes, but if you keep your old 401k, you can usually roll it into a new 401k, and then quit at 55 and this rule will kick in. If you roll into an IRA, you may not be allowed to roll that into a future 401k. Also, a solo 401k might be an option too, as long as you leave your self employment at age 55. I figure at the least, I could always become self employed for Uber, set up a solo 401k, and then “quit” at 55.
My husband and I use Ting for our wireless service. We bought android phones elsewhere and then put Ting sim cards in them. We have been very happy.
Thanks for sharing that, Amy! They hadn’t even been on my radar!
I’ll give a plug to BLU android phones. The one I have is a mid-range Life One X2, that was $170, with 64gb/4gb. So great specs for a great price. It’ll work on AT&T, TMobile, Cricket, etc. My spouse has a BLU as well with TMobile, and a Nexus5 with GoogleFI (for work). I’ve thought about switching to GoogleFI, but the Nexus 5/6 are not sold anymore and the Pixels are ridiculously priced.
Okay, that’s great to know. Thanks, Max! Totally with you that the Pixels are crazy expensive. Maybe when the Pixel 2 comes out, the first one will come down in price??
Nice job on having your life insurance squared away and you are wise not renew those when they expire because you are right, you really don’t need that anymore. I have always heard that after life insurance you should consider “Long Term Care” insurance that will pay for any nursing home situation that may be necessary in those late years. Long Term Care Insurance (I heard) is more expensive that life insurance. What are your thoughts?
Great question! The short answer is that we’ve punted the long-term care insurance question for a year or two down the road, and so haven’t delved as deeply into the question as we could have. USAA, our primary insurance company, once told us that we don’t save much money by buying it when we’re younger…. no idea if that’s true (honestly, it seems like it couldn’t possibly be true!), but that’s what let us feel okay about focusing on other questions for now. ;-)
I’d be pretty wary about buying long term care insurance at your age anyway — it is something you wouldn’t be likely to use (if ever) for 40 plus years, and a lot about the long term care system will likely have changed by then. Most long term care policies reimburse up to a set amount of money anyway, and only pay out a fixed amount per diem — it isn’t unlimited coverage. When we ran some numbers, and compared the return on self-investing the premium amount every year versus the coverage amount in the future (even if the coverage amount increased with inflation), at some point investing the premiums was a better return — particularly if only one person ended up using the insurance, or used it for less than the maximum benefit. Also, I think that unlike a term life policy, where the amount of your premium is fixed for the length of your policy, long term care premiums can and do increase — a lot of people have ended up canceling or downgrading their policies due to increased costs, despite having paid a lot in premiums already.
That’s all super interesting, and new info to me! Thanks for sharing what you’ve learned. So that definitely increases my resolve not to worry about LTC for now, and to think about it once we have more time on our hands, and probably not until all the health care laws get sorted out!
If you itemize, have you thought about paying your 2018 property tax this December if it is possible where you live? A good thing to do in your last high income year if you can, especially if it might be the last year you can itemize.
That is a GREAT point that I hadn’t considered! I will look at our bill timing and see if we could play with the timing a bit.
Would love to hear about your HP Spectre 360 convertible laptop and why you love it. All details would be appreciated as I’m getting close to buying a computer to replace my 10+ year old desktop but haven’t figured out what I want or even what’s most important to have….
Happy to share! I really wanted the smallest and lightest but fully functioning laptop, and I believe it’s that. It can run Photoshop and the like, so way more powered than a netbook. But the battery lasts a long time, like 8+ hours, the flip open feature is nice (I honestly don’t use it often — mostly for movies and Skype), and it really is just so light. It’s not a perfect machine by any means, and does have buggy moments, but it was way cheaper than a Mac of the same size and power. Oh, and it types really well, too! Good luck making your decision! I relied heavily on Cnet reviews, fwiw, and they didn’t lead me astray. ;-)
Well done guys
Get an iPhone 7Plus – no need for a fancy camera on your hikes/trips
Can’t believe you bought an HP …. sigh lol
Road Trip ~ you need a 4×4 Delica :)
Looks like you have the rest dialled in, exciting times
No way do I want that giant hulking monstrosity! Hahaha. But seriously, have you seen the camera on the Pixel?! I am definitely someone who can be swayed by camera quality, though I find the night shots the iPhone 7 supposedly takes quite compelling. And I don’t think you can get a Delica in the states! What I really want is one of the incredible little RVs we saw in Japan. Of course they would have the perfect tiny options.
if money is just money regardless of its timing/medium, why do buckets matter so much? Is it not a different take on market timing? Would it not be more efficient to simply sell how much you need when you need it with losses sold first to max out the tax efficiency?
We’re only talking about bucketing our liquid cash. So not sure what you mean.
I may have misunderstood…
Have you thought about using cash management service through Vanguard or similar with margin account for overdraft? This may be more palatable than HELOC.
We haven’t! That’s a great suggestion for something to look into.
I’m sure you are all over this, but if the ACA stays in place and your income is low – then you should qualify for low-cost health care. My uncle that recently retired stopped drawing on his retirement accounts and lived on what he had in cash for a year to cut his monthly premium from over $1k/month down to a couple hundred per month.
Yes, indeed! https://ournextlife.com/2016/10/31/low-income/ We spent a lot of time before the last election thinking about income and subsidies and the like…. we doubt that stuff will still end up being super relevant, but we did the number crunching. ;-)
I’m planning to retire at the end of Sep this year and have some of the same To Do items:
(1) figure out internet (still using DSL); I live in a condo where FIOS is not an option, so it’s pretty much cable or nothing
(2) computer/laptop – I have an ancient laptop (still Windows XP) and need something new – would love to hear about your new laptop and what software you use for documents & spreadsheets. We use Microsoft Office at work & I’d like to stick with that since I’m familiar with it.
(3) cell phone – mine is provided by work, so I’ll need to get my own. I have an android now, but know a lot of people that love their iPhones. I haven’t had to research phone plans because we didn’t really have options at work. I have a Samsung Galaxy & Verizon as my provider.
I HATE researching technical stuff, so, it would really be nice if you could move these items up to your “BEFORE retirement” list and let me know what you decided! ;)
We’re definitely way happier with cable than DSL, and like that we aren’t paying money to the phone company in addition to cable being much faster. Of course it’s totally company-dependent! I like the HP Spectre 360 I got, but it was definitely not the cheapest option. I wanted it to have a few bells and whistles, enough power to run design programs, long battery life, and very light weight for travel, and I got all that…. but it might be overkill for what others need, or you might just prefer Mac or another company! In terms of software, the Google docs and sheets programs will feel completely comfortable to you if you’re used to Office, or you might have a corporate discount you can take advantage of before you leave. My megacorp has a deal that let me get MS Office professional for home use for $20 I think, so I did that on my new personal laptop. And phones — just beginning to learn, but check out some of the comments in this thread. Some good tips there! Good luck! ;-)
I would replace my mattress before losing income. So important to health and wellness. Can be so expensive. (I love sleep and I’m not great at it)
100% yes. Mattresses are something not to cheap out on!
“Sniff, sniff. We’ll miss you, escrow” – why? I would recommend savings for property taxes be internal and not external. I would never fork over 1/12 of a bill 12 months in advance of its due date and then continue that strategy monthly until the bill comes due. Escrow is a trap for people who can’t save on their own – and the bank loves using your money for free – many lenders are not required to pay you interest on your escrow balance. Pay your taxes & insurance on the day they are due with your reward miles card, and then immediately pay off the charge with the money you have saved up in YOUR bank account. You’ll earn some miles, and you’ll earn internal interest on your own “escrow account” for the entire 12 months you are saving into it. Don’t let a bank save your money for you with no benefit other than making sure the check gets sent to the tax assessor on time – anyone who can keep a calendar can do that… (bonus, in some locales you can get a discount by paying your property taxes 1 month early, but your bank won’t tell you that – they probably don’t even know. Call your tax assessor office and ask. I also get a 5% discount by paying my homeowners insurance in one lump sum in advance, versus 12 monthly payments. YMMV – cheers).
This is all great advice for people who are good at being perfect. Sadly, that’s not us. (Also, this mortgage is dead and gone, so this is all irrelevant for us — but I’m sure some readers will find some good tips here.) We happily traded some tiny cost associated with escrow for not having to worry about this. Our to do list is long enough! ;-)