Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Where are you and where are you going?
Jin+Guice
Posts: 461
Joined: Sat Jun 30, 2018 8:15 am

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by Jin+Guice » Tue Oct 22, 2019 1:53 pm

Interesting, I have more trouble structuring my days than finding people to hang out with. I probably have some advantages in the hanging out department over the rest of you though (band stuff, know a lot of lazy musicians, New Orleans has a low amount of professional jobs).

If you want to avoid bars, I've had a lot of luck in the dinner party department. Inviting people to free events or a book club might work too. If you're friends won't hang out at night, and you're better at socializing than me, you could try going to a park or coffee shop on a workday and talking to strangers who look like they might be interesting.

Running a life usually still requires a fair amount of work, especially if you develop a hobby or interest. I like to "work"/ run errands during the day with exercise in the middle and then hang out or read at night.

Cheepnis
Posts: 152
Joined: Mon Dec 31, 2018 11:52 am

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by Cheepnis » Tue Oct 22, 2019 2:16 pm

While we were only traveling for a little over two weeks this summer, I only took one small single compartment backpack. I should have weighed it, but it wasn't very heavy. As far as urban traveling goes I could have lived out of it indefinitely. There's really not much you need in order to see some shit and I couldn't imagine those two weeks lugging around multiple bags of luggage. Free hands is where it's at.

anesde
Posts: 95
Joined: Wed Jan 09, 2019 8:32 am

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by anesde » Tue Oct 22, 2019 6:10 pm

Jin+Guice wrote:
Tue Oct 22, 2019 1:53 pm
If you want to avoid bars, I've had a lot of luck in the dinner party department.
Dinner parties FTW. Always prefer those than going out to bars (way too noisy) and restaurants (overpriced and I prefer to cook anyway). I’m probably just getting old :lol:

I worked a swing shift in the summer of 2011 when I was on the 2nd Ave subway project in NYC. Started at 3PM, got off at 11PM. It was incredible finding an entirely different way of life for non traditional hours - really opened my eyes. Not directly applicable as you’re way out east and have free days vs. nights but still, I’m sure there’s something out there. Shame it’s already fall otherwise you could just go to the beach or fish everyday 8-)

2Birds1Stone
Posts: 788
Joined: Thu Nov 19, 2015 11:20 am
Location: Earth

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by 2Birds1Stone » Wed Oct 23, 2019 10:01 am

@theanimal, I will definitely share more thoughts as I work through this *issue*.

@c_L, I had many friends with varying schedules back when I was in retail management. From 2010 to 2014, I had no problems finding things to do or people to do them with during the week, since working weekends and evenings was the norm. When I got into a more traditional/professional career I made friends with other busy professionals, and thus it's harder now. I know these people exist, from retail workers, business owners, anyone who does shift work, etc.....but I have had such limited exposure to these people due to my career and own social circle the past 5 years. I hope to make some new friends to do stuff with, even if it's until we leave in March.

@J+G, we do a lot of BBQ's, bonfires, and have people for dinner fairly regularly, and since we have made it a regular thing, more recently our friends have been reciprocating. It's great! Much better than dropping $40-50 PP to go out and eat somewhere only to feel rushed after our meal is over.

One great place I've met people to play with during the week is my Triathlon team, especially in the warmer months. Triathlon is mostly a rich persons sport, so naturally I have friends who are business owners, and self employed professionals who make their own hours. I'm actually meeting up with one such person for an easy 6 mile run followed by taco's this afternoon.

The other good thing, is that my SO has a retail schedule. She's off one weekday, and one weekend day. This makes it nice to do something together during the week when everyone is working, and frees up my schedule to do something with "the boys" on Sundays when she works (typically a long MTB ride or road ride lately). I'm fairly confident that I will have stuff to do and people to do it with over the next 4.5 months. I just hope the weather cooperates, because much of what we like to do together is cycling/mtb/running etc.

@Cheepnis, yea I hear you. Many of the AirBnB's we have looked at have a washer in the kitchen, and we will have a sink stopper to do laundry anywhere. Our trip will be mostly urban stuff, but many adventures into the wilderness and mountains for hiking, so do have to vary the gear/clothing a bit. I'm not overly worried. If we feel the need for something missing, can always purchase it along the way. I'm actually looking forward to this type of lifestyle for the first time ever, feel like it will be a great learning experience.

@anesde, that's quite alright. I never had problems finding stuff to do in the summer for exactly those reasons. I would be happy to just be outside and active by myself. It's the winter and short days that get to me, so it's just a matter of finding stuff to do while there is daylight. I may try to find some used snowshoes (if we get much snow this year, it really is hit or miss with that). I'm also no stranger to video games (currently playing WoW Classic, and LOVING it), which are cheap, offer some social interaction (albeit remotely), and can be a ton of fun. I won't really have time to game on our travels, and haven't had much time over the past 9-10 years of career work, but played a ton when I was younger.

2Birds1Stone
Posts: 788
Joined: Thu Nov 19, 2015 11:20 am
Location: Earth

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by 2Birds1Stone » Sat Oct 26, 2019 5:53 am

Yesterday, After a nice late morning run along the beach (6.2 miles) with a business owner friend of mine, and most of the day helping another friend set up his home/backyard for a giant Halloween bash, I came home to eat dinner and hang out with SO. In the mail was a letter from Fidelity, notifying me of my options for the 401k I had with my employer. It's funny how confusing this 14 page letter can be to someone who is not financially literate. They make it sound like you will owe taxes with whatever option you choose for the funds, and there is not much in there to dissuade you from taking a lump sum/payment cash out.

Naturally I called Fidelity and instructed them to roll the 401k into a Rollover IRA I have with them (where both my former employer 401k's currently sit). The funds will have to sit out of the market for 2 days as the transfer is processed. I did learn one interesting bit of information from the letter/tax professional I spoke with on the phone.

When you roll a 401k into an IRA, and then later do a Roth conversion, if you withdraw the Roth funds for living expenses before the age of 59.5, any gains on the Roth are still subject to the 10% penalty for early withdrawals. I was not aware. The onus is on you to track what is principal vs. gains in that account. Which seems a bit daunting to do for the next 27 years -_-

ETA: I also listed my car for sale.

Saturday Funday

Woke up early as SO had work at 6 AM, French pressed some hand ground coffee, snagged some home made oatmeal raisin cookies, and doing a bit of reading before meeting a friend for a training ride in the woods. We are going to attempt 3 x 10 mile loops of the race course that we are racing in 4 weeks. I am hoping for 4-4.5 laps on race day, in the allotted 6 hours. Expect today to take somewhere around 4.

In the afternoon we are going out for AYCE Sushi with SO's family for her brother birthday, followed by a kick ass Halloween party in the evening. Then tomorrow I have to be up at 6 AM to volunteer at a local marathon. Busy weekend!

Happy Saturday, y'all.

2Birds1Stone
Posts: 788
Joined: Thu Nov 19, 2015 11:20 am
Location: Earth

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by 2Birds1Stone » Tue Oct 29, 2019 1:24 pm

Randomness......

Few tidbits from the weekend, and some fun financial stuff.

The MTB training is going well, and we did nearly 30 miles on Saturday morning. It was incredible out, smelled like fall, and beautiful in the forest. As planned we did AYCE sushi for future BIL's birthday. Crushed a LOT of sushi. I single-handedly ate 7 rolls, 3 appetizers, and 18 pieces of sashimi. Sunday morning was interesting. I volunteered in the cold rain, got completely soaked through, and spent the day recovering. It was a fairly busy weekend, and it felt great to do mostly nothing yesterday.

My 401k -> Rollover IRA conversion completed today. So now I have to figure out what to do with $22k in cash in that account. I'm a bit skeptical buying stocks at these prices......but I also don't want to time the market.

More interestingly, former employer kept their end of the bargain, and I received my final severance payment. This is my last bit of earned income for the foreseeable future. It gives me the benefit of being able to determine my tax liability for 2019 earlier than usual. Right now it looks like I should be expecting ~$2,000 refund, with the caveat being that I don't know how much last years tax refund impacts things -_-

The other curve-ball, is that we may elope before Jan 1. Since we were planning on doing it in 2020 anyway, it might make sense to just move the date up a few months for health insurance and tax purposes. If we end up eloping, that will be an extra ~$2,500 refund, since I grossed about 4x as much as my SO for 2019.

This would bring total tax refund up to the ~$4,500 range, and if dividends/interest stays fairly flat in 2020, I should theoretically "earn" ~$7,500 from that, bringing total "income" up to ~$12,000. This covers ~50% of my projected 2020 expenses.

Since neither of us will be working in 2020, we will have the opportunity to do some serious Roth conversions, as we both have funds sitting in rollover IRA's from previous employers 401k's. Just have to make sure we stay under the ACA limits (just in case our trip is cut short and we need health insurance in the states).

I'll do a full financial monthly recap on Thurs or Friday.......thinking about going back to tracking individual expenses and numbers, now that I am fully into this ERE experiment. I'm not even sure I can call it Semi-ERE at this point, as I have no plans to work, even PT, for the foreseeable future.

ZAFCorrection
Posts: 198
Joined: Mon Aug 14, 2017 3:49 pm

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by ZAFCorrection » Tue Oct 29, 2019 2:18 pm

@2B1S

Re: withdrawals from Roth conversions

This is definitely an elementary question, but are money and securities distinguishable particles, or do you just make sure the value of the account is >= the amount that was originally put into the 401k in order to avoid the early withdrawal penalty?

anesde
Posts: 95
Joined: Wed Jan 09, 2019 8:32 am

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by anesde » Tue Oct 29, 2019 4:01 pm

I hear you on timing market vs sitting out, I face the same conundrum. For now I’m accumulating cash (in ££) as my profession makes investing challenging (financial sector, lots of clearance and notification required). I’m not semi-ERE but I do take solace in the fact that I already have investments and don’t need investment returns. This gets me comfortable accumulating cash and I see it as less of timing the market as being prepared for a good opportunity. I’m also betting that the £/$ exchange rate will continue to improve as (if!!) brexit gets clearer.

You are also invested and don’t need investment returns immediately so there’s nothing wrong with holding some cash for a while, even in a retirement account. I wouldn’t sweat it or look to immediately deploy - I’m sure we will have a pullback or even a semblance of a crash/drop within the next few months. It’s not timing the market as much as identifying what you want and the price you’re looking for. A nuanced difference but a difference nonetheless.

2Birds1Stone
Posts: 788
Joined: Thu Nov 19, 2015 11:20 am
Location: Earth

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by 2Birds1Stone » Wed Oct 30, 2019 7:01 am

@ZAFCorrection, I'm pretty sure shares get assigned a specific share ID (at least with Vanguard), and that is used to track your cost basis. I haven't played around with Fidelity as much yet. With Vanguard I can look back and see when I purchased each bundle of VTI or VXUS and see the cost basis for those specific shares. This allows you to harvest capital gains/losses more precisely rather than a FIFO system.

@anesde, that makes sense. Does your professional limit/restrict you from broad market ETF's as well? Or just individual securities? While I am invested, my stock allocation is <50% of total assets now, which is quite low for my age. I don't mind holding a ton of cash in brokerage/taxable accounts and CD's but feel a bit silly wasting tax deferred space with cash sitting in there. I'm trying to figure out what else I could invest in, within the IRA that might produce a more guaranteed return than stocks, but higher than cash. Maybe brokered CD's?

Inspired by c_L's journal, I put my starting numbers (since I'm now officially without earned income moving forward), through various FIRE/ER calculators, and get the following results;

Starting Parameters
$545,000 investable assets
50% Equities, 30% Bonds*, 5% PM's, 5% REIT's
$18,000/yr initial spending
60 Year Retirement
50% of current PIA for SS, @ age 70
0.1% Investment fee's
*I include CD's with bonds

FIRECalc
98.9% Success Rate @ $18,000/yr
85.4% Success Rate @ $20,000/yr
65.2% Success Rate @ $22,000/yr
48.3% Success Rate @ $24,000/yr

cFIREsim
$17,920/yr @ 100% historical Success Rate
$19,500/yr @ 90% historical Success Rate
$20,750/yr @ 80% historical Success Rate

Engaging Data - Survival Calc*
100% Success Rate @ $18,000/yr
86% Success Rate @ $20,000/yr
69% Success Rate @ $22,000/yr
51% Success Rate @ $24,000/yr
0% Spending Flexibility Input used

Portfolio Charts

This one is a bit confusing to me, still. Using the maximum retirement length of 40 years,

Perpetual Withdrawal Rate = 3.8% or $20,710/yr to maintain principal in worst case scenario
Safe Withdrawal Rate = 4.5% or $24,525/yr to not run out of money in worst case scenario

Thoughts

What does this all mean? Not too much, at least in terms of anything actionable. While the first three calculators are pretty close in their results, Tylers Portfolio Charts is wildly optimistic, likely due to the fact that the data only goes back to 1970, and we are using a 40 yr retirement vs. 60 with the others.

It is cool to know that historically, I would be quite alright not earning any income in the future, so long as spending stays around what it's been the past two years. Despite being 35-40 years away from SS, I'm confident that even if they raise FRA by 3 years, AND slash the benefit by 50% my estimates are still valid.

Adamski
Posts: 18
Joined: Wed May 29, 2019 8:35 am

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by Adamski » Wed Oct 30, 2019 12:29 pm

Hi 2Birds1Stone, interesting thread and life experience. I'll have to read through in detail. I am contemplating full or semi ERE in my late 40s as I am approaching lean FIRE target figure, and it is interesting to get other perspectives.

Can you help with a few questions. I am not familiar with some terms, they may be US centric. (I am in the UK.)

What does 5% RMs mean?
50% of PIA for SS? - is that 50% of the US state pension income at aged 70?
Would you be living on mix of investment principal and investment returns from 30-70, then from SS (state pension) from 70+?
Do you plan part time work or return at some point, or are you taking time out of the workplace to decide?

Is "Unemployed" the right term, should it be "Financial Independent", as unemployed would indicate you are available for work, but you are voluntarily without employment. A concept difficult for the outside to get their heads around!

Thanks, Adamski

2Birds1Stone
Posts: 788
Joined: Thu Nov 19, 2015 11:20 am
Location: Earth

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by 2Birds1Stone » Wed Oct 30, 2019 2:09 pm

Howdy! Hope this helps;

5% PMs = Precious Metals, in my case physical Ag/Au bullion
50% of PIA for SS = Principal Insurance Amount. This is how much I would receive in today's dollars if I never worked another day till full retirement age, which under current law is 67. I assume 50% of the amount, and assume they raise FRA by 3 years to 70. Under current law I would get $14,200/yr @ age 67, I assume $7,100 at age 70.
My investments are lumped into buckets. Near term 12-18 months in high yield savings/checking, 7-8 years in CD ladder, and the rest in various retirement accounts. I would keep rolling the CD ladder and using some of the proceeds to live off of, as well as what I have in my taxable brokerage first. Then I would start tapping the tax deferred accounts through a Roth IRA conversion pipeline. Some side hustle income and funemployment is part of the plan too.
Once I get married the household unit is no longer FI based on combined assets/spending. So I guess it's preference on what I should call it. With people in real life, it's just easier to say I'm unemployed, that way they don't ask for money, and can relate more easily. It's definitely voluntary though, no secret there =)

classical_Liberal
Posts: 1038
Joined: Sun Mar 20, 2016 6:05 am

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by classical_Liberal » Wed Oct 30, 2019 2:27 pm

Cfiresim and Portfolio Charts are very interesting in their different results. You are correct that the historical time frames make a huge difference. Equally interesting, is to just look at the data points they have in common (1970+). In Cfiresim this requires you to run shorter timeframes for easier comparison. I assume Cfiresim is using S&P500 returns for it's stock allocation. No clue how it measures it's bond allocation. If I run a 10 or 20 year timeframe, and lump all of my assets together into the correct corresponding classes that cfiresim allows for, there are significantly different results in the 1970+ timeframe. This is because the subclasses of assets really do matter in a true noncorelation strategy. SWR can increase dramatically in the same 1970+ timeframes.

Adamski
Posts: 18
Joined: Wed May 29, 2019 8:35 am

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by Adamski » Thu Oct 31, 2019 3:47 am

Thanks, that is making more sense to me now. I think your are correct that would FRA would be raised as people are living longer. I think very conservative to assume 50% of the amount.
You seem to have a lower risk portfolio, which is similar to my portfolio risk profile as well.
Fun employment, side hustle sounds good to keep the income flowing in.

2Birds1Stone
Posts: 788
Joined: Thu Nov 19, 2015 11:20 am
Location: Earth

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by 2Birds1Stone » Fri Nov 01, 2019 7:12 am

October Financial Update

Combined Assets
$675,000 (+$25,200)

Combined Spending
October - $2,783
Trailing Twelve Months - $34,080

Combined Income
$19,278 Net

Savings Rate
85.5%

Current Withdrawal Rate
5.05% (Portfolio = 19.8X annual expenses)

Activity
34.6 Miles Ran (10 miles last month)
250.1 miles biked (236 MTB (143 last month) 14 Road (95 last month))
76 miles walked (96 miles last month)
11 weigh-lifting sessions (9 last month)
3.2 lbs gained (204.5 on 7 day average)

Musings

Individually @ $17,128 - TTM Spending, 32.6X annual expenses, and a 3.1% WR

It was a 3 paycheck month for SO, and I got my lump sum payout from ex-employer, which made it quite a high income month....that's cool and all, but what's REALLY cool is that our trailing twelve month household spending is the lowest it's ever been, $34k! That's HUGE. We could earn that without much effort even if somehow our portfolio went to $0. In some parts of the country that might not be impressive, but we are in a HCOL area where the median HH income is ~$100k/yr and median HH spend is ~$90k/yr.

We also beat our gross income from 2018 already, and I won't be working the last two months of the year. Going to be REALLY weird not earning anything next year.

Outside of finances, the activity levels were overall up from last month, and somehow I managed to gain weight. The MTB mileage increased drastically, and running went up as well. I've definitely been eating way more to recover, and it shows on the scale. Still feel good in the 204-205 lb range.

The biggest thing left before the trip is to sell my car, which I listed thanks to [member=11787]neo von retorch[/member]'s nudge.

classical_Liberal
Posts: 1038
Joined: Sun Mar 20, 2016 6:05 am

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by classical_Liberal » Fri Nov 01, 2019 1:50 pm

2Birds1Stone wrote:
Fri Nov 01, 2019 7:12 am
Combined Spending
Trailing Twelve Months - $34,080...
Individually @ $17,128
The numbers don't lie, the fiance is beating your lazy ass! :lol: lucky man!

2Birds1Stone
Posts: 788
Joined: Thu Nov 19, 2015 11:20 am
Location: Earth

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by 2Birds1Stone » Tue Nov 05, 2019 7:06 am

@c_L, she sure is! She's totally got the spending side of the equation down, it's the income that is prohibiting her from having an insanely high savings rate. All good, I'm still extremely impressed she's at ~7.5X annual expenses individually at the age of 28. This upcoming year of lost income and continued spending will take a chunk out of that, but she's going into it with eyes wide open.

This month is off to a rough start. I took a spill riding my MTB on Saturday. The trails were covered in fallen leaves. I took a sweeping turn rather fast, and both my front and rear tires understeered a bit, forcing me to go wide and hit a tree with my left side at speed. I have a few deep bone bruises and some sore muscles, but nothing broken. The impact to my left handlebar sent my flying over the bike and somehow I managed to land without breaking anything. That's putting a damper on my training to start November, and I will be lucky to maintain my fitness level over the next 2.5 weeks till the big race.

November being my first month without a paycheck, I decided to peruse the web and see if there is any low hanging fruit to make some quick money. I turned to bank bonuses and CC rewards, as that's something I'm quite familiar with. I ended up signing up for a chase checking account, which offers $300 after a direct deposit of any amount hits the account. You can trigger the DD without actually having one, by initiating an ACH trasnfer from an outside bank. Some banks work, while others don't. doctorofcredit.com has data points on which ACH's work for which banks. I have the option of using Santander or Vanguard. Trying V first, and if that doesn't work I need to get $5 into my S account to push into Chase. Easy $300 for 15-20 minutes of work.

The other easy money I found was by signing up for a SoFi Money checking account using a friends referral link. SoFi is giving you $50 for opening a checking account and funding it with $100. Then you have the ability to refer friends and get a $100 bonus per referral. I referred one of my friends and my SO, for a quick $250. If anyone based in the USA would like to help me out and take advantage of this offer, just PM me and I will give you my link. The account itself is pretty kick ass, no fees/minimums, pays 1.6% APY which is the highest I've ever seen for checking, and they reimburse ATM fees charged by other banks, internationally, much like the Schwab account I just opened for the upcoming trip.

Since I'm only planning on using 3% of investable assets as a spending baseline (~$1350), this extra "income" can cover any extras for Nov/Dec, which tend to be a bit higher due to holidays, anniversary, etc.

classical_Liberal
Posts: 1038
Joined: Sun Mar 20, 2016 6:05 am

Re: Semi-ERE Experiment - Month 5 - Unemployed, Now What?

Post by classical_Liberal » Fri Nov 08, 2019 6:22 pm

Well, the good news is that if you keep crashing, you can probably lower your life expectancy in your financial models to make up for the increased medical costs.

In all seriousness, be careful!!

Post Reply