Friday, September 08, 2017

It's Done

In my last few posts, I was working my way towards a big life change... and now I've taken the next big step. I quit my job! It was both a big step and strangely anti-climactic, since I hadn't been at that job for very long and had never really settled into it in some ways. Now I just wish I'd done it sooner so I could have had more time off during the summer, but it's actually kind of nice to go into vacation mode just as everyone else is going back to school/work.


This is going to be weird, though. I haven't been unemployed since I was 21! What am I going to do with myself? More blogging, I hope! And I do intend to find other work, but at the moment we're working on moving out of NYC, which seems like a job unto itself. The main thing I'm going to have to adjust to is seeing negative numbers in my income/expense tracking. I will not be saving money in the short term. I will have to be very strict about sticking to a budget, but spending some of my savings is all part of the master plan. It is going to be painful over the next few months as we'll have higher household expenses while we deal with relocating. But afterwards, our ongoing expenses will be lower. And Sweetie will have a lot more liquid cash after the NY apartment is sold. We are pretty sure that if we play our cards right, we don't really ever have to have jobs again, though we do want to find other work, preferably part-time.

Meanwhile, I keep hearing of more and more people who are also leaving NYC-- some are moving to totally new cities for new jobs, some are moving back to their home towns to be closer to parents, some are doing reverse commutes to jobs outside NYC and planning to fully move later. Others are also leaping into the void of uncertainty: one guy quit his job, sold all his stuff, and moved to Berlin! There is a sense that the city has changed so much from when we ourselves were the young new arrivals, but maybe every new generation feels that NYC is becoming just an over-developed playground for the wealthy and their children and just isn't as fun anymore...

But for me, what I'm doing now feels exciting, inspiring, and a little scary. It's rejuvenating, perhaps, to throw off my very stable routines and enter a phase of disruption and reinvention-- though I suppose some people wouldn't think that a middle-aged couple moving to the suburbs is that adventurous! We shall see...


Monday, June 12, 2017

Health Insurance

Another important point brought up by a commenter on a recent post— how am I going to get health insurance if I leave my job? The short answer is that I’m going to pay through the nose for it!

This really is the crappiest part of trying to contemplate a sabbatical, or early retirement. I currently get pretty good health insurance through my employer, including coverage for Sweetie. I pay about $260 a month to cover our dental and medical insurance. I can see from my paystub that the employer covered portion of our insurance costs is about $1000 additional. Going on COBRA will also add some sort of administrative fee, so I’m budgeting that it will cost us $1,400 a month to pay for our insurance.

COBRA only lasts up to 18 months, so after that, assuming we didn’t have jobs yet, we’d have to buy insurance in the marketplace. I went to the NY State website to see what the costs would be under Obamacare. It looks like we make too much money from interest and dividends alone to qualify for any subsidies, so our costs for a “bronze” medical and dental plan for 2 people would be around $800 a month. “Silver” would be about $950, and “gold” would be around $1,150. Given that we are both currently quite healthy and don’t have any prescriptions we take regularly, it probably makes sense for us to try a bronze plan— this would have a really high deductible, so we’d be mainly covering ourselves for something catastrophic, and we have the cash to pay a big out-of-pocket maximum if we get hit by a bus. But that could be over $14,000 worth of charges we’d have to pay before the insurance kicks in. So maybe it’s worth it to pay about $350 more per month for the lower copays and out of pocket caps that we’d get with a gold plan?

Who knows… either way the whole system sucks. I know so many people from other countries that have single-payer systems, and they are perfectly happy with them and think that what we have to pay here is insane. Every time I see a drug ad on TV, I feel outraged that millions of dollars are being spent on all this pointless marketing, though I know that’s not the only reason healthcare costs are high. And of course, my numbers here assume that the Affordable Care Act isn’t completely destroyed by the Republicans. If the protection for people with pre-existing conditions goes away, I’ll be screwed, as I do have one hereditary thing that doesn’t require active treatment now, but would be considered a pre-existing condition and could potentially cause me to be charged a lot more for insurance in the future, or denied coverage for certain things.

So will we really be paying an amount equivalent to the rent on a small outer-borough apartment just to get health insurance? I guess we will, at least for a while. I’ve been googling “part time jobs with benefits” as that would be an ideal scenario, but I’m not sure we’ll get that lucky…

Wednesday, June 07, 2017

Remote Work

Several commenters have asked if I could move out of NYC and work remotely at my current job. I have definitely thought about this option. Unfortunately, in my current position, it would be a non-starter. There is certainly plenty of work I can do from home, but there are lots of meetings and face-time is required (the old-fashioned kind, not the Apple program!). Someone who works for me actually asked to work remotely and though I sympathized and wanted to say yes, my boss wanted to hold the line and say no. It’s seen as a productivity issue, and a fairness issue, I guess. There are some jobs where it may make sense, and some where it would be hard to measure productivity, so although there are some people who work remotely, they often say no, as they’re worried that the more they say yes, the more they’ll have to say yes to everyone just to be fair, and then the office would be a ghost town.

A lot of companies seem to want their employees to work remotely, so as to save on expensive office real estate. But then there is the question of office culture, team spirit, etc. I would certainly be interested in trying to work from home, but it would probably have to be a different job, with a different company. Or I could do some freelance consulting. I would love to have a flexible schedule, where I could bum around in jeans all day instead of having to get dressed up and commute to an office. But I do also worry a bit about whether my temperament is suited to it. When I have a day off, I can laze around for hours, getting distracted by solitaire and Facebook and reading the newspaper. I might not be disciplined enough to work from home. I think I’d also miss the social aspects of going to an office. Some of the suburban/rural areas we’ve considered moving to are actually within what many people consider commuting range— I work with people who travel up to 1.5-2 hours each way, so that’s a pretty wide radius around the city. But that kind of commute would just spoil any quality of life gains we’d get by moving, and those Metro North train passes are pricey.

So that leaves me thinking about what I could do for work from home, or locally wherever we end up living. I’m not feeling pressured to make a ton of money, so theoretically I could have a lot of options, but A) I’d have to figure out what those options are, and B) I might face some age discrimination. I’m not afraid to do menial work, and I did plenty of it when I was younger, but now that I’m pushing 50, I wonder if I’d be taken seriously as an applicant. I’m tempted to just apply for a bunch of random jobs to see if I could get one— kind of as an experiment in what today’s job market really is like. But I would also feel bad if I got a job that I didn’t really want for the longer term, but someone else might have really needed. So at least in the immediate future, I think I will try to focus on doing some networking in my industry to find out more about remote and freelance job opportunities and also try to talk to friends in other industries about what other kinds of professional jobs my skills would lend themselves to. But whether or not I find some other job, I’m becoming more and more certain that I’m going to quit and some kind of big change is coming!

Tuesday, May 30, 2017

How Do I Want to Live?

This is always the key question in thinking about retirement. How do I want to live, where do I want to live, what will I be doing, and what's it all going to cost?
I'm still grinding away at my job, with some good days and some bad days. Still pretty stressed. Still spending a lot of time looking at retirement calculations, and also real estate sites. Because it's suddenly seeming like real estate is where the answer will be found.

Ever since I started writing this blog, one of my key assumptions has been that I will always want to live in NYC. I love it here. It has become home. It's where many of my friends are (though some of my best friends are elsewhere), it is where I have work connections and where most of the jobs in my industry are based. I love the wealth of cultural institutions, even if I don't always take advantage of them. I just like the vibe of the streets-- there is always someone or something interesting to look at. You can walk and take public transportation to do so many things. Although there is anonymity in the city, neighbors still look after each other, and in some ways, NYC is a great place to age-- you can get things delivered, take taxis, there are doctors and hospitals galore, lots of buildings with elevators and doormen-- all things that make life a little easier for elderly people.

The flip side is that it's freaking expensive! If you really want to enjoy the best of what NYC has to offer, it's going to cost you a lot. My lifestyle has always been kind of low-to-middle in terms of NYC standards-- I've mostly lived outside Manhattan, moving further and further as real estate prices increased. I've lived in tiny apartments with no services. I've tried to keep my expenses in check. In more recent years, that has changed a bit due to Sweetie, who already lived in a nicer doorman building and had a car and a cleaning lady coming in weekly. As my salary increased, I felt comfortable taking on my share of the cost for that lifestyle, even if it wasn't what I might have chosen on my own. The cleaning lady is now only every other week but we live quite luxuriously, I think. A lawyer or a hedge-funder might not be impressed, but my 10-years-ago self would be!

So now the question is "what are we willing to give up?" The more we talk about it, the more we realize we're willing to change things quite a bit. Though we love the city, we've started to feel a bit annoyed by all the noise and congestion from so much overdevelopment-- new buildings going up, creating more density, more crowds. Meanwhile our own apartment is kind of crumbling-- Sweetie's owned it for a long time and has done some renovations over the years but more are needed. Add in some new neighbors that are kind of obnoxious, and suddenly we're thinking maybe we should just move so we don't have to deal with all this crap. But to where?

We've started looking at some areas along the Metro-North train lines in NY state and Connecticut. We've looked a little in Hoboken and Jersey City. We've looked at far northern parts of Manhattan and even in the Bronx. Most of this has been idle on-line searching so far but we've seen a few places in person at open houses. It's hard not to pull up stakes immediately when you visit a beautiful newly-built house with twice as much square footage as your current apartment, a washer/dryer, garage, and a terrace with partial water views that we could own mortgage-free with lower monthly costs than the current apartment. The only downside would be my commute being close to 2 hours each way! If I wasn't working the commute wouldn't be an issue, of course, but there were some other issues we didn't love about the location. We've also discovered that property taxes can be surprising-- in NJ and CT, they are often really high vs. NYC, so something that looks like a bargain might not be.

So this question of how we want to live is yet to be answered, but we're looking at a lot more possibilities. We could come into NYC for day trips and still enjoy the culture. We could even stay in a hotel once in a while for far less than it costs us to live here. And if we manage our expenses well enough in the next decade or so, we'd probably be able to afford to move back into the city at some later time, even have a small pied-a-terre. But the bottom line is we're starting to figure out possible budgets that might really allow us not to work at all from now on. Living in NYC is the biggest expense we can cut... I never thought we'd be willing to do it, but it could make all the difference.

Monday, May 08, 2017

More Thinking About Early Retirement

On the last post, bethh commented:

"I'm curious how you decided to set whatever goal it is that you have for retirement - is it salary times x, or spending times 30 years, or what? I feel pretty sure that if I were in your shoes I'd be retired already!" 
This kind of got me thinking about whether I could indeed be retired already. With about $1.2 million in assets and no debt, I already have a lot more money than many people do when they retire. But I'm still under 50, so I have a long window of time that money has to cover. At some point years ago, I had a somewhat arbitrary number of $2 million as my retirement savings goal, which I guess I had calculated would cover what I thought would be my desired retirement lifestyle. I can't remember exactly what math I did at the time-- maybe I should search my own blog archives to help my memory!
Some people use the rule of having at least 25x what your annual spending will be, on the theory that you can safely withdraw about 4% of your savings each year without eating into it too much, since it would hopefully have investment gains of more than 4% each year.
You also have to think about what "retirement" really means-- does it mean you don't work at all? Are you going to want to fill all that spare time with expensive hobbies and travel? Or are you willing to downshift to some other sort of work that will bring in some income, even if it's not much?
I've played around with lots of scenarios in a retirement calculator-- retiring now, retiring later, having a low income now and retiring in a few years, etc. I always felt like I was more or less on track but retiring early never seemed comfortably within reach based on my current lifestyle.
But here's something that I never added to the scenario: Sweetie.
One night when I was noodling around with all this, Sweetie said "does it let you input another person? You know, we're in this together..."
It's not that I didn't think we were in it together, but actually running the numbers this way made a huge difference. Sweetie owns real estate, and has savings, and a small mortgage. After being unemployed for a couple of years, Sweetie got a job that pays a low salary that covers some of our expenses. More importantly, at age 65, Sweetie will get a good old-fashioned defined benefit pension. And someday, Sweetie will most likely inherit a few hundred thousand dollars unless the family circumstances drastically change.
Plug all that in, and boom, we can both retire now.
Of course, this does not make me totally comfortable. We've talked about getting married at some point, but we aren't yet. Our finances are totally separate except for a token joint checking account with $2000 in it. And I just have this independence thing ingrained in me somehow-- the idea of being supported by someone else is just bizarre! But given how miserable I've been at my job, this is now making me think A LOT about quitting.  That may not be "retirement" just yet, but it's pretty amazing to realize that I may have the freedom to just walk away and not worry too much about what my next source of income is. I could try a new career, try doing consulting work, or just step back into a lower level job with way less responsibility. I haven't had more than a 2 week vacation since I was 22, and the idea of just having some time off is very appealing. Once you get this kind of thing in your head, it's hard to stop thinking about it...
So much in the world is uncertain right now-- would it be insane to just walk away from a secure six-figure job??

Saturday, January 07, 2017

Catching up on 2016

A few notes as I do my year-end accounting for 2016. 

The first thing I dug into was the trusts I manage for my mom. Their return was about 9% last year and I was about to pay Mom about $8,000 in dividends. I feel pretty good about this, especially after a shaky start in the first few months I was managing her money when the market was down and I was afraid she wouldn’t understand that it wasn’t my fault! I am also a bit less nervous about my mom’s finances since my grandparents both died in 2016 and she does not have to contribute to their nursing home costs anymore, which was a big expense.

My own personal investment accounts are a bit more aggressive and using the way E*Trade calculates returns, I actually beat the S&P 500 in 2016— 11.4% returns in one account, 10.73% in the other, vs. 9.53% for S&P 500.

I earned more money this year as a result of my new job, and decent investment returns. My total income including salary, bonus, investment income and other odds and ends such as employer contributions to 401k was over $214,000, vs about $188,000 for 2015. I also spent more on various things— food, wine, clothes and a few other small pleasures, but also taxes, as those increased when my income went up. But my total spending only went up by about $6,500, so my net savings for the year ended up being almost $85,000, vs about $65k last year.

I am thinking more and more about how to retire early, or at least downshift to a less stressful job. I like making more money, but it has come with a TON of stress and I’m not sure it’s worth it. Maybe I’ll eventually feel more comfortable in this position, but for these first few months, I’ve been struggling and really not feeling confident that it will ever get better. I’d love to quit, but I’m not ready to admit failure, and I keep telling myself that the longer I stick it out, the earlier I can retire! 

My net worth was about $1.17 million at the end of 2016. I’m on the right track for my retirement goals, but not so much so that I can totally relax. I’ve played around with a lot of scenarios in a retirement calculator— the good news is that it does seem like I’d be able to retire at least a few years early, even if I go back to making somewhat less. If I was willing to move to a different part of the US with a lower cost of living and make some big changes to my lifestyle, I could probably retire tomorrow if I felt like it. But I’m not willing to do that just yet, and who knows what the next few years will bring, in terms of my own career, my family, and the political and economic uncertainty in our country.


2016 was a pretty shitty year. It was bad enough that David Bowie, Prince, and Sharon Jones died, not to mention various other iconic celebrities. I lost some dear friends and beloved family members, which of course was more important to me, and I lost a lot of faith in American democracy in seeing Donald Trump elected President. In most other ways, I am happy, pretty healthy, and generally feel incredibly lucky that I have the life I do. When I started this blog, I still thought of myself as “young”— now I’m middle-aged! It’s weird to feel like I’m shifting into a new attitude towards the future, at exactly the point when the future looks bleak in some ways. But I still keep thinking “onward and upward!” Wishing you all, dear loyal readers, the very very best and a happy New Year!

Tuesday, August 23, 2016

2015 Income and Expenses

I never recapped last year's income and expenses, so here's a very simplified version:


Salary and bonus and 401k match $144,061
Investment income and interest $42,515
Gift rec'd $100
Blog income (net of expenses) $1,018


Housing incl. utilities, phone, internet and other household expense $26,465
Food and liquor $14,881
Entertainment & subscriptions $1,911
Charity $707
Clothing $2,802
Education $1,347
Gifts given $1,753
Gym $2,389
Medical/dental $5,679
Travel (incl vacation) $5,244
Taxes (Payroll deductions and payment of 2014 taxes owed) $55,482
Other misc $4,441


Net Savings $64,594

A few observations:
I continue to be amazed at how much income I get from my investments alone. It is more than Sweetie's salary at the moment! Every time I see that investment income, it is another reminder of how important it is to save money and invest it wisely.
Food and liquor is very high, but I cover all of that for both Sweetie and me. We eat dinner out from time to time, but not all that often. We've been using Blue Apron for a couple of years to encourage us to cook at home more. Blue Apron isn't super cheap, but it's cheaper than takeout or eat-in restaurant meals. Where I've been splurging a wee bit is on lunch, sometimes spending over $10 by going to a more upscale place and buying a drink instead of just having water from a cooler in the office.
Gym-- I pay in advance for 2 years at a time, so the true annual cost is only half this amount.
Medical/dental includes Sweetie's coverage, and an expensive crown.
Taxes-- I owed taxes in 2014 due to the extra income I had from selling my condo, so that was a hit this year.
Other miscellaneous includes things like haircuts, art supplies, postage, etc.

I saved 34% of my gross income, which is good, and I never particularly felt like I was having to make an effort to save-- if anything it's been the opposite, feeling like I could give myself permission to spend a little extra from time to time. But I try to keep that feeling in check! I am thinking a lot about early retirement and trying to balance that against enjoying life now. Always a tough question!