Enough’s enough.

I lasted almost a year. The stateside position, a.k.a the Dream Job, has literally put me to sleep. It’s so boring. Intellectually under-stimulating. Dangerous even.

What kills me is that it’s literally a waste of my time. I leave the house at 5:10am and don’t get to the job site until 7:15am, after eighty-five miles of highway and mountain pass driving. Granted we carpool fifty miles of the trip, but that hardly makes up for anything.

After about ten minutes of equipment set up and checks, I’m back inside making a delicious cup of coffee from my AeroPress. Hurry up and wait.

By 9am, most often later, we’re taxiing for takeoff. Maybe I’ll get an hour of flight time.

Or, maybe not.

By 3pm we’re debriefing a training mission I had very little to do with. But I accomplished a lot that day. One day I spent the whole day researching airport transfers from Geneva to Chamonix. All day. I wrote up a nice compare / contrast document to share with my travel buddies for our upcoming trip. Other days I simply read library books off and on as the noise level allows. My colleagues were busy finding the end of YouTube, headphones optional.

Time to drive 85 miles back home. Rinse and repeat.

Meanwhile, there is a strong Meetup.com presence here in Salt Lake City. One of the groups I like does weeknight hikes that start around 6pm and end well after 8pm. Considering that, legally, I need eight hours of uninterrupted rest in order to fly the next day, I would miss out on these great group hikes. Most of them, anyway. That’s just one example of something I’m trading for money.

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The trailhead is less than three miles from my apartment.

 

So is a few hours of flight time per week worth the trouble?

No, no it’s not. Enough’s enough. Time for a leave of absence.

“I’m not inclined to grant this request…If vacation time off is not enough of a break there are few options that are viable” my manager said in reply to my unofficial inquiry.

Hmm. Okay then. Things are getting a little more serious now. He’s on vacation himself, so we won’t get to chat until after mid May.

Cue the FU Money! Let’s plan ahead for my voluntary termination. Clearly it’s time to move on, but there are things to get in order first. 

Set aside cash for living expenses.

For the first time ever, I sold shares to fund approximately one year of living expenses. About $30k worth.

Enroll in marketplace healthcare

My work benefits stop on my termination date, so I’ll need to enroll in marketplace healthcare. A quick look at healthcare.gov shows I can get a bronze health plan for less than $250 a month, and dental around $20 per month. These costs are very similar to COBRA, although admittedly my employer sponsored healthcare is far superior. Nonetheless, I’ll enroll in new coverage after I get the official termination date.

Roll over 401k to Vanguard

This will be super easy. And as a bonus, lower overall investment costs! I can’t wait to do it.

Review and revise the Super Plan

I’ll review and update the numbers, plan, and makes some overall adjustments.

So is this me starting early retirement, or simply me needing a change? What’s the plan?

It doesn’t seem like a good time to test the sequence of returns risk, but I’m also not stuck on not ever working again. I just don’t want to work in the same soul-sucking capacity of this last year. I just started a 1 year lease on a sweet apartment, so I’m going to stick around town until it is up around April 2018. During that time I’m going to continue living like my initial 3 months off. Paragliding, trail/road running, meeting new people, and focusing on my health. It’s similar to Option #2, but without a leave of absence.

Options

Well, I’m back in the US. Eight years of doing this job has left me well off financially, but it’s taken it’s toll. I’m ready for a break!

I’m taking a ton of PTO – March through mid May – to unwind, visit family, and attend a wedding. After that it would be back to the same old grind, only this time with a crap-tastic commute. Or not.

It’s March of 2016 and I’m turning 30 years old in a very good position: I’ve got a million invested, I’m at an ideal weight and in relatively good physical fitness, and I have choices. I don’t really want to have that insane commute, so let’s explore some options.

 

Option #1 – Initiate the SuperPlan

Quit the job and consider myself FIRE’d. This option is the most ballsy, yet has a statistically high success rate. In accordance with the SuperPlan, I’d work through the fall and resign in December. This sounds good, but I’m having a hard time not investing the $50k cash buffer for years 1-5. That same $50k, if invested, could pay me $1k per year, every year in dividends alone if the yield remains around 2%. Plus growth.

I could do a lot with $1,000. Plane tickets to see family. A season pass to go snowboarding. All kinds of things.

Also, I’m a little uncertain about kicking off early retirement in Salt Lake City. I dunno. Something about being so close to Former Employer.

 

Option #2 – The Gap Year

I could take a leave of absence for up to a year and test out early retirement. Basically have $15k in cash set aside, and turn on the dividend faucet to pay for the rest. This would do a few things:

  1. Further test my $2,500/month spend rate
  2. Get used to planning around the quarterly dividend & interest payments
  3. Allow me to jump back into work if SHTF, or I feel I miss the structured nature of a day job (yeah right).

 

Option #3 – Continue working the same job because I’m a big scaredy-cat.

Since the commute is outrageous, the only logical move forward in this career is to say f**k it and deploy once again. I’ve already calculated that another year gives me an additional $350 per month, forever, but it really isn’t the best option when I think back to how unhappy as I was most of the time during the last deployment. Besides, I think I have enough money, so going after more would be greedy.

There’s also a non-deployable position open here instructing the new hires. Maybe I’ll just do One More Year stateside and deal with the aforementioned commute.

Fear and greed. Such nasty things.

 

Option #4 – Coolworks.com

Coolworks.com is an awesome website that shows jobs postings for non-cubicle types. I often dream of being able to go snowboarding on a regular basis like I used to ten years ago, so I select “Ski Resort Jobs” and see what’s open at the moment.

For example, I could be a Gondola Operator at Telluride in Colorado. Operate a gondola for $14/hr for at least 20hrs per week and get a free season pass? That doesn’t sound too bad! I could even go full-time, four days a week and continue to pad that 401(k), get employer health insurance, and receive other benefits.

 

So what’s it gonna be? Time will tell. But for now, vacation!

The opportunity cost of One More Year

Free housing at B Hut Village!

Free housing at B Hut Village!

Anyone considering leaving a perfectly good job really ought to have a plan. Or at least know what they are giving up, right? 

As my FIRE date approaches, I’m asking myself these types of questions. 

Will leaving a $75,000/year job end up being a terrible decision?

What will I lose in the long run?

Will future me be happy for this decision or will I be kicking myself for it?

These are good questions, but for me, the more important one is,

What will I gain?

Background

I’m working in a high tech field making right around $75,000 per year working in the states. If I deploy instead of work stateside (this is usually 50% of the time) I make about 2.5x my stateside pay. We’ll call that $187,500. Big difference. 

I want to weigh, financially, where I stand right right now and what One More Year would do for me.

The Stash

My FI number from The SuperPlan is $1,000,000. I’ll service an ultra safe 3% withdrawal rate that will provide $2,500 per month. While my FI number has come and gone (thanks Mr. Market),  I’m still working and expecting another ~$50,000 saved before the Quit Date. This should put me close enough.

Nick catches OMY fever. 

Let’s say my FI date comes and I’m just not ready to let go. I’m scared, doubtful, whatever the case may be. Heck with it, I’ll work just one more year!

One More Year, stateside pay of about $75,000

First, let’s subtract the tax deductible 401(k) contribution, pay taxes, and see what’s left. 

Forbes posted 2016 tax brackets online, and my taxable wages would be $57,000 after the 401(k) contribution.

As a single filer I would pay $10,021. Plus, Utah State Tax of a flat 5% leads me to owe them about $2,850. In total, I would owe around $12,871.

My $75,000 wage, minus taxes, and less the 401(k) contribution leaves me with $44,129. 

Assuming I stuck with my proposed FIRE budget (under the 250% Modified Adjusted Gross Income scenario) of $29,242 annual spend, I’m left with $14,887.

$14,887 to invest, or more likely to blow on a car to drive myself to work in the first place.

If I did the smart thing and invest it, it would only increase my early retirement spending by $37 bucks a month. I don’t know about you, but working another year stateside for an extra $37 bucks a month just isn’t worth it to me.

One More Year, deployed pay of about $187,500

I’ll tell you right now, this scenario actually get’s me somewhere. But is it worth it?

Again, let’s subtract the tax deductible 401(k) contribution, pay taxes, and see what’s left. 

Luckily, due to the Foreign Earned Income Exclusion, my federal taxable income would be $68,200, putting the bill at $12,821. The state doesn’t care about FEIE, so that would be $8,475 due to Utah, for a total tax bill of $21,296. 

This leaves me with $148,204 of net income. I’ll have a vacation during the year, and spend some on mail order goodies.

Obviously I won’t have the same expenses as my stateside scenario (free housing!), so I will actually be able to bank around $140,000.

Again, if I was smart and invested it, it would increase my early retirement spending by $350 per  month! Forever! That’s relatively significant. Hmm…

But wait!

Haven’t I figured out what enough is? Do I really need an extra $350 per month of passive income? Does this change anything?

The important question to address is, 

How would another $4,200/year effect my Affordable Care Act balancing act?

Let’s revisit the ACA scenarios in the Taxes and Insurance section of The SuperPlan and look at Roth conversions.

Scenario #1  – Was $14,000, now only $9,800 room to convert. 

Scenario #2 – Was $20,342, now just $16,142 room to convert. 

Scenario #3 – Was $29,760, still $25,560 room to convert. 

Since I’m leaning heavily on the Roth pipeline to fund early retirement, Scenario #1 is no longer an attractive option unless my AGI was a lot less than calculated.

OMY syndrome is not only real, it can also negatively effect your early retirement plan! And that’s just one more year. If I felt I needed a lot more money to be comfortable, I would likely Fall Off The Affordable Care Act Subsidy Cliffs!

Alright, so I’m done exploring the financial aspect of OMY. Let’s see what I’m trading $350 a month for. 

Note that I get 1 month away from the job site in a 12 month deployment.

I lose out on: 11 months of free housing, free military food, free gym access, $166,204 of potential income, and the worst ISP known to man.

I gain: To name a few… 11 months of clean, geographically attractive housing. 72 hours of time each week. Fresh produce. Grocery stores! Beer!! Restful sleep. The great outdoors. Full, uninterrupted seasons. Recreational activities galore. Pretty ladies ALL OVER THE PLACE. A social life outside of work colleagues. Intentional living. Flexibility in location. No more incoming mortar alarms. 

That pretty much sums it up for me. Providing my $2,500/month spend rate in 2016 is acceptable, One More Year just isn’t worth it!