The Intersection of FIRE and Disney

[SouthFayetteFan]

3. Once you reach financial independence you may discover that the freedom to work a job you love means that you don't retire. Or that someone is willing to pay you very well for working just a little.

This is what I think people are truly chasing when chasing FIRE. The further along the path I get, the more emboldened I feel. A couple examples:

• They moved my dept from nice offices to cubes in our building in 2017. I didn't like the cube so I just stopped going in and started working from home everyday except for the 1 day a week we have our in office meetings. Some of my co-workers already had arrangements to work in a branch on certain days so my move wasn't as crazy as it sounds. Some of my co-workers did ask how I could just do that...my response..."Are they really gonna fire me over that...and if they do, oh well, I'l find another job, lol" In the process I gave myself a $3,000 raise by eliminating my parking expense.
• When I lost my Sr. Mgmt position in my prior career back in 2014/2015 (we sold the company unexpectedly) I took a significant pay cut (~20%) to move into a new career path that I love so much now. Because we were saving 50% of our income this wasn't even a big deal at all (and of course now I'm back above where I was then after a few promotions/internal moves).
• I used to be afraid to take vacations close together - that I might "upset" somebody. Now I use all my time each year and exactly whenever I want to use my time. I'm a top performer, and again...they won't fire me over that.

Someday that conversation may be...I want to work from Florida for a month OR I want to move to a 4-day a week schedule. (you can't do that). Ok...well then I'm considering retiring. (WHAT???)

 

[pillow]

The HRA is a new animal to me also - my only advice is to be sure that you have enough cash in the HRA and/or HSA that you could fully fund the out of pocket maximum for him in any given year, in case something did happen (god forbid). We do a high deductible plan, and it works well for us even with a few low-grade health issues that require prescriptions/monitoring for both DH and me. It definitely saves us money over the long term, but we made sure to build up enough cash in the HSA that no matter what we run into, we have the cash to cover a full year's costs so we wouldn't be blindsided if we have a bad year. When I was pregnant, one medication I needed blew through our entire year's deductible for a 3 month supply of medication - I hit my deductible a week into the plan year! Totally worth it (just ask my little one!) but I was glad we had stashed cash to cover it.

I generally don't fund a FSA - its use it or lose it, and unless you know exactly how you will spend the money, its more of a pain than its worth for the cost of a pair of glasses or whatever.

What if something big happens at the end of a plan year - like a car accident or something? One could in theory incur expenses across 2 plan years in a relatively short period of time. So to be safe, we generally like to keep 2 years of out-of-pocket max in cash and/or very very conservative investments. I've just starting moving the excess to an index fund, but I really need to research some other possibilities (maybe self directed?) as I noticed we incurred some type of fee on the investment purchase. Grrr . . . do not like fees!

 

[1st*toright]

What if something big happens at the end of a plan year - like a car accident or something? One could in theory incur expenses across 2 plan years in a relatively short period of time. So to be safe, we generally like to keep 2 years of out-of-pocket max in cash and/or very very conservative investments. I've just starting moving the excess to an index fund, but I really need to research some other possibilities (maybe self directed?) as I noticed we incurred some type of fee on the investment purchase. Grrr . . . do not like fees!

Excellent point! 2 years really is a better answer than one - we have more than one year socked away now, but I remember how much better I felt once we hit that "one year fully covered" point, which is more than the amount you're allowed to contribute in one year for our plan (including all coinsurance etc. once the deductible is met). I'm all about lowering my taxable income, so I contribute the max every year. And I just went in and invested some of our HSA - used the "self directed" plan so that we aren't incurring any fees and it stated that they don't charge any fees on trades or anything, so that should be good. I also filed my dependent care reimbursement for the year (the amount we pay for afterschool care comes out pre-tax, I let it sit there all year, then move it into our 529).

 

[crisi]

This is what I think people are truly chasing when chasing FIRE. The further along the path I get, the more emboldened I feel. A couple examples:

To some extent, we've always had that. We were a two income couple who could easily live off either income. And there is a way your employer treats you when they realize you are less dependent on them then they are on you. But getting to that freedom where both of us could do it was extra nice. We can both do our current jobs from anywhere - and he travels for his - so last year we got to spend ten days in England and this year will be in Africa and Australia. My job more than pays for my plane tickets and side travel. And our kids are college age adults - so there are no longer four plane tickets to buy.

 

[1st*toright]

This is what I think people are truly chasing when chasing FIRE. The further along the path I get, the more emboldened I feel. A couple examples:

• They moved my dept from nice offices to cubes in our building in 2017. I didn't like the cube so I just stopped going in and started working from home everyday except for the 1 day a week we have our in office meetings. Some of my co-workers already had arrangements to work in a branch on certain days so my move wasn't as crazy as it sounds. Some of my co-workers did ask how I could just do that...my response..."Are they really gonna fire me over that...and if they do, oh well, I'l find another job, lol" In the process I gave myself a $3,000 raise by eliminating my parking expense.
• When I lost my Sr. Mgmt position in my prior career back in 2014/2015 (we sold the company unexpectedly) I took a significant pay cut (~20%) to move into a new career path that I love so much now. Because we were saving 50% of our income this wasn't even a big deal at all (and of course now I'm back above where I was then after a few promotions/internal moves).
• I used to be afraid to take vacations close together - that I might "upset" somebody. Now I use all my time each year and exactly whenever I want to use my time. I'm a top performer, and again...they won't fire me over that.

Someday that conversation may be...I want to work from Florida for a month OR I want to move to a 4-day a week schedule. (you can't do that). Ok...well then I'm considering retiring. (WHAT???)

There is no question that your ability to dictate the terms of your employment (therefore eliminating things that annoy you about work) improve when you feel financially secure as well as confident about your value to your employer. I really like what I do, and I would not be easy to replace. I am also the primary breadwinner these days, so I do need a job that pays pretty well. If this job went poof, I would be able to find another, but it would probably be higher stress/require more hours/require more travel, so while I'm valuable to the company, the job is also valuable to me. What that means is that while I can't be totally "my way or the highway" about how I do my job, I do feel free to address stuff that annoys me and make the job work for me. For now, I feel pretty lucky to be doing work I like for a good company - I just got a new boss (old one retired) who I like, respect, and think I can learn from, so no complaints at the moment.

The ultimate goal of FIRE for me is not to retire entirely, but to be able to dictate what kind of work/how much work I want to be doing.

 

[pillow]

Excellent point! 2 years really is a better answer than one - we have more than one year socked away now, but I remember how much better I felt once we hit that "one year fully covered" point, which is more than the amount you're allowed to contribute in one year for our plan (including all coinsurance etc. once the deductible is met). I'm all about lowering my taxable income, so I contribute the max every year. And I just went in and invested some of our HSA - used the "self directed" plan so that we aren't incurring any fees and it stated that they don't charge any fees on trades or anything, so that should be good. I also filed my dependent care reimbursement for the year (the amount we pay for afterschool care comes out pre-tax, I let it sit there all year, then move it into our 529).

Correcting myself . . . I think the fee is a monthly maintenance fee to invest - not a transaction fee. There are lots of options for us to choose from, including a Vanguard index fund, so I'd rather go the easy route and leave funds with the current trustee instead of moving them out to something self directed. I don't need anything else to manage lol!

 

[DisneyMandC]

I just read something that said you can have BOTH an HRA and an HSA . . . https://www.peoplekeep.com/blog/bid/97341/faq-can-i-have-an-hra-and-an-hsa-at-the-same-time

Full disclosure - I know zilch about that source. Just googled cause I was curious.

The HRA is a new animal to me also - my only advice is to be sure that you have enough cash in the HRA and/or HSA that you could fully fund the out of pocket maximum for him in any given year, in case something did happen (god forbid). We do a high deductible plan, and it works well for us even with a few low-grade health issues that require prescriptions/monitoring for both DH and me. It definitely saves us money over the long term, but we made sure to build up enough cash in the HSA that no matter what we run into, we have the cash to cover a full year's costs so we wouldn't be blindsided if we have a bad year. When I was pregnant, one medication I needed blew through our entire year's deductible for a 3 month supply of medication - I hit my deductible a week into the plan year! Totally worth it (just ask my little one!) but I was glad we had stashed cash to cover it.

I generally don't fund a FSA - its use it or lose it, and unless you know exactly how you will spend the money, its more of a pain than its worth for the cost of a pair of glasses or whatever.

I looked, but I don't see where we could do an HRA and HSA. And, unfortunately, the HSA would actually cost us more out of pocket on the very minor medical costs DH does incur. We do have enough in liquid savings to meet our out of pocket maximum if something were to happen though. We also have $740 in our current HRA. I would assume we keep this amount even though the plans are changing from Aetna to Anthem. I don't see how the company could just throw the money away lol.

 

[SouthFayetteFan]

The ultimate goal of FIRE for me is not to retire entirely, but to be able to dictate what kind of work/how much work I want to be doing.

LOVE THIS!!!

 

[piccolopat]

We had sort of planned for it. But my husband is in a job he loves - he works from home. And I fell into a four hour a week work from home job (well, I own half a business) that pays me half of what I made full time. - So we are - or could be - financially independent - at around the age of 50, but didn't end up retiring. We did both end up self employed and consulting for a bit once we hit the point where we didn't "need" jobs - which means sometimes we didn't work, and sometimes we did.

Here are things I know.

1. Life throws big curveballs. We supported my brother in law for a few years when he had terminal cancer back when we both were working full time.
2. If you have kids - college is going to be expensive and anyone with college aged kids with enough money to retire early isn't getting need based financial aid.
3. Once you reach financial independence you may discover that the freedom to work a job you love means that you don't retire. Or that someone is willing to pay you very well for working just a little.
4. Healthcare is nearly impossible to pay for. Its just SO expensive. Specifically U.S. Health Insurance. If you make a small enough amount of money that you qualify for the ACA subsidy - maybe....but the uncertainty around the ACA and increasing healthcare and insurance costs is anxiety producing.
5. It takes a certain mindset to retire early. You can't get to your 401k until 59 1/2, and you won't get Social Security for a LONG time. So you are getting through on your savings - which we did for months and months at a time. But after years of compulsively watching my net worth increase and saving more than I brought in, to switch it around was tough - even though the investments still made more than we spent. I suspect most people end up doing what we did - changing into careers that they find are more fulfilling or less time intensive - rather than truly retiring. And frankly, I think its a better goal.
6. There were things that my husband seemed to buy into when we started the plan, that it turns out he wouldn't give up. Expensive cars tops the list. Should we really retire, he'd have to give up some of those luxuries. Hence the continue to consult on his part. (Mine was anxiety driven - #5 - I didn't have the mindset).

We were never live on a shoestring people - we were "make a lot of money and live a pretty middle class lifestyle" people (except for the expensive cars and vacations).

For your #5, it is my understanding that you can make withdrawals from your 401k as early as age 55 without the usual penalties, though you still pay the taxes. This requires you to first leave the company where you had your 401k (not necessarily retire) and you have to make substantially equal withdrawals for several years following IRS rules.

 

[Haley R]

I'm not sure if anyone feels comfortable answering this, but I'm curious what everyone thinks: How much money is TOO much in your checking account?

 

[tzolkin]

I'm not sure if anyone feels comfortable answering this, but I'm curious what everyone thinks: How much money is TOO much in your checking account?

$15-20k? I just don’t see any reason to have a ton of money sitting in your checking account unless it’s been moved there to have access to it for a specific purpose.

 

[Southernmiss]

I'm not sure if anyone feels comfortable answering this, but I'm curious what everyone thinks: How much money is TOO much in your checking account?

We keep a "buffer" of 1 month basic expenses in our checking account. DH works for the Federal Gov't (he's not under shutdown right now) but if there was one that affected him for a significant period of time, it would be easy for us to maintain everything for a while until his pay picked back up.

It also allows us to make an occasional splurge and float the bill until another payday without overdrawing the account or going into a line of credit, etc.

Just something that DH and i became comfortable with a few years ago.

 

[Haley R]

$15-20k? I just don’t see any reason to have a ton of money sitting in your checking account unless it’s been moved there to have access to it for a specific purpose.

I think we have too much in our checking. We have already maxed out both of our Roth IRAs but that was for last year I guess. We might need to look into investing into something else

 

[Haley R]

We keep a "buffer" of 1 month basic expenses in our checking account. DH works for the Federal Gov't (he's not under shutdown right now) but if there was one that affected him for a significant period of time, it would be easy for us to maintain everything for a while until his pay picked back up.

It also allows us to make an occasional splurge and float the bill until another payday without overdrawing the account or going into a line of credit, etc.

Just something that DH and i became comfortable with a few years ago.

We might need to consider investing it somewhere, opening another bank account with a good bonus, or we could do some updates to our house

 

[QueenIsabella]

I'm not sure if anyone feels comfortable answering this, but I'm curious what everyone thinks: How much money is TOO much in your checking account?

This is really a personal question--people are going to have different comfort levels, just like there are people who can sleep at night with a checking balance of $1.68!

The past few years, when money market accounts were getting near 0% interest, we started having more in checking. Now, interest rates are going up a bit, but DH is out of work, so it still makes sense to us to have a 5-figure checking balance, because we don't know when the next deposit will be. We should be getting a couple 5-figure checks next month--then, I may transfer some to money market.

For normal people, I would say it depends on what you have coming up. If you know there's a property tax bill or a big insurance payment coming up in a month or two, it's probably not worth shifting the money around. It also depends on how easy you can access you "put away" money--we can just write a check from our money market account. If you have to do wire transfers during regular banking hours, I would keep more money accessible.

 

[Jaime4004]

I'm not sure if anyone feels comfortable answering this, but I'm curious what everyone thinks: How much money is TOO much in your checking account?

I keep $1000 buffer in my checking account. Every since that one time, years ago, that I paid a bunch of bills from the wrong account. Oops. Lots of fees there. Otherwise, paychecks go in by direct deposit, bills are paid, and the remaining goes immediately into various savings accounts. No interest in my checking account so no reason to keep it there.

 

[toonaspie]

$15-20k? I just don’t see any reason to have a ton of money sitting in your checking account unless it’s been moved there to have access to it for a specific purpose.

Huh. Well that FINALLY answers a question I was trying to ask in a different thread months ago but was getting bland non specific answers like "enough to survive a few month" etc.

 

[Haley R]

I keep $1000 buffer in my checking account. Every since that one time, years ago, that I paid a bunch of bills from the wrong account. Oops. Lots of fees there. Otherwise, paychecks go in by direct deposit, bills are paid, and the remaining goes immediately into various savings accounts. No interest in my checking account so no reason to keep it there.

We get 3% interest in our checking if you make 10 transactions a month with no minimum spending requirement. It’s super easy to meet the 10 transactions. I think you have to have 20k in the account to get 3% interest? We get about $60-70 a month which is nice

 

[tzolkin]

We get 3% interest in our checking if you make 10 transactions a month with no minimum spending requirement. It’s super easy to meet the 10 transactions. I think you have to have 20k in the account to get 3% interest? We get about $60-70 a month which is nice

Well, this might change people’s answers. Most checking accounts I have seen give like 0.1% interest so there’s no benefit to leaving extra money sitting in that account.

 

[Cruising Engineer]

We get 3% interest in our checking if you make 10 transactions a month with no minimum spending requirement. It’s super easy to meet the 10 transactions. I think you have to have 20k in the account to get 3% interest? We get about $60-70 a month which is nice

What bank or service gives 3% in a checking account, even with a minimum continuous balance? I'm in the "practically zero" interest rate now.