# Seeking advice in countdown to retirement



## james4beach (Nov 15, 2012)

I'm not _really_ retiring. You might call it a sabbatical, but I figure 'retirement' is a familiar term and some of the problems I'm looking at are similar. After working for a stretch of years, I'm going to take a break and pursue some personal projects, leisure, and new business. Ultimately I will return to work in 1-3 years, and then I will work intermittently another 40 years or longer -- hopefully, as long as my mind works. My RRSP stays intact and I will not receive CPP (too young) or a pension. I will be entirely living off my savings. I rent an apartment, have no debts, no kids. I've established a cash buffer with 12 months of living expenses.

*Question 1*

I'm interested in hearing advice from others who've retired or switched from employment to drawing down capital. What kinds of issues have you encountered? One that occurs to me is applying for credit. It must be harder to get a credit card without an employer. I'm also a bit concerned about supplementary medical coverage such as dental/vision. I'd love to hear any thoughts!

*Question 2*

Should I buy short & long term disability insurance? I will need to earn more income in the future. It would be very bad if I had an accident, or develop a condition that prevents me from working again later. I'm an electrical/computer engineer.



_~ Other info ~_

One goal is to exercise more and establish a routine with a greater level of physical activity, which is a good investment towards old age. There are countless other things I want to do... become proficient in French, delve back into artistic pursuits, do more writing, study a new field. There just isn't enough time in life!

I've talked with management at work, figured out an exit timeline and given official notice. My existing cash buffer would get topped up by transferring $ out of my investments (total return approach, while preserving asset allocation). Other than my cash buffer, all the rest of my net worth is deployed in a conservative asset allocation as described here, which has minimal volatility and minimal sequence risk.


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## diharv (Apr 19, 2011)

I would venture a guess that you already have a credit card or two so that would not be taken away after you quit . If not , get one before you take your sabbatical. As long as you pay off your bill every month the cc company won't care if you have a job or not. As for dental/vision, you need to work out the cost of premiums paid versus paying out of pocket for an exam /cleaning . If you don't have a lot of work done or to do and are on basic maintenance , a lot of times I tell my patients its a lot cheaper to just pay out of pocket once a year , like we do with our vision care.


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## james4beach (Nov 15, 2012)

diharv, thanks very much. Do you have a favourite credit card you'd recommend? Mine are PC World Elite and Home Trust Preferred Visa (no foreign exchange fee). If anyone strongly recommends others, I can apply while I still have the job.


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## kcowan (Jul 1, 2010)

James, I have been retired for 17 years. I had the same concerns re Credit Cards. Turns out the only thing they care about is your credit rating. All my current cards have been issued since retiring.

Dental/vision coverage is just a payment plan. Everyone needs it. So the insurance is just a payment plan. i.e. not worth it.

On the subject of fitness, I had three months to decide to continue my corporate keyman insurance. Turns out that my fitness regime after retiring had got me into a lower cost bracket in just 3 months.

Because of your skills, you can get re-employed easily. What you might find is an opportunity to join a startup when you get ready to get engaged again. Then you have a chance to roll the dice, and, if they come up right, your desired lifestyle could become permanent in 10 years.


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## Longtimeago (Aug 8, 2018)

I don't see dental/vision care as an issue. Whether to get insurance for it or not is a personal choice. I never have, always 'self-insure'. Disability could be an issue if something were to happen to you I suppose but whether to get insurance for it or not is again a personal choice. One I would give some thought to is your renting. If you need to move while on your sabbatical, a new landlord might have a problem with you being 'unemployed'. Credit cards, who cares, all you have to do is tell them you have X annual income, they don't care where it comes from as kcowan says. 

A 12 month cash buffer may not be enough if you think you will stay unemployed beyond say 2 years. The ideal would be to not have to draw down your capital obviously. I think a year will probably go by far more quickly than you think. If you are already saying '1-3 years' then it will not be 1 year.

One possibility is to supplement your cash during your sabbatical from full time work. There is no law against that. It can also be interesting in that you aren't looking at it as part of a career but can look at it as part of the new experiences and views of the world you may hope to gain during your sabbatical. For example a school bus driver works 20 hours a week, it's a part time job really. But it is a job that will give you an entirely different perspective on many things. There would still be plenty of free time for exercise and other pursuits.


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## OptsyEagle (Nov 29, 2009)

Yes. I have obtained a credit card and I technically have no retirement income at all. Since I take enough out of RRSPs and my dividends tend to gross up my income somewhat, I have a little ($20K) to put down on the application. In any case, no problem getting a CC. That said, as you know, banks love income. Assets are of secondary importance so if you need a loan, get it before you quit.

Forget about dental/medical insurance. Always will cost much more then your wildest expectation of expenses. They want you to pay for peace of mind, and although that is worth paying for, most of the dental/medical insurers don't give much of it to you, for the money you pay. Their plans are filled with co-payments and maximums, that pretty much take away even piece of mind. Just deal with it yourself. There is no other choice, that is cheaper.

Disability insurance MUST be obtained when you are working. It is designed to protect work income NOW. The maximum is a percentage of your current work income, so without that, your maximum would be $0. That said, should you get it? Well, I know you won't like the price. No where near as cheap as the premium you see taken from your paycheque for group DI. Personal DI, is way more expensive. The negative to you is that when retired (even temporarily) one of your objectives will be to keep your expenses low. DI works against that in a big way. The problem is that one of the reasons it is so expensive is because they pay out a lot of claims. Hence the risk you are worried about is certainly real. So I will let you decide on that. Make sure it is "non-cancelable". That is actually a product category. It just makes sure they cannot reduce the coverage when you are not working. Your new job will be "looking for work". They will still pay if you get disabled when not working if it is non-cancelable. Make sure you also get "regular occupation" protection to ensure they don't force you to do some other job, that you might be able to do, but don't want to do. They don't care if you can or will get that job. If you COULD do it, they say you are no longer disabled. "Reg. Occ." protection ensures that does not happen. With Non-can and Reg. Occ, if you cannot do the job you put down when you applied, they pay. No more questions. No more problems. If you don't have those protections. Lots of questions and definitely problems.

You will need a bigger buffer then 12 months. You need a buffer to at least last as long as your sabbatical OR a bear market, whichever is expected to be over first. Minimum 36 months in this case and the more the merrier. If your bonds are separated from your stocks (not in a combined portfolio like VBAL, etc.) then you could use those during a prolonged bear market, since we our really only trying to outlast the bear market in stocks. Hence portfolios like VBAL etc, do not allow this type of planning. They keep buying more of the stocks that are declining and although this may work out well later, it is a bad idea in the short term, especially if you need the money. In my opinion, one should keep their stocks and bonds separate.

Good luck.


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## cainvest (May 1, 2013)

No answers to your questions but because of the field you're in have you thought of doing part time work remotely? I ask this because I have a friend that does these "sabbaticals" just like you're planning. He (and his wife) traveled South America for 5+ years and all he needed was an occasional internet connection for updates and to get new more work. This could greatly extend your time away and lower the drain on your retirement savings.


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## like_to_retire (Oct 9, 2016)

OptsyEagle said:


> Forget about dental/medical insurance. Always will cost much more then your wildest expectation of expenses. They want you to pay for peace of mind, and although that is worth paying for, most of the dental/medical insurers don't give much of it to you, for the money you pay. Their plans are filled with co-payments and maximums, that pretty much take away even piece of mind. Just deal with it yourself. There is no other choice, that is cheaper.


Agree. I know when I retired, my workplace did not continue dental insurance, so I looked into it. For anyone that has decent teeth it seemed far more expensive than it would ever cost me without insurance. It's worked out so far.



OptsyEagle said:


> You will need a bigger buffer then 12 months. You need a buffer to at least last as long as your sabbatical OR a bear market, whichever is expected to be over first. Minimum 36 months in this case and the more the merrier.


Yeah, seems like a fairly small buffer for plans of perhaps being off for 3 years.



OptsyEagle said:


> If your bonds are separated from your stocks (not in a combined portfolio like VBAL, etc.) then you could use those during a prolonged bear market, since we our really only trying to outlast the bear market in stocks. Hence portfolios like VBAL etc, do not allow this type of planning.


This very point has been on my mind too. Whenever the supporters of _"Total Return"_ retirement income explain the theory of this strategy, it always involves having enough fixed income to get over the bear markets. The bear markets is what strikes fear into those that say they would be selling their stocks while they're depressed. The _"Total Return"_ crowd says, no you leave your stocks alone during those times and get your income from bonds. _"Total Return"_ strategy wouldn't be my strategy, but the explanation makes sense. But then I see recommendations to put everything into an easy one stop shop VBAL ETF. Seems to go against the rules?

ltr


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## james4beach (Nov 15, 2012)

OptsyEagle said:


> You will need a bigger buffer then 12 months. You need a buffer to at least last as long as your sabbatical OR a bear market, whichever is expected to be over first . . . In my opinion, one should keep their stocks and bonds separate.


I do keep stocks and bonds separate in my non-registered accounts for this reason. My non-reg fixed income account (I call this "bonds" in my asset allocation) holds GICs maturing frequently, and individual government bonds which are basically as good as cash as they approach maturity. I took a look at the account just now and within the next 2 years, the amounts maturing add up to 18 months of expenses so it appears I could live just off those alone even if I had zero cash.

IMO this is even better than just holding XBB (which I hold in my RRSP), which mixes all the various maturity bonds together into a soup. Since I hold individual securities non-reg instead of the bond fund, I can actually access the short end of the curve... a unique perk.

Adding up my pure cash buffer, plus these fixed income amounts maturing within 2 years, there's enough to cover 30 months of living expenses without touching equities at all. Do you think I'm looking at this the right way? Does this put me closer to an ideal?


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## james4beach (Nov 15, 2012)

Thanks everyone for these great replies. I am carefully studying all suggestions...



OptsyEagle said:


> Disability insurance MUST be obtained when you are working. It is designed to protect work income NOW. The maximum is a percentage of your current work income, so without that, your maximum would be $0.


Wow, this might be an urgent item I neglected. So are you saying that, if I decide to get disability insurance, I should obtain it *now*... as in, while I am still an employee? My number of remaining days is running thin so I might have to do this ASAP.

Would they still let me buy this, considering that my income today might be 180K and is almost assured to be 0K soon?

Can you suggest insurers I should contact to get some quotes on non-cancelable, regular occupation policies?

I'm a U Waterloo alumni and previously got some good alumni rates through TD Meloche Monnex. Is that a place that might sell this kind of thing?


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## OptsyEagle (Nov 29, 2009)

A broker that can offer products from all insurers would be the best. Great West Life is one of the leaders in DI but most companies offer a DI product and most of those will offer Non-Cancelable coverage. Yes. You have to have income to get DI insurance. If you have group insurance now it might reduce what you can get above that but with a $180,000 income, you can probably still get a lot of individual insurance. There is another rider called "group offset" where it is a system that pays if the group plan does not. For example, most group policies have a "any occupation" definition of disability. That is the definition that says if you can do ANY job that your experience says you would qualify for then you will be no longer considered disabled and all benefits would cease. You may not want that job or may not be the best qualified to get it, even if you did. The insurer does not care. So if you had a "regular occupation" definition, your insurer would ask if you are able to do YOUR current occupation or the one you were doing when you were disabled. If the answer is NO, they don't look at other professions, they just pay you. 

With group offset, you could ensure your group insurance for the better definition. In your case, soon there will not be any group and therefore it might allow you to buy more. If you are just looking for a few thousand a month, I doubt you will need group offset, but if you are trying to protect the $180K, you will need that and who knows what. By the way, no one gets 100% of their income insured. They want to maintain an incentive for you to want to go back to work and taking a cut in pay (if you were insured for 125% of your income for example) does not work well for that objective. Usually 85% of your take home pay is the maximum you can be insured for.

I don't have a referral for you. You could call the insurance companies and ask for a broker that is independent. They will probably say they all are because technically they are. Insurers do not sponsor life licenses anymore, allowing more independence, but they obviously have other ways to garner broker loyalty. I wish I could help you more here.

One last thing. In the definitions of disability, there is "any occupation", "regular occupation" and "own occupation". Many brokers confuse the last two. The last one is the most expensive and I will say, the best of them all. It says that if you cannot do your own occupation, they will pay you EVEN if you are doing any other type of occupation. So basically you could get your benefits and work as an UBER driver or something like that. I won't argue that it is not nice to have a choice, but it is an expensive rider. I figure if you can work and you don't mind your new job perhaps you won't mind going off disability insurance. I figure you won't do that unless the money you earn is the same or more then the DI benefits. The idea that you could technically do both is a little more then one needs. It is for people like a Dentist, who might have a problem with his hands and may never be able to do dental surgery again. There is probably no job on the planet that would replace that income EXCEPT disability insurance, but would he maybe like to teach dentistry to fill up his days, or maybe some other type of job. That is the person that I always thought "own occupation" was best suited for, but you can decide for yourself and get quotes for both. As I have said, many insurance agents think regular occ and own occ are the same thing. They are not and they certainly are not priced the same either.


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## Mukhang pera (Feb 26, 2016)

Also check the policy for an "elimination period" and its duration. If the policy has an elimination period, you'll get nothing until it has passed. Some can be 90 days but up to a year.

Next, I would tell the insurer you expect to have no employment income for the next 1 to 3 years. That might affect their underwriting decision. I would guess that some insurers won't take you in that case. The whole idea is to protect an income stream. You plan to terminate that on your own. I would expect some insurers would be willing to insure the unemployed, but whether they would then insure an income of $180K is another matter. Optsy seems to have expertise in this field and has sounded no alarm, so maybe I am wrong in thinking some insurers won't be anxious to provide disability insurance for someone about to pull the pin. But, to be sure, the law holds that the relationship between insured and insurer and insurance contracts are ones of _uberrima fides_, or the utmost of good faith. A cornerstone of the doctrine of _uberrima fides_ is the duty to disclose anything that could be material to the risk.


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## james4beach (Nov 15, 2012)

Oh boy. This is a lot to think about, and I'm going to have to educate myself and shop around. I don't like rushing into decisions like this.

I'm not looking to insure the whole 180K. This is a ridiculous income, I just got lucky, and I'd be looking to insure to a level of perhaps 80K to 100K income replacement, something like 50% of current.

What would happen if I start shopping around for these once I am unemployed? Am I much better off purchasing this kind of insurance now, while employed?

Mukhang pera: do I understand you correctly, that I have a duty to disclose that I will be unemployed in X months? I want to do what's proper, but I also (of course) don't want to put myself at a disadvantage if I don't need to. And I don't know what the future will bring. I may encounter a great employment opportunity 6 months from now, and take the job. I am just forecasting that I will be unemployed next year, but it's not guaranteed. If the right job opportunity comes along, I will absolutely take it. I just plan to be extremely selective for the next 3 years.


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## OptsyEagle (Nov 29, 2009)

james4beach said:


> Oh boy. This is a lot to think about, and I'm going to have to educate myself and shop around. I don't like rushing into decisions like this.
> 
> What would happen if I start shopping around for these once I am unemployed? Am I much better off purchasing this kind of insurance now, while employed?


The unemployed are not eligible for disability insurance. That said, they probably have a question on the application asking if you plan to change your employment in the next 12 months or something like that. If you tell them the truth, and you kind of have to, I suspect the offer might be retracted. Any lies may very well lead to a voiding of the contract at the exact time you need it. When you are putting in a claim, so the truth is about the only way to go with insurance contracts. These guys were not born yesterday.

Now their concern about your situation would be something like this. It is not easy to go on disability benefits. It takes an illness or accident, etc. A doctors report and perhaps a few other things including a waiting period. They are probably not concerned about you going on your sabbatical, loving it more then work, and then finding away to keep sabbaticalling by obtaining your income from DI benefits. That would not be easy to do. What is relatively easy, is IF you did end up on DI benefits, from a legitimate accident or illness and then recovered. It is not difficult to STAY on DI benefits. You will quickly figure out how it works, you will know the doctors that answer questions in your favour, etc. This gets very expensive to DI insurers and they go to great lengths to find the right people to insure. They want that work motivation. A guy taking a sabbatical may not look like the most work motivated candidate to them. That is how I would see it anyway, even though I have a bit of better idea of your work ethic, you must understand, they do not.

On another note. I mentioned a "waiting period". No DI kicks in immediately. They do not want to process claims for 2 weeks out of work, that type of thing. The shortest waiting period between when your disability starts and your benefits start paying is 30 days. That said, you can save almost 50% of the premium by waiting 90 days and that is on a plan that would pay every month until you are age 65.. 60 days, 120 days 180 days, all the way up to 2 years are the other waiting period options. I always found the sweet spot between low premiums and having something that starts paying before you have to file bankruptcy, to be about 90 days. Even a 60 day wait, will save you a fortune in premiums. Although we all want a paycheque each and every month, it is the long term disability that is the financial disaster that needs to be protected. Not the next month.

Lastly, DI benefits are paid in arrears. Just like work income. So a 90 day wait is actually a 120 days before the first payment hits your bank account.

Alright. You're an expert now. lol. Good luck.


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## Mukhang pera (Feb 26, 2016)

Yes james, a lot to think about.

I really believe you must be forthcoming on any insurance application about your plans, even if that puts you at a disadvantage. I say it so you'll have peace of mind. Let's suppose you signed up now, while employed. You then commence your period (of unknown duration) of time out of the workforce. Then suppose that, in that time, you become disabled. You claim under your disability policy. You get denied. The insurer takes the position that you failed in your disclosure obligation. Now, the coverage you thought you had is not there. You could start a lawsuit and say you had no duty to disclose, but that can be expensive and you might well lose.

You might want to call a couple of agents who handle this stuff and inquire, before you actually apply for any particular policy. 

I am sure you can find a policy that will insure during a time you are not working, but it would probably have a fairly limited monthly payout. I think seeking to insure 80-100K is reasonable. I encourage you to make some inquiries. I know time is short.


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## Pluto (Sep 12, 2013)

Regarding the credti issue, you might want to get a line of credt at your bank if you don't already.


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## Mukhang pera (Feb 26, 2016)

OptsyEagle said:


> The idea that you could technically do both is a little more then one needs. It is for people like a Dentist, who might have a problem with his hands and may never be able to do dental surgery again. There is probably no job on the planet that would replace that income EXCEPT disability insurance, but would he maybe like to teach dentistry to fill up his days, or maybe some other type of job. That is the person that I always thought "own occupation" was best suited for, but you can decide for yourself and get quotes for both. As I have said, many insurance agents think regular occ and own occ are the same thing. They are not and they certainly are not priced the same either.


Brings to mind this case: _Wright_ v. _Sun Life Assurance Company of Canada_, 2015 BCSC 776

DISABILITY INSURANCE — Entitlement • As result of arm fracture suffered in skiing accident in 1993, plaintiff, a general dentist, receiving total disability benefits from insurer commencing in 1996 — "Total disability" defined in policy to mean that as a result of injury or accident, insured "is unable to perform the essential duties of his general occupation" and "is under the regular care of a physician" — Plaintiff retraining and commencing work in specialized dentistry field and insurer terminating benefits in 2001 — Plaintiff’s action for wrongful termination of benefits and for declaration of continuing entitlement dismissed — Plaintiff failing to prove that from 2001 onwards, as a result of the 1993 injury, he was under the regular care of physician — Plaintiff bearing onus of proof in this regard and evidence establishing that plaintiff consulted physicians only sporadically to deal with occasional conditions or for routine matters, and not for treatment for the 1993 injury.

https://www.courts.gov.bc.ca/jdb-txt/SC/15/07/2015BCSC0776.htm


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## james4beach (Nov 15, 2012)

kcowan said:


> James, I have been retired for 17 years. I had the same concerns re Credit Cards. Turns out the only thing they care about is your credit rating. All my current cards have been issued since retiring.


Thanks, that's good to hear.



> Because of your skills, you can get re-employed easily. What you might find is an opportunity to join a startup when you get ready to get engaged again. Then you have a chance to roll the dice, and, if they come up right, your desired lifestyle could become permanent in 10 years.


Many years ago, I ran a small business doing my own contracts and it was very doable. I can do that again, or work remotely, etc. However what I've realized over time is that I really like being in an office. It's fun to work together with people and have the social atmosphere. I will get lonely if I work alone.

What I've really enjoyed is both having the social setting of the office (camaraderie) but also not being a slave to the boss. Knowing I don't really need to work, and that I could walk away tomorrow and still be financially comfortable is a huge freedom. I would happily keep working in offices in the future, if I can find nice people to work with.



cainvest said:


> because of the field you're in have you thought of doing part time work remotely? I ask this because I have a friend that does these "sabbaticals" just like you're planning. He (and his wife) traveled South America for 5+ years and all he needed was an occasional internet connection for updates and to get new more work.


It's an option I'm considering, but the work I really like doing involves working closely with other people. I'm not sure the "remote worker" lifestyle is right for me. A big reason I stopped doing my own consulting and contracting was that I found it lonely.


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## james4beach (Nov 15, 2012)

Longtimeago said:


> One possibility is to supplement your cash during your sabbatical from full time work. There is no law against that. It can also be interesting in that you aren't looking at it as part of a career but can look at it as part of the new experiences and views of the world you may hope to gain during your sabbatical. For example a school bus driver works 20 hours a week, it's a part time job really. But it is a job that will give you an entirely different perspective on many things. There would still be plenty of free time for exercise and other pursuits.


Yes I am absolutely open to this. I don't think I will be low on cash (I have very considerable savings for my age) but I would like to try some new and different work environments. I really like the idea of gaining a new perspective.

For several years now I've been in quite a monoculture. The people are very nice but everyone seems to think the same way.


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## marina628 (Dec 14, 2010)

TD has the Emerald Credit card and with good credit the interest is only 4% ,you never know when it may make sense to use a credit card vs cashing out investments .My son has a $25000 Credit line and only makes $50,000 a year so they do give you a decent credit line .


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## cainvest (May 1, 2013)

james4beach said:


> It's an option I'm considering, but the work I really like doing involves working closely with other people. I'm not sure the "remote worker" lifestyle is right for me. A big reason I stopped doing my own consulting and contracting was that I found it lonely.


It's not quite the same thing I'm told, working 5-20 hrs a week (or whatever you setup) with very flexible hours. Sitting on the beach or at a small restaurant in a mountain range (he'd often send pictures of his new office) while you churn out some work is very different. Also being employed part-time you might be able to maintain some benefits, you'd have to check on that.


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## james4beach (Nov 15, 2012)

cainvest said:


> It's not quite the same thing I'm told, working 5-20 hrs a week (or whatever you setup) with very flexible hours. Sitting on the beach or at a small restaurant in a mountain range (he'd often send pictures of his new office) while you churn out some work is very different. Also being employed part-time you might be able to maintain some benefits, you'd have to check on that.


That does sound attractive. I like the sound of something like 20 hours a week of work, with a flexible location.


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## Beaver101 (Nov 14, 2011)

^


> What I've really enjoyed is both having the social setting of the office (camaraderie) but also not being a slave to the boss. Knowing I don't really need to work, and that I could walk away tomorrow and still be financially comfortable is a huge freedom. *I would happily keep working in offices in the future, if I can find nice people to work with.*





> Yes I am absolutely open to this. I don't think I will be low on cash (I have very considerable savings for my age) but I would like to try some new and different work environments. I really like the idea of gaining a new perspective.
> 
> For several years now I've been in quite a monoculture. *The people are very nice but everyone seems to think the same way.
> *


 ... sounds like you need to be your own boss in your next line of work.


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## Beaver101 (Nov 14, 2011)

Mukhang pera said:


> Brings to mind this case: _Wright_ v. _Sun Life Assurance Company of Canada_, 2015 BCSC 776
> 
> DISABILITY INSURANCE — Entitlement • ....


 ... any idea how many court cases (a rough percentage would be fine) are tied with disability claims nowadays? 


Upon reading this article in the TO Star today, I can't imagine putting in a disability claim in the private sector would be any easier than the public sector.

*Injured workers face benefit cuts as compensation board assigns them ‘phantom jobs’ with ‘ghost wages’: *
https://www.thestar.com/news/canada/2019/05/22/injured-workers-face-benefit-cuts-as-compensation-board-assigns-them-phantom-jobs-with-ghost-wages-report.html

Wow, talk about WSIB adjudicators making things up to stone-wall the disabled claimants ... only after years of paying into the plan - thank you!


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## Mukhang pera (Feb 26, 2016)

Beaver101 said:


> ... any idea how many court cases (a rough percentage would be fine) are tied with disability claims nowadays?


My own records allow me to quickly come up with some numbers going back as far as 1996. I have all the cases back to 1982, but to get you stats from 1982 to 1996 would take me awhile. But the figures I have over the last 23 years should give an idea.

I have just over 69,000 decisions emanating from the BC courts since 1996. I have probably missed a few. These cover the Provincial Court, Supreme Court of BC, Court of Appeal for BC and Supreme Court of Canada cases with a BC origin. By my count, 87 of those judgments relate to disability claims. A rather small percentage. I think that can be explained by the fact that those denied or cut off disability claims lack the financial resources to litigate. It can run to the tens of thousands. If you lose, you pay your own costs and about 40% or so of the insurance company's costs. A bit discouraging. 

My records will not show the number of lawsuits that get started and either settle or are discontinued.


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## Eclectic12 (Oct 20, 2010)

Mukhang pera said:


> ... I am sure you can find a policy that will insure during a time you are not working, but it would probably have a fairly limited monthly payout. I think seeking to insure 80-100K is reasonable ...


Maybe ... I suspect it will be extremely expensive. 

Most of the time the insurer would be looking to be collecting from a pool of employed people. Adding in people who are planning on terminating their employment to potentially have trouble paying premiums and be seen as more of a risk is probably not the type of client the insurer is looking to add to the pool.


Cheers


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## Mukhang pera (Feb 26, 2016)

Beaver101 said:


> *Injured workers face benefit cuts as compensation board assigns them ‘phantom jobs’ with ‘ghost wages’: *
> https://www.thestar.com/news/canada/2019/05/22/injured-workers-face-benefit-cuts-as-compensation-board-assigns-them-phantom-jobs-with-ghost-wages-report.html
> 
> Wow, talk about WSIB adjudicators making things up to stone-wall the disabled claimants ... only after years of paying into the plan - thank you!


I looked at the Star article. I was allowed to read a few sentences before being told to pay for a subscription in order to keep reading. I cheaped out. But I got the gist.

That is an issue that has caused lots of fireworks here in BC between injured workers and the WCB. Being going on almost since the board commenced operation in 1917. 

In BC, injured workers receive short term benefits based on a percentage of date-of-injury wages, not to exceed "board maximum", which is adjusted annually for inflation. Board max is about $80,000/yr. at present and the WCB will pay 90% of that for up to a year. If you earn $20,000 a week, you won't get 90% of that. There are lots of fights about when the worker has recovered sufficiently to be able to return to work. Workers usually want to stay on wage loss longer. The board will have the worker examined by a Board Medical Advisor who will effectively rule on when, in the board's view, the worker can go back to work, whether on a graduated basis or otherwise. While the decision is supposedly made by a Claims Adjudicator (the appellation changes from time to time), the CA usually adopts the MA's opinion. The worker is then left to appeal to the Review Division, then to the Workers Compensation Appeal Tribunal and, if bold (and rich), off to judicial review. 267 of those in the last 23 years.

The real fun comes when the board accepts (reluctantly) that the worker cannot return to his old job. Then it's time to assess a permanent partial disability (ppd) award. Those awards are assessed either on a "functional" basis, or on a "loss of earnings" basis. A functional award is often made with reference to the "meat chart", a.k.a. the Permanent Disability Evaluation Schedule. For example, the chart dictates that a leg amputation at the hip equals 70% of total disability. If that worker was making $1,000 a week, the functional award would be 70% of $1,000 = $700 and the board would pay a ppd award calculated at 90% of that. The award would be paid even if the worker worked in an office and was able to return to his former job, with no income loss. 

But let's say the worker has more of a hard labour job and suffers a permanent back injury. That worker might get a "scheduled award" of 1-2% for loss of range on motion in the spine and the standard 2.5% award for "chronic pain". So the functional award would be about 4% of $1,000 x 90% = $36/mo. Such an award would be commuted and paid out in a lump sum. But that worker does not want to go back to work on the green chain, or whatever, and claims entitlement to a loss of earnings (l.o.e.) award. The brass ring in workers comp circles is the 100% l.o.e. pension. Much coveted indeed. The board accepts the worker as unemployable and the award is then $1,000 x 90% = $900/mo. tax-free. Not bad, eh? But getting to that can be a challenge. The worker will be assessed by a Disability Awards Medical Advisor (DAMA) and a Vocational Rehabilitation Consultant and a Claims Adjudicator Disability Awards (CADA) or Disability Awards Officer (DAO) will make the decision. Their task is, in part, to identify other "suitable work" for the worker, to avoid a loss of earnings. The workers that have those guys scrambling are the middle-aged guys who have modest education, limited English skills and who have a history of doing well-paid heavy work. Where are you going to get them another job at no loss of earnings? Well, for one thing, you can "deem" them into a job. A long-time favourite in BC has been telling those guys "You can be a parking lot attendant." That won't completely mitigate a loss of earnings, but it will reduce it (the deemed wage will be deducted from the award calculation), hence the ppd to be paid will be less. If you cannot be a parking lot attendant, then you can be a speed bump. You get the idea.

The board sometimes sends younger workers back to school to be retrained for other, lighter, work with better wages. Works sometimes, not always.

As for disabled workers who "paid into the plan", that's not the case in BC (although many workers will say they paid in for years). Truth is that employers fund the "accident fund" through levies on payroll. They pay a percent of gross payroll every month. The percent is based on their classification. Fishing, logging & such pay a high percentage because they are prone to more claims, and more expensive claims than, say, workers in a law office. Employers are thus rated by class and they are "experience rated". If they have workers who make claims, they pay more. I suppose workers pay into the accident fund indirectly, as do we all.


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## Mukhang pera (Feb 26, 2016)

Eclectic12 said:


> Maybe ... I suspect it will be extremely expensive.


I suspect the same, if available at all on a forthright disclosure of the facts.


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## diharv (Apr 19, 2011)

I've kept a personal disability policy since 1991, originally with Paul Revere and now currently with RBC Life In Co. It is for an amount that is less than half what I pay myself from my corp and I pay $1226.00 per year premium or $613.00 every six months. If I were to increase it to $7000 per month it would cost me $5954.00 per year.Though I could not increase it to that all at once as it has to be done incrementally at a rate of $59.00 per $100.00 increase to a max of a $1000.00 increase each period before my premiums due. So, seeking to replace 80-100K is going to be very expensive . Reasonable? That's up to you.


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## Eclectic12 (Oct 20, 2010)

Mukhang pera said:


> I suspect the same, if available at all on a forthright disclosure of the facts.


Agree 100% on the forthright disclosure of pending sabbatical. I would personally be upset to pay in then find out later when it was needed that either the benefit was tied to employment income at the time of the disability (i.e. a lot lower than when the policy was taken out while employed) and/or flat out denied due to the employment change.


Cheers


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## Beaver101 (Nov 14, 2011)

Mukhang pera said:


> My own records allow me to quickly come up with some numbers going back as far as 1996. I have all the cases back to 1982, but to get you stats from 1982 to 1996 would take me awhile. But the figures I have over the last 23 years should give an idea.
> 
> I have just over 69,000 decisions emanating from the BC courts since 1996. I have probably missed a few. These cover the Provincial Court, Supreme Court of BC, Court of Appeal for BC and Supreme Court of Canada cases with a BC origin. * By my count, 87 of those judgments relate to disability claims. *A rather small percentage. I think that can be explained by the fact that those denied or cut off disability claims lack the financial resources to litigate. It can run to the tens of thousands. If you lose, you pay your own costs and about 40% or so of the insurance company's costs. A bit discouraging.
> 
> My records will not show the number of lawsuits that get started and either settle or are discontinued.


... would it be correct to assume that tiny amount (or 87 of those judgements) were considered as favourable for the claimants? in BC alone of course.


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## james4beach (Nov 15, 2012)

like_to_retire said:


> The bear markets is what strikes fear into those that say they would be selling their stocks while they're depressed. The _"Total Return"_ crowd says, no you *leave your stocks alone during those times and get your income from bonds.* _"Total Return"_ strategy wouldn't be my strategy, but the explanation makes sense. But then I see recommendations to put everything into an easy one stop shop VBAL ETF. Seems to go against the rules?


Although I do separate my bond component, this probably isn't even necessary.

I don't think VBAL is against the rules. As far as I can tell, it's all consistent with 60/40 asset allocation with annual rebalancing -- even in withdrawals. In fact a reason 50/50 and 60/40 are recommended for retirees is that the portfolio is well suited to withdrawals, even during extended bear markets.

During sharp downturns in stocks, the 60/40 portfolio is a net buyer of stocks. As long as you're withdrawing a sustainable amount of cash, taking it out of the 60/40 portfolio does not result in selling stock. Just as you wrote, the stocks will be left alone and the cash comes out of the bond portfolio. This is a key feature of diversified asset allocation with rebalancing.

It's also counter intuitive because when you wrote this, I first agreed (yeah, selling VBAL in bear markets must sell stocks right?). Turns out stocks will not be sold, at sustainable withdrawal rates like 3.5% or 4%. The internal rebalancing is the key.

To convince myself further, I ran through a simulation through the 1930s and 1940s during consistently negative years in the stock market, and near zero interest rates (poor bond performance) while withdrawing at 3.5%. What I saw is that a 60/40 allocation generally avoids selling stocks in depressed years.


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## Beaver101 (Nov 14, 2011)

Eclectic12 said:


> Agree 100% on the forthright disclosure of pending sabbatical. I would personally be upset to pay in then find out later when it was needed that either the benefit was tied to employment income at the time of the disability (i.e. a lot lower than when the policy was taken out while employed) and/or flat out denied due to the employment change.
> 
> 
> Cheers


 ... I think J4B should ask the broker/agent for a copy of the policy (sample) to read first with emphasis on eligibility and the definition of earnings for the purpose of income replacement caused by a disability. Or maybe have the honest broker/agent explain the eligibility part to J4B given his circumstances (coverage upon sabbatical).


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## Eclectic12 (Oct 20, 2010)

The Gov't has an article with some of what should be considered for private disability insurance.
https://www.canada.ca/en/financial-consumer-agency/services/insurance/disability.html

If nothing else, it would give J4B a head start on some of the terms and possible restrictions or pitfalls.


Cheers


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## james4beach (Nov 15, 2012)

OptsyEagle said:


> A broker that can offer products from all insurers would be the best. Great West Life is one of the leaders in DI but most companies offer a DI product and most of those will offer Non-Cancelable coverage.


I haven't dealt with any insurance brokers before so I know very little about how this works.

I started by contacting TD Meloche Monnex and another insurer that I have alumni group associations with, but neither sells DI. So I guess I should find some local broker and just ask if they have GWL policies?


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## Mukhang pera (Feb 26, 2016)

Beaver101 said:


> ... would it be correct to assume that tiny amount (or 87 of those judgements) were considered as favourable for the claimants? in BC alone of course.


Actually, more than half were favourable to plaintiffs. Here's a recent example: _Godwin_ v. _Desjardins Financial Security Investments Inc_., 2018 BCSC 99

DISABILITY INSURANCE — Damages • Duties of insured — Good faith — Trial judge awarding insured $30,000 damages for mental stress and $30,000 in punitive damages, finding insurer’s handling of plaintiff’s claim was substandard and in breach of its duty of good faith.

https://www.courts.gov.bc.ca/jdb-txt/sc/18/00/2018BCSC0099.htm

It's a 50-page decision, but a good read.

Someone upthread mentioned Paul Revere. It was sued once in the 87, and successfully. Other, more popular defendants, were (in no particular order): Sun Life, RBC Life, Great-West Life, Manufacturers Life, Standard Life. Looks like Sun Life and Manufacturers attracted the most lawsuits, with Unum Life also putting forth a good effort. Those insurers might write more policies than others, so it's hard to draw much from that raw data.

I suspect the fairly high success rate against insurers is explained by the fact that no lawyer would want to take on such a case without a high level of confidence in winning. It's not the type of lawsuit where are you dealing with a plaintiff with deep pockets who can take losing and the attendant costs in stride. I would guess some are taken on a contingency fee basis.


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## james4beach (Nov 15, 2012)

Beaver101 said:


> ... I think J4B should ask the broker/agent for a copy of the policy (sample) to read first with emphasis on eligibility and the definition of earnings for the purpose of income replacement caused by a disability. Or maybe have the honest broker/agent explain the eligibility part to J4B given his circumstances (coverage upon sabbatical).


Great ideas from everyone, thanks. I will definitely ask for a copy of a sample policy to read first.

Well, I'm giving up for today. I've phoned 5 brokers and nobody sells disability insurance, and I have to go to work.


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## james4beach (Nov 15, 2012)

diharv said:


> I've kept a personal disability policy since 1991, originally with Paul Revere and now currently with RBC Life In Co. It is for an amount that is less than half what I pay myself from my corp and I pay $1226.00 per year premium or $613.00 every six months. If I were to increase it to $7000 per month it would cost me $5954.00 per year.Though I could not increase it to that all at once as it has to be done incrementally at a rate of $59.00 per $100.00 increase to a max of a $1000.00 increase each period before my premiums due. So, seeking to replace 80-100K is going to be very expensive . Reasonable? That's up to you.


Interesting info, thanks. I'd be happy to replace less than 80-100K as well. I just have no data points so I haven't calibrated any of this yet.

Do you enjoy working with RBC Life Insurance? Their mutual fund salespeople and advisors are a nightmare, I wouldn't trust any of them and I have severe hesitations about trusting any salesperson associated with RBC.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> I don't think VBAL is against the rules. As far as I can tell, it's all consistent with 60/40 asset allocation with annual rebalancing -- even in withdrawals. In fact a reason 50/50 and 60/40 are recommended for retirees is that the portfolio is well suited to withdrawals, even during extended bear markets.
> 
> During sharp downturns in stocks, the 60/40 portfolio is a net buyer of stocks. As long as you're withdrawing a sustainable amount of cash, taking it out of the 60/40 portfolio does not result in selling stock. Just as you wrote, the stocks will be left alone and the cash comes out of the bond portfolio. This is a key feature of diversified asset allocation with rebalancing.
> 
> It's also counter intuitive because when you wrote this, I first agreed (yeah, selling VBAL in bear markets must sell stocks right?). Turns out stocks will not be sold, at sustainable withdrawal rates like 3.5% or 4%. The internal rebalancing is the key.


Yeah, your explanation makes sense. You're saying the fund's re-balancing mechanism buys depressed stocks, and gets the money to do that from bonds (whose allocation is skewed higher because of the bear market). Interesting.

I guess I would rather complete control over that sort of thing, but I do see your reasoning on this.

ltr


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## james4beach (Nov 15, 2012)

like_to_retire said:


> Yeah, your explanation makes sense. You're saying the fund's re-balancing mechanism buys depressed stocks, and gets the money to do that from bonds (whose allocation is skewed higher because of the bear market). Interesting.
> 
> I guess I would rather complete control over that sort of thing, but I do see your reasoning on this.


Then again I've made some assumptions on how VBAL does its rebalancing. Like you, I'd rather have complete control over this. That way I can do my rebalancing and be absolutely certain I haven't sold stocks to do it. I'm reasonably sure it's ok with VBAL but I like having more control over the details.


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## james4beach (Nov 15, 2012)

I got in touch with an insurance broker and asked about non-cancellable, regular occupation coverage. Here's what he said:



> All disability cases are underwritten based on your current job.
> 
> If you plan on changing jobs we can get it underwritten to reflect that, and income underwriting will be done at time of claim. Does that make sense? Unfortunately, you can't have coverage without a job. For example, I am a licensed financial planner/Insurance Specialist and I can only get Disability for this job. *If i get approved and I switch jobs, at time of claim they will require proof of job/income.*
> 
> I can not apply for a disability contract for a job I currently don't have.


But I thought this was the point of non-cancellable coverage. And what does he mean by 'income underwriting will be done at time of claim'?

What good is the insurance if, at the time of a claim, I happen to be unemployed and therefore the claim is denied?


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## Eclectic12 (Oct 20, 2010)

I would guess that you'd be underwritten based on the current job which would set the maximum. When filing a claim after having changed jobs, you'd have to prove the job was of a similar income or the claim would be scaled back to be closer to what the new job income was.

Maybe this ManuLife Disability Underwriting guide has some answers or pointers?
https://repsourcepublic.manulife.co...-937fbefc-246c-42d1-8b7c-d020c1bb62ea-mDtKySw


As for what good is the insurance while unemployed - not much. But should the disability while unemployed be temporary or short term where later you get a job when a permanent disability happens that the claim is accept for - the situation as well as the usefulness could change.


Cheers


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## james4beach (Nov 15, 2012)

When I wondered what good it is, I was thinking that any time I'm employed I'd likely have group disability insurance anyway (as I currently do). I would think that a big reason for insurance like this is to cover me during times I'm not employed, if I get the really serious/permanent injury at a time I don't have a job.

Is the most common scenario that someone would experience the big/permanent injury or illness at a time they currently are employed? And if so, why wouldn't their existing group coverage under the employer be sufficient?


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## Eclectic12 (Oct 20, 2010)

And where you are covered: what does short term pay? 
How long does it last? 
Does the payment drop when long term kicks in?
Does the coverage change from "my occupation" to "any occupation' at the two year mark?


Short term disability typically pays more but has a short time frame. When one is transferred to long term disability, the payout can drop. Then at the two year mark, should the coverage change to "any occupation" - should you be deemed to be able to be a mail room clerk, your disability benefits are cut off, whether your job paid more than a mail room clerk or not.

It all boils down to what the employer can afford, what they think is enough and what they are willing to setup. 


Keep in mind that while they talk about the big/permanent injury that forces one to substantially change jobs, it can be like my sister who was off two years for cancer, made it back to work for about a month then had two new tumours found so that she can't work again. She and her husband are trying to find out if the short period she worked reset the disability clock so that she has a full two more years or whether it is prorated so that she only has a few weeks of coverage before her coverage stops and hopefully his takes over (though possibly at a lower level than hers).

https://mylifepolicy.ca/article/disability-insurance-for-professionals
https://www.moneysense.ca/save/financial-planning/why-disability-insurance-is-so-important/
http://www.myselfemployedbenefits.ca/why-is-disability-insurance-very-important/


Essentially skipping evaluating the disability coverage the employer provides to see if it is enough is like assuming that the company pension is enough to retire on without knowing if it is a Group RRSP matching at 2% or a DC pension at 4% or a DB pension with whatever benefit that would provide. 


Cheers


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> ... I would think that a big reason for insurance like this is to cover me during times I'm not employed, if I get the really serious/permanent injury at a time I don't have a job ...


Except for a few companies like Lloyds that would charge a pretty penny, most others are in the business to make money while having a predictable risk. Unemployed types wouldn't fit this.




james4beach said:


> ... Is the most common scenario that someone would experience the big/permanent injury or illness at a time they currently are employed?


It happens when it happens, employed or not. IIRC, a recent survey had 48% of Canadian employees had employer provided disability insurance.


Cheers


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## james4beach (Nov 15, 2012)

Thanks Eclectic12 for this valuable info. I'm going to have to do more reading about all of this.

I see what you mean; the employer-provided coverage may not really cover much. I see the value in finding a policy for myself where I really know the parameters.


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## Beaver101 (Nov 14, 2011)

james4beach said:


> I got in touch with an insurance broker and asked about non-cancellable, regular occupation coverage. Here's what he said:
> 
> [ ... ]
> 
> But I thought this was the point of non-cancellable coverage. And what does he mean by '*income underwriting will be done at time of claim*'?


 ... it's another way of saying: we'll sell you the policy first and figure out if you can claim later. 



> What good is the insurance if, at the time of a claim, I happen to be unemployed and therefore the *claim is denied?*


 ... the last part is a sure bet here.


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## Beaver101 (Nov 14, 2011)

james4beach said:


> Thanks Eclectic12 for this valuable info. I'm going to have to do more reading about all of this.
> 
> *I see what you mean; the employer-provided coverage may not really cover much.* I see the value in finding a policy for myself where I really know the parameters.


 ... that's what makes it affordable, to the employer in this case. Supposedly, the employer wants their "human assets" protected, should catastrophe hits.


A quickie here -you might want to check your current employment's policy (group) to see if there is a conversion clause (rare) to an individual DI policy. This might fast-track/bridge you to coverage when you're gone from the firm.


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## Beaver101 (Nov 14, 2011)

Eclectic12 said:


> ...
> 
> 
> Short term disability typically pays more but has a short time frame. When one is transferred to long term disability, the payout can drop. Then at the two year mark, should the coverage change to "any occupation" - should you be deemed to be able to be a mail room clerk, your disability benefits are cut off, whether your job paid more than a mail room clerk or not.
> ...


 ... are you talking about spousal DI coverage here? If so, interesting as I didn't know it existed?


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> ... I see what you mean; the employer-provided coverage may not really cover much. I see the value in finding a policy for myself where I really know the parameters.


It's like a mortgage or a lot of other things ... you have to read all the details to get a complete picture.

Pulling up my company's Sick Leave, STD and LTD the way it would work is:

a) use up sick days first for five days - income replacement is 100%. 
This is regardless of whether one has more sick leave or not as one is typically forced to move to STD at five days. 
There may be the option for a director to override this but it is not spelled out in the plan.

b) after five days, STD is applied for. The benefits are tied to how long one has been employed. 
Be there less than a year then it's zero weeks at full salary and two weeks at 75% salary.
Be there more than eight years then it's eight weeks of full salary and nine weeks at 75% salary.

c) after seventeen weeks, LTD is in play. It is 60% of monthly salary but is caped at $12K a month. 
Where one figures this is to little, one can signup to pay for extra coverage that is also limited but increase the overall benefit.


Both STD and LTD mean a third party claims manager is involved. Some employees have reported pressure from the claims manager to go back to work earlier or go back to a different job. The LTD also can mean a doctor of the carrier's preference has to review/report on the disability, in addition to one's own doctor. If there is a disagreement there is an appeal process.


There is room for disagreement as the STD requires one be totally disabled from the essential parts of their position.


FWIW, I seem to recall the previous employer having a much lower monthly limit for the LTD but don't believe I have the details anymore.


The other potential reason for one's own coverage is that when leaving the employer, like the life insurance - it stops. Should the new employer's plan be better or the same, it is all good. If the new employer's plan is worse or they don't offer it - then not so good.


Cheers


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## Eclectic12 (Oct 20, 2010)

Beaver101 said:


> ... that's what makes it affordable, to the employer in this case. Supposedly, the employer wants their "human assets" protected, should catastrophe hits ....


They want to keep valuable human assets as it is cheaper than bringing someone else up to speed on the culture/procedures etc. At the same time, they also don't want to go broke.




Beaver101 said:


> ... A quickie here -you might want to check your current employment's policy (group) to see if there is a conversion clause (rare) to an individual DI policy. This might fast-track/bridge you to coverage when you're gone from the firm.


If it is available, it may be a good option. Though with James looking to start working in Canada there may be an issue with the carrier not wanting to deal with someone is another country.

Finding out is good though.




Beaver101 said:


> ... are you talking about spousal DI coverage here? If so, interesting as I didn't know it existed?


Probably more rare than the conversions to an individual DI policy. 

My company and none I have worked for offer it. The closest I can recall is being able to get life insurance for a spouse under the company plan.


Cheers


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## james4beach (Nov 15, 2012)

This is all more complicated than I thought. I'm going to have to do a lot of reading to make sure I'm buying what I think I'm buying... nothing worse than insurance that refuses to pay out when I need it.

I really appreciate all the great pointers here. Thanks everyone!


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## Jimmy (May 19, 2017)

Sounds like fun and must be a nice break to take a year off when you are still young. I know it was a good break even to go back to school. Hope you get to do some traveling too.


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## james4beach (Nov 15, 2012)

james4beach said:


> One goal is to exercise more and establish a routine with a greater level of physical activity, which is a good investment towards old age.


Thought I'd give an update here. I did end up going on sabbatical (quit my job with the intention to take a rest period from working) and the increase in physical exercise has been a significant advantage. For years, I never had the time or energy alongside work to get regular exercise.

Or perhaps I used it as an excuse? Now I have no excuse, and I've been making exercise a very high priority.

I had already increased my exercise level while still at my last job, but having all the extra free time to do more has been fantastic. I've been doing tons of hiking, cycling (until winter) and swimming. In fact I'm about to head out for a winter hike right now!

The results have _really_ surprised me. I've become leaner and my weight has dropped to the lowest in 20 years. My BMI has shifted down into "normal weight" for the first time I can remember as an adult.

I always considered quitting work as an investment in my own health, and I think this is a good example.


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## Longtimeago (Aug 8, 2018)

james4beach said:


> Thought I'd give an update here. I did end up going on sabbatical (quit my job with the intention to take a rest period from working) and the increase in physical exercise has been a significant advantage. For years, I never had the time or energy alongside work to get regular exercise.
> 
> Or perhaps I used it as an excuse? Now I have no excuse, and I've been making exercise a very high priority.
> 
> ...


That's good to hear, congratulations.

I have been fortunate in that outdoor activities have always been a part of my life. I have also been fortunate in that my somatotype and metabolism have also contributed to keeping me relatively stable in terms of weight. My waist size for example has been between 32-34 since I was around 18. I have never been on a diet and I have never 'exercised' in my life. I have been active though which of course can replace 'formal' exercising if done often enough. But I wouldn't say I have been active enough in the last couple of decades to make up for lack of exercise. I think my metabolism and body type just don't let me get fat. Lucky me.


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## cainvest (May 1, 2013)

james4beach said:


> Or perhaps I used it as an excuse? Now I have no excuse, and I've been making exercise a very high priority.
> 
> I had already increased my exercise level while still at my last job, but having all the extra free time to do more has been fantastic. I've been doing tons of hiking, cycling (until winter) and swimming. In fact I'm about to head out for a winter hike right now!
> 
> ...


Good job James, regular exercise does make a difference. As you said, setting a priority on it is a key component and it really doesn't take that much of your daily time to do but consistency is key.

In the warmer months I have zero issues with exercise, I can push my body to its limits and extend them (gaining). In the colder months I drop my levels, mainly due to the types of exercise available are not as "fun" and/or the levels are not as demanding as the warm weather ones.

Some of my friends use fitness trackers (fitbits, etc) and I started using google fit on my phone. The data does show you how you're doing and is a good reminder to adjust your levels.

Congrats on getting into the Normal BMI range, now just keep it going!


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## james4beach (Nov 15, 2012)

Thanks! Yes the challenge is to keep it going, especially in winter. I have the same difficulty in the colder months.

My last few years on the west coast were probably very helpful in all of this. The weather is simply better year round, meaning it's easier to be active outdoors.

There's another aspect I didn't mention, which is diet. I generally have always eaten healthy but over the last year, I've been more careful about a couple things. I found that I was over-eating, especially in office-related lunch outings. So I became much more careful about either bringing my own food from home, or deliberately watching my intake to make sure I didn't over-eat. The other thing is that I started listening to my body more, about when I actually am angry vs not hungry.

For example, I generally am not hungry in the morning. So I stopped force-feeding myself breakfast and pretty much never have breakfast any more, unless I'm hungry. Sometimes I'm not very hungry at dinner either, in which case I will snack or have a light salad. I think really the message here is to not eat for the sake of eating a scheduled meal, and definitely don't over-eat at dinner.

The other aspect where exercise helps with this, is that hiking gets in the way (in a positive way) from sitting and eating a big meal. What often happens is: I want to get outside and go for a hike. I will load up some snack food (nuts, banana, cheese, fruit) and have a fun walk, taking some breaks for snacks. If I do this around dinner, then come home and find I'm not very hungry, then I will just skip dinner entirely. Or I might have some more nuts, salad or something light.

Overall, I think these are the two things which helped me. One is just getting more routine exercise and outdoor time (much higher level of exercise/walking) and the second is reducing large meals and unnecessary eating, trying to be careful to only eat when I'm hungry.

Great example of this lifestyle change: currently it's almost noon, and I'm feeling hungry. But it's also sunny and warm outside, with a narrow window of good weather. I feel the draw to go outside, and lunch is a minor concern. So instead, I will eat a bit of cereal, then grab some fruit & nuts & cheese in my backpack and head out for a long walk... minimum 1 hour.

^ the above is very difficult to do when working a regular office job, sadly


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## cainvest (May 1, 2013)

For sure diet is important and it's not complicated, though I find many make it way too complicated.

Balanced meals, eat the calories your body needs ... done.

If you need, check you weight once every two weeks, adjust exercise/diet accordingly to stay on track.


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## Retired Peasant (Apr 22, 2013)

james4beach said:


> Thanks! Yes the challenge is to keep it going, especially in winter. I have the same difficulty in the colder months.


You need to embrace winter - cross-country skiing, snowshoeing, skating ...


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## agent99 (Sep 11, 2013)

Retired Peasant said:


> You need to embrace winter - cross-country skiing, snowshoeing, skating ...


There was a time when we couldn't wait for winter to come. That was in Quebec where skiing was our passion. In Ontario harder to get to decent skiing, so filled in with X-country. Our dog pricked up his ears if he heard us say skiing (as well as walk)  Swimming is another good winter activity - lots of indoor pools in Canada. Some of my golfing friends Curl or even play Hockey right into their 70s. 

So yes, no reason not to be active in winter. 

In our case, like many retirees, we have become snowbirds. Occasional walk, raking, some snow clearing, before we head South. Then bike, golf, swim and/or walk daily for 3 months.


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## james4beach (Nov 15, 2012)

Thanks and you are right -- I have to embrace winter. I think I'm doing a good job so far (much better than past winters in Canada). For example yesterday, I went to a Starbucks to work on my laptop. That's 30 to 40 minutes walking in the ice & snow... a nice little outing.

Let me ask for some advice here on another matter. I can't tell if I'm succeeding or failing at my sabbatical.

After quitting my last job, I've been networking and catching up with people. I stumbled into some work and took on some contract/consulting work, signed a contract, and am billing hourly for work. This work is fun, and I'm able to fit it nicely into my lifestyle.

The client appears pleased so far and just pointed me to another person, who is now approaching me for more work. The work and money is great, but I'm starting to worry that I'm failing at "taking time off" because the idea was to have unstructured and free time. For example, yesterday I gave a science & engineering talk at a high school. I love having the free time to do things like this -- it's _very_ valuable to me.

My current idea is to set a hard limit on how many hours a week I will work and consult. Maybe it's 20 hours/week, and then I can be careful to not pledge anything above that. This will leave me plenty of time for other pusuits (including technology research & innovation I want to work on).

Can anyone share some thoughts? Am I making a mistake by taking on this hourly contract work? My concern isn't the money; it's my free time.


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## cainvest (May 1, 2013)

james4beach said:


> Can anyone share some thoughts? Am I making a mistake by taking on this hourly contract work? My concern isn't the money; it's my free time.


Not a mistake if expectations are set and *truely understood by the client*. Seen this happen a number of times where the client "all of a sudden" expands the scope of the project or needs it faster than expected.


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## Userkare (Nov 17, 2014)

james4beach said:


> Can anyone share some thoughts? Am I making a mistake by taking on this hourly contract work? My concern isn't the money; it's my free time.


Just keep asking yourself "am i still having fun?" When the answer is "no', then stop taking contract work. 

At my retirement lunch, I was asked if I would consider doing some contract work. I didn't want to slam the door on opportunity, so I said yes. The 1st contract went very well, I was on my own with no schedule, and the work was interesting. The 2nd and final contract ( from a different division that I was unfamilar with ) was a nightmare. They really didn't know what they wanted, but had to have it done right away. I couldn't get the information I needed from the full-time employees, and detected that they really didn't want to be cooperative. Was I pooping on their turf? I didn't know what internal politics was involved, but didn't want to get sucked into it. There were lots of billable hours, but the stress and lack of free time wasn't worth it.


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## james4beach (Nov 15, 2012)

Userkare said:


> Just keep asking yourself "am i still having fun?" When the answer is "no', then stop taking contract work.


Thanks, this is really good advice. Currently I am having fun doing the work.


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## james4beach (Nov 15, 2012)

cainvest said:


> Not a mistake if expectations are set and *truely understood by the client*. Seen this happen a number of times where the client "all of a sudden" expands the scope of the project or needs it faster than expected.


So far it's been good, but I do worry about this. If a client started doing that as a pattern, I would stop working with them.


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## Topo (Aug 31, 2019)

One thing to consider is how cyclical or secular factors affect your line of work (leading to volatile income). For example how will recessions or government-driven austerity policies affect your pay or amount of work available to you. If your work is recession-proof, then you have a lot of control over how much work you do. If you are in a cyclical business that would be adversely affected in a downturn, it may be prudent to front-load your work because you may be pushed into an involuntary sabbatical in those times. Same also applies if there are secular trends that could make work hard to come by later (technological advances, etc). 

Most importantly, if you are financially independent, consider yourself bullet-proof. You are the master of your time.


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## james4beach (Nov 15, 2012)

Good points about the cyclical nature. That does apply to my work, but I already front loaded it. The income in my last 3 years was very high, and I already collected and banked that money (working more than I really wanted to).



Topo said:


> Most importantly, if you are financially independent, consider yourself bullet-proof. You are the master of your time.


I'm not retired or financially independent but I'm close. At this point all I need is a bit of income; I no longer need a full time job. I am confident that my finances would be OK even if I never had another full time, full hours job.

And I should clarify that when I say "a bit of income", I don't mean right now. I could go 5 or probably even 10 years without income. I just mean that, averaged over the next 20 to 50 years, I need a bit of income.

Because I only need a bit of income, I'm trying to be very selective... I'd rather take a contract for an interesting but low pay project rather than exhausting highly paid work. Or alternatively I would rather spend two years with no income searching for an interesting project rather than fill my time with uninteresting work.

As you might be able to guess from my Permanent Portfolio / risk parity threads, I'm already somewhat living off capital. But because I'm very young (hopefully a long time horizon) and because I don't want to get stale, I would still like to work... just not very much.

I feel like occasional, interesting working bringing in a bit of money would be perfect for me. It would strengthen my capital position, keep me sharp & employable, without exhaustion or having to give up on other interests and passions.


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## Topo (Aug 31, 2019)

Looks like you have all bases covered. You are close to financial independence and can choose to work as little or as much as you like to. That gives you the freedom to spend your time as you wish. 

Well done!


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## james4beach (Nov 15, 2012)

Topo said:


> Looks like you have all bases covered. You are close to financial independence and can choose to work as little or as much as you like to. That gives you the freedom to spend your time as you wish.
> 
> Well done!


Thanks Topo. I'm definitely enjoying the freedom.


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## Longtimeago (Aug 8, 2018)

Userkare said:


> Just keep asking yourself "am i still having fun?" When the answer is "no', then stop taking contract work.
> 
> At my retirement lunch, I was asked if I would consider doing some contract work. I didn't want to slam the door on opportunity, so I said yes. The 1st contract went very well, I was on my own with no schedule, and the work was interesting. The 2nd and final contract ( from a different division that I was unfamilar with ) was a nightmare. They really didn't know what they wanted, but had to have it done right away. I couldn't get the information I needed from the full-time employees, and detected that they really didn't want to be cooperative. Was I pooping on their turf? I didn't know what internal politics was involved, but didn't want to get sucked into it. There were lots of billable hours, but the stress and lack of free time wasn't worth it.


After I retired in my early 40s, I found that this perception that 'he must know something to have done that'. As a result, I often found people trying to get me involved in something that would benefit them at least as much as it would pay me. This kind of thing of having opportunities to make some money just get put to me without my ever having gone looking for anything continued on for many years. It was only as I started nearing 60 that it no longer seemed to occur. It was an interesting phenomenon to see happening.

I refer to having just 'fell into' several of these money making opportunities since retiring. But with all of those I chose to 'fall into', as Ukerkare suggests, I did them ONLY until they were no longer fun. I also never let anyone involve me in something that they thought they could profit from but that I did not perceive as being fun for me to be involved in. So my advice is sure, take something on that is offered to you that you are interested in doing, turn down others politely and stop doing anything you do do, when it is no longer fun.

As for number of hours and work/life balance, I always went with things that were time limited by nature and had little scope for anyone to try and expand them on me. I always made sure up front that what I would do and how much time I would spend doing it was understood.


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## ian (Jun 18, 2016)

I think that the trick will to keep the funnel filled to your desired level and to accept assignments/contracts that expand your knowledge and experience base. I suspect that remaining challenged and expanding your knowledge base is the key to enjoying your contract work. I realize that this can be difficult to do at times depending on your client base.


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## james4beach (Nov 15, 2012)

Thanks for the great tips and advice everyone. I still have to get myself some Critical Illness insurance, I think. I did get a quote for Disability through my professional association (IEEE) but they actually cap benefits severely for self employed, max 16K annual payout. What kind of insurance is that? But CI may still work out.

Does anyone know if the University of Waterloo alumni group plan gives access to any kind of DI or CI?

I continue to do "poorly" at being semi retired and on sabbatical. I started off thinking I'll just take it easy. But then I stumbled into a contract job, which was fun. I now appear to have added a second client recently (direct result of my networking/meet-and-greet business trip in December), and I'm going to boost my hourly rate as well. Income projections for the year have shifted from a net withdrawal (thought I'd be living off capital) to net new additions.

Winnipeg deserves some thanks for this because once that Sept snow storm hit, I got trapped indoors and thought I might as well work more. And today with -33 windchill, it's not like I'm stepping outside.

Don't laugh but this is a mild disappointment for me as I was excited about trying to live off capital. I will have to defer that for later. I'm sure this business will slow down at some point, or I will get tired and want to step away.


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## Tayls77 (Dec 10, 2019)

james4beach said:


> Thanks for the great tips and advice everyone. I still have to get myself some Critical Illness insurance, I think. I did get a quote for Disability through my professional association (IEEE) but they actually cap benefits severely for self employed, max 16K annual payout. What kind of insurance is that? But CI may still work out.
> 
> Does anyone know if the University of Waterloo alumni group plan gives access to any kind of DI or CI?
> 
> ...


Its funny reading your post as I went through a similar thing at a much faster rate though. Sold the business last summer, thought I would stay on for 5 years until I was 60. After a few months wasn't enjoying it, so advised them I was going to three days looking for the life work balance. Been on this forum looking at both investment and retirement tips. Last week I advised them I was leaving for good at the end of February. I realized was staying more for the money then the job as I think I was just afraid to take the plunge and not have a paycheck, this forum removed those fears. 
I have already had some interest since announcing my retirement but I think I am going to give retirement a real try, maybe I will joining the ranks of those who say, "I should have done it sooner". Good luck with your dilemma and hopefully you get some clarity.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> ... I continue to do "poorly" at being semi retired and on sabbatical ... Don't laugh but this is a mild disappointment for me as I was excited about trying to live off capital. I will have to defer that for later. I'm sure this business will slow down at some point, or I will get tired and want to step away.


Work you enjoy now where you can put away for future retirement instead of spending capital is doing "poorly"?

Unless the work/life balance is getting out of hand or you feel it is somehow re-programming your brain to no longer enjoy non-work activities/spending ... I wouldn't sweat it. :biggrin:


Cheers


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## Longtimeago (Aug 8, 2018)

One of the interesting aspects of early retirement that I found was the perception of others when they found out I was retired. Basically, it was, 'he must know something to have been able to retire at 43'. What that resulted in was people approaching me with offers of jobs, projects, etc. Clearly, they were hoping they could use me to further their own goals somehow.

Nor were the proposals necessarily anything to do with my specific skill set. It seemed to be more of an 'he must have a brain and if he could do well in one thing he can probably also do well in my thing.' I found it quite amusing sometimes really. It was almost as if I had to fight to remain retired sometimes.

I did allow myself to what I call 'fall into' a few things over the years and that was fine, you just have to know to stop when it is no longer FUN. Being financially independent and 'retired' does not mean you cannot supplement your income, it just means you are free to choose to do so or not as you please.


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> Work you enjoy now where you can put away for future retirement instead of spending capital is doing "poorly"?
> 
> Unless the work/life balance is getting out of hand or you feel it is somehow re-programming your brain to no longer enjoy non-work activities/spending ... I wouldn't sweat it. :biggrin:
> 
> ...


Thanks for the thoughts everyone. You're right, as long as the work is enjoyable, there's no harm in doing it ... this is extra earnings & capital to store away.

The key factor seems to be whether the work is fun, as opposed to a tiresome chore. Currently I still do find it fun, and my current entrepreneurial activities have been pretty exciting. I'm close to locking down a second client and many opportunities are popping up these days. More than I expected.

I just want to make sure I leave enough free time in my life for leisure. It's a tough balance to achieve and I've never quite gotten the balance that I want. Still trying to find a good balance!


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## Eclectic12 (Oct 20, 2010)

Maybe it's your writing style or lack of details ... but it reads to me you are sweating a minor imbalance such as 55% work to 40% leisure versus having a larger one like 95% work to 2% leisure balance.

If you are concerned about the balance to that degree, why not schedule in your leisure so that it fits your allocation and fit the exciting, unexpected work around it?
Should the client have a different time line, you weren't depending on this work in the first place, right?


Cheers


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## Longtimeago (Aug 8, 2018)

james4beach said:


> Thanks for the thoughts everyone. You're right, as long as the work is enjoyable, there's no harm in doing it ... this is extra earnings & capital to store away.
> 
> The key factor seems to be whether the work is fun, as opposed to a tiresome chore. Currently I still do find it fun, and my current entrepreneurial activities have been pretty exciting. I'm close to locking down a second client and many opportunities are popping up these days. More than I expected.
> 
> I just want to make sure I leave enough free time in my life for leisure. It's a tough balance to achieve and I've never quite gotten the balance that I want. Still trying to find a good balance!


I don't see how it is a 'tough balance to achieve' UNLESS you allow greed to enter into your decision making. That is, if someone offers you enough money, you are willing to give up your leisure time to get the money. It's real simple. Which do you value MORE, time or money, you can't have both. Eclectic12 suggests a simple solution, schedule your leisure time and then only take on work that fits around it. That works, right up until you decide you can't pass up a job that pays 'good' money.

I'd say if you are having difficulty finding a balance, that is where your issue lies. You are still seeing money as more important than time. You have to set your criteria for taking something on BEFORE some offer comes along, otherwise you may indeed find yourself regretting a decision to start something and then finding out it interferes with your leisure activities.

For example you could decide you will not take on anything that you cannot do on a 2 day per week schedule. If someone then wants you to take on a project that will take say 3 months of full time concentrated work, the answer is NO, regardless of how well it would pay. I suspect that under those circumstances you would decide to 'compromise' your leisure time for the money.

When you write, "I'm close to locking down a second client and many opportunities are popping up these days", what I read is still thinking as a 'willing worker' rather than as a 'retiree'. I would never be looking to 'lock down a second client', that sounds like you are TRYING to make it happen. That is the total opposite of trying to avoid working and only doing something that is OFFERED to you (you don't have to do anything to make it happen) if you see it as being fun. I would never be excited by people giving me multiple offers of work and I would never be looking for opportunities to work. I read your own words as betraying your thinking as not having shifted.


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## cainvest (May 1, 2013)

james4beach said:


> The key factor seems to be whether the work is fun, as opposed to a tiresome chore. Currently I still do find it fun, and my current entrepreneurial activities have been pretty exciting. I'm close to locking down a second client and many opportunities are popping up these days. More than I expected.
> 
> I just want to make sure I leave enough free time in my life for leisure. It's a tough balance to achieve and I've never quite gotten the balance that I want. Still trying to find a good balance!


Since you're still young and work is fun then earning capital to invest now puts compounding on your side. Not saying you should bury yourself in work for the payback later but a little more work now (since its available) could give you more options for FIRE.


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> Maybe it's your writing style or lack of details ... but it reads to me you are sweating a minor imbalance such as 55% work to 40% leisure versus having a larger one like 95% work to 2% leisure balance.
> 
> If you are concerned about the balance to that degree, why not schedule in your leisure so that it fits your allocation and fit the exciting, unexpected work around it?
> Should the client have a different time line, you weren't depending on this work in the first place, right?


You make a lot of sense, and this is good advice. I think you're right about all the above.

I ask you guys this stuff because you really do have good replies. All of this really helps me out -- thanks to all who are replying


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## james4beach (Nov 15, 2012)

cainvest said:


> Since you're still young and work is fun then earning capital to invest now puts compounding on your side. Not saying you should bury yourself in work for the payback later but a little more work now (since its available) could give you more options for FIRE.


No question that compounding is on my side, and definitely, there is an advantage to burying myself a bit in the immediate work. I like that it creates more options for the future.

I have a fear of becoming a workaholic, and getting so buried in "constant work" that I miss out on other enjoyable things. Maybe it's an unjustified fear.

As Eclectic12 says, what I should be doing is scheduling leisure activities I want to do, so that they take priority. The work should fit around it, and I have the luxury of doing that now.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> You make a lot of sense, and this is good advice. I think you're right about all the above.
> I ask you guys this stuff because you really do have good replies. All of this really helps me out -- thanks to all who are replying


It gets confusing as some posts make it sound like a minor difference in the work/leisure balance then in post # 81 there's "an advantage to burying myself a bit".

If you don't want to post numbers that's up to you but it sounds like tracking work versus leisure and looking for leisure being sacrificed might go a long way to identifying a problem or reassuring you.


Cheers


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## james4beach (Nov 15, 2012)

Very good points again Eclectic. Maybe tracking this better can help clarify things for me. I recently have started carefully tracking all hours worked in all forms (direct work, plus overhead such as administration, networking) and I think that will help.


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## james4beach (Nov 15, 2012)

I looked at my recent timesheets and I think this helps explain something. This last week was pretty busy for me, with roughly 20 hours of time consumed by "work" of all kinds relating to clients. This involves some lack of choice, having to (for example) take a phone call first thing in the morning, or another day -- I had to skip going to lap swimming because of an important work phone call. Another thing that happened is that I had a work meeting in the evening with complicated outcomes, so I had to work on condensing and organizing my notes late into the night... _which I truly did not enjoy_.

And yes, I do get paid for all that work. Pay isn't the problem here as I'm compensated extremely well for my time.

So the discomfort is partly due to 20 hours in the week of work (which does seem too high to me). But also partly, maybe more importantly, having to skip the leisure I wanted (swimming exercise) for work reasons.

I'm not entirely sure how to tackle those factors because any time I'm working with clients, there will sometimes have to be compromises made in my personal schedule.


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## cainvest (May 1, 2013)

james4beach said:


> So the discomfort is partly due to 20 hours in the week of work (which does seem too high to me). But also partly, maybe more importantly, having to skip the leisure I wanted (swimming exercise) for work reasons.


At 20 hours of work a week I don't believe "workaholic" should be a worry for you .... just saying.


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## james4beach (Nov 15, 2012)

cainvest said:


> At 20 hours of work a week I don't believe "workaholic" should be a worry for you .... just saying.


Thanks, this does make me feel better.

Keep in mind though, my 20 hours of highly focused (pure work) may be more actual work than many typical workers at 40 hours.


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## cainvest (May 1, 2013)

james4beach said:


> Thanks, this does make me feel better.
> 
> Keep in mind though, my 20 hours of highly focused (pure work) may be more actual work than many typical workers at 40 hours.


It's still only 20 hours spent working but that likely benefits you on a contract (e.g. stated amount of work needs to be done).
For comparison (back many moons ago) I was pushing 80-100 hours a week for months and that was on salary with no overtime pay.


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## Eclectic12 (Oct 20, 2010)

cainvest said:


> james4beach said:
> 
> 
> > ... This last week was pretty busy for me, with roughly 20 hours of time consumed by "work" of all kinds relating to clients. This involves some lack of choice, having to (for example) take a phone call first thing in the morning, or another day -- I had to skip going to lap swimming because of an important work phone call. Another thing that happened is that I had a work meeting in the evening with complicated outcomes, so I had to work on condensing and organizing my notes late into the night... _which I truly did not enjoy_ ... So the discomfort is partly due to 20 hours in the week of work (which does seem too high to me). But also partly, maybe more importantly, having to skip the leisure I wanted (swimming exercise) for work reasons ...
> ...


Considering when you were an employee, IIRC you were talking about significantly more hours where you cancelled far more leisure activities - being worries, maybe obsessing about twenty hours potentially making you a workaholic suggestion you've lost perspective.




james4beach said:


> ... Keep in mind though, my 20 hours of highly focused (pure work) may be more actual work than many typical workers at 40 hours.


Seems obsessive to be comparing to "typical workers" when you are the one in control.

When you were talking about collapsing upon arrival home, with far more than twenty hours of work - did the "typical workers at forty hours" need to concentrate matter to you?
Why now, considering it seems like the job hasn't changed?

What would shifting to that sort of work do to your leisure activities/opportunities? How much would you enjoy such a job which likely has a much lower income? Or one similar to what cainvest describes?

IMO you are creating unnecessary trouble when comparing to a mythical "typical worker", who in theory concentrates less or more or the same. 


The decision you have to make is whether you are sacrificing too much leisure for work that wasn't planned on. I don't think you are but you are the one that has to decide what's right for you. Things like "becoming a workaholic while working significantly less than as an employee" or trying to compare concentration between jobs are red herrings that are distracting you from what you need to decide.


Cheers


*PS*
If you asked these questions of your former co-workers doing similar work - what reaction do you think they'd have?


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## james4beach (Nov 15, 2012)

Good points ^ there and yes, I was getting exhausted when working 40-60 hours a week. My current situation is much better; I actually have time to do things.

No question that I've improved my situation.


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> Considering when you were an employee, IIRC you were talking about significantly more hours where you cancelled far more leisure activities - being worries, maybe obsessing about twenty hours potentially making you a workaholic suggestion you've lost perspective.


Very possible that I've lost some perspective



Eclectic12 said:


> When you were talking about *collapsing upon arrival home*, with far more than twenty hours of work - did the "typical workers at forty hours" need to concentrate matter to you?


Right. Those long hours in an office job are just exhausting. 40 hours, 50 hours etc spent in the office, stuck in there, always superceding your personal plans. Not even being able to take a day of respite to yourself. That stuff really wore me out and exhausted me.

I have far more energy today without that crushing pace of work. I'm very happy to be free from that.

(Thank goodness I saved up all the excess money from those previous exhausting work hours.)


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## cainvest (May 1, 2013)

james4beach said:


> Right. Those long hours in an office job are just exhausting. 40 hours, 50 hours etc spent in the office, stuck in there, always superceding your personal plans. Not even being able to take a day of respite to yourself. That stuff really wore me out and exhausted me.


This paints a very different picture, I had no idea a regular work week (40 hrs) was so stressful for you. You'll definitely need to manage your work/free time to control that.


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## james4beach (Nov 15, 2012)

cainvest said:


> This paints a very different picture, I had no idea a regular work week (40 hrs) was so stressful for you.


40 hours a week tires out many people. Each person is different, but I know many people are pretty worn out by their 40 to 45 hour a week jobs.


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## cainvest (May 1, 2013)

james4beach said:


> 40 hours a week tires out many people. Each person is different, but I know many people are pretty worn out by their 40 to 45 hour a week jobs.


I've been doing 40+ hours a week for many decades, same as most of my friends in all sorts of fields of work. We always find time for leisure activities and normally one only complains about being tired if they've been pulling overtime hours or if they've been sick or something. Now I'll point out that some do complain they're "tired of their work" because they don't like their jobs but that is different.


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## james4beach (Nov 15, 2012)

I'm glad to hear it's worked out for you and your friends, but many people do find 40 hours in the office exhausting.

There's another potential issue here which is that older men try to act brave and strong for social reasons (also a generational difference). You may not be getting an accurate "reading" of just how much full time work wears out people, even in your demographic. Whether it's age group, or male bravado, I don't know. We have enough secondary and tertiary indicators, such as health and mental health stats, to think that people generally are pretty tired.

In any case, 40 hours in an office with only a couple weeks vacation is too much for me. I won't be doing that again as I really don't need to any more


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## cainvest (May 1, 2013)

No social reasons/pressures in my group, everyone tells it like it is, we don't sugar coat things. 

Regardless of the differences you have to do what is "best for you" so hopefully you can find and maintain a good balance.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> Very possible that I've lost some perspective ...


With less than or about half of the old working hours being a "concern" with an occasional dropping of a leisure activity, I think you have.




james4beach said:


> ... Those long hours in an office job are just exhausting. 40 hours, 50 hours etc spent in the office, stuck in there, always superceding your personal plans. Not even being able to take a day of respite to yourself. That stuff really wore me out and exhausted me ...


No weekends off in the old job?
Plus don't forget from what you've said, the vacation/statutory holidays granted while working in the US were far fewer than most Canadian jurisdictions.


It is probably a factor in why I look at the 40/50 hours as not that bad compared to 80+ hours a week for months on end with no overtime.


Cheers


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> Plus don't forget from what you've said, the vacation/statutory holidays granted while working in the US were far fewer than most Canadian jurisdictions.


This was indeed a factor.



> It is probably a factor in why I look at the 40/50 hours as not that bad compared to 80+ hours a week for months on end with no overtime.


It's all relative but both of those sound tiring to me. I think working 80 hours a week is an easy way to shorten your life.

Working 50 hours a week in a sedentary job, with no fresh air and little daylight, also wouldn't be a good fit for me. To each their own but I aggressively saved money and invested so that I don't have to keep doing it.


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## heyjude (May 16, 2009)

james4beach said:


> I think working 80 hours a week is an easy way to shorten your life.


That is certainly true, as I discovered from personal experience when working as a doctor. My Dad said “you’ll be old before your time”. He was right. So I lived well below my means, became FIRE and retired early.


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## kcowan (Jul 1, 2010)

In my first real job, I worked on the automation of 2 IOEL plants in Sarnia for 3 years. Bac use I was single and the demands for computer tome were large, I decided to work 8 pm to 8 am T thru Th. Woke op on Friday around 3pm and the drove to GTA to spend the weekend with friends.

On Sunday, I left around 6 and partied from 9 until 12, then went to work until 8 am and repeated the cycle. So I was putting in 4x16 plus 8 hours (72 hours a week on salary), but got all my work done and then helped rest of the team.
The performance stayed with me my whole career as someone who will do what needs to be done.

Got many awards subsequently but I eventually managed my time down to 50 hours. Earnings grew by a factor of 30 over 25 years.

The point,of the story is that everyone can manage their most important resource to,their own benefit, because otherwise you just resent working for "the man"!


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## Longtimeago (Aug 8, 2018)

cainvest said:


> I've been doing 40+ hours a week for many decades, same as most of my friends in all sorts of fields of work. We always find time for leisure activities and normally one only complains about being tired if they've been pulling overtime hours or if they've been sick or something. Now I'll point out that some do complain they're "tired of their work" because they don't like their jobs but that is different.


Well, 40 hours in the office is not the same for everyone. It depends on many factors such as the intensity of the work being done and just how many of the 40 hours are actually being spent doing the work. For example, someone who has time to update their Facebook page during their work day is probably not going to be as tired as someone who is working at or near their maximum capacity for the entire 40 hours. In other words there is a difference between 'putting in' 40 hours and actually 'working' 40 hours. There are plenty of people who 'put in' X hours but don't actually 'work' all those hours.

Then there is the question of what does a 40 hour work week actually mean? Does it include 'breaks' and lunch hour? In which case 40 hours is never actually being worked at all. If you want to try and determine how much work people are actually doing, it is better to look at productivity rather than hours spent in an office. Looking at that, you will find there is actually no correlation between hours spent and productivity. Some of the most productive countries actually have lower hours spent than some less productive countries. The inferrence is that more productive people are probably working smarter, not harder but you could also infer that they may well be working with more intensity and allowing less distractions when they are working. Look at this list and give it some thought. https://time.com/4621185/worker-productivity-countries/

The average Canadian work week is only 32.8 hours and the productivity is ONLY $50.9 of GDP per hour worked. At the same time, Luxembourg at the top of the table only has an average work week of 29 hours and yet they produce $93.4 per hour worked. Sure looks to me like Canadian workers are 'slackers' by comparison.


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## Eclectic12 (Oct 20, 2010)

All interesting with different work experiences, different job requirements ... none of which changes that James reduced 20 hours a week work is likely similar to the previous 40 - 50 hours, making it unlikely IMO that his fear of becoming a workaholic is a problem.

AFAICT, he has already freed up 20 - 30 hours a week to relax, particularly since he doesn't need the work and being self-employed, he should be able to negotiate the schedule and where the client won't do so, he can drop that project/client. 

Based on the "not even being able to take a day of respite to yourself", it sounds like weekend off may also have been added to the mix.



Cheers


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## james4beach (Nov 15, 2012)

Update on my "sabbatical". After the earlier discussion, I was careful to ease off the work a bit and make sure I leave enough leisure time for myself. There's no question I now have more free time than when I was working.

Today, I am apparently 56 K wealthier than the day I quit my job! That's due to living expenses (-) with investment performance (+) and some self employment income (+).

Granted, extremely strong markets are a big part of that but it's still really nice to see. If anything _close_ to this continues for the next few years, I'm going to be very happy. I deliberately chose an asset allocation with low historical volatility and minimal drawdowns, hoping that I can engineer my net worth to gradually and consistently keep rising, even without a real job.

There's a danger of being overoptimistic during such strong markets. But my hope... and intention... is that I will continue to see my net worth gradually rise with time even as I work less.


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## Longtimeago (Aug 8, 2018)

james4beach said:


> Update on my "sabbatical". After the earlier discussion, I was careful to ease off the work a bit and make sure I leave enough leisure time for myself. There's no question I now have more free time than when I was working.
> 
> Today, I am apparently 56 K wealthier than the day I quit my job! That's due to living expenses (-) with investment performance (+) and some self employment income (+).
> 
> ...


As I have said in this forum before james4beach and will no doubt continue to say, the saying is, 'nothing is as constant as change'. Whenever I read a post where someone is talking about their 'retirement plan' over the long term, I just shake my head. Things change and we just have to change with them. What will change and how we will have to adapt to that change are unknowns that we cannot plan ahead for unless we happen to have a crystal ball. 

The important thing is to be ready to change when needed and quickly. I look at what I think will happen in the coming year, each January and plan accordingly. One year or 'one step' at a time. My net worth has continue to grow now for 30 years since 'retiring' but nothing about it looks anything like it did 30 years ago.

Re your 'sabbatical', one alternative to actually full time retirement is to work part time for a long time. I happen to know a Psychologist in Australia who is now in her mid-50s (at least that's what she will admit to). She has only worked 2-3 days per week for the last 20 years. Her office is a 10 minute walk from her home and she spends more time gardening than she does at her profession. She has a private pension plan she pays into as well as whatever government pension income she can expect. She intends to continue to 'work' this way until she reaches the point where she decides to retire completely.

Maybe you will decide to stay on 'sabbatical' a long, long time.


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## james4beach (Nov 15, 2012)

Wise observations Longtimeago, thanks. I'm certainly willing to see how things play out.


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## Longtimeago (Aug 8, 2018)

I should have said that the Australian woman isn't interested in getting rich or retiring rich, only in having enough to meet her needs and allow her to enjoy her life. She is one of the most content people I have ever met.

A lot of people don't seem to understand the difference between 'standard of living' and 'quality of life.' Chasing a higher standard of living meaning more income and net worth rather than trying to figure out how much they need to enjoy the quality of their life and to be CONTENT.

The funny thing is that those who keep chasing more money never do seem to reach a point of contentment. It always has to be 'more.'


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## james4beach (Nov 15, 2012)

Longtimeago said:


> The funny thing is that those who keep chasing more money never do seem to reach a point of contentment. It always has to be 'more.'


I know people like that too.

It's now 41 days into the year, and I've already got contractual agreements that provide enough income for my full year's living expenses. Very glad that I quit my office job. If you had asked me five years ago, I would have never thought this would be possible.

Theoretically I could just work for another few weeks, completing the existing agreements, and I would be done for the year (income > expenses). More likely though I will work throughout the year at a slow pace, as there's no harm banking some extra dollars to compensate for the lean years.


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## Longtimeago (Aug 8, 2018)

james4beach said:


> I know people like that too.
> 
> It's now 41 days into the year, and I've already got contractual agreements that provide enough income for my full year's living expenses. Very glad that I quit my office job. If you had asked me five years ago, I would have never thought this would be possible.
> 
> Theoretically I could just work for another few weeks, completing the existing agreements, and I would be done for the year (income > expenses). More likely though I will work throughout the year at a slow pace, as there's no harm banking some extra dollars to compensate for the lean years.


One aspect to keep in mind is that if you want to continue doing contracts year after year, you must maintain your 'presence' in your market. Many people find they can get some contract/consulting type work after retiring but it tends to dry up in a couple of years because their 'face' is no longer being seen enough out there in the marketplace. They can also be perceived as having lost touch with the latest and greatest advances in their field etc.

My impression is that if the idea is to continue to work 'part time' over many years, it is best to work throughout the year, just not as much as when you worked full time. My Australian example, works every week except when she is off on vacation. To her clients and colleagues in her profession she APPEARS to be working full time if you see what I mean. So yes, work 'throughout the year at a slow pace' as you said.


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## james4beach (Nov 15, 2012)

Longtimeago said:


> My impression is that if the idea is to continue to work 'part time' over many years, it is best to work throughout the year, just not as much as when you worked full time. My Australian example, works every week except when she is off on vacation. To her clients and colleagues in her profession she APPEARS to be working full time if you see what I mean. So yes, work 'throughout the year at a slow pace' as you said.


Very good points there, thanks


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## james4beach (Nov 15, 2012)

Revisiting this thread from when I quit my 'regular job' and started a more relaxed pace, with more free time, along with some contract work & self employment. It's been going well.

I want to thank everyone for the great ideas and advice. I really do appreciate everyone at CMF and the help you offer.



Retired Peasant said:


> You need to embrace winter - cross-country skiing, snowshoeing, skating ...





Userkare said:


> Just keep asking yourself "am i still having fun?" When the answer is "no', then stop taking contract work.





Topo said:


> You are close to financial independence and can choose to work as little or as much as you like to. That gives you the freedom to spend your time as you wish.





Eclectic12 said:


> it reads to me you are sweating a minor imbalance such as 55% work to 40% leisure versus having a larger one like 95% work to 2% leisure balance.
> 
> If you are concerned about the balance to that degree, why not schedule in your leisure so that it fits your allocation and fit the exciting, unexpected work around it?


You hit the nail on the head here @Eclectic12 because at the end of the day, I now enjoy far more leisure time than I did before. Some weeks, I'm able to work as little as 2 days. As you suggested, I've also been scheduling in leisure on my calendar and this has worked very well for me.

I'm about a year into my self employment / contract work and it's going better than I expected. I even brought a friend on board, and we're now a two-man team with more capabilities and availability. I do the project planning, budgets and project management, while he focuses on technical work.

Initially I thought I would start withdrawing and living off my capital but this didn't happen. My net worth is 135K higher than when I quit my high-paying job! I didn't expect that to happen.

The only downside has been that I miss the social environment of my old workplace. I've kept in touch with them but obviously COVID was the unforeseen factor here.


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## kcowan (Jul 1, 2010)

james4beach said:


> ...
> The only downside has been that I miss the social environment of my old workplace. I've kept in touch with them but obviously COVID was the unforeseen factor here.


Yes even long-time retirees are having difficulty with social withdrawal, and so are my remote working sons.

I found going independent immediately increased my take home after tax by 50%.


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## cainvest (May 1, 2013)

james4beach said:


> I'm about a year into my self employment / contract work and it's going better than I expected. I even brought a friend on board, and we're now a two-man team with more capabilities and availability. I do the project planning, budgets and project management, while he focuses on technical work.
> 
> Initially I thought I would start withdrawing and living off my capital but this didn't happen. My net worth is 135K higher than when I quit my high-paying job! I didn't expect that to happen.
> 
> The only downside has been that I miss the social environment of my old workplace. I've kept in touch with them but obviously COVID was the unforeseen factor here.


Nice! 

Seems like you've found a good work/leisure balance now without needing to reduce your retirement savings. The social thing will get better post-covid so I wouldn't worry about that.


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## afulldeck (Mar 28, 2012)

@james4beach I just went back and read the entire thread. Congratulations on finding a balance for you. 



james4beach said:


> So far it's been good, but I do worry about this. If a client started doing that as a pattern, I would stop working with them.


One of the best things about contracting I found is that I can fire my clients (politely of course)


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## james4beach (Nov 15, 2012)

kcowan said:


> Yes even long-time retirees are having difficulty with social withdrawal, and so are my remote working sons.





cainvest said:


> Nice!
> 
> Seems like you've found a good work/leisure balance now without needing to reduce your retirement savings. The social thing will get better post-covid so I wouldn't worry about that.


Thanks guys. Yeah, I think the social withdrawal is really just a temporary covid thing.

Retirement savings are intact for now. I guess I'm not retired, since I'm currently not withdrawing from the savings.




afulldeck said:


> I just went back and read the entire thread. Congratulations on finding a balance for you.
> 
> One of the best things about contracting I found is that I can fire my clients (politely of course)


Thanks! I'm still new at this, so things might change, but I really like the current situation. Rising markets really helps, too.


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## Gator13 (Jan 5, 2020)

You're in great shape. You're on top of your investments and you live well within your means. And, if the situation changes or we have a couple consecutive down years, it sounds like you can take on more work if you choose to.

Enjoy your non-work pursuits!


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## james4beach (Nov 15, 2012)

Gator13 said:


> You're in great shape. You're on top of your investments and you live well within your means. And, if the situation changes or we have a couple consecutive down years, it sounds like you can take on more work if you choose to.
> 
> Enjoy your non-work pursuits!


Thanks! Yes I would even be willing to go back to a 'regular office job' in the future. I just felt that I needed a break from all of that.


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## james4beach (Nov 15, 2012)

I wonder if the strong equity markets might be reducing my motivation to work. Around when I started this thread, I quit my high salary job and went on "sabbatical". Then I found some consulting work and started working part time.

One year after I quit my job, my net worth was up 86K
Today, I'm 200K wealthier than when I quit my job.

These are mostly investment gains. Has anyone else experienced this effect? Now I'm saying to myself, why would I go back to full time work (and exhaust myself) when it seems that I can continue to become wealthier due to investments?


Also, thanks once again to the whole CMF community as I really think you helped me figure out this whole investing and portfolio design thing. Thanks to @AltaRed @Eclectic12 @fireseeker @like_to_retire @cainvest @agent99 @milhouse @My Own Advisor and countless others, both for sharing your own strategies and also helping stress-test my own ideas. It's fair to say that what I learned at CMF has improved my quality of life.


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## m3s (Apr 3, 2010)

james4beach said:


> These are mostly investment gains. Has anyone else experienced this effect? Now I'm saying to myself, why would I go back to full time work (and exhaust myself) when it seems that I can continue to become wealthier due to investments?


Yes

It feels like going to work comes at an opportunity cost of researching investments that would yield more for my time. I'm just conscious that this is probably temporary and it's worthwhile to build up a safety buffer. If I didn't have to live near work my expenses and taxes would be even lower in a better location.

I can see how most people's attitude towards work is very fake and based only on their need for promotions just to keep up with the lifestyle and fiat inflations. Not all but many would change given financial independence. They are exhausting themselves in a hamster wheel and don't even see it

Automation will only make it worse


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## Ponderling (Mar 1, 2013)

Good thread to review.

I have a call scheduled next week with my boss and HR to discuss the options for going from 37.5 to 22.5hrs per week.
Apparently it can be with or without benefits.

But boss and I am not sure what happens if there are times like writing a big proposal when work might even press beyond 40hrs in a week - would I get paid, or just carry it as more vacation or bank it to work under 22.5 hrs in future week.

I am salary now, so not fretting about overtime premium wage rate. 

But what happens if we wil a big proposal I wrote. Do I qualify for more than the 3/5 of the normal full work week management bonus slice I get now if I put gobs of time into it, etc etc etc.


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## james4beach (Nov 15, 2012)

Ponderling said:


> I have a call scheduled next week with my boss and HR to discuss the options for going from 37.5 to 22.5hrs per week.
> Apparently it can be with or without benefits.
> 
> But boss and I am not sure what happens if there are times like writing a big proposal when work might even press beyond 40hrs in a week - would I get paid, or just carry it as more vacation or bank it to work under 22.5 hrs in future week.


If you're anything like me, you'll enjoy the 40% reduction in hours. The issue you raise is a tricky one, though.


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## wayward__son (Nov 20, 2017)

james4beach said:


> I wonder if the strong equity markets might be reducing my motivation to work.


i have also observed a very strong inverse correlation between my net worth and ability to tolerate work related bs.


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## Ponderling (Mar 1, 2013)

Yes, I would not be looking at less hours if portfolio was at depths of first round of Covid numbers. 

On the other hand back then for 5 months in 2020 whole company was working a 4 day week and taking less pay as a result. The down side for me was my crew took different days, so I just spent a bit less time each day at the desk answering their questions and steering them in he right direction


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## afulldeck (Mar 28, 2012)

james4beach said:


> I wonder if the strong equity markets might be reducing my motivation to work. Around when I started this thread, I quit my high salary job and went on "sabbatical". Then I found some consulting work and started working part time.
> 
> One year after I quit my job, my net worth was up 86K
> Today, I'm 200K wealthier than when I quit my job.


My answer is no. My motivation is strong to work at things I want to do. It helps that my work is around problem solving and my outside pursuits are mainly physical. Its balanced. What I have in my investment account is not a preoccupation. 

However, I may stop working if taxes continue upwards. No one likes to be taken advantage of.


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## Ponderling (Mar 1, 2013)

So I had a meeting with my boss, my bosses boss and HR rep today.

Likely path for me is to go to a variable hours with benefits model of compensation. Hours will be at least 22.5 per week to keep benefits, and if I get busy I can choose to bank time over 22.5hours per week up to 360 hours of time before it needs to be paid out to me as wages.

Just await the HR document of employment offer ( even though at same company) and if it says what she said, I sign, and three weeks later I am at reduced hours and pay.

At reduced wage I get less chance to get invest in company stock. Used to sock away 3% of salary a year and co would match it in company stock. Now as variable I can do most 2%, and company only matches my money at 50%.Not a deal breaker. 

Vacation and wellness days accrue at 3/5 of full work week rate. Not too bad since I had a huge vacation allowance, so I end up at 3 weeks vacation and 3 wellness days per year now. Since no longer salary management I loose 3 comapny paid days off christmas to new years, and need to use own vacation time for that company shut down period unless I have accrued time to use up instead.

Pay in CPP slower, so now til September to max it. But if it means instead of 9-5, I can do three days 9:30-4 in office and one morning 9-noon to fill the reduced week that suits me fine. Even with hybrid work model my group has agreed that tues and thurs are networking days, and once back in office to some extent 10-3 Tues and Thurs are must turn up days for all staff. 

I give up management bonus, also called STIP in the variable model. But senior manangement is putting so many hoops in place to qualify no one ever sees a full pay out any more. As I put it on the call, it is like being told to be a clown at a kids birthday party, but no allows a red nose, while hair, gloves or floppy shoes but still put the costume on and expect a full house of giggles. 

To get stip, I need to be at fixed 22.5hrs a week. If I work more, I don't get paid anything for time over 22.5hrs , and at most qualify for 3/5 of the full time STIP pay out.

Full STIP pay out means: for your projects: report issues monthly on time, are done on time, and even better if under budget, and client pays really fast. Plus your department meets all its goals, plus your division meets all its goals, plus national meets all its goals. So 2019, last full precovid year I saw like 4k of the max 26k STIP because MTO pays slow no matter how often I call, and Ontario Transportation division I am part of was weak, and nationally had some weak divisions. This year all department budget goals were increased even though most of our clients are money focused on covid expenses for a while yet. So any STIP pot I miss this year will be bound to be a very small one.

But hey, that is why I am also a stock holder with 40K in holdings, because some of the unpaid STIP goes to the acquisition war chest, and in last two years we have continued to be an acquisition behemoth.


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## james4beach (Nov 15, 2012)

Ponderling said:


> Likely path for me is to go to a variable hours with benefits model of compensation. Hours will be at least 22.5 per week to keep benefits


This sounds pretty good. That's roughly similar to how much I'm working these days.

I certainly have a lot more free time than when I was working 40 to 50 hour weeks!


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## agent99 (Sep 11, 2013)

james4beach said:


> I certainly have a lot more free time than when I was working 40 to 50 hour weeks!


Gosh, I have worked 0 hours per week for past 18 years and I still don't have much free time!

When I do, I soon get bored and look for more things to do.

Mind you, playing golf sometimes seems like work 🏌️‍♂️⛳


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## afulldeck (Mar 28, 2012)

agent99 said:


> Mind you, playing golf sometimes seems like work 🏌️‍♂️⛳


Its worse. I work just to avoid the frustration of golf.


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## Eder (Feb 16, 2011)

These days I'll drive the cart...give advice & drink the beer but no more whap _uck for me...I'm free!


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## james4beach (Nov 15, 2012)

Eclectic12 said:


> maybe obsessing about twenty hours potentially making you a workaholic suggestion you've lost perspective.


Oh yeah, no question I've lost perspective. You're right, I am not a workaholic by any measure.

Work started irritating me last fall (customers ate up way too many hours of my time) so I decided to raise my hourly rate. I'm now charging around $200/hr.

I think I'm pushing my luck with this rate, but that's kind of intentional. I hope it also discourages them from asking me to do too much! And if it backfires on me and they don't want to hire me any more... I guess I'll have more free time then.

And it's not ludicrously high or anything. The CPA who I work with charges $350/hr, possibly even more now and I actually do think they are worth it.


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## james4beach (Nov 15, 2012)

Another update. I've now finished two years of operating my small business (self employed consultant). Despite the pandemic, it's been two profitable years! And my 2021 earnings were 13% higher than 2020 earnings.

Those of you near retirement age may want to consider quitting your jobs and working independently. I'm enjoying life much more than when I had to work full time in an office.

Another positive thing I'm finding is that the "social withdrawal" as we discussed earlier @kcowan is not as bad as I first feared. First, I still keep in touch with old friends from the office. I've visited some of them and will be visiting more of them soon when cross-border travel relaxes. I have some social phone calls with old colleagues lined up for today and tomorrow, so there's lots of social connections continuing.


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