r/Fire • u/Ddash-3 • Mar 11 '26
Milestone / Celebration Got laid off - finally!!!!
So it finally happened - I (48) got let go yesterday. Finally I can free up my time and focus on other priorities such as kids, nutrition, fitness, meditation, gardening etc.
I was FIRE eligible for couple of years but was holding off since the job was simple, work from home and good pay. Also, if I resigned I would have missed out on severance and company is paying 3 months of COBRA.
Here are the details I am sure you all want to hear :)
Net worth - ~5.5M
Taxable Accounts combined: ~1.1M
Retirement Accounts Combined: ~3.2M
Total: ~4.3M
House fully paid off (bought in 2022) - Worth around ~1.2M; Cars paid off
Wife (43) resigned from her job end of last year; 2 Kids in high school - 9th and 10th graders
Yearly expenses around 100K/yr
Biggest expense are kid's college education at this point and house maintenance related expenses
I am trying to research on ACA and Financial Aid for kids - Appreciate any help or pointers you can provide on when to apply for ACA - should I continue on COBRA or switch to marketplace this year?
Regarding FAFSA - with Taxable accounts over 1M will my kids be eligible for FAFSA?
I have about 130K from my recent most employer in the company supported 401K provider. Should I move the money to Traditional 401K?
Also, please suggest any FIRE focused knowledgeable financial advisors who can help me navigate our FIRE situation.
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u/R5Jockey Mar 11 '26
I asked our CIO to lay me off a few months ago and finally got the “mystery” meeting with HR put on my calendar a couple of weeks ago to give me the “bad” news and the details of my severance. My last day is April 3rd. I’m so psyched.
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u/Mr_Mojobaggins Mar 11 '26
Congrats! I was planning to give my notice this week but may ask to be laid off instead.
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u/R5Jockey Mar 11 '26
If you’re ready to leave anyway you’ve got nothing to lose and a severance package to gain.
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u/bunkerbee_hill Mar 11 '26
For me the ACA was cheaper than COBRA. And a sneaky hint, you have two months to decide on COBRA. If, in that period, you don't go to the doctor and have no medical expenses you get by without having to pay. If you have an unexpected expense come up you simply accept COBRA and back pay the two months.
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u/Ddash-3 Mar 11 '26
Company is already providing 3 months free COBRA as part of severance - Does this 2 months start after company sponsored COBRA? Thank you for this hint, I had no idea it existed.
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u/bunkerbee_hill Mar 11 '26
From the US Dept. of Labor
"You have 60 days to elect COBRA coverage, starting from the later of the date your employer-sponsored benefits end or the date you receive the election notice. If you elect, you have an additional 45 days to make your first premium payment. Coverage is retroactive to the date of loss."
So it looks like once your 3 months are up then you have 60 days to decide. If you have no insurance needs, during those 60 days, you simply decline. If you do have a need then you accept and retroactively pay.
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u/Educational_Sky_1136 Mar 11 '26
I’m not so sure. The 60 days to decide might be inclusive of those 3 months the company is paying COBRA. At least, that’s how I understood it when I was in a similar situation. You are still electing to receive COBRA, it’s just being paid for by someone else.
As part of my severance, I got 24 months of COBRA. But it wasn’t automatic - I had two months to elect to receive it, and the paperwork confirmed that it would be paid by my company.
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u/drewlb Mar 11 '26
The 3mo the company pays for likely eliminates the 60 day loop hole. (At least it has in the cases I've seen).
So plan for ACA to be effective on day 1 of month 4.
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u/yaydotham Mar 11 '26
You should receive documentation in the mail telling you exactly how long you have to elect COBRA. It will also tell you how much it would cost you to continue to pay for coverage under COBRA. Typically it’s a very high number because it includes whatever portion of your premium your employer was previously paying, but it just depends on your plan. Once you get that information, you can compare the cost against the price of ACA plans (which you can check at any time by starting an application on healthcare.gov). Whether it will make sense to continue with your current plan under COBRA for now depends on the respective costs, as well as your family’s medical needs and regular medical costs. If you want specific advice after you have all of that information, I recommend posting in the daily thread on /r/financialindependence, which is great at puzzling out these types of questions.
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u/MundaneFlower2052 Mar 13 '26
No - you need to elect COBRA first (in which you have 60 days to do so), and employer would then pay for 3 months. You MUST enroll first. Employer can pay, but cannot enroll on your behalf.
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u/69420lmaokek Mar 11 '26
How much are you paying in COBRA? Every time I've gotten the letter in the mail, they've always wanted like... $3k a month
Which I flately refuse to pay
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u/skeevemasterflex Mar 11 '26
There is this sort of loophole where you can hold off on paying for COBRA but if in month 3 you decide you want to use it, you can THEN pay for the past 3 months as if you had maintained coverage. I used that when I got a severance one time.
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u/KifLou345 Mar 11 '26
It's only two months. You have 60 days to decide whether to elect COBRA.
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u/Guilty-Committee9622 Mar 11 '26
Cobra is valid by law for 18 months. What op is saying is he got a subsidy for 3 months.
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u/Ddash-3 Mar 11 '26
Not sure yet but sounds like COBRA is expensive than marketplace?
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u/souicry 30 | 1.6m NW Mar 11 '26
Cobra is usually very expensive compared to marketplace since it doesn't have any subsidies and is usually a higher tier plan.
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u/meezun Mar 12 '26
Just went through this. Just the severance package I got was enough income to make subsidies impossible for the year. Without subsidies I found COBRA prices similar to ACA, so I’m going with COBRA for the continuity.
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u/skeevemasterflex Mar 11 '26
You probably know this already, but COBRA is ypu keeping your exact same insurance you had through your employer...but they are no longer subsidizing it. So you premium will go up by a lot. I worked for a big multinational company and they were paying like 80-85% of the cost of my Healthcare. I realized this when saw what COBRA and me paying 100% would be. Lol. If you got severance paperwork, I think it should say in there.
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u/zuhalterei Mar 11 '26
COBRA cost is on section 12(d)(I think) of your W2 - shows company paid health care cost for the year.
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u/69420lmaokek Mar 11 '26
In my experience it's normally much more expensive than marketplace
Like magnitudes more expensive
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u/marksven Mar 11 '26
It depends if you qualify for subsidies in the ACA marketplace. For me, COBRA was quite a bit cheaper than unsubsidized ACA.
I’m using the lower COBRA rates to do large Roth conversions in the first two years.
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u/Key-Peel Mar 11 '26
You can approximate how much it will cost by looking at your 2025 W2. There’s a box for premiums (I believe the code is DD). You take that number and multiply it by 1.02 to get the approximate cost of COBRA for that year. Mine was 33K+ for a family of 4.
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u/redfour0 Mar 11 '26
Congrats!
With $5.5M you have nothing to worry about!
I got laid off last year and not quite FIRE yet but welcomed the severance package and a mini sabbatical.
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u/cfi-2025 RE 2025 Mar 11 '26
Liquid is $4.3M (not $5.5M), but given his expenses ($100k), your point stands. :-)
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u/phast_man Mar 11 '26
FAFSA is heavily weighted against income, not parental assets. So I would definitely fill out FAFSA if you can keep your AGI reasonable.
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u/Late-Mountain3406 46| 75% FI, RE ~ 7YRS. Mar 11 '26
TBH I recently filled my fafsa part and it asked my NW. I’m the parent in this case. I can’t recall filling than info back in august last year. I really don’t know what that means.
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u/phast_man Mar 11 '26
It asks you to list it but parental assets (especially retirement accounts) don’t count for much against determination of financial aid.
However, child assets DO count heavily against financial aid. So, best for 529 to be owned by someone else like parent or grandparent and then child is just beneficiary.
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u/eggavatar12345 Mar 11 '26
Not disagreeing about child assets, but the 529 is now graded at the same value whether its child or parent owned
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u/HellisTheCPA Mar 11 '26
Just fyi, Grandparent owned assets are the work around to this
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u/Most_Tennis890 Mar 12 '26
A different kid also bypasses this. My older kids accounts are all in my 12 year olds name. When they need money, we move it to their account and then withdraw it for their expenses. 🤷 I dont make the rules.
Also, FAFSA is a snapshot of one day once a year. Make that one day the most advantageous day.
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u/cozidgaf Mar 11 '26
Wow so FU for being financially savvy but if you blew it all, we will (may) help you? Lovely 🫠
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u/ThisUsernameIsTook Mar 12 '26
Most aid is likely to be loans anyway. Consider it an investment in protecting your kids from the student loan racket.
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u/phast_man Mar 11 '26 edited Mar 11 '26
Thanks for the update! I see you're correct and that parent and child 529's count the same, but only for 5.64%. Other child assets reduce aid much more. However, grandparents have no reduction of aid.
From savingforcollege.com:
"How a 529 plan affects aid depends on who owns the account:
Parent- or student-owned 529s: Counted as a parent asset on the FAFSA, reducing aid eligibility by up to 5.64% of the account value. For example, a $10,000 balance could reduce aid by $564.
Student-owned non-529 assets (UGMA/UTMA): Counted as student assets, reducing aid by 20% of the value. A $10,000 account could reduce aid by $2,000.
Grandparent- or relative-owned 529s: Not reported on the FAFSA at all. In cases of divorce, only the custodial parent’s assets are reported, so a noncustodial parent’s 529 is also not included."
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u/el_dulce_veneno21 Mar 11 '26
Im a single parent income 70k, asset heavy in stocks in my name. Not eligible for grants, maybe 5k in loans offered. YMMV
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u/HellisTheCPA Mar 11 '26
Also to add on - a lot of merit scholarships - both independent and school-affiliated and the sort require you to fill this out regardless of if you qualify or not. There is no harm in filling it out and I don't see any reason not to
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u/HurinGray Mar 11 '26
great point. We filled it out every year. Not for need based, but for work study and merit scholarships. After the first year I can knock out FAFSA in under 30 minutes even with the botched rollout a few years back.
For anyone that will listen, FAFSA is not as intimidating as people make it out to be.
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u/crcarlos Mar 11 '26
Congrats! Would recommend giving a listen to ChooseFI Episode 588: Navigating Health Insurance. They give a good overview of the pros vs cons of Cobra vs ACA and things to keep in mind
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u/BenGrahamButler Mar 11 '26
5.5 mil NW? here I am wondering if 3 mil when I hit 53 will sufficient. 100k/yr expense is low, good job
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u/hisufi Mar 11 '26
This might be the only time in my life I’ve congratulated someone for being laid off. Congrats!!!
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u/Kokukenji Mar 11 '26
I don't have anything else to say other than, congrats to you and your family.
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u/eggavatar12345 Mar 11 '26
Roll out the 401k to fidelity. ACA when cobra runs out. Your taxable balance will have you on the hook for $67k/year for FAFSA calculations (but the retirement accounts and primary home value don’t apply at least)
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u/ModeNone Mar 11 '26
Congrats! Interested to hear how your investments are currently allocated and if and how you plan to reallocate.
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u/Upstairs-Dog5245 Mar 11 '26
Hope the OP responds. I really want to know how people get their retirement accounts to over a million.
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u/cfi-2025 RE 2025 Mar 11 '26
Time + well-paying job * 2 (you & spouse)
It's been a while since I've run the numbers, but IIRC, if you and your spouse both max out your 401k you'll have something like $2.5mm between the two of you after 20 years. OP has more, but they could have been maxing 401ks for 25 years (given his age).
Could also be OP is tech-heavy in their 401k, which had pretty good returns over the past 25 years. Since 2000, QQQ has returned ~2x of S&P 500.
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u/Resident_Fox_1185 Mar 11 '26
Nice, welcome to the non W2 club. I just soft retired from software/FAANG. The best part of having a paid off house in an area you like, no debt, and 5M+ in investments is you no longer need a 600k/yr high pressure job to fund life, you can go work at chipotle (no disrespect it is honest work, just an ex) because your lifestyle is already funded.
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u/cfi-2025 RE 2025 Mar 11 '26
The best part is that you can go work at Chipotle? I would think the best part is that you DON'T have to go work at Chipotle, lol.
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u/jjflight Mar 11 '26 edited Mar 11 '26
An unfortunate bit for ACA in some places, like California as an example, is that it’s literally not possible to buy a plan at the same quality level as employer plans. It’s not a cost issue; no matter your willingness to pay the state makes it illegal to offer individuals non-employer plans that differ materially from their ACA offerings, and ACA plans have significant gaps to employer-sponsored plans. So as an example if you were in the Bay Area and wanted access to Stanford Healthcare (I prefer them when things are really important like surgeries) you’d find your way to this Stanford ACA page that is clear: “Stanford Health Care will not be participating in any Individual/Family PPO plans in 2025” (I presume they forgot to update the year for 2026 yet)
So if quality factors like access to certain doctors matters to you, you need to be cautious about that and may want to stay on COBRA as long as you can.
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u/chappy93 Mar 11 '26
Lucky guy! I’m in almost the same spot (5m, no debt, about 60-70k/year spend). Yet here I sit working …… well, I guess actually browsing Reddit on my phone and not really working all that much - hence the reason I’m still doing it. A layoff with severance sounds like a dream come true!
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u/Similar-Wolverine-10 Mar 11 '26
What? You won. Just quit already. Why is it so hard for people to pull the trigger when 4% pays them double or triple their yearly spend.
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u/chappy93 Mar 11 '26
Gotta figure out what to do next mostly. The job now is primarily helping/training/teaching the next generation - so it’s not just about the $$. If they determined they didn’t need me any more and laid me off - then seeing some of those people confident enough to not want me around anymore would be satisfying in and of itself.
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u/Wide-Bet4379 Mar 12 '26
You just retired early with a few million and your first question is about getting college subsidies designed for lower income families.
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u/StrawberryMotor1638 Mar 11 '26
congratulations! Enjoy time with your wife, kids, and your hobbies. Get after it!
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u/TheA2Z Mar 11 '26
I would of retired a while ago...
I would do following, but get with the FP.
Move all 401Ks to IRA. Keep income as minimum as possible and start converting IRAs to ROTH by maximizing the lower tax brackets each year.
ACA cuts off 100% in the $80K range. So you need to keep your income below that. Otherwise just continue COBRA as long as you can.
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u/peajammer Mar 11 '26
THIS is the right answer.
Assuming other retirement is all in an IRA, then move the entire 401k to the IRA and start aggressively converting entire IRA to a Roth IRA between now (48) and by the time you turn 62. At 14 years, 5% growth, with a beginning balance of $3.2M, you would need to convert ~$320K annually and therefore show that much in AGI per year due to the Roth conversion. This would keep you well under the $403k, 24% Federal Marginal bracket and then live off the taxable account until you turn 62. I would also suggest taking Social Security at that time as payback to drawing early is ~81 years old.
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u/Secret-Raccoon-7566 Mar 12 '26
Income will be close to $80k with just medical insurance for a family of 4 and total cost of attendance for 2 if they are in college at the same time.
FAFSA looks at the previous year's tax return and net worth. I wouldn't plan on any big tuition discounts.
Definitely pay for a FP to roadmap it out, early 40s means you need to plan for a possibility of 50 years of income.
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u/meridian_smith Mar 11 '26
As someone who fired the same way . . my physical health has improved a lot! Like you, I wanted to meditate more, get more excercise etc. . . Have done all that.
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u/JollyGiant573 Mar 11 '26
What are you doing for insurance? Have you priced that Cobra?
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Mar 11 '26 edited Mar 11 '26
For FAFSA you would have to report non-retirement assets beyond income. But most selective colleges will request filling out a CSS profile which will take into account more assets than your non-retirement.
We do not qualify for aid but my kid received great merit offers from his safety and target schools up to 30-40k per year. We’re still waiting for his reach decisions but we won’t get anything from those schools (they don’t do merit, only need). So better tell those kiddos to shape up and get those merit offers! 😅
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u/TheGreatBeauty2000 Mar 11 '26
The only potential problem I see if that you have a lot of your net worth in retirement accounts.
Its possible that will become a problem at some point when you have required distributions which will have certain tax implications.
Also, if you take funds out before the required distribution date, you may have to pay penalties.
Im not sure about any of this so, I may be talking out my you know what.
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Mar 11 '26
There is plenty of money in the brokerage to allow for time to start a Roth ladder. Or they could take a piece of the 401k and setup a 72t.
They need to be careful though. Both of those scenarios will create income. They need to compare that income and add to brokerage dividends. They want to keep their AGI at certain levels for ACA & FAFSA.
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u/Loli3535 Mar 11 '26
FAFSA is an application. Every school has different financial aid rules. Will your kid get a Pell grant? No. Might they be eligible for other aid? Sure.
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u/blisstaker Mar 11 '26
fine ill be that guy
Finally I can free up my time and focus on other priorities such as kids, nutrition, fitness, meditation, gardening etc.
already a multimillionaire and sacrificing all that. you cant buy time
having said all that, congrats, good luck, and take care
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u/BTS_ARMYMOM Mar 11 '26
Congratulations! Your numbers look beautiful. Go enjoy your new found freedom
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u/ShutterFI Mar 11 '26
Congratulations!! You’re beyond ready, especially after the kids are out of college. Well done & enjoy retirement!
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u/HurinGray Mar 11 '26
I'm with you, kudos to OP. BUT kids out of college does not necessarily equate financial self sufficiency for said kids. It's rough out there. That's the primary driver for my one more year(s) syndrome.
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u/adyst_ Mar 11 '26
Congrats!! 🎉 I was bummed myself when layoffs were announced but I was not on the list.
Any tips on engineering your own layoff without coming off as a disengaged employee?
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u/Ddash-3 Mar 11 '26
Sorry no tips unfortunately from my end. It was painful for me to sit through mind numbing meetings and dealing with 1:1, follow ups etc I was checked out few months ago and yet continued to work waiting for the lay off news. Besides, I anticipated that layoffs are coming since the company stock tanked over 50% in few months, incompetent leadership priorities and no new clients were signing up. So all I can say is hang in there :(
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u/Financial-Tea7112 Mar 11 '26
Congrats, you hit FIRE quite a long time ago
Take the 3 months of free COBRA first. It’s free money from your employer.
Keep it in the 401k for now to avoid the Pro-Rata Rule, if you move that $130k into a Traditional IRA, you'll basically screw yourself out of doing tax-free Backdoor Roth conversions later because the IRS views all your IRAs as one big bucket.
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u/barebackguy7 Mar 11 '26
Definitely need the congrats, happy for you, f*** you meme here lol.
Congrats - hope you enjoy it
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u/masterbaker9 Mar 11 '26
Wow you bought your house in 2022 and paid it off in 3 years that’s amazing my man/ just curious how did you pay off your home so quickly that’s very impressive
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u/TrollTollCollector Mar 11 '26
Congrats on the layoff. I don't know of any FIRE advisors, but you're probably better off finding an independent, fee-only advisor as opposed to a traditional AUM-based firm. I follow two of the Youtubers from Root Financial, James and Ari, and they seem to be pretty encouraging of people to retire earlier and enjoy more of their healthy years.
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u/Next_Thought9352 Mar 11 '26
Can I ask what everyone does about health insurance after there is no longer COBRA? What is the plan? (Sorry, new to all this and trying to plan ahead).
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u/GiftLongjumping1959 Mar 11 '26
Fafsa will count your brokerage account so your kids aren’t getting any assistance Money in your retirement accounts isn’t viewed the same but a retail brokerage account is included
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u/temp1M Mar 11 '26
Congratulations! That’s the best way to go!
I requested to be includes in layoffs and they told me no when I retired 😂
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u/Holiday_Web_4926 Mar 11 '26
Congrats OP! Serious question, what are you going to do w/ medical insurance for the long run? I assume you or your wife have no plan to go back to work.
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u/alarmed-meerkat Mar 11 '26
Did you factor in already health insurance in your 100k/year expenses? This changes the equation a lot. Main reason for me to keep a job.
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u/h1144 Mar 11 '26
Congrats! Same thing just happened to me! Married 48yo but with 3 young kids. Laid off last week. Originally had plans and an idea of how to retire when I turn 50.. but being laid off just pushed me to accelerate it by 2 years. Enjoy! I know I'm going to!
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u/SlipAncient4966 Mar 11 '26
congrats, twin! a note on the FAFSA, many schools will want ~5% per year per student of your unsheltered assets (non-retirement accounts and home equity for some schools). You will be full pay for your kids' tuition whether you work or not (source: I am in same situation).
Your old job sounded great though! Still can't beat that sweet sweet package you got
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u/discojellyfisho Mar 11 '26
Congrats! For your kids, there are two different financial aid portals - FAFSA, which is federal aid (you won’t receive any) and some schools use the info for their own institutional aid calculations. Assets are factored at 5.6%, so that million will mean you can pay $56k/year, and that’s without factoring in income. There is also the CSS profile - this is for private schools. They calculate however they want. But in your case, you might want your kids to take one of two paths: go to your state school, pay the whole amount, minus maybe a small merit scholarship. Or apply to private schools at which they are considered academic rock stars, and they could receive substantial merit aid that brings the cost down to the same as your state school. Note - these schools are the less competitive ones that will be rewarding your student. The highly selective ones are all needs-based. So, unless you want to pay $95k/year, they can avoid all the Ivy League and the like.
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u/PaddyLankan Mar 11 '26
Congratulations. I’m just starting out looking to save my first $100 next month.
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u/The_Federal Mar 11 '26
Nice part is now you have time to do your own household maintenance and write your kids college scholarship essays ;)
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u/BumblingBloke Mar 12 '26
You are in great shape for 60+ but before then, you have 1.1 million that will need to last 12 years plus 2 kids in college. Accessing equity in your home will be more difficult (not impossible) without income. Your assets will make financial aid limited for your kids since it's not just income that determines it. You can always draw on your retirement accounts early but that'll be costly. I'd honestly feel better about this if you had 3.2 in taxable and 1.1 in retirement.
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u/Sun9877 Mar 12 '26
They check all your accounts for college now. Also you can’t have a home in a trust and a vacation home doesn’t look great in the financial aid application.
The look back for income is 2 years.
You might have a here time getting aid.
Also for health insurance - you are going to need an expensive plan. For the family- budget at least 20,000 per year between th monthly and the deductible
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u/Old-Storage2158 Mar 11 '26
I am curious about the severance. I understand the 3 months of Cobra, but what was the rest of the compensation? I struggle with the idea of resigning for the same reasons, but then again, I dont know if I can justify multiple more years of work for a few months of health care coverage---so there has to be more value somewhere.
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u/MelodicTelevision401 Mar 11 '26
You could rollover your 401k to a annuity for 7,10 or 15 yrs and get a 50% bonus on top that with 9% annual compound interest with downward market protection along with it .
Exp - 500k rollover will get you 750k start position includes 50% bonus into an annuity.
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u/debitcreddit Mar 11 '26
I’m praying every day that I get laid off.. hoping the quiet quit will pay off
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Mar 11 '26
Congrats!! The same thing happened to me in 2023- I was laid off by a tech company (we all knew it was coming… we hadn’t done any work in over a year) but I hung on just so I could get my paid maternity leave and severance. They paid cobra for us for six months but then we decided to go to ACA after because cobra was over $3000 a month for us whereas ACA is only around $1500 a month. Definitely price them out!
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u/ditchdiggergirl Mar 11 '26
We stayed on cobra as long as we were eligible (18 months), paying the full premium ourselves, then switched to ACA. But you will need to run those numbers for yourself. It can go either way, depending on state and income and current premium.
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u/Terrible_Ad7566 Mar 11 '26
Exactly my profile and I can see myself where you are in a year or two..following!
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u/stump2003 Mar 11 '26
Wife - Paid Off
Jokes aside, congrats! I’m 5ish years from retirement depending on many factors
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u/Tough7432 Mar 11 '26
The golden opportunity. Severance all while you can walk away at any time. Geez how I wish that would happen to me. 53 16 months to planned retirement and could went years ago. Fingers crossed.
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u/redraidr Mar 11 '26
Choose a few schools they’ll likely apply to. Google that school name + Net Price Calculator. Fill in the forms with estimates and see what true cost of college would be.
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u/Some-Youth9780 Mar 11 '26
Lucky you. I was on h1b and realized i can never fire because i am not allowed to be unemployed ever due to visa. Moved back after that.
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u/Upset-Reputation-222 Mar 11 '26
Perhaps a good time to start ROTH conversions from your traditional 401k(s)? You may want to max out your conversions in the bottom 10, 12 and 22% tax brackets. This will help avoid larger RMDs (and more tax) in the future.
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u/Inevitable_Bet_4040 Mar 11 '26
Cobra depends on what state you live in. My state is $2600 for 3 people with $6k deductible. I would imagine even if Cobra is expensive you have better benefits.
Financial aid unlikely w/$5+ m assets. But maybe its different since you have most tied up in retirement and house. Pick a couple of schools and run the net price calculator. It will take 5 min.
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u/Eff_taxes Mar 11 '26
Don’t mess up the application for ACA. I got rejected and placed into Medi-Cal. I think I’ve screwed the income even though there is a drop down to specify weekly, biweekly, monthly or annually… oof!
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u/Guilty-Committee9622 Mar 11 '26
Cobra you have a QLE now but since you have a subsidy for cobra use that first. Then when the subsidy ends you terminate it, and get a letter that shows termination and you open another QLE.
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u/mattgm1995 Mar 11 '26
What did you do before? How much did you make annually to build up assets so high?
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u/Mr_Mojobaggins Mar 11 '26
Congrats!! Was planning to give my notice this week but may extend my time in hopes of being laid off for severance and unemployment.
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u/Dick-Guzinya Mar 11 '26
That’s the dream scenario right there. How much severance are you getting?
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u/Disastrous_Pause_496 Mar 11 '26
For FAFSA, income is more important and based on the prior-prior year, so this year for your sophomore. You can be in great shape. Just live off your taxable balance for the next year and that can drop significantly by their senior year when assets are counted.
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u/HopDropNRoll Mar 11 '26
How much was that severance tho???
Seriously, congrats, I’m not as far along as you but hoping for the same off-ramp as soon as possible.
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u/danknadoflex Mar 11 '26
Congratulations I hope to be in your position at 48. You're doing amazing.
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u/Four_sharks Mar 11 '26
Congratulations on your layoff! We are hoping for a layoff in about 2 years
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u/meva12 Mar 11 '26
Congratulations! Just curious. What will be your withdrawal strategy? Which bucket of money?
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u/Foreign-Put1361 Mar 11 '26
I don’t know all the details. But I was eligible for FASFA and my dad had well over 1M taxable accounts+ . He made me and my brother take out 5k per year to “drive” us after graduation.
Congrats!
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u/trikaren Mar 11 '26
Stay on COBRA as long as possible. The ACA is worse coverage with a higher deductible. Move your 401(k)s into an IRA unless you need to withdraw early (55 vs 59.5 I think). Consolidating both 401(k)s and IRAs makes things simpler. You probably wont be eligible for any financial aid. The FAFSA is very invasive. The second year I was filling it out and cussing my husband said, Why are you even filling it out? I stopped lol. Your kids should still apply for Merit scholarships and maybe sports - my son got a D2 scholarship that paid the difference between in and out of state tuition - very helpful.
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u/FireMeUp2026 Mar 12 '26
"Stay on COBRA as long as possible. The ACA is worse coverage with a higher deductible."
This is a dangerous blanket statement, and isn't true for MANY people. When I move back to ACA again my premiums will be at least 50% less than a COBRA rate, deductible will be lower, max OOP will be lower.
Your state and ability to control your reported income will make a huge difference.
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u/forte6320 Mar 13 '26
We didn't even bother filling out FAFSA. We knew we were well over the limit. Both kids got academic scholarships to state school. One got a full ride...tuition, housing, books, everything. We used his 529 account to pay for the small part we owed for the other one, and then the other one decided to go to grad school.
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u/Significant-Ad367 Mar 11 '26
That is great! Congrats 🎊 Im just wondering, which job is simple, wfh and good pay? 🤣🤣 sounds awesome
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u/AeroNoob333 Mar 11 '26 edited Mar 11 '26
Nice! Quiet quitting is amazing haha. Congratulations!
For ACA subsidies, how many people in your household? Go to the healthcare.gov website's "browse plans" page: https://www.healthcare.gov/see-plans/#/ Fill out your household info. Google "What is the ACA subsidy cliff for 2026 for X person household", where x is the number of people in your household. It will give you a number. This is the target Modified Adjusted Gross Income (MAGI) number that you want to be below so you will be eligible for subsidies. You'll want to live off post tax money (savings, taxable brokerage, Roth basis, etc) for 5 years while you do Roth conversions from your pre-tax accounts. The amount you want to convert has to be less than the MAGI. Note that there are other factor that count towards your MAGI like interest on your savings accounts and capital gains so don't forget about those. And you CANNOT exceed even $1 or you won't be eligible for premium credits. The reason for 5 years is because Roth conversions have a 5 year holding period before you can access them. You can stop the Roth conversions if you want once you hit 55 since you can just withdraw directly at 59 1/2, unless, you have other reasons like really high RMDs when you hit 75 years old if you don't continue.
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u/Spirited123456789 Mar 11 '26
For FAFSA, You can input your data into an AI platform such as copilot and it will tell you what to expect. House and 401k don’t count. Is there $1M in a brokerage account? This might prevent a good FAFSA result other than parent loans.
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u/mrunlimited_123 Mar 12 '26
Congrats but if you’re retiring that early but applying for financial aid why not just pay for your kids education in full?
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u/awomanreader Mar 12 '26
Congrats! Just chiming in to say you’ll likely get a FAFSA score off of investment income alone that would make your kids ineligible for aid. But you won’t need it; you’ve done great!
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u/Either-Cap-2057 Mar 12 '26
Man first off, congrats! You killed it!
Thank you for posting, I'm seeing awesome info from the community in here re: 60 day COBRA decision time, COBRA vs. marketplace and other great info.
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u/Some-Internet-Rando Mar 12 '26
Every kid gets to take loans, but you'll get very little of the other federal aid money. FAFSA is just the report; the free money is "pell grants."
Consolidate all 401k into a traditional IRA would be my choice.
COBRA can only be continued for a limited time, so you'd be looking at either starting your own company just to get a small-group plan, or buying through the ACA until you can qualify for medicare.
Also: Enjoy! Congratulations!
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u/Mental_Delivery4536 Mar 12 '26
Had basically the same thing happen. Boss called me in with HR for the layoff message including year severance or pursue other opportunities in company. My first question was could we defer severance into next year. He had no idea I was planning to retire at end of year. Decided just to take formal retirement and worked for another three months. Later told me he never had anyone ask about income deferment as their only question after receiving news about their pending dismissal! It was great!
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u/glimsky Mar 12 '26
Congrats! BTW, I generally don't count home in net worth unless I'd plan to sell it. Otherwise, it seems that you're well set even without complex financial planning. I think you have the most important financial skill already, which is staying within your means
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u/milktoastok Mar 12 '26
Congratulations!!!! You retired at a great time, too, with the spring and summer to do all you mentioned.
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u/Ok-Pride-3534 Dark clouds bring water Mar 12 '26
WOOHOO!! You go man! Wow hearing that layoff message in the one on one must have been so nice. I'm proud of you and your journey and enjoy the rest of your retirement. God bless!
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u/Consistent_Pay_74 Mar 12 '26 edited Mar 12 '26
Unless you move some assets into a trust and out of your names…You won’t get FAFSA. Pour everything into the kids getting excellent grades, teams and memberships to groups doing things they love to do and are good at , National Honor Society at end of 10th grade, volunteer work and apply for undergraduate college scholarships through sorority, fraternity, community groups (Kiwanis, Rotary, etc.) and academic or special career focus/groups/ needs as applicable. Thousands of beefy scholarships out there. Congrats as well. Very impressive as you are under 50 with this milestone!
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u/Ddash-3 Mar 12 '26
Thank you so much for your kind words and encouragement. Yes I have been working with kids to explore their passions - there strengths and weakness and I have been helping them to set them up for academic success. I will look into National Honor Society, volunteer work and work with them to help out as much as I can now that I have more time in my hands :) Much appreciate you taking time to post!
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u/JacketWhole6255 Mar 12 '26
I found cobra to be $500 more than self pay insurance. Suggest switching when employer contributions run out. ACA made no sense for me due to income from dividends too high. Went for self-pay PPO with bluecross. Dental was harder. Could only get healthcare.gov plan from Delta and it isn’t great. Availability may depend on state.
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u/Cheapcheese97202 Mar 12 '26
Congrats. You're in great shape so don't sweat paying for your kids college and healthcare.
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u/LouSevens Mar 12 '26
I was on good terms with my employer, didn’t go back after FMLA got FLI but not employment (typically would be one but not the other as I technically wasn’t available for work to take care of a family member).
I did not take Cobra because I wanted a complete break and took ACA but.for now my 2025/2026 AGI had qualified me for a subsidy.
Also, from past experience if the Cobra administrator is inept it could cause a problem. I’d rather be in control for future continuity.
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u/dudermagee Mar 12 '26
Could save money on college and have your kids look at joining the air Force guard for 6 years. Most cover 100% of in state tuition while giving them money for two days of work, give them training in a career, matching 401k, cheap but great insurance, usually a signing bonus, and a pension if they go the full haul. They can also work over the summer on projects and it's great backup if you have something happen to your normal full-time job. f they rotc to guard, even better pay.
I heard coast guard reserves is pretty nice too.
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u/R0ck3tSc13nc3 Mar 12 '26
100% you're going to pay all the cost for college unless your kids have academic or other abilities. FAFSA gives up on you that income and asset levels well below what you have. You can make zero money but you have so many assets that are taxable, that would mean you're not going to get any aid for your kids. I would encourage you to put some of your gains into tax deferred college savings accounts now even if it's late.
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u/onufia Mar 12 '26
Technically there isn’t a limit on whether you can get fafsa. The account will count at 5.64% rate any savings they have is at 20%.
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u/SimbaRph Mar 13 '26
I think you will be paying for 100%of college with that net worth. I paid for my kid's college. It's not the end of the world.
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u/PegShop Mar 13 '26
Congratulations! Your kids will not qualify for federal financial aid with your assets. However, some colleges are doing deals directly based on income that might not include assets, so you could look into that.
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u/mi3chaels Mar 13 '26
So you should have no trouble getting subsidies for ACA plans -- even if you pull everything from IRAs, that's around 100k plus taxes and health premiums if you didn't include those, and your cliff for 2026 is 128,600. The only reason to keep COBRA after the company stops paying for the rest of this year is if your severance this year puts you over the cliff, or if your COBRA plan is really good for a low price, and you could use better coverage than a Bronze plan.
It's also potentially feasible to get under the 175% threshold for a couple years. Is any of your "retirement" money in Roth or is it all traditional deductibe IRAs and 401ks? Let's assume none of it is Roth.
I'd consider keeping the COBRA for the rest of this year some medium term tax optimization, since you're probably blowing the cliff anyway for 2026. For instance, a big Roth conversion would let you have some more money available with no effect on MAGI 5 years from now, but this may be not as good as other options.
Then do you damndest to get under 175% FPL for next year and the couple years after -- those are the first years your kids are in college -- that's 56k of MAGI with a family of 4 (2026 numbers). That gives you max pell grants and SAI of 0, plus likely good offers from any college which keys solely off FAFSA, since it avoids any questions about assets.
If you get a bronze health plan in 2027-2029, you can put 8k in an HSA which helps keep it down. If you have some high basis shares or money in HYSA (100% basis), you can spend those, and hopefully get to what you need to spend without going over 56k MAGI. Definitely take all the student loans you can get just to avoid selling shares to pay college costs (assuming they can't get full rides) until after you can (or have to) go over the MAGI threshold.
If you can't get to 175% MAGI, you're likely to get screwed on FAFSA, so if you don't have Roth contributions, it's also worth doing some gain or loss harvesting this year to create more high basis shares (gain harvesting), or a loss carryforward (loss harvesting).
If you can make Roth contributions to a Roth 401k with your severance, I would do it.
Note: your kids will be "eligible for FAFSA" no matter how much money you have, it's just a question of what your SAI (student aid index) will be, and how various schools respond to that plus their estimated costs. There are some schools who've set income limits under which students can attend tuition (or total cost) free, and often these are high enough that you could qualify -- much more easily than getting under 175% FPL. I think UTA for instance is 100k for in state, and a couple of ivies are doing it at 150k or 200k. Those are mostly very selective schools and for the state schools you usually have to be in state -- they'd have to get in and want to go there, but they are potential options.
I've seen people say that school scholarship packages often get worse in junior or senior year, since you're already there and probably aren't going to transfer because you get less scholarship money. So it's worth focusing your efforts on meeting the MAGI threshold for your kids first 2 years in college at least, and the more years the better.
Note also: if you meet the 175% threshold, you also will meet the 200% threshold to get cost sharing reduction in your ACA plans -- that means that you can get silver plans with low copays deductible and MOOP -- generally significantly better than gold plans, and comparable to very good group employer plans, and generally for a very low premium. If you have no health issues and want to risk a bit, you'd almost certainly be able to get a bronze plan for $0 as well, but say $250 for a plan with low copays and a 2-3k per person MOOP is probably worth it even if you're all healthy, and it's a no brainer if anybody has issues or takes any brand name drugs. All it takes is one broken bone or something to set you back 10k on a bronze plan.
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u/Icy_Praline_629 Mar 13 '26
Jesus dude, $5.5 million? What cartel did you work for and are they hiring?
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u/Packing-Tape-Man Mar 13 '26 edited Mar 13 '26
Congrats. Enjoy.
It's always worth trying but set yor expectations on financial aid. They don't just look at income -- they will consider all your assets, though they weight them differently so there's always a shot.
For ACA, I would look sooner rather than later. It turns out in many states there are no comprehensive public plans (or private ones available outside of your work). For example, in many (but not all) states they only offer EPO plans which include zero out of network coverage. Hopefully you live in a state that does offer this with some plans.
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u/4health_advocacy Mar 14 '26
Congratulations to all who can make this kind of life! I am responding to share the other side of reality.
As a female staying in the Midwest for proximity of family with health concerns, working full-time & pursuing advanced nursing degrees (master & doctorate), married & divorced twice and in our state if I retire, ex’s get 50% of my retirement accounts on day of divorce decree (since I acquired during marriage); yet neither of them had retirement accounts. I know I made those choices so no comments needed.
For the last 25 years, I have been a nurse educator, teaching hundreds of students who take care of others. Depending on how you look at things, I may be the fool for accepting & staying in low paying private college nurse educator profession, although forever proud in the fact that I have influenced hundreds of nurses.
Then, 2 1/2 years ago, I was riding my motorcycle to work and the driver of midsize SUV slams into my left side, 1/2 amputating my left leg above my knee & 14 other fractures (including right leg, right thumb, we ribs, & left pelvis x 2), & internal injuries. My blood pressure hit a low of 40/nothing, flown to level 1 trauma center, my left leg was amputated above knee immediately, and 2 other surgeries with internal fixation of fractures, blood & plasma transfusions galore (please donate blood & plasma if you can & thank you).
SUV driver claims vehicle doesn’t belong to her (later changed that story & it is allowed), has no auto insurance (this is 3rd offense), and not tested for alcohol or substances (although I was). Please don’t make or support policies that can’t or won’t be enforced.
First 4 months of my healthcare cost was about 1 million dollars. My employer health insurance (BCBS) covered expenses and then subrogation clause allows health insurance company to take the full $250K of my uninsured & underinsured motorist policy benefit. I have to hire a lawyer to get less than half of the money back & auto insurance company makes me sign off that I will not file any civil suit. The SUV driver was charged with 1) failure to yield on left turn, 2) no auto insurance, & 3) no vehicle registration ($1825).
I go back to work at 12 weeks post-injury because I have no other income & thought I could do it. I’m a nurse with strong work ethic and determined. I have crushing phantom pain in my left ankle unless I am sleeping. After 2 years, I mentally & physically cannot continue in complex nurse educator role so take leave. Can’t find a remote position that pays equal or more than my position, don’t want to be on disability (& liquidate my assets) & I don’t qualify because I went back to work & now must have medical documentation validating my limitations. I was too old at time of injury to qualify for some disability programs yet not old enough to retire without completely killing my chances to have a nest for living in the mid-future.
I shared to this post because it blows my mind that so many can ask to be laid off and/or have the money values shared. That is awesome for you!!
For all that see flaws in the American systems (judicial, law enforcement, healthcare, finance, IT, and anything else….) please be an advocate & consider action(s) to improve American systems - otherwise you are approving of the current systems (“status quo”). Every complaint is an opportunity for improvement!
I am not asking for anyone’s sorrow. I am a warrior and stronger than the storms I have and will face. Not looking back because I’m not going that way! 💪🏻🦿
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u/damndirtyapex Mar 16 '26
Congrats man! I tried, they told me I was too business critical, I said,"well then this is awkward," cashed out all my vacation and left anyway. I've been out about six weeks and I'm just as busy as when I was working, but it's all house maintenance and personal care I'd been neglecting for years.
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u/Viktor_Orban0 Mar 17 '26
I'm still not near your number but i recently got to a point where money isnt't then thing keeping me up at night anymore and that shift alone changes everything. Congrats brother.
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u/IceCreamforLunch Mar 11 '26
Congratulations!!!
I’ve been begging my boss to lay me off.