42 laid off 3 kids

[OrganicRain]

Hi all,

I am laid off from my job - it was a sales management gig and the company closed that division. I am totally burnt out from the sales game!

Wanted to get some feedback on whether it would be reasonable to retire or semi retire.

I am 42/wife 44 - 3 kids aged 12, 10 and 8

Assets 720k index funds, House 300k paid for

Income: Unemployment insurance for 9 months of $2000/month
Wifes part time income varies $600-$1200/month
Monthly kids subsidies $400 - these go up as high as $1200 if our income drops to 30k a year ( We are in Canada )

At age 65 we "should get" a gov pension of about 15k-20k total indexed to inflation

Our monthly budget works out to about $2850 - including a misc $250 just because amount

 

[Senator]

You will need to get a job... Are you sure you can live the rest of your life on $2,850 a month?

 

[aaronc879]

I'm sure many people here would say no but I would not find another full time job if I were you. I'd be open to working part time like your wife but that's all you should need. Don't take more than 3% per year of your $720K so it lasts your whole life. Maybe even take just 2.5% for a while in case the market doesn't do well. Good luck.

 

[MasterBlaster]

Using your $720k nestegg and a "safe" withdrawal rate of 4%. I would give you an annual income of $28.8k plus the 7.2-14.4k wife income brings you to something like 36k.You are spending close to that now. I suppose it could be done especially if you can pare the spending budget down and add in the kid subsidies.

How about taxes and Medical expeditures? How about kids college costs ?

are those covered ?


I like the previous suggestion of getting some sort of part-time gig to stretch the budget.

 

[OrganicRain]

Using your $720k nestegg and a "safe" withdrawal rate of 4%. I would give you an annual income of $28.8k plus the 7.2-14.4k wife income brings you to something like 36k.You are spending close to that now. I suppose it could be done especially if you can pare the spending budget down

How about taxes and Medical expeditures? How about kids college costs ?

are those covered ?

Medical is covered for the most part as I live in a socialist country (Canada) lol

Kids saving fund is included in this for about $28k so far - being in Canada college costs are lower. I am also ok with them taking out some student loans and I would teach them the frugality skills to pay them off fast.

We are also willing to sell our house and rent later in life in needed.

 

[aaronc879]

Using your $720k nestegg and a "safe" withdrawal rate of 4%. I would give you an annual income of $28.8k plus the 7.2-14.4k wife income brings you to something like 36k.You are spending close to that now. I suppose it could be done especially if you can pare the spending budget down and add in the kid subsidies.

How about taxes and Medical expeditures? How about kids college costs ?

are those covered ?


I like the previous suggestion of getting some sort of part-time gig to stretch the budget.

4% is considered safe for a 30 year retirement. Unless these people expect to die in their early 70's i'd go lower than 4% at least for the first 10 years. If they are willing to work part time if the market does poorly then they should be fine.

 

[OrganicRain]

I should also mention that I am really burnt out on what I have been doing to the point where it was damaging my health. Also tired of the job insecurity in the field that I am and constant pressure for results.

I guess one option is to retrain to a lower stress and stable career....?

 

[ivinsfan]

I should also mention that I am really burnt out on what I have been doing to the point where it was damaging my health. Also tired of the job insecurity in the field that I am and constant pressure for results.

I guess one option is to retrain to a lower stress and stable career....?

This---, the government might even offer low cost or free career retraining as an option. As your kids get older they are going to cost more money.

 

[MasterBlaster]

I suspect that by tightening the budget you could fully or partially retire if you really wanted to.

My suggestion is to take 6 months to a year off, then re-evaluate what you want to do. Many people think they want to retire young, do so and get restless, and then go back to work at something different. That different work could potentially be much less stressful and more personally meaningful.

It's your life, you get to decide

 

[MasterBlaster]

4% is considered safe for a 30 year retirement. Unless these people expect to die in their early 70's i'd go lower than 4% at least for the first 10 years. If they are willing to work part time if the market does poorly then they should be fine.

I am well aware of the nuances of asset decumulation- Notice that the "safe" in SWR was in quotes.

However I still believe that with some part-time or occasional full-time work-gigs the OP could do it.

 

[OrganicRain]

Appreciate the responses. Its been a tough one.....

 

[rodi]

I think you have plenty of time to take a "break" and see if you can actually live within your limited budget. Call it a sabbatical. If it turns out you can actually live on the projected low income.... consider extending the sabbatical. If you find an interesting part time gig, consulting opportunity, or any other income generator... consider adding those back in.

4% is probably too aggressive for someone your age and with kids. I say that as someone who retired at 52 with 2 kids... and I'm trying to stay around 3.2% WR.

 

[Options]

I should also mention that I am really burnt out on what I have been doing to the point where it was damaging my health. Also tired of the job insecurity in the field that I am and constant pressure for results.

I guess one option is to retrain to a lower stress and stable career....?

At 42, I would personally move slowly in terms of hanging it all up (your numbers make me nervous, and a lot can happen in the next several decades). You mention some pretty significant factors impacting you: burnt out, damaging your health, ongoing job insecurity, and constant pressure. Any single one of these issues would color one's view--in combination, who wouldn't be burned out?

You mention possibly seeking a more stable career, but how about a more fulfilling one as well? There are so many useful books to help with this. Also, significantly, early forties usually represents one of the major turning points in a male's life.

About three years before retirement, in the midst of the post-2008 Jobpocalypse, I was laid off not once, but twice! I decided (correctly) to seek a job that would be fulfilling (although it was in my same field, it was working for an old boss who I had loved working for) while representing more security (as in much less likely to suffer a layoff) to get me to retirement.

I know it's a cliche, but have you considered "reinventing" yourself? Many people have, and have gone on to the most fulfilling work of their lives. This just may be your time.

 

[dvalley]

I think you've done a good job with the savings and you're pretty close, if you can hang in there a few more years and add another 200-300k to your portfolio. After that you could even get a job at something like Starbucks (ahem, Horton's?) or perhaps some other interests you might pursue that could bring in a small income until the kids are on their own.

 

[Sunset]

You should perhaps take a break, and consider some other work that will pay what you were roughly making $45,000/yr.

Kids expenses will go up more than you think. Lucky for you Canadian University is only $5K/yr (plus another $1K for books)
Sure basic health coverage is free in Canada, but not everything is free, and prescriptions are not.

Plus bad stuff happens, like how will you pay for a new furnace/roof, car ?

It's too early to check out, as your savings are really too low for such a young age.

 

[daylatedollarshort]

I would also suggest taking a break to look for a different job or make a career change into a field that would be less stressful and more rewarding. Who knows you might find something you like that pays better than the job you have now.

 

[jw72]

I was laid off at your age in a sales job, total surprise. Called my wife and she said do not come home, nothing here for you. Worked on my resume for a few hours and went out looking for a job. Get on your horse and get a job, you can make double pay, severance pay and new job. Bank it! Strike while the iron it hot.

 

[brucethebroker]

Wife and I could not "fully retire", but were able to leave full time careers at her age 57 and my age 62 (SS early benefits). We have a small, home based internet business that allows us to maintain a nice lifestyle when added to our investment income and SS. Plus, we enjoy the work. (Also great tax breaks, but that is a US thing?)

I would suggest finding something interesting to do part time. Once the kids leave home, you and your wife can match work schedules and travel or whatever. Meanwhile, you continue to live off current income (without the stress of full time jobs) and your retirement cash grows.

 

[OrganicRain]

A little more info. My layoff actually happened 7 months ago - I did get a severance back then. After a few months of searching I landed a "so-so" job. Once I got and started at this "so so" job, I realized that I as lied to about the territory and other aspects. I then found another, and had to quit 6 weeks into it as it was completely over the top in terms of hours and work demands vs. the pay. I left under Dr's care for anxiety and am back on unemployment. All this happened after a successful and resilient career in sales and sales management. As mentioned, I am in a tough spot after all this.

Part time retail or something might be a way to go for now until I get my head on straight...

 

[pb4uski]

+1 in that it would be cutting it a bit too close IMO to retire now, but it is imperative that you make a career change for your health sake. Sit down and do a tally of the "soft" skills that you have and see how they might translate to a less stressful career.

For example, working in fundraising/development for a non-profit might be a good fit with your past experience and (I'm guessing) less stressful. What color is your parachute?

 

[mystang52]

You're under some stress now, so any decisions you make may not be made with the best rationality. But based on your comments so far, I'd suggest you not think in terms of retirement. 3 children means a lot of unexpected expenses down the road.
I also think (it didn't take rocket scientist brains for this) you should seek out a non-sales job. An entirely new career/entry level job could be the ticket to an enjoyable work life. Surely, the long term income from this would be better than just retiring now and scrimping on part-time gigs. Further, no one says you'll have to do it until age 65. You have such a great financial base, that your next career may not be that long, and you can still enjoy a long early retirement.

 

[cooch96]

Remember to breathe. You're in a much better place than so many of your peers. Cam you lean on your family some more? I.e. Can DW get some more money in through a part time gig? Can your eldest child pull in some babysitting money?

That and a low stress part time job and some seasonal work might be enough to keep your quality of life reasonable and give you time to heal. Your health is extremely important to your family. Take care of yourself.

 

[OrganicRain]

You're under some stress now, so any decisions you make may not be made with the best rationality. But based on your comments so far, I'd suggest you not think in terms of retirement. 3 children means a lot of unexpected expenses down the road.
I also think (it didn't take rocket scientist brains for this) you should seek out a non-sales job. An entirely new career/entry level job could be the ticket to an enjoyable work life. Surely, the long term income from this would be better than just retiring now and scrimping on part-time gigs. Further, no one says you'll have to do it until age 65. You have such a great financial base, that your next career may not be that long, and you can still enjoy a long early retirement.

Thanks. Just figuring out what that looks like is key. I was thinking of going back to school and becoming a practical nurse...(program is 2 years). But your right about my decisions, I am all over the place at the moment.

Also thought about selling cars (but thats sales again)

 

[OrganicRain]

Remember to breathe. You're in a much better place than so many of your peers. Cam you lean on your family some more? I.e. Can DW get some more money in through a part time gig? Can your eldest child pull in some babysitting money?

That and a low stress part time job and some seasonal work might be enough to keep your quality of life reasonable and give you time to heal. Your health is extremely important to your family. Take care of yourself.

True - I am in a better place. Wife is bring in $600-$1200/month now through a PT gig.
My wife has a passion to be a hairstylist actually- she is planning to get training for that. I feel like we are both starting over....

 

[Brat]

Stay away from car sales, you would be jumping into the same culture.

You mentioned becoming a LPN, a 2 year program. Pay a visit you your local community college, research the demand, income and working conditions of 2 year training programs in fields that are a good fit for you.