Hello, I'm desperate at 55.

[Pat_H]

Hello, I'm new to this reddit (I think I introduced myself when I registered last year, but that's about it), so I hope that I'm not being too repetitious in my question. I'm sure that questions like this come up all the time. And I hope I'm posting it in the right place.

I'm 55 years old, married and have one kid who is finishing high school this year and who wants to be a veterinarian. I have another kid in his third year of college now and who probably has a couple of more years to go. My house is paid for and we have no loans.

I have two jobs basically, one being a super high stress desk job and another in which I own cattle that are run on an in-laws place. I have about $2M saved up, part of which I inherited. I'd like to quit the high stress job right now but every time I mention this it provokes outright panic of the highest order with my spouse, who maintains that it's absolutely impossible. She pays the household bills and maintains that insurance alone will kill us (she's 44 and her's approaches the $1,000/month.

If that's the case, we'll never be able to retire.

So here are my questions:

Is she right (I know, that's almost impossible to answer, but we live fairly conservatively); and

If she's wrong, has anyone else gone through the "oh no, you absolutely must not quit discussion).

This is one thing we almost can't discuss in our household as the level of emotional drama that comes up every time I mention this is just over the top. I'm almost ready to simply quit and then announce I've done it, which would be bad, but at least that'd be over.

[ivinsfan]

Probably not what you are looking to hear but it seems you and your spouse need some outside counseling at this point.

Does your spouse work? Does your spouse have general anxiety issues? Does your spouse not want you around during the day? From what you say the numbers aren't the problem since she won't even talk about the numbers.


Since you spouse pays the bills do you know your monthly budget? Baby steps but without knowing more details I can't really give you any pointers.

[Aerides]

Is your spouse's extreme reaction only on this topic, or a more general disposition? If general, I agree with Ivan, but if it's very specific to retirement, then I'm not sure I'd start there.

You don't mention your expenses, but a 2M nut is generally a good milestone. Have you pulled together the details of what you need - based on your actual running expense, taxes, HI, travel, etc. You say your spouse pays the bills - does that mean you don't have much visibility into expenses? If so, start learning that now.

Assuming your expenses work out and 2M is plenty, and you can lay out that case effectively (or already have done), then you may wish to look into marriage counseling together as something is odd.

[Amethyst]

I assume insurance means Health Insurance, and also that your wife either does not work outside the home, or has a job with no health insurance benefits. So your family HI bills, if you quit, could be steep. I have no advice to offer there, since we are both Federal retirees who carried HI into retirement, but...

The contrast between your wife's concern over rising HI costs/loss of your income, and her seeming lack of concern about the high stress which you feel could actually kill you, is striking. It jumps right out at me.

It seems like the two of you need to put your heads together to devise a compromise to get you out of that darn job, before she loses all your income because you have keeled over.

Maybe a lower-level, less-stress job for you. Maybe a job with HI benefits for her.

And yes, as everyone else will tell you, you have to know more about your household income and expenses (including taxes). Without that knowledge, you cannot have an informed discussion. She must keep some kind of records - ask to have a look. Get your own online access to the financial accounts and credit cards, and check them regularly.

Good luck.

Quote:

Originally Posted by Pat_H She pays the household bills and maintains that insurance alone will kill us (she's 44 and her's approaches the $1,000/month. .

[Lukeee]

Here is how I approached my situation. My wife has always been for early retirement but didn’t know we could afford it.

Step 1: draw up an honest spreadsheet or scribbling, listing an honest line by line annual budget.
Step 2: run firecalc and or other calculator. I did a year by year drawdown to 92 using a best case and worst case budget (allowing for emergencies, reduced SS etc)
Step 3: present it to her and let her digest. Ask her what her worries are after looking at the numbers and hopefully all her uncertainties will be covered/answered.

[Which Roger]

Quote:

Originally Posted by Pat_H Is she right (I know, that's almost impossible to answer, but we live fairly conservatively); and If she's wrong, has anyone else gone through the "oh no, you absolutely must not quit discussion).

Not enough information to know whether ER is the right decision for you. As a previous reply indicated, you need to understand your expenses now and in the future, run FireCalc, etc to understand where you are financially with respect to ER. The discussions can follow all that. Even if you don't pull the trigger now, you'll have a better understanding when you make the decision in the future.

[Ready]

Assuming a WR rate of 3-4%, $2M would give you between $60K-$80K a year to live on. You'll need to figure out if that's enough to maintain your current lifestyle. I agree with others that you and your spouse need some outside assistance to work through this. It doesn't sound like you are both working together toward a solution here. She sounds like she's very worried about money. It may be a lack of understanding of managing investments or just a general fear of being poor.

[kgtest]

Quote:

Originally Posted by Lukeee Here is how I approached my situation. My wife has always been for early retirement but didn’t know we could afford it. Step 1: draw up an honest spreadsheet or scribbling, listing an honest line by line annual budget. Step 2: run firecalc and or other calculator. I did a year by year drawdown to 92 using a best case and worst case budget (allowing for emergencies) Step 3: present it to her and let her digest. Ask her what her worries are after looking at the numbers and hopefully all her uncertainties will be covered/answered.

I take this approach and DW still laughs at the impossibilities. Along with everyone else. But once you have enough, and you are smart enough with math to know that, its just a matter of maintaining the coarse.
I also use FireCalc, i-orp.com, my DW 403b has a little built in calculator showing income replacement with a few assumptions...
She still doesn't know how 1.5-2mil would be enough, but it will. I've ran the numbers. Sure if some 1/2 million expense comes all at once it would slow us down a few years, meh.

I think she might need to see some future budgets and understand current and future spending, and understand how that income will kick out "enough".
It's simple, you quite your job and retire, when your investments earn enough to replace your income/spending. If you've accomplished that, quit.

[Lukeee]

Quote:

Originally Posted by kgtest I take this approach and DW still laughs at the impossibilities. Along with everyone else. But once you have enough, and you are smart enough with math to know that, its just a matter of maintaining the coarse. I also use FireCalc, i-orp.com, my DW 403b has a little built in calculator showing income replacement with a few assumptions... She still doesn't know how 1.5-2mil would be enough, but it will. I've ran the numbers. Sure if some 1/2 million expense comes all at once it would slow us down a few years, meh. I think she might need to see some future budgets and understand current and future spending, and understand how that income will kick out "enough". It's simple, you quite your job and retire, when your investments earn enough to replace your income/spending. If you've accomplished that, quit.

It’s time for subliminal messages when she sleeps.
...or you can tell her you’ve planned for both to retire early but she is welcome to keep working

[kgtest]

Quote:

Originally Posted by Ready Assuming a WR rate of 3-4%, $2M would give you between $60K-$80K a year to live on. You'll need to figure out if that's enough to maintain your current lifestyle. I agree with others that you and your spouse need some outside assistance to work through this. It doesn't sound like you are both working together toward a solution here. She sounds like she's very worried about money. It may be a lack of understanding of managing investments or just a general fear of being poor.

+1

[Fedup]

I was going to suggest get a new wife. But I’m kidding of course.

[joeea]

Quote:

Originally Posted by Pat_H Hello, I'm new to this reddit

reddit is at http://www.reddit.com

Quote:

I have about $2M saved up, part of which I inherited. I'd like to quit the high stress job right now but every time I mention this it provokes outright panic of the highest order with my spouse, who maintains that it's absolutely impossible. She pays the household bills and maintains that insurance alone will kill us (she's 44 and her's approaches the $1,000/month. Is she right (I know, that's almost impossible to answer, but we live fairly conservatively); and If she's wrong, has anyone else gone through the "oh no, you absolutely must not quit discussion).

With $2M saved it's exceedingly unlikely that life insurance alone will kill you.

You could benefit from some time with a fee-only fiduciary financial adviser. The adviser could go over your entire financial picture, insurance, portfolio, income, social security, budget, etc. Then your adviser will ask about your goals. Finally, the adviser will work with you to come up with a plan to achieve your goals.

There are several benefits to this approach:
- it will be based on you and your wife's goals
- it will take all factors into account
- it will almost certainly not come up with "never retire" as a solution
- quitting your job now might not be the recommended solution either, but at least you'll know
- you won't be to blame

I'm guessing your wife is worried that you will die and she will be left in financial ruin.

This process could go a long way toward calming your wife's fears, whatever they might be.

[Another Reader]

To me the bigger problem is you have no idea how much is being spent and where it is going. I would start by talking to DW about the importance of tracking spending in every category so you know how much you would need to maintain the current spending plus your health insurance when you do retire. You may find a lot of money is being spent on things that never occurred to you. Once you know what the actual spending is, you can discuss cuts to make retirement work for you and at an earlier age. In addition, you can discuss additions, such as travel together, or setting money aside for the grandkids' college expenses, whatever is important to both of you.

[gerntz]

You both get Medicare health insurance at 65, so whenever that is for her, you certainly could retire.

[Conundrum]

Quote:

Originally Posted by joeea With $2M saved it's exceedingly unlikely that life insurance alone will kill you.

+1
There may ways to mitigate insurance costs. You have to have a really good grasp of your expenses to head down that road.

Quote:

Originally Posted by joeea You could benefit from some time with a fee-only fiduciary financial adviser. The adviser could go over your entire financial picture, insurance, portfolio, income, social security, budget, etc. Then your adviser will ask about your goals. Finally, the adviser will work with you to come up with a plan to achieve your goals.

BIG +1

I had already run the numbers and we looked solid. However, my wife was unsure. We hired a hourly fee based CFP to develop a plan. From there we went to our long time CPA who we really respect to get a second opinion. Both independently agreed we could retire. That data from professionals in the industry cut my wife’s stress probably 90%.

You have to really dig in on your due diligence. It’s potentially a 40 year decision

BTW: I’m 52, DW 50

[mountainsoft]

Quote:

Originally Posted by Pat_H I'd like to quit the high stress job right now but every time I mention this it provokes outright panic of the highest order with my spouse, who maintains that it's absolutely impossible.

Have you run the numbers yourself to know if it's possible? Since she pays the bills, maybe she is aware of expenses you don't know about. Credit cards, shopping expenses, home or vehicle maintenance, etc. Maybe she is considering future expenses as well, such as sending your kid to college. Or she just might be more conservative and want a bigger financial safety cushion.

Numbers don't lie. You could earn 5 million per year, but if you're spending 6 million you won't be able to retire. If you only earn 30K per year but your expenses are only 20K, you're ready. Write it all down. Make an outline of your current and future expenses (including insurance, taxes, health expenses, home repairs, etc.). Then figure out what your income sources would be after retirement (pension, social security, retirement savings, etc.). If your income exceeds your retirement expenses you're good to go.

When you're confident the numbers work out, show them to your wife. Give her time to look them over and ask her to update the income or expenses you may be wrong about. Run the numbers again. And again if needed. Don't pressure her, it's just about seeing if you're really financially capable. Maybe she has valid reasons to worry. Maybe not. If she's still concerned, ask her if there is a future date she would be comfortable with.

If the calculations show you're ready on paper, you'll need to find out what emotional hurdles are scary for her. Maybe she values her time at home alone. I'm sure you could figure out a solution to that, maybe go to the farm during the day or something. Equally, find out what things she might enjoy about retirement. Maybe she wants to travel, or has hobbies or interests she would like to pursue. Having something to retire "to" might be more valuable than what she is giving up.

Remember, your retirement is as much about her as it is about you. I think I'm more nervous about making the transition to retirement than my wife is, but we've run the numbers numerous times and it always works out. After that it's just my own fears holding me back. I'm sure it's probably similar for your wife.

[EastWest Gal]

Several things to consider when it comes to health insurance expenses:

What is your income from raising cattle, without the high stress job? It isn't as you will have no income at all. You are basically working two jobs now, and want to quit one of them. That income doesn't disappear when you quit your job.

Health insurance:

I'm not sure I understand what you were saying about your current situation. You indicated that you are paying out of pocket for your wife's health insurance, but you and the kids are on your company insurance?

Going forward, if your MAGI will be less than about $98,400 (for a family of 4), your will be eligible for premium subsidies, which will cover most of the cost.

If your MAGI is > than $98,400 and you don't have a premium subsidy, Health insurance premiums are a line item subtraction off your AGI on the 1040 tax form. So even if your premiums are high, your income tax could be substantially reduced.

Take a look at healthcare.gov. You can browse 2018 plans without registering to get an idea what the premiums are, based on your estimated income without the high-powered/high-stress job. This is not likely to go away as soon as we thought.

Work on a spreadsheet to figure all your expenses going forward, including health insurance, taxes, and business expenses of your cattle operation. You might be in better shape than you realize.

[pb4uski]

Quote:

Originally Posted by Ready Assuming a WR rate of 3-4%, $2M would give you between $60K-$80K a year to live on. You'll need to figure out if that's enough to maintain your current lifestyle. I agree with others that you and your spouse need some outside assistance to work through this. It doesn't sound like you are both working together toward a solution here. She sounds like she's very worried about money. It may be a lack of understanding of managing investments or just a general fear of being poor.

+1 Not only would you have $60-80k from your portfolio, in 7-15 years you would have social security, plus any pensions that you might qualify for.

Health insurance is expensive and could be an issue... you can a good idea of the current cost by visiting healthsherpa.com and working through the prompts... but the cost of health insurance is the biggest component of the price of freedom.

We retired at 56 with about that level of assets plus SS and planned spending of about $75k a year... including ~$12k for health insurance... so it can be done. We knew that our withdrawal rate would be high in the earlier years but once SS started it would be quite acceptable.

What does FIRECalc say?

If she is that nervous about money, perhaps what you can do is for you to resign from that high stress job and she get a job that includes health insurance benefits.

[Car-Guy]

Quote:

Originally Posted by mountainsoft Have you run the numbers yourself to know if it's possible? When you're confident the numbers work out, show them to your wife. Give her time to look them over and ask her to update the income or expenses you may be wrong about. Remember, your retirement is as much about her as it is about you.

+1 on the comments above...

Also consider that it's probably a little more scary to think about ER for someone who is 44 VS someone who is 55.

[Big_Hitter]

Quote:

Originally Posted by Pat_H This is one thing we almost can't discuss in our household as the level of emotional drama that comes up every time I mention this is just over the top. I'm almost ready to simply quit and then announce I've done it, which would be bad, but at least that'd be over.

Hire a fee-based FA to perform an analysis of your situation

that finally convinced DW that we were okay