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Old 12-12-2017, 03:39 PM   #1
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Hello world!

Hi,

Quick intro. I'm 42, wife is 41, two boys 8 and 11 yold trying to figure out what to do next and generally looking for some commentary/advice.

Current net worth around 5.5-6M, making roughly 1-2M a year or so.
Have likely 2-3 more years in the current job and thinking seriously of calling it quits at that time. Our expenses are nothing extraordinary we spend around 250-350k a year depending on what is going on.

Work is extremely stressful at time but comes with some amazing life benefits. There is no way for me to "work less". You are either in the game or not...

Wife is extremely against the idea of me taking it less seriously. I'm all for it

So all of that said, any commentary would be helpful.

D
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Old 12-12-2017, 04:01 PM   #2
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Welcome to the forum! Others better at this than me will be along shortly, but at a SWR (safe withdrawal rate) of 3.5% you're a little short for the expenses you posted.

A huge issue of course is the cost of health insurance and that's kind of up in the air now. Here's a set of questions you'll want to have solid answers for before pulling the plug:

Some Important Questions to Answer Before Asking - Can I Retire?
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Old 12-12-2017, 05:14 PM   #3
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Welcome,

As Walt34 said you will be short in 2 years, and at your young age, I don't even think 3.5% is safe, more like 3% so that is worse.

Unless you have have a plan for drastic reduction in expenses, or get the wife working, you'll have to tough it out longer.
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Old 12-12-2017, 05:27 PM   #4
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Originally Posted by Ticker314a View Post
......... Our expenses are nothing extraordinary we spend around 250-350k a year depending on what is going on.............
Yea, that's about average for most of us here, depending on what is going on.
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Old 12-12-2017, 06:50 PM   #5
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You and your wife need to be on the same line of thought. Solve that problem first. $250-350K/year is very high expenses unless you have some exceptional mortgage or other costs.
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Old 12-14-2017, 10:36 AM   #6
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Thanks for the commentary. Now how do I get the wife on the same page
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Old 12-14-2017, 11:04 AM   #7
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Our expenses are nothing extraordinary we spend around 250-350k a year depending on what is going on.
Your margin of error (100K) in your 250-350K/year expenses is more than the annual expenses of most members of this forum. Good luck.
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Old 12-14-2017, 12:32 PM   #8
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You make $1-2M per year, spend $250-350K, and only have a NW of $5-6M? It doesn't add up. Do you make $1M or do you make $2M? Why such wild swings in income?

If you make $2M, given taxes and expenses, you should be able to save at least $1M a year. If you make $1M, you should be saving $500K per year.

Your numbers are wildly vague and your NW is too low given your spending, which is significantly more than most of us here, and most of our gross incomes when we were working.

Also, your spending level is awfully high for someone who says they want to retire early. You need to get a better handle on your finances and planning your spending if you want to retire early.

I'm having trouble believing you.
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Old 12-14-2017, 02:34 PM   #9
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+1 and you are young. Health Insurance for the family might get dicey. Hope everyone is in good health. You are looking at 50 years of FI, possibly more.
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Old 12-14-2017, 07:01 PM   #10
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Welcome.

I understand wanting to be a little vague in your answers.... but all of your numbers have large "ish" factors... 5.5-6M net worth, 1-2M income, 250-350k spending. You need to nail down the numbers a little bit.

Folks here have mentioned safe withdrawal rates. Given your age - 3% is safe, 3.5 might be pushing it. 4% is too much. 3% of 5.5M is $165k.... that's what you can *safely* spend each year - increasing each by inflation. So you need to either increase the nest egg or cut spending.

Oh - and the spending is 'all in' - taxes, health insurance, funding kids college savings....

As for getting your wife on the same page... I had a similar issue with my husband... until I showed him a fully formed, well thought out plan showing we would not have to drop our standard of living. Once he saw the math - he got on board.
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Old 12-14-2017, 07:55 PM   #11
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#include <stdio.h>

main( )
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Old 12-14-2017, 08:11 PM   #12
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Welcome.

I understand wanting to be a little vague in your answers.... but all of your numbers have large "ish" factors... 5.5-6M net worth, 1-2M income, 250-350k spending. You need to nail down the numbers a little bit.

Folks here have mentioned safe withdrawal rates. Given your age - 3% is safe, 3.5 might be pushing it. 4% is too much. 3% of 5.5M is $165k.... that's what you can *safely* spend each year - increasing each by inflation. So you need to either increase the nest egg or cut spending.

Oh - and the spending is 'all in' - taxes, health insurance, funding kids college savings....

As for getting your wife on the same page... I had a similar issue with my husband... until I showed him a fully formed, well thought out plan showing we would not have to drop our standard of living. Once he saw the math - he got on board.
His safe WR is most likely much less than $165K as his 5.5-6M NW would include his home equity. Maybe the unknown $500K is the equity?
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Old 12-14-2017, 11:18 PM   #13
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#include <stdio.h>

main( )
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printf("hello back to ya\n");
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Yep, just what I was thinking , too.
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Old 12-15-2017, 12:20 PM   #14
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Originally Posted by EastWest Gal View Post
You make $1-2M per year, spend $250-350K, and only have a NW of $5-6M? It doesn't add up. Do you make $1M or do you make $2M? Why such wild swings in income?

If you make $2M, given taxes and expenses, you should be able to save at least $1M a year. If you make $1M, you should be saving $500K per year.

Your numbers are wildly vague and your NW is too low given your spending, which is significantly more than most of us here, and most of our gross incomes when we were working.

Also, your spending level is awfully high for someone who says they want to retire early. You need to get a better handle on your finances and planning your spending if you want to retire early.

I'm having trouble believing you.
Heard of taxes bud? Fed+ CA + Sf we have averaged almost 50% flat....
Numbers always vary. Stock goes up/Stock goes down.
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Old 12-15-2017, 12:49 PM   #15
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It sounds like you should be able to come up with a sensible plan to get there in 2-3 years. Do you expect that your $250-350k a year in spending would decline in the future? Does it include private school that might "go away" after 11-14 years? Any other expenses that might change dramatically one way or the other? Would you relocate to a lower COL area at some point in the future? What lifestyle do you want for yourself in retirement? What would you do all day?

Do any of the institutions that you already bank or invest with offer financial planning services?
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Old 12-15-2017, 12:54 PM   #16
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How much of your net worth is in your primary residence (because that doesn't count towards your SWR unless you're selling it)?

What type of asset allocation are you comfortable with now, and once retired?

Are you just trolling the forum or are you serious? (if the latter, I recommend being more definitive i.e. "our fixed expenses plus discretionary spending is ~XYZ with significant variations in spending for taxes based on income swings", and "our invested assets are at $XYZ with a home valuation of $ABC and we do/do not plan on downsizing and/or moving to a lower/higher COL area)

As for your wife's opinion, explain to her the benefits of early retirement and what that life would look like for your family. If she doesn't like that idea, then I couldn't tell you how to convince her to fall in love with the idea.
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Old 12-17-2017, 04:41 AM   #17
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Heard of taxes bud? Fed+ CA + Sf we have averaged almost 50% flat....

Numbers always vary. Stock goes up/Stock goes down.


You need to include taxes in your spending. I do.
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Really?
Old 12-18-2017, 04:56 PM   #18
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Really?

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Originally Posted by travelover View Post
Yea, that's about average for most of us here, depending on what is going on.
Travelover, your joking, right? $250K - $350K is far more than most people on this site require per anum.

Having a a more clear understanding of your expenses would be beneficial; 30% - 40% uncertainty is pretty significant.
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Old 12-18-2017, 05:53 PM   #19
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Travelover, you're joking, right? $250K - $350K is far more than most people on this site require per anum............
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Old 12-19-2017, 04:45 AM   #20
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Given your age - 3% is safe, 3.5 might be pushing it. 4% is too much. 3% of 5.5M is $165k.... that's what you can *safely* spend each year - increasing each by inflation. So you need to either increase the nest egg or cut spending.

Oh - and the spending is 'all in' - taxes, health insurance, funding kids college savings....
+1 on WR. At that age with lower future returns expected, to spend $300K/yr at 3% WR you need $10M in investments, not counting your house.
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