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Old 01-13-2018, 09:44 AM   #21
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Ten years ago, I was 42 and DW 35; two kids at 6 and 4.

Both of us worked as engineers at startups in the Silicon Valley. My kids went to day care and private school, as neither of us can afford to stay at home to take care of them.

We decided to move away at that time as we didn't like the school environment. We don't mind the rat racing, but no need to have our kids in the toxic competition.

So DW retired at 35, after working 8 years in the industry. BTW, she was the only female engineer at the startup. She got exclusive use of the rest room, nice when she need to pump milk for the babies.
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Old 01-13-2018, 11:50 AM   #22
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It looks as if you have been doing very well financially. The bottom line is that if you get the spending down, you certainly will be able to do it. (I would not however, not plan to spend down to $0, live on ss income and cat food, and/ or returning to work in 15 years; or dying at 85.)

As an aside, I would not give up your job completely right now. You just had a baby, and are drained physically and emotionally. Take a looooog maternity leave. Spend some time at home just being a full-time mom of two itty-bitties before you make any no-turning-back-decisions. While on maternity leave - don't close the doors on any options - including PT.
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Old 01-13-2018, 09:03 PM   #23
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...a bit of a similar financial situation, but older in earlier 50s, and 3 kids (1-middle, 1 HS, 1 College).

Can't seem to get our expenses below 240k at the moment but so much is discretionary we are not worried about it.

Still generating > 100k in very part time consulting from home so that helps the mental aspect.

Just over 1 year so far with this new lifestyle, interesting transition. Can't imagine going back.
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Old 01-14-2018, 11:06 AM   #24
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Thanks to all who have weighed in! I'm reading on my phone in the midst of newborn schedule (ha! How's that for an ER forum!), but will respond more thoughtfully when I can get in front of a computer. I really appreciate all the wisdom and experience of the people on this forum--a huge help!
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Old 01-15-2018, 04:49 AM   #25
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Quote:
Originally Posted by tb001 View Post
Trying to decide if we feel confident enough to pull the trigger on a partial 'retirement.' I use quotes, since our situation is a little different than most I've seen.

DH is 53, I'm 47, but we have two very young children (2.5 and a newborn). We both grew up in very frugal environments, and have managed to save a nice nest egg, but also enjoy the nicer things that we've been able to afford in the last 15 years or so. We're not interested in significantly downsizing our lifestyle at this point, especially when it comes to spending on things that benefit the kids (music, athletics, education, etc...). We don't want them to be making sacrifices for our decision.

I'm very well compensated, so am hesitant to walk away from that at my age, but the intensity, schedule and commute is a huge strain on our family and my health. I would love to be a SAHM, but know that the likelihood of being able to re-enter the workforce at a similar salary will be low given my age, so trying to plan as though this is it. DH intends to work for several more years, assuming his job holds, but he spent several years before this job un/under employed, so we don't want to bank on him working more than the next 2-3 years.

I've gone through the Important Qs post in the FAQ, and have tracked our spending pretty closely. I think I have a reasonable budget laid out, with the caveat that we spend a ridiculous amount of $ right now on help just trying to keep our head above water, given our jobs. (e.g. a ton of takeout/delivery, nanny, lots of extra childcare in AM and evenings, etc...). I'm assuming in our budget that a lot of this goes away. That said, there are obviously a ton of unknowns that come with a time horizon this long and a young family, so it's hard to know for sure that our budget is going to be accurate in 10-15 yrs.

So the numbers/plan:

We have a little over 5.8mm in assets, all in vanguard funds, 401ks, IRAs, and cash/bonds. Currently 70% equities.

We have another chunk of $ invested with an asset management firm. I'm assuming we will bring in another 350K from that over the next 2-3 years--I think I'm being pretty conservative with this return estimate, but there is of course risk here.

I'm assuming DH continues to work through 2021, at a salary of 200k--this is not including potential bonus of 30% of salary. So far, all is going well with this job and I would assume if it continues to go well, he'd like to stay longer. His position is in the middle of being reclassified and it looks like his salary has the potential to double in the next 18-24mo, but not counting on this.

No pensions. DH will receive max SS benefit. Mine is ~18K/yr. The only other additional income stream we have is $ coming in from an investment DH made in a bar several years ago. To date that's been ~20-30k/yr, but I'm not including it in our calculations.

Budget:
I'm embarrassed to actually type this, but I'm budgeting 280k/yr, including taxes, healthcare, $ for home maintenance/improvements, fully funding 529s, etc... Note that there are a ton of things in here which I *think* are conservative or go away as kids get older, etc..., but obviously some other stuff I'm guessing on. There is about 60k of spending that I think could be eliminated if we needed to without impacting kids activities, etc...

As part of this plan, we would be selling our house and moving to a new area. This should give us the ability to be mortgage free, with equity in a new home at ~2-2.3mm. I can't imagine us wanting the same type of home in 20 years, but am assuming we stay there and expenses don't decrease.

If I'm using firecalc correctly, the parameters I've entered above put our max annual spend rate at 95% success at 270k, assuming I live to 90, and 280K assuming I live to 85. I'm ok with these success estimates, given that I think I'm making a fair number of conservative estimates and there is flex in our spend, but am trying to figure out what I'm not taking into account.



My backups/old lady eating cat food prevention strategies:

If we see significant correction in the next few years I would for sure be looking to re-enter work force and we would be making significant adjustments to our spending.

Any place we buy would have at least one area which could be rented out (inlaw quarters/pool house) to generate additional income.

Lifestyle changes/move to lower COLA. I would love to do this now, but DH still wants to live in an expensive urban area.


Would love any input. Are we nuts to be considering this

Also, is there any data on the impact on portfolio success when pulling the trigger during a big bull run? This is maybe my biggest worry.
You'll know when it's time. Frankly it doesn't quite sound like you're ready yet. Translating your initial post, I was reading: "I'm tired but I love our high income overfilled life and we're doing all we can for the kids".

Hey that's great, enjoy. When you get to the point of "The kids are better if I'm home, I can walk away from the paycheck and not look back", you'll be closer to ready.

DW retired at 34 (I worked until 50) to raise our son. Absolutely no regrets for us, but money was not that important (our retirement budget is approx. 60K, no more college tuitions as of last year)

One other warning-sometimes it is very difficult to get rehired after 50. Ageism is rather rampant. I have not tried but many others have stories.
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Old 01-16-2018, 12:38 PM   #26
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OP, Congratulations on amassing you current wealth. We retired with way less than you. I was fortunate to be able to work part time as my kids were growing up. Got me away from them for a little while and Kept my skills current and I was still able to spend much quality time with the family. Best of both worlds for me at the time.

Seems you have enough dollars to live quite comfortably for the rest of your life. You can never get the time back with you children. I have never regretted being able to be home with them as much as I was.

Good luck with your decision and I look forward to watching your progress in making your decisions.
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Old 01-16-2018, 03:14 PM   #27
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Quote:
Originally Posted by tb001 View Post
Trying to decide if we feel confident enough to pull the trigger on a partial 'retirement.' I use quotes, since our situation is a little different than most I've seen.

DH is 53, I'm 47, but we have two very young children (2.5 and a newborn). We both grew up in very frugal environments, and have managed to save a nice nest egg, but also enjoy the nicer things that we've been able to afford in the last 15 years or so. We're not interested in significantly downsizing our lifestyle at this point, especially when it comes to spending on things that benefit the kids (music, athletics, education, etc...). We don't want them to be making sacrifices for our decision.

I'm very well compensated, so am hesitant to walk away from that at my age, but the intensity, schedule and commute is a huge strain on our family and my health. I would love to be a SAHM, but know that the likelihood of being able to re-enter the workforce at a similar salary will be low given my age, so trying to plan as though this is it. DH intends to work for several more years, assuming his job holds, but he spent several years before this job un/under employed, so we don't want to bank on him working more than the next 2-3 years.

I've gone through the Important Qs post in the FAQ, and have tracked our spending pretty closely. I think I have a reasonable budget laid out, with the caveat that we spend a ridiculous amount of $ right now on help just trying to keep our head above water, given our jobs. (e.g. a ton of takeout/delivery, nanny, lots of extra childcare in AM and evenings, etc...). I'm assuming in our budget that a lot of this goes away. That said, there are obviously a ton of unknowns that come with a time horizon this long and a young family, so it's hard to know for sure that our budget is going to be accurate in 10-15 yrs.

So the numbers/plan:

We have a little over 5.8mm in assets, all in vanguard funds, 401ks, IRAs, and cash/bonds. Currently 70% equities.

We have another chunk of $ invested with an asset management firm. I'm assuming we will bring in another 350K from that over the next 2-3 years--I think I'm being pretty conservative with this return estimate, but there is of course risk here.

I'm assuming DH continues to work through 2021, at a salary of 200k--this is not including potential bonus of 30% of salary. So far, all is going well with this job and I would assume if it continues to go well, he'd like to stay longer. His position is in the middle of being reclassified and it looks like his salary has the potential to double in the next 18-24mo, but not counting on this.

No pensions. DH will receive max SS benefit. Mine is ~18K/yr. The only other additional income stream we have is $ coming in from an investment DH made in a bar several years ago. To date that's been ~20-30k/yr, but I'm not including it in our calculations.

Budget:
I'm embarrassed to actually type this, but I'm budgeting 280k/yr, including taxes, healthcare, $ for home maintenance/improvements, fully funding 529s, etc... Note that there are a ton of things in here which I *think* are conservative or go away as kids get older, etc..., but obviously some other stuff I'm guessing on. There is about 60k of spending that I think could be eliminated if we needed to without impacting kids activities, etc...

As part of this plan, we would be selling our house and moving to a new area. This should give us the ability to be mortgage free, with equity in a new home at ~2-2.3mm. I can't imagine us wanting the same type of home in 20 years, but am assuming we stay there and expenses don't decrease.

If I'm using firecalc correctly, the parameters I've entered above put our max annual spend rate at 95% success at 270k, assuming I live to 90, and 280K assuming I live to 85. I'm ok with these success estimates, given that I think I'm making a fair number of conservative estimates and there is flex in our spend, but am trying to figure out what I'm not taking into account.



My backups/old lady eating cat food prevention strategies:

If we see significant correction in the next few years I would for sure be looking to re-enter work force and we would be making significant adjustments to our spending.

Any place we buy would have at least one area which could be rented out (inlaw quarters/pool house) to generate additional income.

Lifestyle changes/move to lower COLA. I would love to do this now, but DH still wants to live in an expensive urban area.


Would love any input. Are we nuts to be considering this

Also, is there any data on the impact on portfolio success when pulling the trigger during a big bull run? This is maybe my biggest worry.


Hi and don't feel embarrassed about $270k spend level as that is somewhat frugal for a family of four in coastal/urban areas!

We are in a similar boat in terms of assets, I have three kids 8,6 & 5 and I see that as one of the greatest challenges to early retirement if you are planning to foot the bill for college. Health costs are another X factor but at your net worth and budget, it is less likely to blow up the budget. I am budgeting $1.5mm for college expenses in the expensive Northeast.

In terms of the firecalcl, 97% is a very good reading and one you can feel comfortable retiring on, really anything over 95%. Equally critical is how realistic your budget is and like you, we have flex in our budget so that should make you feel extremely confident. Those 3% fails are the depression years, I doubt many of us would continue the club memberships etc. through those events just on principle.

I also want to downsize at some point, and I think modeling that is realistic, I have us selling our house when the last goes off to college in 2032. Happy to compare notes.
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Old 01-16-2018, 03:30 PM   #28
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Congratulations and welcome to the forum. At 47 I downsized my career significantly. My salary went to 1/3 of my previous compensation. However, the new job allowed me to work from home, not travel and only work 3 or 4 days per week. My stress went way down, enjoyment went way up and I lost 30 pounds. I fully retired at 53. This was a nice transition. It allowed our savings to continue to grow. It is hard to recognize when you have worked all of your life, but your savings allow a great deal of flexibility. You can design the life you want for you and your family.
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Old 01-16-2018, 03:59 PM   #29
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OK, finally getting back to a proper keyboard so I can respond. Again, thanks to all who have weighed in!

Hermit, r.e. education, our budget includes fully funding a 529 plan, but also living in a top notch school districtópart of the reason our housing costs are so high. DH and I believe strongly in sending kids to public schools, so I donít see that changing. If it did, we would likely relocate to a lower $ home. We are pretty firm believers in public colleges as well, and are not interested in funding a private university education, with a few exceptions. That said, as you and Dawgman suggest, a lot can change in 15 years!

Aerides, youíre correct that I am sooo ready! Itís DH who isnít at 100%, which means I have to balance lifestyle Ďwantsí with needsÖ And yes, the 5.8 is not including the house, which we would pay cash for, so no mortgage.

Cayman, we would likely have a WR of ~2.5%, likely less, as long as DH continued to work. Iím assuming this would be at least the next few years, but after him having gone through an extended period of unemployment after age 50 weíre trying to be cautious. As others have commented, age discrimination is very real.

pbuski, boy can I relate to your travel nightmare! I used to love the travel before kids, but now itís just so much to juggle, especially with DH traveling 1-2 weeks a month as well.

Montcefo, MarieIG, and flint (and others Iím forgetting!), Iíve definitely considered going to part time if I could WFH. Preserving the ability to go back if things headed south would sure help me sleep better at night! Itís the commute which is so deadly (3+hrs/day) on top of a demanding job. As Iíve read through the comments, itís helped me realize that part of what has me so stressed out is that Iím literally counting down the weeks of maternity leave I have left with dread. I realized I would feel FAR better about going back, especially in a PT situation, if I had an extra two months of leave. Marie, your comment about a looong maternity leave really helped.

And Dawgman, Shanky, DanP and StuckinCT, thank you for your inputómakes me not feel so ridiculous!! And nice to see others in a similar place, albeit with older kids . Iím hopeful that our spending will go down significantly below 280k, but trying to be conservative! StuckinCT, I saw your intro post and thought the same thingóit sounds like we are in remarkably similar situations! Our budget does include paying for 4 yrs of college and ~20K/yr of health insurance, though Iím assuming this doesnít kick in until after kids are in grade school, so it basically offsets preschool expenses. And youíre right, lots of spend goes out the window if we hit a depression type scenarioóI have a SHTF budget of ~130K pre tax that covers all basic expenses and gives the kids some activities, but cuts out the $ extras...

Part of the difficulty is that while, as long as DH is working, I think the numbers pencil out if we stay in our current home, to really be safe it requires relocating so we donít have a mortgage. So big changes that also impact my potential work situationÖ

Again, I really appreciate all who took the time to read through my way too lengthy post and respond. Reading through the comments has really helped me think through potential options and priorities and helped me put things in perspective. If it were just me, Iíd be moving to the country and retired ages ago! Ronstar, the bit you highlighted really rings true. Also, as others have commented, being able to be home with the kids at this age feels really important and even more so as I see our DD developing some habits that Iím not thrilled about. At this point, Iím thinking I may propose extending my maternity leave without pay until June and then coming back PT through the end of the year, if I can WFH. Being able to walk away if needed has itís advantages! Will take some time to think things through over the next month or so and see how I'm feeling.
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Old 01-16-2018, 04:33 PM   #30
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You'll know when it's time. Frankly it doesn't quite sound like you're ready yet. Translating your initial post, I was reading: "I'm tired but I love our high income overfilled life and we're doing all we can for the kids".

Hey that's great, enjoy. When you get to the point of "The kids are better if I'm home, I can walk away from the paycheck and not look back", you'll be closer to ready.

DW retired at 34 (I worked until 50) to raise our son. Absolutely no regrets for us, but money was not that important (our retirement budget is approx. 60K, no more college tuitions as of last year)

One other warning-sometimes it is very difficult to get rehired after 50. Ageism is rather rampant. I have not tried but many others have stories.
I 100% agree with this. I "retired" at around 40 to stay home with my toddler. I was ready! I'm glad I'm home too now that she is in school. I think it would be really hard to navigate daycare/camp/babysitter logistics for all the time off from school.

OP, if you are on the fence about reducing expenses or giving up your career, I'd stay where you are and reassess when the kids are a little older. I think the concept of on-ramping back to your career only works if you are in your late 20s or early 30s. After 40, and especially after 50, I think it's really hard to get back on. There's no way I'd be able to get back to my former career.
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Old 01-17-2018, 09:34 AM   #31
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I'm in a very similar situation- though my net worth is significantly less. Spending is significantly less too. I'm 45 and my husband is 54, and we could live on about 3% of our portfolio at this point. My husband makes enough to support us on his salary alone and I feel like I'm missing time with my 11 and 13 year olds that I can never get back. I have gone to part time work and will be taking a retirement package in 2 years that will allow me to scale back my hours even more and get paid for an additional 2 years after I'm done entirely. It took me years of hard work to get to where i am in my profession and while I could get another job easily, it wouldn't be what I'm making now. I never thought I'd be the stay at home type, but the truth is, the things l enjoy most at 45 are being with my kids and puttering around the house. (okay, and travelling too) All of which are made more difficult by my job. Teenagers require a lot of patience and I just don't have a lot left at the end of my work day.

Don't forget that your husband working a few more years will give your portfolio time to grow without much in the way of withdrawals.

I think you can go. Cutting back for you will certainly not put you in the category of bag-lady. And you may find that the reduction in stress is worth the loss of a few luxuries. Now if only I could talk myself into the same.
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