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Wife retiring at 43 and I'm not too far behind...
Old 04-10-2015, 12:57 PM   #1
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Wife retiring at 43 and I'm not too far behind...

Yep after 16 years with the same company my wife is going to give her notice on June 1st. She will walk away from a good career and six figure income but she has grown weary of being a full time mom, wife and full time professional. We think we can afford it and it will be great for the family and quality of life moving forward. She is looking forward to spending more time with the kids (who are under 10), hitting the gym and getting in better shape, keeping the house and property looking good and volunteering at the kids school. We can travel more and stop counting her vacation days as we use them up.

Current net worth is approaching $3 million and growing quickly so should hit that number this year. Household income has shot up in the last few years as the business I started 7 years ago is doing very well. Household income around $400k will drop to $300k after my wife retires. No debt other than a small mortgage on a vacation rental property. I do need to buy her a new car and am thinking a Sonata or Camry (new but under $30k out the door and then keep it for 10 years).

Expenses are pretty reasonable. We have been putting six figures a year into investment accounts and not blowing wads on anything dumb. That should continue even with the hit on income. I dress like I am homeless, we rarely eat out, kids are not spoiled (they love the dollar store) and most travel is to our short term rental in Florida. Lots of life and disability insurance so if anything happens to me I know she and the kids will be fine financially. House is in great shape and just did a reno so no major projects needed anytime soon.

I like what I do and don't kill myself doing it. No long hours and plenty of time off plus a happy bunch of employees who are well paid and I have super low turnover. Really no reason for me to retire for at least 5-7 years but we will see. I think once the investment portfolio grows another million I will start thinking about it more seriously. I can just cut my hours a little at a time until I am ready to cash out.

Any reason to think twice or would you agree we are good to go?
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Old 04-10-2015, 01:15 PM   #2
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Sounds l like a plan. I got out at 47 myself.

I would start tracking and categorizing all your spending in Quicken or something similar. That way you will have actual data on how much you spend when you are not constrained. If you setup your categories properly, you can see which expenses will go away when both of you retire.

Once you know your spending along with your investable assets, you can use calculators such as FireCalc or I-Orp to tell you how robust your plan is.

-gauss
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Old 04-10-2015, 01:23 PM   #3
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I agree you are good to go now. DW's income appears irrelevant at this point.

What's wrong with looking at what it would take to maximize your business' selling price and start to organize things to make it look pristine to any buyers. Interest rates are low so the value of free cash flow is worth more now than if they go up a few percent. Buying also want to see several years of positive results and selling is often not as easy as you think. Cutting back your hours and letting the business suffer won't help the sale or the price. Nothing like wanting to sell and not being able to at a decent price.
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Old 04-10-2015, 01:24 PM   #4
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Thanks. I have been tracking our spending, have a budget moving forward and FireCalc likes our chances. Quite a few expenses will disappear when my wife retires including $9k of before and after school program costs.

Future budget shows $85,860 in after tax spending not including money going to investment portfolio. This is a high estimate including $12k budget for travel (want to take the kids on some nice trips). $14,400 on groceries (we don't eat in restaurants but like good food at home). $20,820 on housing even with no mortgage we have higher utilities (pool) and property taxes.

Can see we would more likely come in at $75-80k/year for the next few at least.
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Old 04-10-2015, 01:26 PM   #5
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I agree you are good to go now. DW's income appears irrelevant at this point.

What's wrong with looking at what it would take to maximize your business' selling price and start to organize things to make it look pristine to any buyers. Interest rates are low so the value of free cash flow is worth more now than if they go up a few percent. Buying also want to see several years of positive results and selling is often not as easy as you think. Cutting back your hours and letting the business suffer won't help the sale or the price. Nothing like wanting to sell and not being able to at a decent price.
Thanks 2B. Business is attractive for sale and very profitable. Will likely sell to current employee(s) but no firm exit plan. Also own a commercial building which will be sold and the cash will fund 6-8 years of retirement.
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Old 04-10-2015, 01:42 PM   #6
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Your family sounds financially savvy. Your wife will be busy enough with the two 'careers'.
When I'm 43, I'll evaluate our situation because I'd love to quit my work even though our portfolio is much smaller than yours and we don't have a business to sell. I'm waiting for a recession to see how portfolio will fare then.
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Old 04-10-2015, 04:16 PM   #7
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Welcome to the forum and congratulations to your wife. I can relate to your wife's schedule. I have 2 middle schoolers and the juggling act gets really tiring. I'm busier than ever now that I retired, but my kids now have my full focus on their academics and social life. (The 8th grader is less than thrilled about this but it's a good thing.)

Your budget numbers are a little higher than ours but in the same range.

One word of warning ... Now that they won't be parked in after school programs don't be surprised if other kids activities fill the void. We're paying more for sports now that I'm not working because we have the time to get them to all their practices.
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Old 04-15-2015, 05:20 PM   #8
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Any reason to think twice or would you agree we are good to go?
Sounds like you are doing fine. One question: what percentage of your reported net worth is attributed to your business, as opposed to more liquid investments? Reason I ask is that quite a few small business owners find that when it comes time to retire, the market places much less value in their businesses than they had thought.
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Old 04-17-2015, 09:32 AM   #9
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Sounds like you are doing fine. One question: what percentage of your reported net worth is attributed to your business, as opposed to more liquid investments? Reason I ask is that quite a few small business owners find that when it comes time to retire, the market places much less value in their businesses than they had thought.
About 10% of net worth is in the business. I am very conservative when placing value on it.
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