How big emergency buffer do I need with small kids?

[SilentWalker]

For a while now I have been debating a conundrum of how much is enough for secure retirement with my small kids. Felt like I could share a bit about my specific situation:

I am a mid 50's megacorp mgr with a younger DW and two small kids (5 and <1). Been minimally FI for some time now, meaning that I could jump into second career as a SAHD while DW would love to go back to work full time. Her job would provide the family insurances and her 401k savings but nothing more. For the first 7 years my savings would fund our fairly modest lifestyle in a LCOL area and starting age 62 my defined benefit pensions with SS would cover our basic budget. We have about 150k for each kid's education and have about 2 M to cover any non-essentials, irregularities and emergencies. But there is my main conundrum - with small kids and young wife, so much can happen yet making it very difficult to imagine what is the sufficient amount. Just to list a few of the things that keep me worried:
- With kids so small it's still possible for all kinds of health or developmental issues to emerge. Seems that extreme situation could easily generate expenses in six or seven figures over just a period of few years. This by far is the one biggest concern in my mind.

- My wife's future earnings are still a question mark. If she is motivated to continue her education for two more years, she could double her pay and could easily save enough to fully fund her own much later retirement. But she is worried about not being able to handle the added responsibilities and pressure of the higher level position, so at the current income level she will need significant "leftovers", maybe 1M, from our current savings for the time when I'm probably not around any more.
-Then there are the typical possible LTC expenses, a few cars, roofs and who knows some fun travel for the family.

I have been feeling burned out and exhausted from work for a while now, so if I can make myself feel comfortable with our current buffer I would jump to the SAHD stage at the end of the year. I really want to be there for my kids instead of just the current tired weekend dad, as the 12 hour days suck the life from me during the week. By quitting this early instead of working 3 more years to my megacorp formal earliest retirement age would have various financial impacts. I am estimating that the combined impact of starting spending 3 years later and significantly higher pension would equal 1M more in my stash in the retirement day. But feeling often that I won't get through 3 more years healthy and sane. Just about every other week I conclude that I have enough and then the following week get scared again. The decision will be irreversible as I am pretty sure that just few months out of the game at this age it would be impossible to get hired at any comparable level and even lesser opportunities would require moving to a higher COL area.

So, I don't really have any specific questions beyond just the main issue. Probably some folks here have been through similar situations in their lives. How did you process it to make yourself feel comfortable and did it all work out?

 

[lhamo]

If you are in the US and died prematurely, your wife and kids would get Social Security survivor benefits -- I think she gets them until the kids turn 15, and the kids get them until they turn 18 or graduate from high school, whichever comes first. Given the size of your stash, that would probably be plenty to take care of them.


Since you mentioned developmental or physical stuff with your kids, do you have particular concerns there? Genetic/family history stuff or warning signs? You could consider getting screened or tested.

Any chance you could take a leave of absence or sabbatical to see how you feel physically and emotionally when not working?

If I were you I would try the SAHP thing. My dad died at 52, when I was only 15, of a massive heart attack. He had planned to retire early at 55, the earliest he was eligible. Part of my own motivation to FIRE was that history.

 

[SilentWalker]

If you are in the US and died prematurely, your wife and kids would get Social Security survivor benefits -- I think she gets them until the kids turn 15, and the kids get them until they turn 18 or graduate from high school, whichever comes first. Given the size of your stash, that would probably be plenty to take care of them.

Since you mentioned developmental or physical stuff with your kids, do you have particular concerns there? Genetic/family history stuff or warning signs? You could consider getting screened or tested.

Any chance you could take a leave of absence or sabbatical to see how you feel physically and emotionally when not working?

If I were you I would try the SAHP thing. My dad died at 52, when I was only 15, of a massive heart attack. He had planned to retire early at 55, the earliest he was eligible. Part of my own motivation to FIRE was that history.

Yes, we are in the USA.
No specific health concerns at all with kids. Just my nature to always worry about unforeseeable things.
Leave of absence is really not an option in my position. I am a key person with very specific and extensive training and experience. They would need to hire a replacement immediately and no place for me to go back then.

Thanks for sharing your personal experience. It may well be that the biggest risk actually is all about me not making it, rather than other much younger family members developing something.