Let's say...

[smooch]

that a couple has just reached the $1 million mark. The husband wants to keep working. The wife has had it. This couple never expects to withdraw more than $40k from their savings. No pensions - $900k in retirement accounts, $100k in taxable. He is 60 and she is 56. If the wife quits and doesn't find another job right away, would they put themselves in danger by using up to $20k to supplement his income?

I know the answer. I just need to have this discussion. The wife might be having a major case of nerves. She might give up a good salary, but she hates her work.

[astromeria]

If the couple can live on $40k per year, why does $20k need to be withdrawn per year if the lady of the house retires? Does the husband make only $20k? Is there some reaosn they ahve to retire simultaneously? Do they totally separate their finances? Is hubby unwilling or unable to support his wife? I'm retired and my husband is still working. I don't take any wihtdrawals from our portfolio except to pay the taxes generated by the port's taxable accounts.

[MasterBlaster]

The simple answer is that yes a $1M diversified/low cost portfolio can generate $40k/year with no risk to a 56/60 year old couple.

So if their spending is $40k (before taxes) then yes they can retire.

I'll let others discuss the caveots.

[smooch]

The couple will have $50k a year in expenses for the next 2 years, because they still have a mortgage. The husband works 4 days a week for 47k gross. So the wife either has to earn some or they have to take some from savings. The husband is very much in favor of the wife leaving the current job. The wife (that would be me) is feeling guilty about cutting off a 70k a year salary to possibly take half of that at a job I would like in a totally different field. I'm trying to convince myself that we really don't need to accumulate any more and we will be fine if we just don't use our savings. I don't even expect to take out $20k a year right now. What's really worrying me is that I'll find a job immediately and I'd just like to have a month or two off.

I know I'm rambling. Thanks for listening.

[astromeria]

Sounds like you only need to take out $3k/year to meet the budget--or did you need $50k after taxes? Also, if you track your spending, maybe you can come up with the $3k by not spending on whatever...restaurants, movies, hobbies....

Don't feel guilty--you're probably prolonging your life. And you can save some $$ by staying at home, too (not $70k, but still). I felt guilty about leaving my perfectly good job, too--but only before I quit, not after.

=astro, typing w/one hand since I burned my thumb taking a ham out of the oven...dang, this hurts

[ESRBob]

Smooch,
Go for it! Life is short. The fact that you've found another job you would like (albeit not as well-paid) puts you even that much further ahead. Your numbers suggest you could do this without working at all, but working some just means you're still adding to savings during this transition period. Heck if you really like it, you could potentially do this for many years. Think of yourself as 'semi-retiring' into work you really love-- you've paid your dues now start living b4 its 2 late!

[Enuff2Eat]

Quote:

Originally Posted by smooch that a couple has just reached the $1 million mark. The husband wants to keep working. The wife has had it. This couple never expects to withdraw more than $40k from their savings. No pensions - $900k in retirement accounts, $100k in taxable. He is 60 and she is 56. If the wife quits and doesn't find another job right away, would they put themselves in danger by using up to $20k to supplement his income? I know the answer. I just need to have this discussion. The wife might be having a major case of nerves. She might give up a good salary, but she hates her work.

smooch,

go for it. life is way way too short. why be unhappy. i bet u can live much much less than you think once you retire. i believe if your house is paid for. you can live much less than 40k/year. guilty what guilty? you worked hard all your life and believe millions and millions of other people only dream to have HALF of what you got.

enuff