Almost 40, Safe to RE if I wanted?

[RunningBum]

Stock options can juice net worth in a hurry.

 

[Conundrum]

I have to ask. How does someone nearing 40 accumulate $3,655,000 and a paid off $500k home? Kudos! But seriously that is a tremendous amount to have accomplished it age 40.

OP is in Beaverton which is also referred to as the silicon forest. If your smart and motivated you can do extremely well. My BIL is in tech as a integrated circuit engineer. Also residing in Beaverton. These companies aren’t afraid to shell out big $ to attract and retain talent

Intel is a major employer in Hillsboro next door to Beaverton

 

[HI Bill]

I'd say you're very close...but I'd ask myself a few questions.

1) Is the 529 funded well enough for two four-year degrees at colleges your kids are willing to go to?
2) Do you have any contingencies built in?
3) Long term care costs are covered?
4) Once your nest is empty, will you be satisfied with the quality of life (house, travel, toys, cars), your $129K budget allows?
5) Have you set up multiple budgets (e.g., age 40 to empty nest age) for the various stages of your life?
6) Have you considered what will fill your time after the kids are away, and whether you'll have enough funds to cover the costs?

Cheers!

 

[ivinsfan]

Stock options can juice net worth in a hurry.

yes they haven't been mentioned to this point...

 

[Floridatennisplayer]

Inherited

 

[cooch96]

With your expected expenses I would say you should work a few more years. However, with a paid off house you should be able to cut those expenses in half or close to it and still live a solid middle class lifestyle. In that case you could retire today. Your choice.

+1

You have many options to fall back on in case of normal calamities: cutting expenses, getting a part time job, returning to work full time, some combination of the above. But I suspect you won’t need to do any of that.

 

[broadway]

It doesn't have to be all or nothing.

Why not go part-time if possible?
or work temp jobs for a few months a year?

 

[Acey]

Great replies. No, there is no inheritance, just hard work. My stay-at-home DW had comparable career prior to leaving the work force, so we had strong dual incomes. And fortunately we both have similar approaches to finances and saving. So 28 years of income between the two of us, and also the power of compounding investment returns.


I agree that a combination solution might be best. Work another year, make a few spending reductions, prepare some contingency strategies.


No one has yet said that I'm crazy way off, which is reassuring.

 

[FlaGator]

Here are a couple hard questions to chew on..

........................
As your kids age even though college is funded stuff like expensive activities, braces, cars etc start to occur have you factored that into your number.
...............

Does your job require extensive travel and/or very long hours? Otherwise 7 and 10 year olds life is pretty much school, a little down time, making and being with friends. If you already have your weekends free you're not going to be adding a lot to the one on one time.
.............

OP-Congratulations on translating your career success into a very solid financial foundation! Your work and discipline have given you choices and a lot flexibility as to how to live your life. Ignore the rude comments from people who apparently don't understand tech industry or corporate compensation structures.

I became a single parent 5 years ago when my wife passed away after a year-long illness. Kids were then 12 and 9 (now 17 and 14). I found the quoted comments to be meaningful issues to consider.

Braces and dental care generally - Both my kids had braces while I had my employer dental coverage (youngest at the end of COBRA), but I still ended up with out of pocket expenses of $8,000+. When you're buying your own health insurance, you may not find dental coverage to be a good value (I have not), so plan for that.

If you decide to stay in the job for a while and can put some money in an HSA, that would give you another option for paying those costs.

Cars - I added one to the fleet so the oldest had some independence and I got relief from chauffeuring. Will be adding another one in 18 months for the same reason. Insurance for young drivers is costly no matter where you live. Suggest you factor those costs into you planning.

Time with the kids - Driving my kids back and forth to school was really valuable. I had a captive audience, as did they, and it was a great time to help them prep for the day and review it at the end. Other than that, demands on my time were initially fairly modest.

That changed when the oldest entered HS and got involved in a number of extra-curricular activities. The youngest soon followed. I am very fortunate to be able to devote time to their activities and be involved in the parent support organizations as well. Chaperoning field trips, including overnight ones, helping out teachers with special events and getting to know the school administrators have improved my confidence in the quality of their educations and are appreciated my kids. Your experience may be different.

One caveat - giving up your career, even when you can financially, is a huge step. The world I knew changed around me when my wife got sick and later died, and it changed again when I gave up the job a year later. That was the right decision for my kids, but there has been a significant personal cost to me that I didn't understand for several years. Having a good spouse at your side makes a huge difference, so keep your marriage strong

 

[JakeinChina]

Great replies. No, there is no inheritance, just hard work. My stay-at-home DW had comparable career prior to leaving the work force, so we had strong dual incomes. And fortunately we both have similar approaches to finances and saving. So 28 years of income between the two of us, and also the power of compounding investment returns.


I agree that a combination solution might be best. Work another year, make a few spending reductions, prepare some contingency strategies.


No one has yet said that I'm crazy way off, which is reassuring.

Great Job Acey! Of course you could early retire if you wanted to, but I think your issue might be more of a change in lifestyle matter than a financial one. Perhaps you should take time off and see what it really would be like to not go to work each day.

Also, 129K is a lot of spending in a year, esp given that you have no mortgage. Besides the vacations, what else do you spend money on each month? 129K over 12 months is almost 11K spending each month. Do you have high property taxes? Wife likes to shop?

Congrats on your success!

 

[cbslc]

I'm 46 and was (until last month) in the same arena. I'm putting things off a bit till the market recovers. But I'm only budgeting 50k/year and we don't have any kids. Given your annual budget and kids. I think you should keep going.
Sorry, working for megacorp sucks. I'm in healthcare IT and its horrific - can't wait to get out. But, I don't think the grass is all that greener elsewhere, so I'm sucking it up and trying to stop internalizing things.

 

[pacificlou]

Early withdrawals from an IRA or 401k account can be an expensive proposition because of the hefty penalties they carry under many circumstances. The IRS allows penalty-free withdrawals from retirement accounts after age 59 1/2, so you can kiss your investment or a large portion goodbye.If you are 59½ or over, you may withdraw as much as you want, as long as your Roth IRA has been open for at least 5 years.
If you are under 59½, you may withdraw the exact amount of your Roth IRA contributions with no penalties.
There are special exemptions for first-time home purchase and college expenses.
You definitely need to speak with a specialist about withdrawing any funds and understand the consequences, the money you have to spend will be allot less than you think unless you pay those heavy fines. Good Luck

 

[pacificlou]

Early withdrawals from an IRA or 401k account can be an expensive proposition because of the hefty penalties they carry under many circumstances. The IRS allows penalty-free withdrawals from retirement accounts after age 59 1/2, so you can kiss your investment or a large portion goodbye.If you are 59½ or over, you may withdraw as much as you want, as long as your Roth IRA has been open for at least 5 years.
If you are under 59½, you may withdraw the exact amount of your Roth IRA contributions with no penalties.
There are special exemptions for first-time home purchase and college expenses.
You definitely need to speak with a specialist about withdrawing any funds and understand the consequences, the money you have to spend will be allot less than you think unless you pay those heavy fines. Good Luck

 

[HI Bill]

Early withdrawals from an IRA or 401k account can be an expensive proposition because of the hefty penalties they carry under many circumstances. The IRS allows penalty-free withdrawals from retirement accounts after age 59 1/2, so you can kiss your investment or a large portion goodbye.If you are 59½ or over, you may withdraw as much as you want, as long as your Roth IRA has been open for at least 5 years.
If you are under 59½, you may withdraw the exact amount of your Roth IRA contributions with no penalties.
There are special exemptions for first-time home purchase and college expenses.
You definitely need to speak with a specialist about withdrawing any funds and understand the consequences, the money you have to spend will be allot less than you think unless you pay those heavy fines. Good Luck

You can also take Substantially Equal Periodic Payments (SEPP) before 59.5 under IRS Rule 72t if you follow the rule very precisely, avoiding penalties.

 

[Retired Expat]

My only question is if you have factored in not just college but advanced degrees for the kids and/or money to help them start out, like buying a house or apartment?

Basically your assets seem fine to maintain current lifestyle but what about more? Kids are at an age where a lake house or vacation home may be nice? I would suggest looking at your wish list to see what big ticket items you may want to allow for and work long enough to fund them, then pull the trigger and enjoy!

 

[gamboolman]

Acey,

As others have said - well done for being in the great financial shape you are while still South of 40.

Ms. gamboolgal and I are looking to retire at end of 2019 at near to your exact estimated spends and desired net per year. I will be age 60 and our kids are grown - and I feel we are on the knife edge of being OK - and we are 100 + % on FIRECalc and many other programs and the ole homemade spreadshiites.....We are looking at working with ~$3.2 M nest egg for the similar projected expenses and desired net.

I will be the first to admit that I may be missing something with your numbers vs your age and stage in life. But I just don't see how your making it work based on $2.3M ? until you bridge the years before the other monies is available or desired to be used.

You have 2 kids getting ready to head into teenage years, college, etc. Your house is guaranteed to need a new roof, AC / Furnace, unexpected major expense repairs, and the dreaded "kitchen upgrade" etc. Life happens, car wrecks not your fault happen and can involve uninsured motorists, unexpected illnesses can come. Health care & insurance increasing costs for a long period of time for your desired number of years for retirement. And yawl might have another visit from the stork......

Sequence of Returns, normal market fluctuations, Bear markets, increased inflation, etc.

I really want your numbers to work - but I would say you ought to bear down for another 5 years and pile it higher and deeper.

But thats just me. All the best and again, well done sir ! Please do keep us posted on what yawl decide.

gamboolman....

Lifes A Dance And You Learn As You Go.....