I'm 45, and was recently laid off from a lucrative but soulcrushing corporate job. The writing was on the wall (isn't it always?) and I got a decent exit package, which I was sticking around in hopes of getting.
I'm forming a consultancy, but have had difficulties getting a client base established. I figured it would be slow, but going the summer without a paying client (been doing some pro bono) has me thinking realistically about the worst case scenario.....what if I have no work again, ever? How would the numbers work?
DW (age 42) makes $75K, we get an additional $10K in family gifts. Our assets are $335K in my retirement and $90K in hers, and about $80K in cash. Our house (lakefront, which we figured would one-day be our retirement place) was just appraised at $515K with a mortgage of $450K. We just successfully refi-ed at 3.65% based solely on DW's salary and our assets. The application suprised the mortgage broker, who listed my occupation as "RETIRED", since my consultancy/LLC is showing no profit right now. That word got me thinking.
The other factor is 3 children, one of whom is enrolled in a state college (fully funded through a 529 account - the other two 529 accounts are well under way for the others) and DW doesn't want to move. No debt of any kind other than the mortgage.
In doing the numbers for the worst case scenario, I looked at what it would take to supplement DW's income to cover basic living expenses. Once severance and 25 weeks of unemployment are exhausted, we're looking at spending liquid cash, then tapping into retirement, paying the penalties. Again, this is not a PLAN, it is a fall-back position in case I never land proper paying work again...a reaction to unemployment or underemployment.
As you can imagine, the numbers showed a fairly long period of staying afloat, even without adopting an excessively frugal lifestyle.
The final financial factor, the really unusual part of this scenario, I should assume, is that my parents (both aged 77) recently enlisted my help in organizing their finances - centralizing their records, etc. - and I discovered just how well off they are. Their accounts top $10M, which would one day be split three ways after taxes.
So, it is not my current plan or intention to retire early, and I want my parents to be around a long, long time, but there is a possibility that if things turn out really badly in my life (never working in my field again) that I may, in fact, be retired early.
We'll see.
I'm forming a consultancy, but have had difficulties getting a client base established. I figured it would be slow, but going the summer without a paying client (been doing some pro bono) has me thinking realistically about the worst case scenario.....what if I have no work again, ever? How would the numbers work?
DW (age 42) makes $75K, we get an additional $10K in family gifts. Our assets are $335K in my retirement and $90K in hers, and about $80K in cash. Our house (lakefront, which we figured would one-day be our retirement place) was just appraised at $515K with a mortgage of $450K. We just successfully refi-ed at 3.65% based solely on DW's salary and our assets. The application suprised the mortgage broker, who listed my occupation as "RETIRED", since my consultancy/LLC is showing no profit right now. That word got me thinking.
The other factor is 3 children, one of whom is enrolled in a state college (fully funded through a 529 account - the other two 529 accounts are well under way for the others) and DW doesn't want to move. No debt of any kind other than the mortgage.
In doing the numbers for the worst case scenario, I looked at what it would take to supplement DW's income to cover basic living expenses. Once severance and 25 weeks of unemployment are exhausted, we're looking at spending liquid cash, then tapping into retirement, paying the penalties. Again, this is not a PLAN, it is a fall-back position in case I never land proper paying work again...a reaction to unemployment or underemployment.
As you can imagine, the numbers showed a fairly long period of staying afloat, even without adopting an excessively frugal lifestyle.
The final financial factor, the really unusual part of this scenario, I should assume, is that my parents (both aged 77) recently enlisted my help in organizing their finances - centralizing their records, etc. - and I discovered just how well off they are. Their accounts top $10M, which would one day be split three ways after taxes.
So, it is not my current plan or intention to retire early, and I want my parents to be around a long, long time, but there is a possibility that if things turn out really badly in my life (never working in my field again) that I may, in fact, be retired early.
We'll see.