Are the higher powers telling me something?

[StuckinCT]

A year ago firecalc was showing 96% spending $22k a month living in one of the more expensive areas of the country outside NYC.

Today firecalc has us firmly at 100%, and the job is adding a lot of unnecessary stress. I am 48, wife is 38 w/ three kids 10, 8 and 6. Have a $1.3mm house w/ $500k mortgage, $7.85mm in investments for retirement mostly non qualified, $1.4mm for education and total net worth just over $10mm.

We can't sell our house as our real estate market is frozen due to high property and local taxes, we paid $1.7mm and have updated kitchen etc.

My wife is currently pursuing her masters degree to become a 3rd grade teacher which she hopes to complete in two years. She is a pre-school teacher now and runs the book fair, library auction etc in our town so she is well connected. This has been a lifelong dream and now that the kids are a little older, it is doable.

If she teaches in the public schools, it would provide platinum health care and her income would pad our passive income of $250k- we spend $260k roughly with tax. We also are quitting our country club with a huge new assessment to go to a smaller club with just racquets / pool.

This could be the third leg of the stool w/ healthcare, extra income, a potential pension and ample time off to travel.

I am wondering if I should wait until she gets hired or if I should just call it quits? The club thing sort of just happened and so did the teacher pursuit. I think the stress is effecting my health - luckily I exercise a lot to manage it and I eat relatively well, but I am sacred to retire at 48. The other concern is what if my kids need to go to private school, so much time until they are out of the nest!

Wondering what others would do in my situation..

 

[davebarnes]

1. Your wife can quit her job and get the Masters in less time.
2. You can sell the house, you just don't want to.
3. Kids never NEED to go to private school. You just move to a decent public school area.

 

[Aerides]

Wondering what others would do in my situation..

With those assets almost all of us would figure out the minimum notice and see if you can be free by the holidays (or at least check the calendar for your bonus schedule, and quit the day after that)

 

[Bamaman]

The Higher Power is telling you to pack up your family and move them to a lower cost of living place. And then you really don't need to worry about your extreme stress levels.

I'd hate to think I had a $1.2 million house and your financial resources and still be living middle class.

There are places that you could be living like a king on far less cash outflow. There's a reason thousands of people are moving out of your state.

 

[Dtail]

If you really wish to retire, you can certainly find a way with your total investments.
Think it through and truly decide if you wish to stay in Ct.

 

[38Chevy454]

My thoughts exactly.

The Higher Power is telling you to pack up your family and move them to a lower cost of living place. And then you really don't need to worry about your extreme stress levels.

I'd hate to think I had a $1.2 million house and your financial resources and still be living middle class.

There are places that you could be living like a king on far less cash outflow. There's a reason thousands of people are moving out of your state.

Why tolerate the HCOL area if you don't have to? Bail out and retire while you still have your mental health.

 

[Mdlerth]

When you are ready, you won't need to ask

I don't know about the higher powers, but the lower powers right here are all telling you that you're overthinking it. You report that FIRECalc says you have more than enough stash to permanently fund even your enviable spend rate, in which you already are pursuing some reductions. Your j*b is costing you more in health and happiness than it's paying you in $$.

Of course you can sell the house. Everything is for sale at the right price. But why would you want to, if it's in the location that will set up DW for achieving her Master's dream? You could hand in your notice, and it wouldn't create an obstacle to any of your hopes and dreams.

However, despite all signs pointing to "yes", it sounds like you aren't mentally ready yet. I understand that syndrome, having labored under it for some time. If you're not ready, you're not ready.

 

[StuckinCT]

1. Your wife can quit her job and get the Masters in less time.
2. You can sell the house, you just don't want to.
3. Kids never NEED to go to private school. You just move to a decent public school area.

#s 1&3 somewhat true, but as for #2 there are houses like mine foreclosed offered at 50 cents on the dollar and no one willing to step into the tax trap. 7 figure write downs.

I stopped crying about that a while ago, but I can’t move!

 

[StuckinCT]

The Higher Power is telling you to pack up your family and move them to a lower cost of living place. And then you really don't need to worry about your extreme stress levels.

I'd hate to think I had a $1.2 million house and your financial resources and still be living middle class.

There are places that you could be living like a king on far less cash outflow. There's a reason thousands of people are moving out of your state.

Ha! Too funny and you might be right. We’re going to Mt Pleasant SC after Xmas to check on the Charleston area and get away.

It’s unreal what’s happening in this state, plenty of blame to go around. I think we may be at the bottom, finally. It’s been a painful decade so hopefully my mental health holds up long enough to get out of here without a fire sale.

Seriously, there are some unbelievable deals, custom houses that were in the mid 2s now going for a buck. It’s gruesome!

 

[aja8888]

but as for #2 there are houses like mine foreclosed offered at 50 cents on the dollar and no one willing to step into the tax trap. 7 figure write downs.

I stopped crying about that a while ago, but I can’t move!

You mean in Fairfield, CT, too? I thought that was only going on in the Waterbury/Woodbury/Southbury area (New Haven County)?

 

[Aus_E_Expat]

Why not rent your house for a year or 2?

Quit your current job and mover somewhere less stressful and cheaper - rent a house there for a year or 2 and give it a trial run.

I suspect if you have accumulated around $10m by age 48 you will not stay full time retired for long. In 2 years you will probably be back doing some sort of job but hopefully in a much less stressful environment (and maybe at a lower income) so you will not need to draw fully on your investment income.

Do something you enjoy and less stressful while your kids are young - in 10 years time the kids are grown and they will have their own lives.

 

[davebarnes]

Watch this https://youtu.be/MIZqTUal6As

And, this all time gem https://youtu.be/20n-cD8ERgs

 

[cathy63]

Hmm. You have $250K of passive income and you spend $260K with a $7.85M portfolio. In order to make up that extra $10K, you would be looking at a .1% withdrawal rate. That's sustainable indefinitely.

Let's say your wife also decides she'd rather retire than become a 3rd grade teacher, so you end up having to buy ACA insurance and it comes in at some outrageous amount, like $50K annually so now you're taking $60K out of the portfolio. You've bumped up the withdrawal rate to .8%, which is still sustainable indefinitely.

Let's say all your kids need to go to private schools (which is unlikely if you stay in an HCOL area), and you decide to bump the withdrawal rate up to 3%. That's gives you $235,500 or $175,000 on top of the health care and regular household expenses for up to 12 years. I don't know if you can send 3 kids to private school in CT for $175K, but even if you need to go a bit higher for a few years, your portfolio could still handle it.

You do not need to move to a LCOL area to make retirement feasible. You might want to move, and that's fine if you do, but take your time and know what amenities you're giving up before doing anything that drastic. It's much harder to move back to the HCOL area once you've left.

 

[pb4uski]

You have $10m including a $1.3m house... so let's say you take a bath on the house and that $10m becomes $9.5m... at 3% that is still $285k a year... and you and your family can live like a king in many areas of the country (including my home state).

You say $1.4m for education... I hope that isn't $1.4m locked up in 529 plans... $1.4m is too much to begin with.

 

[daylatedollarshort]

Wondering what others would do in my situation..

I would have retired a long time ago (way before reaching $10M NW) and moved some place with lower taxes and better weather.

 

[nancyfrank232]

A year ago firecalc was showing 96% spending $22k a month living in one of the more expensive areas of the country outside NYC.

Today firecalc has us firmly at 100%, and the job is adding a lot of unnecessary stress. I am 48, wife is 38 w/ three kids 10, 8 and 6. Have a $1.3mm house w/ $500k mortgage, $7.85mm in investments for retirement mostly non qualified, $1.4mm for education and total net worth just over $10mm.

We can't sell our house as our real estate market is frozen due to high property and local taxes, we paid $1.7mm and have updated kitchen etc.

My wife is currently pursuing her masters degree to become a 3rd grade teacher which she hopes to complete in two years. She is a pre-school teacher now and runs the book fair, library auction etc in our town so she is well connected. This has been a lifelong dream and now that the kids are a little older, it is doable.

If she teaches in the public schools, it would provide platinum health care and her income would pad our passive income of $250k- we spend $260k roughly with tax. We also are quitting our country club with a huge new assessment to go to a smaller club with just racquets / pool.

This could be the third leg of the stool w/ healthcare, extra income, a potential pension and ample time off to travel.

I am wondering if I should wait until she gets hired or if I should just call it quits? The club thing sort of just happened and so did the teacher pursuit. I think the stress is effecting my health - luckily I exercise a lot to manage it and I eat relatively well, but I am sacred to retire at 48. The other concern is what if my kids need to go to private school, so much time until they are out of the nest!

Wondering what others would do in my situation..

I would wait until your wife gets hired

Your kids probably have their friends and connections so I personally wouldn’t move

I’m sorry to hear about your primary residence. That really sucks

 

[StuckinCT]

Hmm. You have $250K of passive income and you spend $260K with a $7.85M portfolio. In order to make up that extra $10K, you would be looking at a .1% withdrawal rate. That's sustainable indefinitely.

Let's say your wife also decides she'd rather retire than become a 3rd grade teacher, so you end up having to buy ACA insurance and it comes in at some outrageous amount, like $50K annually so now you're taking $60K out of the portfolio. You've bumped up the withdrawal rate to .8%, which is still sustainable indefinitely.

Let's say all your kids need to go to private schools (which is unlikely if you stay in an HCOL area), and you decide to bump the withdrawal rate up to 3%. That's gives you $235,500 or $175,000 on top of the health care and regular household expenses for up to 12 years. I don't know if you can send 3 kids to private school in CT for $175K, but even if you need to go a bit higher for a few years, your portfolio could still handle it.

You do not need to move to a LCOL area to make retirement feasible. You might want to move, and that's fine if you do, but take your time and know what amenities you're giving up before doing anything that drastic. It's much harder to move back to the HCOL area once you've left.

Cathy, good point on the schools and difficulty moving back to a HCOL area. The $250k is our dividend and interest income, so that would be part of our withdrawal rate. The private school we would send to is $28k all in, and I am thinking mainly of our two boys who have ADHD. So far our public schools have done an amazing job, maybe better than a private school could do, so the chances of needing to go private have decreased for sure.

 

[StuckinCT]

Watch this https://youtu.be/MIZqTUal6As

And, this all time gem https://youtu.be/20n-cD8ERgs

I died laughing watching this. I went through this vary same scenario 10 years ago.

I will save most of my comments on this. In terms of the house, I always joke I am going to give it to charity when we're done with it because it is worth more as a write off. Luckily, it is a nice place to live and our property taxes just got reduced to $28k from $33k, so we could have worse problems for sure.

I also don't care about scratching the floors or making fires in the marble fireplaces too which is great! We're lucky to be down only $400 or $500k too, people that bought before 08 are down 7 figures.

 

[ncbill]

I would wait until your wife gets hired

Your kids probably have their friends and connections so I personally wouldn’t move

I’m sorry to hear about your primary residence. That really sucks

Agree.

OP has the income and assets to remain in their HCOL area until the kids are grown and gone.

Then they can move to a lower COL area.

 

[ckelly78z]

I certainly think if I had your assets, and had platinum health care to look forward to in a few years, I would move the family to a warm location that allows year round healthy living, rather than living in a HCOL area that is full of stress.

The wife can pursue her masters degree wherever you end up, and probably find a teaching job locally afterwards. I think you, her, and your kids would end up being happier in a slow paced life in a LCOL area.

 

[pacergal]

It sounds like your finances are in great shape. Congratulations on your savings rate!
Can you take a 6-12 month sabbatical from your job and give retirement a mini trial? Your kids are at enjoyable and busy ages where being an at home Dad has great advantages.
If you like your home and where you live, why not stay and enjoy it?

 

[cathy63]

I certainly think if I had your assets, and had platinum health care to look forward to in a few years, I would move the family to a warm location that allows year round healthy living, rather than living in a HCOL area that is full of stress.

The wife can pursue her masters degree wherever you end up, and probably find a teaching job locally afterwards. I think you, her, and your kids would end up being happier in a slow paced life in a LCOL area.

Part of what makes CT a HCOL area is that teachers get better pay and benefits than they do in LCOL areas, so moving and having the wife become a teacher in the new destination may mean that platinum health coverage is no longer something they can look forward to. (I'm thinking of my sister's case where their only health insurance option is to pay 100% of the premium for the group coverage offered through their union. It's not platinum coverage by any means.)

Also, teaching in a LCOL area means the public schools have lower funding and fewer resources, class sizes are larger, higher numbers of students are living in poverty, etc. It may be easier to get a teaching job in LCOL areas, but that may not be the job the OP's wife is dreaming of. And their own kids with ADHD are more likely to need private schools or other outside support in a place where public schools are under-resourced, so that's another expense.

There are a lot of moving parts in this equation.

 

[cathy63]

Cathy, good point on the schools and difficulty moving back to a HCOL area. The $250k is our dividend and interest income, so that would be part of our withdrawal rate. The private school we would send to is $28k all in, and I am thinking mainly of our two boys who have ADHD. So far our public schools have done an amazing job, maybe better than a private school could do, so the chances of needing to go private have decreased for sure.

I still think you can stay put and retire now if you want to. How much of that $260K spending is discretionary? Presumably some childcare, clothing, commuting expenses will go away when you retire.

Also, the TCJA expires after 2025 which is only six more years. I'm not sure if your housing market's issues are entirely a result of that, but it's certainly not helping the situation. Things should get clearer as we approach that expiration date and the housing situation could improve. From the outside, it seems unlikely to get much worse if you wait.

 

[StuckinCT]

Part of what makes CT a HCOL area is that teachers get better pay and benefits than they do in LCOL areas, so moving and having the wife become a teacher in the new destination may mean that platinum health coverage is no longer something they can look forward to. (I'm thinking of my sister's case where their only health insurance option is to pay 100% of the premium for the group coverage offered through their union. It's not platinum coverage by any means.)

Also, teaching in a LCOL area means the public schools have lower funding and fewer resources, class sizes are larger, higher numbers of students are living in poverty, etc. It may be easier to get a teaching job in LCOL areas, but that may not be the job the OP's wife is dreaming of. And their own kids with ADHD are more likely to need private schools or other outside support in a place where public schools are under-resourced, so that's another expense.

There are a lot of moving parts in this equation.

This is the conversation my wife and I had about a month ago and why the pressure is turning up, she would not be enthused about teaching in an underfunded overcrowded system. The further we get into her masters the more committed we become. We’re heading to Mt Pleasant Charleston area after Xmas to have a look around, the schools there are quite good but probably not as good as CT schools.

I am aware of the tax law sunset. Last year there was a bill to regionalize schools in CT, the urban areas want to share resources and property tax revenue. That would be a complete dealbreaker for us paying the high taxes for watered down schools.

 

[Gumby]

Last year there was a bill to regionalize schools in CT, the urban areas want to share resources and property tax revenue.

I feel confident in predicting that will never happen.