Laid-off...maybe it's time?

[fire53]

We've planned to retire in 2024 when all the kids are done with college undergrad. However I was recently laid-off from mega corp, (very blessed to receive a nice package). It was quite a stressful job and so far I really enjoy the freedom, more quality time with family, work on small projects around the house and volunteers. And at times, a bit frustrated that I am unable to find a job. I thought maybe I should officially declare ER but need advice for the following concerns:
1. Not sure how DW will react and how to overcome the guilt that she will be working while I stay at home.
2. Not sure how our children will see this. Dad is not working hard (good model ?)

I have read great info here and used several retirement calculators and they all gave me 100% with the scenario that DW will be working until 2020.

Our Info:
- I am 49 and DW is 46. 3 children, one in college. (already saved enough for tuition). But only save 1/2 for the 2 younger college tuition.
- DW 401K 300K and my is 600K. Invest in 60/40 stock/bond
- House worth 750K with 300K mortgage. Plan to pay off by 2020.
- Cash 350K, may go in partnership with relative to invest in RE shopping plaza
- Residential Rentals worth 1.5M with 600K mortgages. ~3.5K/Month NI
- Defer Compensation Account: 340K pay out in the next 4 years at 85K/yr before tax. 20/80 stock/bond.
- Small non-COLA pension. Able to start receiving 900/Month at 55. Or shoud I wait for later?
- DW salary is 70K/yr
- Annual expenses 66K after tax

Any financial suggestions for the above will be much appreciated.
Many thanks.

 

[Whisper66]

Do you have a good handle on what your expenses are per year? If so, what are they and do they change much if you fully retire?

How is your health insurance coverage....both if you fully retire now and after your wife retires? Have you included these costs in your firecalc analysis?

How many residential rentals are you managing and how dependable has that income been? Any large maintenance expenses included in your financial analysis?

Just a broad look at your note suggests that you have pretty good savings and ongoing income .... but no way to know if it's enough to ER without knowing expected expenses.

 

[ivinsfan]

If that 350K is in after tax money, you might want to hold onto it and not go into the mall business. You don't have unfettered access to your 401 at 49. Cash for living expenses might come in very handy. You might start tracking all your expenses. Rethink paying off your house, that 60K a year for the next 5 years will give you a lot of flexibility.

Don't count on your wifes income, she might want to retire with you and/or lose her job too.

 

[rodi]

First welcome!

Sorry to hear about the layoff. But it sounds like you're in decent shape, financially.

The biggest concern I have is whether you have an accurate idea of your spending, including taxes.

The second biggest concern I have is whether your wife will be on the same page.

 

[fire53]

Do you have a good handle on what your expenses are per year? If so, what are they and do they change much if you fully retire?

How is your health insurance coverage....both if you fully retire now and after your wife retires? Have you included these costs in your firecalc analysis?

How many residential rentals are you managing and how dependable has that income been? Any large maintenance expenses included in your financial analysis?

Just a broad look at your note suggests that you have pretty good savings and ongoing income .... but no way to know if it's enough to ER without knowing expected expenses.

Current expense is 66K annually after tax and will stay roughly the same when/if DW will join me in 2020 and we paid off the mortgage. Mortgage payment will go to health Insurance coverage and yes I included them FIREcalc calculation.

I have 5 rentals and and have budget for maintenance and being conservative on net income and properties value.

Thanks

 

[fire53]

If that 350K is in after tax money, you might want to hold onto it and not go into the mall business. You don't have unfettered access to your 401 at 49. Cash for living expenses might come in very handy. You might start tracking all your expenses. Rethink paying off your house, that 60K a year for the next 5 years will give you a lot of flexibility.

Don't count on your wifes income, she might want to retire with you and/or lose her job too.

Yes the 350K is after tax.
Agreed, I need to reserve a good portion for emergency funds.
Paying off the house will make DW very happy even though I agree with you that it can give me lots of flexibility or use it to invest else where as the mortgage interest is only 3.375
So we plan to use the Defer Comp pay out in the next 4 years to paying off the house. (Unless the mega corp bankrupt. It's been around for 100+ yr and financially sounds at the present)

Thanks

 

[fire53]

First welcome!

Sorry to hear about the layoff. But it sounds like you're in decent shape, financially.

The biggest concern I have is whether you have an accurate idea of your spending, including taxes.

The second biggest concern I have is whether your wife will be on the same page.

Thanks RODI. The more I think about the laid off the more I think it is a blessing as even DW noticed that I am much happier now.

I now added 66k annual expenses after tax in the original post.

DW and I briefly discussed, ideally, I would like to find another job (less stress and less pay) and we both quit in 2020 when our youngest starts college, but unsuccessful so far unless I am willing to move.

 

[Texas Proud]

My DW still rags on me for not working.... but she has never had a full time job... just sub teaching....

Last year I worked part time and made about $60K... but none of the offers this year were near me so I declined...


I am still looking to do temp work, but it is not like a normal temp job where there is an opening all the time... I hope to get about 5 or so months of work in each year....


You seem to be way ahead of me in assets.... and you expenses are less than me... you do not have to work at all... and your DW is pulling in more than your expenses...

 

[Katiek]

I think a lot will depend on your wife and if she is ok working when you're not. however, you mentioned you have rentals that generate income. Do you do the maintenance on the properties or spend time handling the business aspects? If so, you're still working as those are tasks that many people pay others to handle.

 

[FreeBear]

If that 350K is in after tax money, you might want to hold onto it and not go into the mall business. You don't have unfettered access to your 401 at 49. Cash for living expenses might come in very handy. You might start tracking all your expenses. Rethink paying off your house, that 60K a year for the next 5 years will give you a lot of flexibility.

Don't count on your wifes income, she might want to retire with you and/or lose her job too.

++1

VEHU,

Strongly agree with above reply regarding importance of after tax/cash holdings since you both are so far away from 59.5 yrs. Of course there are alternatives to get at the 401K/IRA money like ROTH conversions and 72T Rule (substantially equal payments), but these come with non-trivial constraints. Furthermore, you say you still need to fund a few more university educations.

Finally, I strongly agree that you can't assume that either of you can maintain or increase income for 5 more years. Obviously, this depends one the line of w*rk you both are in. Given such uncertainties and commitments, I'd recommend maintaining, preferably increasing, after tax holdings/cash.

Looks like you have a fair amount of experience with RE. Have you had much experience selling, not just buying? It can be a pain to unload, especially if forced by circumstances.

You've been through and are going through a lot. It may be wise to avoid heavy $$ commitments until the dust settles a bit. Also suggest in-depth conversations with DW over an extended period of time regarding investment plans and possible ER.

The reality is that there is still a stigma if the man ER's and the woman is "forced" to still work. On the other hand, it's commonly perceived that the woman is lucky if she can "just stay at home" while the guy grinds out the cash a few more years.

Take it slow and talk lots. Good luck!

 

[chris2008]

Make sure that your wife has some benefits from your ER, like you being the full time stay at home dad and running the home.

 

[Walt34]

http://www.early-retirement.org/for...re-asking-can-i-retire-69999.html#post1399715

 

[kimcdougc]

Sounds like you are in a pretty good financial position. There is nothing that says you must pay for your children's college education. They will appreciate it more if you pay half and they pay the other half. Just my 2 cents worth.