RIF to FI? to FIRE?

[FI50]

Thank you everyone for your replies, information, and questions. The information have been very useful to help me trying to figure this out. However, I'm still very conflicted and keep changing my mind every other second. With that in mind, I'm providing a little more information hoping to help me move this further along:

I'm 47, DW 39, 3 children( 10,8,3 years old)
We have approximately 2.95 Mil in investment assets
In addition, our home is worth ~650K with a 350K mortgage with 27 years left
I will get 30k in SS at 67
DW 15k at 67
DW will get 40K in pension at 60
We are planning to spend 160k(present value) in education for each child
We are spending about 76k a year base on 4 months of tracking
DW is planning to working another 4-5 years. She is currently making 100k a year

Firecalc is telling is tell us with a 100% success at 115k spending.

Part of this is I'm pretty burned out at work and desire to spend more time with the kids.

Thanks for reading!

 

[Rianne]

Thank you! You have pretty much hit on everything I was thinking. If I take the package and DW works a year longer we would have very similar to the number projected for 2021. That being said, DW enjoys her work and I would be surprise if she would stop working in the near future. 2021 is really the year we both stop working if we chose.

It's my understanding you want to RE. Your wife seems happy with her $100K job, at least for now. I'm just not seeing a downside here. The SS estimates are if you stop working now? Wife will continue to contribute. The important question here is your mental/physical health. Two more years of working to be on the "safe side" is better, but if you are struggling, stop working. Your family needs you, just as you need them. My DH was teetering on the edge when he resigned. Thank heavens, he resigned. He got a year package, with HC and we figured it out. Life is good, now. You will figure it out.

 

[marko]

I got my RIF package last week. The package will cover me for 9 months. On Friday, one on my previous mangers offered me a similar position with the same pay etc...

Is the RIF package that will cover you for 9 months more lucrative than accepting the similar position for now and seeing how you feel about that in 9 months?

Just make sure you get something ironclad.

When my company was acquired, the new company offered some folks a job instead of taking their hefty severance.

Then, after 3 or 4 months they canned them and they got nothing.

 

[davebarnes]

If you have low income when you kids go to college, they are more likely to get financial aid (grants, not loans).
You should look at the FAFSA, CSS Profile when your oldest is a freshman in high school.

 

[Milton]

[W]e are only spending about 40% of what we gross.

Which sounds fine, as long as you don't live in Sweden, Quebec, Ontario, Denmark or some other place with a top marginal rate exceeding 55%.

 

[stepford]

Which sounds fine, as long as you don't live in Sweden, Quebec, Ontario, Denmark or some other place with a top marginal rate exceeding 55%.

Then again, such places tend to have strongly subsidized healthcare, education and other services. So cost of living after taxes may be quite a bit less. I don't want to turn this into a debate about socialism, but representing the high marginal taxes in other countries as a major driver of retirement costs seems incomplete at best.

 

[dtbach]

It sounds like you would like to cut out of the workforce. If your wife is working and is OK with it, why not go for it.

 

[Milton]

Then again, such places tend to have strongly subsidized healthcare, education and other services. So cost of living after taxes may be quite a bit less. I don't want to turn this into a debate about socialism, but representing the high marginal taxes in other countries as a major driver of retirement costs seems incomplete at best.

Yes, fair enough.

My point was not to complain about high taxes; rather, I just wanted to note that when it comes to retirement planning, saving a certain percentage of gross income isn't terribly meaningful.

X% of net income is a bit more helpful, but what is really needed is a comparison of non-employment income to expenses. I trust the OP has done that math, although he hasn't said so expressly.

 

[WestUniversity]

The one thing that is making me nervous is that we have only been tracking our expenses for 4 months. With many of the unknowns, we build in a 20% buffer for things we do not feel comfortable, such as healthcare.

Can you go online with your bank and download the last 12 months of transactions? Ideally the last 24 months. That will give you a much better read than only 4 months...

 

[ncbill]

If you have low income when you kids go to college, they are more likely to get financial aid (grants, not loans).
You should look at the FAFSA, CSS Profile when your oldest is a freshman in high school.

Not for public schools...apart from the Pell grant, aid comes in the form of loans, even with low income.

 

[Philliefan33]

If you have low income when you kids go to college, they are more likely to get financial aid (grants, not loans).
You should look at the FAFSA, CSS Profile when your oldest is a freshman in high school.

Assets are also considered in the financial aid equation. There is a special treatment for tax-deferred retirement accounts, but a family with large savings and investments in taxable accounts will be unlikely to receive much need-based aid.

 

[catii]

Do you REALLY have a detailed, realistic scope of what you'll need to deal with with both of you retired & out of the workforce? Do you have fallback plans on side gigs, or something else that could bring in money? You're far from collecting SS, so that's not helpful. What are your plans if one of your kids needs extended medical care?

Seems like there's still more baseline work for you to do before making a decision on the RIF package.

 

[FI50]

It's my understanding you want to RE. Your wife seems happy with her $100K job, at least for now. I'm just not seeing a downside here. The SS estimates are if you stop working now? Wife will continue to contribute. The important question here is your mental/physical health. Two more years of working to be on the "safe side" is better, but if you are struggling, stop working. Your family needs you, just as you need them. My DH was teetering on the edge when he resigned. Thank heavens, he resigned. He got a year package, with HC and we figured it out. Life is good, now. You will figure it out.

Thanks Rianne! My last working day will be 4/1/2019. SS estimates are based one if we stopped working now.

 

[FI50]

Just make sure you get something ironclad.

When my company was acquired, the new company offered some folks a job instead of taking their hefty severance.

Then, after 3 or 4 months they canned them and they got nothing.

I'm not really sure ironclad it it, but I feel pretty comfortable with the package.

 

[FI50]

If you have low income when you kids go to college, they are more likely to get financial aid (grants, not loans).
You should look at the FAFSA, CSS Profile when your oldest is a freshman in high school.

Which sounds fine, as long as you don't live in Sweden, Quebec, Ontario, Denmark or some other place with a top marginal rate exceeding 55%.

Then again, such places tend to have strongly subsidized healthcare, education and other services. So cost of living after taxes may be quite a bit less. I don't want to turn this into a debate about socialism, but representing the high marginal taxes in other countries as a major driver of retirement costs seems incomplete at best.

Yes, fair enough.

My point was not to complain about high taxes; rather, I just wanted to note that when it comes to retirement planning, saving a certain percentage of gross income isn't terribly meaningful.

X% of net income is a bit more helpful, but what is really needed is a comparison of non-employment income to expenses. I trust the OP has done that math, although he hasn't said so expressly.

Assets are also considered in the financial aid equation. There is a special treatment for tax-deferred retirement accounts, but a family with large savings and investments in taxable accounts will be unlikely to receive much need-based aid.

We live in a moderate tax state and we are looking into long term tax planning.

As for education funding and aids we do need to do further research. We should be able to support 160k for each child.

 

[FI50]

Thanks! 4/1/2019 it is!

 

[FI50]

Thank you all for your replies. I just wanted to give an update:

Since my last reply a few things have developed:

- Lost a friend and a family member in their mid 40s and 50s
- Sold my second home and net 80k more than my conservative estimates
- DW got a promotion
- I was able to negotiate 12 months of severance pay, plus 15 months of medical, dental, and vision insurance

With that, I decided my last day will be 4/1/2019!!!!

 

[Dtail]

Thank you all for your replies. I just wanted to give an update:

Since my last reply a few things have developed:

- Lost a friend and a family member in their mid 40s and 50s
- Sold my second home and net 80k more than my conservative estimates
- DW got a promotion
- I was able to negotiate 12 months of severance pay, plus 15 months of medical, dental, and vision insurance

With that, I decided my last day will be 4/1/2019!!!!

Excellent. Enjoy the best part of your life.