How to convince my dear wife that 6M is enough ?

[smilefun]

I’m really glad I found this forum — I’ve learned a lot from all of you.

My wife and I are both 58. She retired about 18 months ago (after a lot of convincing from me). She worked incredibly hard while raising our four kids, who are now all finished with college and working.

I’d like to retire now, but she would prefer that I keep working another 2–4 years to add more cushion to our nest egg, help the kids when they’re ready to buy their first homes, and leave something for them and future generations. We both grew up poor, so financial security means a lot to her. Our total NW is 7.6M not including our paid off house worth about 1.4M.
Here are our numbers:
- Pre tax: 2.8M in 401K/IRA (DW 1.05M & Me 1.75M) 60% stocks funds and 40% bonds
- After tax: 600K in brokerage (70% stock funds, 30% bonds and a small stock trading account that is not doing well compared to the market… LOL)
- Cash: 1.1M in various CDs earing around 4%. I have this cash for a few years now, waiting to purchase in case market/RE crash...LOL.
- RE Rentals: 6 SFH, net equity 3.1M, net monthly income before tax is about 13K
- My current salary is shy of 200K (including bonus). Job is not stress and work from home.
- Our expenses is approximate $115K/yr ($135K/yr if retire to include funds to purchase health insurance)

Questions:
1. How can I reassure my wife that we likely have enough to retire now and still leave plenty behind?
2. What should we do with the cash currently sitting in CDs? I am realizing now that at our age, I’m not interested in buying more rental properties.
3. My company offers an HSA and Roth 401(k). If I keep working, should I max them out this year?

Thank you for your time.

 

[PaunchyPirate]

I would plug all those numbers into Pralana software and see how it models your future with its various analysis tools. It is a fairly complex software, but if you have an ability to work thru it slowly and study what is happening on the various screens and outputs, you'll start to figure out how to learn and trust from it. Your modeling can include "withdrawals" from your accounts for one-time payments such as helping a kid buy a house as well as the sale of properties and such over the rest of your life.

With your numbers, I have to imagine that you have a big green light to retire and enjoy life.

Show her the charts and graphs and get her to understand them. She might come around.

 

[Lorenzo]

You could tell her that some of us with that spending level retire on a third of what you have.

 

[skyking1]

You could tell her that some of us with that spending level retire on a third of what you have.

Yes. Bring here on over to the forum, the members here are very generous with their time and knowledge IMO.
She can ask questions and many people will break it down, how it goes for them.

 

[pacergal]

Have you run Firecalc and other retirement calculators? What does your wife say when you review them with her?
What is her comfort "retirement number" and why did she choose it?
Heck, your monthly income is $156K from your rentals alone?
I would have retired long ago.

This is not a financial problem, it is an emotional one. It will require some long conversations with your DW, perhaps in a supportive theraputic environment.

 

[Koolau]

Welcome to the Forum.

You might use an old envelope or a sheet of paper and lay out for your DW what you have and how you see it being deployed to insure your "survival" under almost any scenario.

Also, you might run FIRECalc and show her those results. I'm sure FIRECalc will give you 100% chance of not running out of money.

If all else fails - lay a guilt trip on her that "HEY! You're retired and I'm still w*rking!!"

FIRECalc can be opened here: FIRECalc: A different kind of retirement calculator

 

[Just_Steve]

Or you can just tell her you are done and that's that.

 

[Cassius King]

Agreed. The rental income satisfies your spending needs alone.

 

[Koolau]

Not about my retirement but I had, for years, wanted to drive highway 1/101 from WA to CA. DW seemed uninterested no matter how much literature I found. Finally, I told her I was going to go do it and she was welcome to come with me or stay home. That got her off the dime and we had a great time.

 

[brett]

You could mention to her that good health is fleeting. The time to retire is when you have the finances and the good health to enjoy it.

Nothing wrong with helping your children, grandchildren etc. We are doing exactly that.

But...do either of you want to be stuck in a nursing home or be immodile at home while regretting that you did not retire when you had the health to enjoy it.

I suspect that your spouses objections to retirement go well beyond the financials. Ask her what really is her number? 8, 10,,,

Read some of posts on this board. Our equity accounts are more than twice what they were 10 years ago.

Hard for me to understand this. When I retired at 58/59 my question to DW at the time was let's retire, sell the house, put things in storage and travel for a year. Then come back and rent until we can buy a smaller lock and leave home.

Her response was immediate.... a smile, followed by a why not let's do it. So we did.

 

[Koolau]

Might also tell her that MANY people here on Retirement Forum retired with less (way less) than you have and most of us are doing well indeed!

 

[Koolau]

Have you heard of the so-called "4% Rule?" It's the most succinct Retirement calculator ever. In essence it says that you can afford to spend about 4% of your retirement stash each year, adjusted for inflation as long as you have roughly a 40/60 to 60/40 asset allocation and live for 30 years in retirement. Multiply your assets by 4% and show DW about what you can spend per year. I think she'll be impressed.

 

[Fermion]

Tell your wife to email Shannon Dougherty and ask her if money is more important than time.

 

[Koolau]

Tell your wife to email Shannon Dougherty and ask her if money is more important than time.

Find a copy of the cartoon about the man walking past the graveyard thinking "Time is money." In the cemetery is a grave stone that says "Time > Money."

 

[marko]

With $6M and a $135k burn rate, you don't have a math problem, you have an imagination problem. IMO, all the FireCalc runs and assurances aren't going to overcome the hesitancy.

Try a different tack. Maybe try one more six months working but not touching the salary and instead live off the portfolio. Show how it works.

 

[sdawson]

Someone else on these forums a while back said something great along the lines of ...

No mattter when you stop working, you are leaving money on the table.

But by not retiring when one can afford to, one leaves life on the table.

Now I have a mental image of life and money as two sides of the same coin. One can choose more life or more money.

 

[SnowballCamper]

Take a look at rich broke or dead. Rich, Broke or Dead? Post-Retirement FIRE Calculator: Visualizing Early Retirement Success and Longevity Risk - Engaging Data

If you're rich, but dead, what's the point?

 

[Dtail]

I mean seriously. There are many folks on this forum who retired with less than 6m and spend the same or more.
Your rental income more than covers expected expenses. She retired 18 months ago, but YOU should keep working?
Not a chance I would still be working.
Check through any thread you can find and see if you can find someone bemoaning that they should have worked longer. Now check how many threads state they should have retired earlier.

 

[FD1000]

I asked AI, "what percent of US households have a net worth of 7.6 million?"

The answer below should be enough.

• A net worth of about $5.5 million gets you into roughly the top ~2% of U.S. households. (link)
• A net worth of $11+ million corresponds to the top 1%. (link)

If you can't retire, what should the other 98+% do?

 

[EastWest Gal]

Between your cash and taxable, you can manipulate your income to qualify for ACA subsidies, but stay above Medicaid. But you don't need to if you don't want to. You should also do some Roth conversions once you retire. You are looking at RMDs from your pre-tax that are pretty high, 12-14 years from now. Your pre-tax could double by then, so you might be facing RMDs of over $200K, based on an annual ROI of 7% of a 60/40 asset allocation. Retiring now gives you more opportunity to do more Roth conversions.

Does DW have any travel dreams? Plan a dream trip for when you retire, then ask what if either of you has a health problem. We lost two friends in their 50s due to breast cancer and other people in that age group due to heart attacks.

Or plan a trip that you suddenly realize you can't do because you are working...

 

[Mark1]

help the kids when they’re ready to buy their first homes, and leave something for them and future generations.

7.6M is a lot, but I agree with DW it might not enough to do all of what she wants to get done. Four houses and 8-12 grand kids to set up in the future takes a lot of money. Is she willing to scale this back some?

 

[PlayinwithFIRE]

Seems strange that she has allowed herself to retire, but doesnt want you to....

Are you sure her issue is with "not enough" and not "too much (of you) " haha

pwf

 

[Montecfo]

Someone else on these forums a while back said something great along the lines of ...

No mattter when you stop working, you are leaving money on the table.

But by not retiring when one can afford to, one leaves life on the table.

Now I have a mental image of life and money as two sides of the same coin. One can choose more life or more money.

Feeling dumb for not retiring?

 

[brett]

Well....why don't you retire and ask her to go back to work if she is that desperate for more savings?

 

[Flyfish1]

Ok - you are in great shape. Your burn rate is incredibly low IMO. However, you have a lot of assets that canprovide income in retirement. Not sure if you are interested in travel or other experiences in retirement but it won't matter because you have the income. Can you leave the 6 SFH rentals for a month while you are on a trip?

I would consider putting some of that cash to work and creating more income. How about putting 50% of it into a muni CEF at 7%? Hold the rest for rainy days.

Oh, heck yeah max out that HSA. Best deal out there.