Please don't burst my bubble!


Confused about dryer sheets
Mar 7, 2011
37 planning on retiring in 15 years or so once kiddos (2) are in college. We have 500K for retirement: half in "retirement" accounts (401(k) and 2 Roths) and the rest in a joint account. We are traditional 60/40 vanilla Vanguard Target 2025 retirement fund, some TIPs, international and Energy Index funds. We plan on working and contributing as much as we can in the next 15 years- between 20-30K depending on if I continue to work full time. We are weighing the cost/benefit of my continued full time employment (do you guys do marital advice?) to maximize ER savings vs cutting back or staying at home. We can cashflow our budget on one salary, but we'd see a drop in retirement savings. I ran our current numbers through FIRECALC and got pretty excited by the results without adding Social Security, our house, and some likely but unknown lump cash (inheritance and private company stock). Current house valued at 450K, have 180K left to pay off by 2025 and we'll sell and retire to a family farm (low cost of living). So should we feel ok about our plan? Can I call in "sick" tomorrow:confused:
Countrymouse, welcome to the forum.

I think you have a good foundation to build on financially. The second salary question depends and you should put some effort into doing a fulsome analysis. 8 years ago DW and I moved to the burbs. When I sat down to crunch the numbers, it was pretty obvious that when I added commuting costs, income and payroll taxes, and other costs of working DW was working for peanuts (like minimum wage). We also were short-handed at home, since there were a bunch of things at the house that required time: painting, minor repairs, someone to wait for the cable guy, etc. So it was not a hard decision for her to bail on her day job.

This does not have to be an all or nothing decision, though. DW was able to set up a small business continuing in her chosen profession (career counselor) working out of the house. Overhead is minimal and the tax burden is very light for the first 21k or so of net income (pay only payroll taxes and the rest is sheltered in a solo 401k), versus working at a day job with high overhead and a marginal tax rate approaching 50% (gulp). DW's business is also flexible since she runs it (she can be around on short notice with sick kids or elderly dog struggling with chemo). Her business has never been a huge earner, but being able to dump an extra 3 to 15k into retirement savings a year has been a big help. This is also a great way to keep your skills current so that you have the option of going back to work. DW could walk on to a decent job in any college or university since she has kept her skills up and has no big "mommy" gaps on her resume.

The one big downside is that the sole breadwinner's job becomes a lot more important in this case. When I was tossed out of work a couple months before Lehman blew up it was not pretty. Make sure you have generous emergency funds and contingency plans. I was re-employed after a scary 4 months, albeit at a lower salary.
.......... Can I call in "sick" tomorrow:confused:

I don't see any mention of how much you will need to live on in retirement. It all comes down to how much you need to live on and how much you need to save to support that withdrawal. If you can save enough without your working, great.

Welcome to the forum.
Welcome countrymouse. +1 to travelover's comment. I am the same age as you with two young kids. We will be purchasing an upgraded home at around the same value as yours in the next year or sooner, but will have a 250K mortgage. I have some more in savings but not significant given the mortgage differences. However, I plan to retire in 2020 at the latest, I'm pushing hard for 2018. I think it all comes down to expenses in retirement and now.

I also agree with Brewer's comments as the points he mentioned are important considerations. DW stopped working after child #2 and gave up a good salary ($150K+). We still think it was one of the best decisions we made mainly because of some intangibles - virtually no errands on the weekends, no childcare stress, etc. DW maintains her professional licenses to slightly mitigate the risk of my job. She might do part time work once the kids get in school for the exact reasons Brewer mentioned.
+1 to Brewer's and SunsetSail's comments.

I decided not to return to work two months ago after my maternity leave ended with daughter #2. It has worked out very well for us so far as well. The weekends are now reserved for family time and I no longer spend the weekends running errands and going grocery shopping since there's plenty of time during the week for that. Also, I definitely don't miss the commute to the office (especially in the winter when it's -30 outside and dark :hide:).
Thanks all. We've really been struggling with the competing goals of me staying home now and retiring early. And believe me, I do know if I stayed home I'd be trading in a cushy 9-4 job with pay for a hard 24 hr "job" with no pay or vacation and my retirement would still be in 2025. I also know if it doesn't compromise our joint goal of early retirement I want to take advantage of our ability to stay at home.
Before I just quit completely, I'm looking into reducing my hours to keep my career contacts, continue to contribute to ER and keep a little of my sanity. It's just so hard to trust your plan when there are so many variables- even if they are unlikely- job loss, deep long-term recession, exploding health care costs and even early death. (My MIL passed away unexpectedly this year 5 days before their official "retirement"). And to Brewer's point about one income- that is really our bigger concern. Not so much job loss- though I'm not naive enough to think it can't happen- but a more likely scenario is job burn-out and maintaining the financial flexibility to allow for DH to change careers. Having a "large" emergency fund is a good point. We can view some of our savings as just that and not use it in forecasting ER.

I guess I'm just looking for advice on how you know you have enough of a "base" so that any extra you throw at retirement is just that- extra. Do you go by calculators? Talk to a financial advisor, read books? I've used several calculators and I am always very conservative: generally not including proceeds from sale of current house (we will move to family farm), not including Social Security, and using 45K for yearly cost of living (that is higher than we spend now minus housing/childcare). Is there anything else we should be looking at doing at this point?
"How much is enough?" Clearly that is one of the hardest questions to answer.

Personally, I use firecalc to back into an amount and just keep in mind that things could change a lot. You pays your money and you takes your chances.
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