pulling the trigger


Confused about dryer sheets
Apr 13, 2008
I've been following the FIRE plan for years and never realized so many others were doing the same until I came across this forum.

My wife and I are both 41 with two children 8 and 10 years old. We have done a good job saving and have about $1 million in a diversified portfolio of 60% stock 40% bonds and have $600,000 in a money market as a safety net. Our house is paid off and worth over $1 million and we have aprox $100,000 in each of the kids 529 plans which will be our part of their college (they will be responsible for the difference if any). We have absolutely no debt and our expenses are only $60,000/yr leading a very comfortable life style in the Boston area.

My dilema is this - I make about $400,000/yr in a job I like but don't love. I would like to "retire early" which for me means working part time from home doing something I am passionate about but I would probably make only $80,000/yr doing that. Financially this would work since my "retirement job" would cover our expenses but I'm having a hard time giving up the big paycheck and the amount of money we are putting into savings.

As other posters have said, I would rather have the free time and flexibilty now while our children are young than wait until they are out of the house. Any guidance for someone who can't seem to pull the trigger?
So not counting the college plans or the paid off home, you have $1.6m if I understand correctly. The standard 4% SWR would give you 64k pre-tax (you didn't specify if the $60k expense was pre or post-tax, but sounded like pre-tax). However, with $1M in cash/bonds and 600k in equities, a 4% SWR may be too high, and thus your plan to work part time would definitely have to be implemented, or your AA would have to be adjusted a bit.

So, if your question is "from a financial standpoint, can I do it?"...then yes you can. But, IMOH, you are a bit on the borderline. (You don't mention your flexibility in regard to reducing expense if necessary in the future, and you do not mention if the 60k includes medical...I would doubt it). If it were me, I would probably stick it out another year or two to build security a bit. Another thing I would do would be to create a retirement budget, take that money each year and set it aside and use it to live on for the next year or two. Have your salary automatically put away so you can't touch it. Then, you will be able to find out whether you really can retire on 6ok per year (don't forget taxes).


Some interesting thoughts here: http://www.early-retirement.org/forums/f29/handling-just-one-more-year-syndrome-20091.html

Of course no one can know when you should pull the trigger except you. You will hear from both camps - 'just do it, I did and love it' and 'why do it so early, I didn't and here's why.' You won't get any deliberately bad advice here but none of us have any stake whatsoever in your future so if you hear something here that really influences you, you might live to regret it. There's so much more to it than reaching your $ goals anyway.

If it was your time, you probably wouldn't be asking a bunch of (well meaning) strangers...
Midpack hit the nail on the head - you need to decide when is the right time. You are making a very good income. If you are not burnt out, having health issues etc. It may serve you well to stay for awhile to build in a nice buffer.
If you need to get out....your feelings/body will tell you. But a couple years of focused investing/saving can change the "tone" of your freedom.

But, on the other hand I want to tell you to jump in - the waters fine....
If your certain you can make a reliable $80K/yr from home then I say go for it. Even if it's only 50-60K i'd go for it.
Our kids are almost 8 and 5. We knew if we (DH) kept working for a few more years, we'd be more secure, but they'd be hitting those preteen, teen years. We wanted it to be a normal part of life that we were both around before they got to the stage that they didn't care if we were or didn't want us around. DH quit in dec.

DH felt like he missed most of the youngest's first 4 years. If you're making that high a salary, you're probably missing a lot too. I'm willing to go back to work later if I have to (praying I don't), but we won't get these years again. good luck on YOUR decision.
If your certain you can make a reliable $80K/yr from home then I say go for it. Even if it's only 50-60K i'd go for it.

I agree. If you can make 80k from home and only spend 60k and spend time with your kids, it sounds like a win-win situation.
What about a "sabbatical" to "try" the deal for a few months?

What about going back? --- if things did not work out...... is it a good possibility that you can get back in your "industry" at say half (200k) salary to start?

If so then you have a really good insurance policy for failure...
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