I am 45, married and have one kid. My wife and I are relatively high earners and we have saved a lot in our somewhat short working years. I earn about 60% of our income. I think we spend too much, but relative to the Joneses we work with, we never really adapted our spending to our incomes. Our house is modest, we dont have new or luxury cars, etc. Our incomes rose rapidly after a late start and saved we about 35% of our combined gross income. A decent amount of market growth hasn't hurt either. We have a current portfolio of $2 million split over our 401ks, Roth IRAs, HSAs, and taxable brokerage accounts. I also have a pension that would provide about $30k a year if I stopped work now and collected at 65 and we both would collect social security. We also have a 529 for our child's education that is reasonably well funded and a cash reserve adequate to comfortably cover 6 months expenses
My wife is happy to keep working due in large part to the flexibility of her job. I, on the other hand, feel a desperate need to make a change. On paper, it seems like our current portfolio if left untouched for 15-20 years, should be sufficient to cover our expenses in retirement (based on current spending, some 4% withdrawal, and overly simple rule of 72 assumptions. With my wife's income we should be able to cover current expenses with potentially a little belt tightening, but big luxuries like major renovations, a bigger nicer house, or a vacation home would be out of reach. My wife's company offers good insurance that could cover the whole family. I would likely pursue work that allows for more flexibility at a much lower income, but I'm assuming the worst, that I'd have no income or it would at least take a long time to get up to speed in a new career.
So, with all that said, am I crazy to contemplate giving up 60% of our income? Am I being too rosey in my assumptions? Is giving up a much larger pension and social security payout idiotic? How should I go about assessing all this? Any good tools to recommend? Any similar experiences you could offer up as examples?
I've focused on the financial aspects but the non-financial drivers for me wanting to make the change are quite strong.
My wife is happy to keep working due in large part to the flexibility of her job. I, on the other hand, feel a desperate need to make a change. On paper, it seems like our current portfolio if left untouched for 15-20 years, should be sufficient to cover our expenses in retirement (based on current spending, some 4% withdrawal, and overly simple rule of 72 assumptions. With my wife's income we should be able to cover current expenses with potentially a little belt tightening, but big luxuries like major renovations, a bigger nicer house, or a vacation home would be out of reach. My wife's company offers good insurance that could cover the whole family. I would likely pursue work that allows for more flexibility at a much lower income, but I'm assuming the worst, that I'd have no income or it would at least take a long time to get up to speed in a new career.
So, with all that said, am I crazy to contemplate giving up 60% of our income? Am I being too rosey in my assumptions? Is giving up a much larger pension and social security payout idiotic? How should I go about assessing all this? Any good tools to recommend? Any similar experiences you could offer up as examples?
I've focused on the financial aspects but the non-financial drivers for me wanting to make the change are quite strong.
Statistics: Posted by mopman78 — Fri Apr 19, 2024 2:14 am — Replies 0 — Views 71