Can I quit working?

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carloslando
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Can I quit working?

Post by carloslando »

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Last edited by carloslando on Mon Sep 18, 2023 11:18 pm, edited 1 time in total.
Comparison is the killer of all joy.
Horton
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Re: Can I quit working?

Post by Horton »

carloslando wrote: Sun Sep 19, 2021 1:33 pm
My husband is in a stable IT job and plans to work for at least 10 more years. In that time (in addition to having good employer supported healthcare) we expect to add about 100K/year to our savings, even if he is the only one working.
Yes, you can absolutely quit working. Enjoy time with your family!
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susan123
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Re: Can I quit working?

Post by susan123 »

Of course you can quit! You know you can!
59Gibson
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Re: Can I quit working?

Post by 59Gibson »

Geez..you wrote all of this out as if there's a question.
Trader Joe
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Re: Can I quit working?

Post by Trader Joe »

Yes you can.
Simple Simon
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Re: Can I quit working?

Post by Simple Simon »

carloslando wrote: Sun Sep 19, 2021 1:33 pm We expect to add about 100K/year to our savings, even if he is the only one working.

...

I want to know if my income can now be out of the equation.
I don't understand.

Have you not taken your income out of the equation in the first statement?

It looks like your family income will still comfortably exceed your spending. Plus you already have 4M of assets, right?
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Topic Author
carloslando
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Re: Can I quit working?

Post by carloslando »

Simple Simon wrote: Sun Sep 19, 2021 3:03 pm
carloslando wrote: Sun Sep 19, 2021 1:33 pm We expect to add about 100K/year to our savings, even if he is the only one working.

...

I want to know if my income can now be out of the equation.
I don't understand.

Have you not taken your income out of the equation in the first statement?

It looks like your family income will still comfortably exceed your spending. Plus you already have 4M of assets, right?
yes I did take my income out of the equation in the 100K/year saving if my husband is the only one working. The thing is: this would be the first time in 20+ years that we'll be a single income household, and I am not sure if I can return to working in IT if I stop now, so nervous about pulling the plug.

And yes the family income will exceed our spending as long as my husband works in a same/similar role.

Total assets are 4M, but that includes 1.5M in our house; so really 2.5M that is generating returns (& it is 2.5M in this hot/frothy market, a lot of that grew in the past 18 months).
Comparison is the killer of all joy.
delamer
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Re: Can I quit working?

Post by delamer »

How much does your husband make? And how much are you spending per year now?
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
Marseille07
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Re: Can I quit working?

Post by Marseille07 »

Talk to the spouse. Given the numbers, it's a family decision not financial.
LuckyGuy
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Re: Can I quit working?

Post by LuckyGuy »

Can you take a sabbatical to see if you enjoy not working outside the home? My wife did that before she decided to quit. But, yes, you can quit. I would if I were you. You can go back to work later if you want.
HomeStretch
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Re: Can I quit working?

Post by HomeStretch »

If your spouse agrees, in my opinion you can absolutely stop working now and your husband is on track to retire in 10 years or even sooner especially if you are willing to downsize your home. Edit - your expenses may go down if you leave the work force as you won’t have any work-related expenses (which may be minimal if you are work-at-home during the pandemic), you might cook more vs. takeout, you might do things around the house that you normally hire out, etc.

Does your annual expense numbers of $80k and $100k include income taxes and periodic expenses such as a car purchase and large home repair?
Last edited by HomeStretch on Sun Sep 19, 2021 3:41 pm, edited 1 time in total.
EnjoyIt
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Re: Can I quit working?

Post by EnjoyIt »

carloslando wrote: Sun Sep 19, 2021 3:13 pm
Simple Simon wrote: Sun Sep 19, 2021 3:03 pm
carloslando wrote: Sun Sep 19, 2021 1:33 pm We expect to add about 100K/year to our savings, even if he is the only one working.

...

I want to know if my income can now be out of the equation.
I don't understand.

Have you not taken your income out of the equation in the first statement?

It looks like your family income will still comfortably exceed your spending. Plus you already have 4M of assets, right?
yes I did take my income out of the equation in the 100K/year saving if my husband is the only one working. The thing is: this would be the first time in 20+ years that we'll be a single income household, and I am not sure if I can return to working in IT if I stop now, so nervous about pulling the plug.

And yes the family income will exceed our spending as long as my husband works in a same/similar role.

Total assets are 4M, but that includes 1.5M in our house; so really 2.5M that is generating returns (& it is 2.5M in this hot/frothy market, a lot of that grew in the past 18 months).
$2.5 million in assets should bring in $100k/yr living expenses for 30 years. And, let me remind you that it includes some of the worst times in history. So, unless this frothy market is going to give you a sequence of returns that is worse than the great depression and the high inflation of our 70s, your $2.5 million is good for 30+ years. Add in your social security and you are likely golden with neither of you needing to work any further. The key word here is likely as no one can predict the future. Just to point out, if you both retired this year, you would have significant healthcare subsidies especially with two dependents so I doubt your health insurance will cost $20k/yr. You both can probably retire and be fine though I would prefer the house paid off prior to that decision. So yeah, you can quite tomorrow.

One thing that isn't discussed in this thread is that one should not retire from something but to something. Make sure you have things you want to do with your time off. The husband at work, the kids at school, what will you do? I hope you have that figured out. There are plenty of ways to keep yourself occupied. Just make sure you have a legitimate plan. Can I also recommend possibly finding a way to work part time if at all possible. Maybe with another company, even if the pay is less than you would normally receive. The reason for this is to dip your toes into retirement and see how the water feels instead of jumping head first. Plus it would keep your IT skills sharp incase you change your mind. Do this for a year and then re-evaluate. Some people hate their current job so much that all they can only think about is escaping without realizing there is a better alternative. Do you need the extra money? Probably not. But there are benefits to still working part time. There are social aspects, more money doesn't necessarily hurt, keeping your mind sharp, as I said testing the waters of retirement, and I'm sure there are plenty of others.

Good luck
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
Topic Author
carloslando
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Re: Can I quit working?

Post by carloslando »

delamer wrote: Sun Sep 19, 2021 3:16 pm How much does your husband make? And how much are you spending per year now?
My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
Comparison is the killer of all joy.
Topic Author
carloslando
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Re: Can I quit working?

Post by carloslando »

HomeStretch wrote: Sun Sep 19, 2021 3:33 pm If your spouse agrees, in my opinion you can absolutely stop working now and your husband is on track to retire in 10 years or even sooner especially if you are willing to downsize your home. Edit - your expenses may go down if you leave the work force as you won’t have any work-related expenses (which may be minimal if you are work-at-home during the pandemic), you might cook more vs. takeout, you might do things around the house that you normally hire out, etc.

Does your annual expense numbers of $80k and $100k include income taxes and periodic expenses such as a car purchase and large home repair?
Thanks. Yes the 80K and 100K numbers include income taxes (assuming <10K) and periodic large home repairs (roof etc) and cars (we are not big on fancy cars, prefer buying lightly used Hondas and keeping them 8-10 years).
Comparison is the killer of all joy.
EnjoyIt
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Re: Can I quit working?

Post by EnjoyIt »

carloslando wrote: Sun Sep 19, 2021 3:57 pm
delamer wrote: Sun Sep 19, 2021 3:16 pm How much does your husband make? And how much are you spending per year now?
My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
Ahhh. This changes my answer a bit. You both can't retire just yet. You will need a few more years to pay off the mortgage and the private school. You will need
Mortgage $120k
Private school child #1 $22k
Private school child #2 $22 * 6 = $132k

Total $274k

You and your husband need to make another $274k after taxes before you both can retire. Depending on market returns and savings rate, you can get there in 1-2 years easy with just your husbands employment.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
Topic Author
carloslando
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Re: Can I quit working?

Post by carloslando »

EnjoyIt wrote: Sun Sep 19, 2021 4:08 pm
carloslando wrote: Sun Sep 19, 2021 3:57 pm
delamer wrote: Sun Sep 19, 2021 3:16 pm How much does your husband make? And how much are you spending per year now?
My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
Ahhh. This changes my answer a bit. You both can't retire just yet. You will need a few more years to pay off the mortgage and the private school. You will need
Mortgage $120k
Private school child #1 $22k
Private school child #2 $22 * 6 = $132k

Total $274k

You and your husband need to make another $274k after taxes before you both can retire. Depending on market returns and savings rate, you can get there in 1-2 years easy with just your husbands employment.
Yes, my husband has no plans for retire right now and is hoping to work 10 more years and then evaluate his options.

Thank you also for your response around the non-financial aspects of retiring. I do need to think that through, and this might be a case of 'retiring from' due to burnout/stress. Good food for thought. Thank you.
Comparison is the killer of all joy.
HomeStretch
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Re: Can I quit working?

Post by HomeStretch »

carloslando wrote: Sun Sep 19, 2021 4:00 pm
HomeStretch wrote: Sun Sep 19, 2021 3:33 pm If your spouse agrees, in my opinion you can absolutely stop working now and your husband is on track to retire in 10 years or even sooner especially if you are willing to downsize your home. Edit - your expenses may go down if you leave the work force as you won’t have any work-related expenses (which may be minimal if you are work-at-home during the pandemic), you might cook more vs. takeout, you might do things around the house that you normally hire out, etc.

Does your annual expense numbers of $80k and $100k include income taxes and periodic expenses such as a car purchase and large home repair?
Thanks. Yes the 80K and 100K numbers include income taxes (assuming <10K) and periodic large home repairs (roof etc) and cars (we are not big on fancy cars, prefer buying lightly used Hondas and keeping them 8-10 years).
If you haven’t run any retirement projections, perhaps a back-of-the-envelope calculation might make you feel more comfortable with the financial impact of you retiring now. If your spouse were to retire at age 55, you would need:
$1.5 million (age 55-69 - 15 years @ $100k/year)
$1 million (age 70+ 4% withdrawals $40k/yr for net expenses)
————-
$2.5 million portfolio needed at age 55 (in today’s $)

So your portfolio today should be sufficient as long as you have sufficient income to cover living expenses through age 55. The extra $100k/yr that will go into savings for the next 10 years can add cushion for contingencies such as your husband being unable to work in 5 years, a bad sequence of returns, SS benefits being reduced, etc. You also have $1.4 million in house equity as a resource.

Best of luck! Your early retirement may benefit your whole family in non-financial ways. Less stress for you, kids benefit from you being around more and your spouse should have more free time as you take on more of the household responsibilities. At least that’s how it worked out in our household. Don’t underestimate your ability to earn some $ in a low-stress way using your IT skills if you want to pad your portfolio cushion a little more.
delamer
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Re: Can I quit working?

Post by delamer »

EnjoyIt wrote: Sun Sep 19, 2021 4:08 pm
carloslando wrote: Sun Sep 19, 2021 3:57 pm
delamer wrote: Sun Sep 19, 2021 3:16 pm How much does your husband make? And how much are you spending per year now?
My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
Ahhh. This changes my answer a bit. You both can't retire just yet. You will need a few more years to pay off the mortgage and the private school. You will need
Mortgage $120k
Private school child #1 $22k
Private school child #2 $22 * 6 = $132k

Total $274k

You and your husband need to make another $274k after taxes before you both can retire. Depending on market returns and savings rate, you can get there in 1-2 years easy with just your husbands employment.
I don’t see an issue. The husband’s income should comfortably cover their expenses for 10 years.

And that gives their nest egg to grow untouched for ten years, even if they don’t add much additional money.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
EnjoyIt
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Re: Can I quit working?

Post by EnjoyIt »

delamer wrote: Sun Sep 19, 2021 5:58 pm
EnjoyIt wrote: Sun Sep 19, 2021 4:08 pm
carloslando wrote: Sun Sep 19, 2021 3:57 pm
delamer wrote: Sun Sep 19, 2021 3:16 pm How much does your husband make? And how much are you spending per year now?
My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
Ahhh. This changes my answer a bit. You both can't retire just yet. You will need a few more years to pay off the mortgage and the private school. You will need
Mortgage $120k
Private school child #1 $22k
Private school child #2 $22 * 6 = $132k

Total $274k

You and your husband need to make another $274k after taxes before you both can retire. Depending on market returns and savings rate, you can get there in 1-2 years easy with just your husbands employment.
I don’t see an issue. The husband’s income should comfortably cover their expenses for 10 years.

And that gives their nest egg to grow untouched for ten years, even if they don’t add much additional money.
Either I mis-wrote, or you misunderstood. They can't both retire right now. She can retire just fine. He needs a few more years to make it all work.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
Figaro
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Re: Can I quit working?

Post by Figaro »

Numbers wise yes it will work out. And with the kids leaving you'll possibly be able to adjust /tap into the home equity down the line.

The real question is what you'd retire to. Burn all your vacation time or ask for a two month break. If you are feeling the same by then, make your decision then.

And if you are going to leave, try to negotiate a package for yourself in exchange for a good handover.
Wannaretireearly
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Re: Can I quit working?

Post by Wannaretireearly »

What's causing the stress at work? Can you eliminate or reduce it? You're at the point where you can make any decision you want. Why not try and get an easier, simpler, more fun gig or boss at current employment? Perhaps it'll give you a couple more years towards mid/late 40s, and then pull the plug with a fully baked RE plan.

Just an alternative opinion to think about...
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Watty
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Re: Can I quit working?

Post by Watty »

carloslando wrote: Sun Sep 19, 2021 1:33 pm Is it safe (from a financial perspective) for me to quit my job now?
You have a spouse that makes $450K a year and a net worth of almost $4 million. :oops:

Of course you can stop working, at least from a financial standpoint. There are of course relationship issues and your spouse would need to be on board but that is not something that people on a message board can give you much insight about.

As a fallback plan, like if your spouse gets burned out or laid off and cannot find other similar work you could move somewhere less expensive and retire today if you really needed to. Even if you are not willing to move to a different part of the country housing can be dramatically less expensive in some cities if you move 30+ minutes farther out.

I might have missed it but I did not see what you actually earn now.

The more important number is what you clear after taxes. Between federal and state income tax and Social Security I would would not be surprised if you are in around a 50% tax bracket. It would be good to do dummy tax returns to see just how much take home pay you would have with just one income.
Simple Simon
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Re: Can I quit working?

Post by Simple Simon »

How about turning this question on its head?

Can you identify a financial reason why it might be inadvisable for you to stop working? What is it that is bothering you?
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anoop
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Re: Can I quit working?

Post by anoop »

The only thing that may get impacted is the size of the trust fund that you leave for your kids.

You can always get back into the workforce even after a year or two out of it. People won't forget you so quickly.
medic
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Re: Can I quit working?

Post by medic »

Consider evaluating your husband's life insurance and disability (probably pretty good in big tech, but you may need to supplement). While you are fine, if anything were to happen to the income stream and you didn't/couldn't return to the office, you'd have the remaining mortgage, child expenses, etc to still cover without tapping the nest egg. Expenses may decrease, but probably not proportionally.

To Simple Simon's question, we have a similar net worth, income, and spending level as the OP's single income setup. I'm toying with the idea of stopping, but the wife isn't on board yet. The main items are social and future uncertainty (both on wants and unexpected occurrences - rebuild after earthquake, support for aging parents, etc). I think, at least in part like the OP, the largest issue is mentally shifting from a contribution to a withdrawal mindset.
Topic Author
carloslando
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Re: Can I quit working?

Post by carloslando »

Wannaretireearly wrote: Mon Sep 20, 2021 12:05 am What's causing the stress at work? Can you eliminate or reduce it? You're at the point where you can make any decision you want. Why not try and get an easier, simpler, more fun gig or boss at current employment? Perhaps it'll give you a couple more years towards mid/late 40s, and then pull the plug with a fully baked RE plan.

Just an alternative opinion to think about...
The stress is both from workload (the company has had attrition/layoffs, and those who remain are having to do more) and having to keep up with others on the team who are very ambitious and putting in long hours (to stay visible or climb the ladder). It is hard for me to find the extra time beyond the 9-6, given parenting and household responsibilites.
Comparison is the killer of all joy.
Topic Author
carloslando
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Re: Can I quit working?

Post by carloslando »

Simple Simon wrote: Mon Sep 20, 2021 1:12 am How about turning this question on its head?

Can you identify a financial reason why it might be inadvisable for you to stop working? What is it that is bothering you?
We have always been a 2 income household and right after the dot-com bust my income became a safety net when my husband was laid off and it took him a few months to find another job. That was a long time ago, but going from 2-income to 1-income just makes me nervous: removes the safety net.
Comparison is the killer of all joy.
Topic Author
carloslando
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Re: Can I quit working?

Post by carloslando »

medic wrote: Mon Sep 20, 2021 2:29 am Consider evaluating your husband's life insurance and disability (probably pretty good in big tech, but you may need to supplement). While you are fine, if anything were to happen to the income stream and you didn't/couldn't return to the office, you'd have the remaining mortgage, child expenses, etc to still cover without tapping the nest egg. Expenses may decrease, but probably not proportionally.

To Simple Simon's question, we have a similar net worth, income, and spending level as the OP's single income setup. I'm toying with the idea of stopping, but the wife isn't on board yet. The main items are social and future uncertainty (both on wants and unexpected occurrences - rebuild after earthquake, support for aging parents, etc). I think, at least in part like the OP, the largest issue is mentally shifting from a contribution to a withdrawal mindset.
My husband has good life insurance from work and we have an external policy as well (20 year, $2M) to supplement it.

Were you thinking of switching to single income as well, or were you both thinking of quitting?
Comparison is the killer of all joy.
delamer
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Re: Can I quit working?

Post by delamer »

EnjoyIt wrote: Sun Sep 19, 2021 7:40 pm
delamer wrote: Sun Sep 19, 2021 5:58 pm
EnjoyIt wrote: Sun Sep 19, 2021 4:08 pm
carloslando wrote: Sun Sep 19, 2021 3:57 pm
delamer wrote: Sun Sep 19, 2021 3:16 pm How much does your husband make? And how much are you spending per year now?
My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
Ahhh. This changes my answer a bit. You both can't retire just yet. You will need a few more years to pay off the mortgage and the private school. You will need
Mortgage $120k
Private school child #1 $22k
Private school child #2 $22 * 6 = $132k

Total $274k

You and your husband need to make another $274k after taxes before you both can retire. Depending on market returns and savings rate, you can get there in 1-2 years easy with just your husbands employment.
I don’t see an issue. The husband’s income should comfortably cover their expenses for 10 years.

And that gives their nest egg to grow untouched for ten years, even if they don’t add much additional money.
Either I mis-wrote, or you misunderstood. They can't both retire right now. She can retire just fine. He needs a few more years to make it all work.
It was my misunderstanding.

Now I see that you were talking about them both retiring, while my comment was about just the OP retiring.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
BogleHead1008
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Re: Can I quit working?

Post by BogleHead1008 »

carloslando wrote: Mon Sep 20, 2021 10:05 am
Wannaretireearly wrote: Mon Sep 20, 2021 12:05 am What's causing the stress at work? Can you eliminate or reduce it? You're at the point where you can make any decision you want. Why not try and get an easier, simpler, more fun gig or boss at current employment? Perhaps it'll give you a couple more years towards mid/late 40s, and then pull the plug with a fully baked RE plan.

Just an alternative opinion to think about...
The stress is both from workload (the company has had attrition/layoffs, and those who remain are having to do more) and having to keep up with others on the team who are very ambitious and putting in long hours (to stay visible or climb the ladder). It is hard for me to find the extra time beyond the 9-6, given parenting and household responsibilites.
You are describing like my company.. Covid made companies lay off people and overload others with more work and nonstop calls at odd hours.
Hope you can find a different job that is not stressful.
delamer
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Re: Can I quit working?

Post by delamer »

carloslando wrote: Mon Sep 20, 2021 10:09 am
Simple Simon wrote: Mon Sep 20, 2021 1:12 am How about turning this question on its head?

Can you identify a financial reason why it might be inadvisable for you to stop working? What is it that is bothering you?
We have always been a 2 income household and right after the dot-com bust my income became a safety net when my husband was laid off and it took him a few months to find another job. That was a long time ago, but going from 2-income to 1-income just makes me nervous: removes the safety net.
This is an important issue. People die prematurely; people become disabled; one spouse’s stable job suddenly isn’t so stable; divorce happens seemingly out-of-the-blue.

You are in a much better financially position than most to weather those events, but giving up your income and/or your ability to hold a decent job is an important decision. In your position, I’d prefer to step back to a less demanding role (at another employer, most likely) rather than drop out of the workforce altogether.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
vrr106
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Re: Can I quit working?

Post by vrr106 »

carloslando wrote: Sun Sep 19, 2021 3:57 pm
delamer wrote: Sun Sep 19, 2021 3:16 pm How much does your husband make? And how much are you spending per year now?
My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
You certainly seem in great shape financially. Your spending does seem lower than what I would expect for VHCOL - wouldn't property tax alone be close to $20-$30K? Not that it changes the fact that you should be okay, but based on my experience looking at spending, for VHCOL I would expect $150K+ excluding mortgage
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ymmt
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Re: Can I quit working?

Post by ymmt »

vrr106 wrote: Mon Sep 20, 2021 10:27 am
You certainly seem in great shape financially. Your spending does seem lower than what I would expect for VHCOL - wouldn't property tax alone be close to $20-$30K? Not that it changes the fact that you should be okay, but based on my experience looking at spending, for VHCOL I would expect $150K+ excluding mortgage
Funny I literally just PMed the OP on this... If I had her expenses, I would be done...
nigel_ht
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Re: Can I quit working?

Post by nigel_ht »

carloslando wrote: Sun Sep 19, 2021 3:57 pm
delamer wrote: Sun Sep 19, 2021 3:16 pm How much does your husband make? And how much are you spending per year now?
My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
Lol, I your kids go in state public the tuition doesn't change much.

Personally, I'd gut it out 3 more years but there is no need to. Three years because the house will be paid off, the first kid half way though college, etc.

Here's the deal that makes this viable without needing to change jobs: you don't need to keep up with the ambitious folks staying long hours anymore to try to stay visible or climb the ladder. The ladder is done for you. Your timeline is 3 years max and 2 weeks at a minimum.

"9-6, sorry I have to do kid stuff tonight and can't do OT, see ya!" is your new mantra because you have achieved FI. Do your job well in the normal working hours, don't make any waves but be firm in avoiding OT or stress.

Whats the worst that can happen if you do your job with no overtime? Get laid off and a severance package? Heck yeah, give me a package and help me pay off my house!

If you do retire soon, I'd forgo any additional retirement savings beyond any match and pay off the $150K mortgage. Keep the money as an extra EF until you can lump sum pay off the house.

Then your cash flow improves and go back to saving for retirement.

Unless the market crashes before the payoff...then go back to contributions if you husband's job looks secure and just keep the money as extra EF until the house balance allows you to pay it off lump sum.
harrychan
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Re: Can I quit working?

Post by harrychan »

Yes you can quit. My wife and I were in a similar situation almost 5 years ago and we weren't nearly as rosy as your NW and income. Somehow I almost doubled my income and we are doing fine. Also private school. Enjoy the time with your family. My DW is.
This is not legal or certified financial advice but you know that already.
Wannaretireearly
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Re: Can I quit working?

Post by Wannaretireearly »

carloslando wrote: Mon Sep 20, 2021 10:05 am
Wannaretireearly wrote: Mon Sep 20, 2021 12:05 am What's causing the stress at work? Can you eliminate or reduce it? You're at the point where you can make any decision you want. Why not try and get an easier, simpler, more fun gig or boss at current employment? Perhaps it'll give you a couple more years towards mid/late 40s, and then pull the plug with a fully baked RE plan.

Just an alternative opinion to think about...
The stress is both from workload (the company has had attrition/layoffs, and those who remain are having to do more) and having to keep up with others on the team who are very ambitious and putting in long hours (to stay visible or climb the ladder). It is hard for me to find the extra time beyond the 9-6, given parenting and household responsibilites.
Hear ya. We're a few years behind you overall (Kids age & our expenses are higher :twisted: ). I'd be tempted to take all vacation/long vacation time. Just sit at home for a couple of weeks, take care of mental health & exercise etc. If after two/three weeks you still feel the same, pull the plug, you have the FI money to make the right decision for your family.
The only thing our family contemplates is that we both want to retire at the same/similar time - doesn't sound like that's a big concern for you guys.
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
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Watty
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Re: Can I quit working?

Post by Watty »

carloslando wrote: Mon Sep 20, 2021 10:05 am
The stress is both from workload (the company has had attrition/layoffs, and those who remain are having to do more) and having to keep up with others on the team who are very ambitious and putting in long hours (to stay visible or climb the ladder). It is hard for me to find the extra time beyond the 9-6, given parenting and household responsibilites.
It sounds like you are at a point where the corporate ladder does not matter to you and I don't see why the visibility would be important either.

I retired from corporate IT and there are occasional real emergencies when working overtime goes with the job but many companies will try to get you to constantly work more and more hours just because they can.

One option would be to just work reasonable hours, except for the few times a year when there is a valid emergency. The worst they can do is to fire you. It can be a pain to actually fire someone so often people are laid off instead and you might even get a nice severance package if they decide to get rid of you.

I would not count on that though. Most likely they will realize that getting 40 hours a week of good work out of you is better than getting rid of you when they would not normally be laying someone off anyway. The problem is that they could have difficulty in finding a good replacement and training them, only to have them leave in a few years or not work out well. There is also a chance that if they get rid of you they will not be allowed to hire any replacement.

There is a saying, "Your bad planning is not my emergency." I would not recommend actually saying that to your manager but when work gets overwhelming keep that in mind.
jarjarM
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Re: Can I quit working?

Post by jarjarM »

Take a leave of absence and see how "pseudo" retirement fits you. DW is doing that right now. She originally put in her resignation letter but her boss convinced her to take a 1-year leave with full benefit so she can have time to decide on what to do. She have quarterly check-in with her boss to just check on how she feels but otherwise no work needed (she remove herself from all the slack channels and email alerts). I can't tell if she's good with permanent retirement yet since it's only being 3 weeks but she's spending plenty of time with our little one so it was a refreshing difference. As to the financial side, I think you'll be fine either way, especially if your DH can work for 10 more years as planned. Good luck.
marcopolo
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Re: Can I quit working?

Post by marcopolo »

carloslando wrote: Sun Sep 19, 2021 1:33 pm We are a working couple, both in our early 40s, with 2 kids: one going to college next year, the other in 6 years. I am a working mom in the IT industry, in an individual contributor role, with high stress and somewhat poor WLB. I am getting burnt out, and was wondering if I quit my job now, would we still be ok from a financial perspective.

My husband is in a stable IT job and plans to work for at least 10 more years. In that time (in addition to having good employer supported healthcare) we expect to add about 100K/year to our savings, even if he is the only one working.

We live in a VHCOL, expect to spend around 80K per year after the kids are out of the house and the house is paid off, both of which will happen in the next 6 years. If we are both retired before Medicare kicks in, expenses might go to 100K (assuming 20K health insurance from the market).
The 80K/year is based on our current average non-kid non-home related expenses over the past 3-4 years (60K) and then adding 20k for increased travel, large home maintenance, car replacement etc.

Our savings are currently:
- 2.5M in our retirement accounts (1M in 401K+Roth, 1.5M in taxable)
- 1.5M house value (120K mortgage remaining, will be paid off in ~3 years)
- two 529s are funded at 200K each for college tuitions. This is separate from the retirement accounts above.

We have both crossed the 2nd bend point on our social security and though benefits are expected to be reduced, should probably receive around 60K/year in Social Security at 70, and maybe 45-50K/year at 62 (rough estimates given the uncertainty on SS funding).

Is it safe (from a financial perspective) for me to quit my job now?


P.S: Will look for other things to do to stay busy (non-profits, volunteering, SAHM for a bit etc), but want to know if my income can now be out of the equation.
You work in IT, so I am going to assume you can do the math. With a husband that is making $450k/yr, with a $2.5m portfolio, and saving $100k/yr, of course you can support $150k of spending now, going down to $100k later without you working. Surely, you know that, or at least can do the math to arrive at the same conclusion.

So, perhaps this is not really just a financial question?


EDIT: Are you sure about your expenses? Where is the other $200k going? That seems awfully high for taxes, even in CA, for a $450k gross income level.
Once in a while you get shown the light, in the strangest of places if you look at it right.
jarjarM
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Re: Can I quit working?

Post by jarjarM »

marcopolo wrote: Mon Sep 20, 2021 4:21 pm EDIT: Are you sure about your expenses? Where is the other $200k going? That seems awfully high for taxes, even in CA, for a $450k gross income level.
OP posted this, probably explain the difference.
carloslando wrote: Sun Sep 19, 2021 3:57 pm
delamer wrote: Sun Sep 19, 2021 3:16 pm How much does your husband make? And how much are you spending per year now?
My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
marcopolo
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Re: Can I quit working?

Post by marcopolo »

jarjarM wrote: Mon Sep 20, 2021 4:27 pm
marcopolo wrote: Mon Sep 20, 2021 4:21 pm EDIT: Are you sure about your expenses? Where is the other $200k going? That seems awfully high for taxes, even in CA, for a $450k gross income level.
OP posted this, probably explain the difference.
carloslando wrote: Sun Sep 19, 2021 3:57 pm
delamer wrote: Sun Sep 19, 2021 3:16 pm How much does your husband make? And how much are you spending per year now?
My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
That is what i was responding to.
$450k income. Spend $150, Plan to save $100k. That adds to $250k, leaving $200k unaccounted for. Presumably some of that is for federal and state taxes, but seems there should still be significant gap.
Once in a while you get shown the light, in the strangest of places if you look at it right.
jarjarM
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Re: Can I quit working?

Post by jarjarM »

marcopolo wrote: Mon Sep 20, 2021 5:41 pm
jarjarM wrote: Mon Sep 20, 2021 4:27 pm
marcopolo wrote: Mon Sep 20, 2021 4:21 pm EDIT: Are you sure about your expenses? Where is the other $200k going? That seems awfully high for taxes, even in CA, for a $450k gross income level.
OP posted this, probably explain the difference.
carloslando wrote: Sun Sep 19, 2021 3:57 pm
delamer wrote: Sun Sep 19, 2021 3:16 pm How much does your husband make? And how much are you spending per year now?
My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
That is what i was responding to.
$450k income. Spend $150, Plan to save $100k. That adds to $250k, leaving $200k unaccounted for. Presumably some of that is for federal and state taxes, but seems there should still be significant gap.
Hmmm, you're right. Maybe OP is thinking of today's tax (with dual income) and subtracting it from future single income scenario.
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carloslando
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Re: Can I quit working?

Post by carloslando »

vrr106 wrote: Mon Sep 20, 2021 10:27 am
carloslando wrote: Sun Sep 19, 2021 3:57 pm
delamer wrote: Sun Sep 19, 2021 3:16 pm How much does your husband make? And how much are you spending per year now?
My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
You certainly seem in great shape financially. Your spending does seem lower than what I would expect for VHCOL - wouldn't property tax alone be close to $20-$30K? Not that it changes the fact that you should be okay, but based on my experience looking at spending, for VHCOL I would expect $150K+ excluding mortgage

we got lucky buying our home back when the price was about half of what it is now. That, and Prop 13 in California capping the annual increases has helped keep our property tax manageable (has been going up, but is just under $12K/yr now).
We are generally LBYM: no car payments, always bought used cars all-cash etc.
Comparison is the killer of all joy.
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carloslando
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Re: Can I quit working?

Post by carloslando »

jarjarM wrote: Mon Sep 20, 2021 5:44 pm
marcopolo wrote: Mon Sep 20, 2021 5:41 pm
jarjarM wrote: Mon Sep 20, 2021 4:27 pm
marcopolo wrote: Mon Sep 20, 2021 4:21 pm EDIT: Are you sure about your expenses? Where is the other $200k going? That seems awfully high for taxes, even in CA, for a $450k gross income level.
OP posted this, probably explain the difference.
carloslando wrote: Sun Sep 19, 2021 3:57 pm
delamer wrote: Sun Sep 19, 2021 3:16 pm How much does your husband make? And how much are you spending per year now?
My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
That is what i was responding to.
$450k income. Spend $150, Plan to save $100k. That adds to $250k, leaving $200k unaccounted for. Presumably some of that is for federal and state taxes, but seems there should still be significant gap.
Hmmm, you're right. Maybe OP is thinking of today's tax (with dual income) and subtracting it from future single income scenario.
I was thinking 450K: post-tax thats 250K? Spend of 150K, leaves around 100K in savings.
Comparison is the killer of all joy.
marcopolo
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Re: Can I quit working?

Post by marcopolo »

carloslando wrote: Mon Sep 20, 2021 7:05 pm
jarjarM wrote: Mon Sep 20, 2021 5:44 pm
marcopolo wrote: Mon Sep 20, 2021 5:41 pm
jarjarM wrote: Mon Sep 20, 2021 4:27 pm
marcopolo wrote: Mon Sep 20, 2021 4:21 pm EDIT: Are you sure about your expenses? Where is the other $200k going? That seems awfully high for taxes, even in CA, for a $450k gross income level.
OP posted this, probably explain the difference.
carloslando wrote: Sun Sep 19, 2021 3:57 pm

My husband makes roughly 450K/yr (depending on his employers stock price, large part of this is RSUs). This is after a recent job change to big-tech.

We spend about 140-150K now. This includes mortgage (30K) and 2 private school tuitions (20-22K each).
That is what i was responding to.
$450k income. Spend $150, Plan to save $100k. That adds to $250k, leaving $200k unaccounted for. Presumably some of that is for federal and state taxes, but seems there should still be significant gap.
Hmmm, you're right. Maybe OP is thinking of today's tax (with dual income) and subtracting it from future single income scenario.
I was thinking 450K: post-tax thats 250K? Spend of 150K, leaves around 100K in savings.
That is what i am questioning. You are saying $450k will become $250k after paying taxes. That is $200k in taxes. That seems rather high on $450 gross income
Once in a while you get shown the light, in the strangest of places if you look at it right.
Topic Author
carloslando
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Re: Can I quit working?

Post by carloslando »

marcopolo wrote: Mon Sep 20, 2021 7:19 pm
carloslando wrote: Mon Sep 20, 2021 7:05 pm
jarjarM wrote: Mon Sep 20, 2021 5:44 pm
marcopolo wrote: Mon Sep 20, 2021 5:41 pm
jarjarM wrote: Mon Sep 20, 2021 4:27 pm

OP posted this, probably explain the difference.

That is what i was responding to.
$450k income. Spend $150, Plan to save $100k. That adds to $250k, leaving $200k unaccounted for. Presumably some of that is for federal and state taxes, but seems there should still be significant gap.
Hmmm, you're right. Maybe OP is thinking of today's tax (with dual income) and subtracting it from future single income scenario.
I was thinking 450K: post-tax thats 250K? Spend of 150K, leaves around 100K in savings.
That is what i am questioning. You are saying $450k will become $250k after paying taxes. That is $200k in taxes. That seems rather high on $450 gross income
you are right, I was overestimating taxes. I do get a takehome of 300K when I check the numbers at https://smartasset.com/taxes/california ... mk3LmSILpt ($100K federal + $16K FICA + $35K CA State = $150K tax).
(260K if single, but we'd still be married-filing-jointly).

Thank you for the correction!

This additional savings rate is good, though this number is also dependent in a large part on his employers stock price.
Comparison is the killer of all joy.
Topic Author
carloslando
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Re: Can I quit working?

Post by carloslando »

Thank you everyone for the very helpful and detailed responses. Really appreciate the time each and every one of you took to share your perspective and advise me.

Susan123, 59Gibson, Trader Joe, Marseille07, HomeStretch, Delamer, Watty, Anoop, Vrr106, Harrychan, Marcopolo,
Thank you for clarifying that from a financial perspective we are likely ok even if I quit. Takes a weight off my shoulders.

LuckyGuy, Wannaretireearly, jarjarM
I am considering taking a sabbatical or atleast a multi-week vacation from work to rest/recharge. I dont know how good of a 'retirement test' that would be, since at the back of my mind I'll know this is a short break, but lets see. December is usually slow at work anyway, so this might work out ok timing-wise too.

Boglehead1008
Sorry to hear that you are going through something similar at your workplace. I hope things get better for you soon.

Simple Simon, medic
The uncertainty about the future (in some ways just a fear of the unknown) has been giving me pause. Part of it could be the mental switch from accumulate to withdraw; part of it just a fear of things going bad: bad economy, husband unable to work for some reason etc.

EnjoyIt, HomeStretch, Wannaretireearly, Delamer, Nigel_ht, Watty,
I am going to dwell on this the next few weeks, but the idea of another job for a few more years (with less stress, maybe even a remote role) to keep myself busy and feel fulfilled actually sounds appealing. If we pay off the house by then thats a bonus, but even from a personal front making it to mid/late 40s would I think feel more like I have had a full career.

Thank you very much!
Comparison is the killer of all joy.
medic
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Re: Can I quit working?

Post by medic »

carloslando wrote: Mon Sep 20, 2021 10:10 am My husband has good life insurance from work and we have an external policy as well (20 year, $2M) to supplement it.

Were you thinking of switching to single income as well, or were you both thinking of quitting?
We're already single income, so it would be both "retiring"
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