Hi everybody! So, after 15 years in my soul-crushing legal job, I submitted my notice of withdraw from the partnership last week. Had planned to work through December 2017 so that I could pay off my mortgage but just couldn't do it. Expect my last day to be end of July - just after my 40th birthday (mid life crisis anyone?) Feeling the regret of not sticking it out the few additional months so looking for some feedback on the strength of my numbers, where to optimize, or face punches for not simply working a few months. Here's my situation:
Single 39.9 year old lady-mustachian / no plans for kids
Yearly expenses ~ $40,000
Assets as of FIRE date:
$225,000 House ($104,000 left on mortgage through 2027)
$756,058 Taxable Investment Account (about 80/20 stocks/bonds)
$410,000 401K (Vanguard Target Retirement Fund 80/20 allocation)
$100,000 IRA (low cost American funds. Mostly stocks)
$ 82,500 Partnership Capital (i.e. cash) to be returned within 6 months of quitting
$ 40,000 Checking account
Total (not counting house value): ~$1,388,500
No debt other than mortgage.
With expenses of $40,000, I should be well within the 4% rule and even 3%. Main concerns/thoughts:
1. Healthcare costs. I'm (knock on wood) very healthy at this stage. My $40,000 per year budget assumes $450/mo. in health insurance costs. Based on my limited research, I think I should be able to find a plan for that without subsidies if necessary. Should have additional wiggle room in the budget to increase that amount as I age, and I can sell the house to help defray long term care/nursing home costs at very late stage of life.
2. Sequence of returns risk. Should I consider an equity glide path? Or some allocation other than my current ~80/20 to protect against this?
3. What to do with my cash. Will have about $40K in my checking account when I quit, and another $82,500 to be returned to me by the partnership within 6 months. All told, that's 3 years of living expenses. Was considering just living off of this money for 3 years so I do not need to sell any stocks. Not sure it that is smart. Alternatively, maybe invest about $40,000 and keep two years of expenses liquid. I do not generally like having that much cash on the sidelines but feel like it could help reduce sequence of return risks if we hit a bear market soon.
4. I have a number of actively managed funds in my taxable account that have expense ratios higher than I'd like. I'm working on moving those to low-cost index funds.
Would love any feedback. Things to consider in the last month of work? Ways to optimize? Suggestions on things I may not have considered?