Case Study--one-more-year-itis

[luckyme13]

As my title suggest I've been white-knuckling my days at work for a while and I'm pretty sure I have to quit soon/like real soon. I do have a lot of fear to leave my job with all of its pay/perks.  My partner likes their gig and is happy if I quit-mostly to stop my constant complaining I suspect. 

Life Situation: Married filling jointly, mid 40s, one child in grade school.  MCOL in the Midwest.

Gross Salary/Wages: $340k combined ($200k and $140k)  I have variable pay so I averaged out the past 5 years.

Individual amounts of each Pre-tax deductions: Max out 401k and IRA each year ($51k)

Qualified Dividends & Long Term Capital Gains: We reinvest dividends

Rental Income, Actual Expenses, and Depreciation: N/A

Adjusted Gross Income: $289k

Taxes: $70k

Current expenses: Average $6k a month.  Biggest expense are $2,100/rent, $700/groceries, $1,000/travel (when we could), $300/eating out, $600/entertainment/beauty, $400/utilities, $300/car insurance, life insurance, $200/charity, $150/subscriptions, $100/coworking space, $100/after school/babysitters. 

Expected ER expenses: $4,000/month  I know how to scale way down when needed and we are thinking of becoming expats for at least 2 years as the U.S. is also wearing me out recently.  Mostly the safety of our child and healthcare being such a mess. 

Assets:

Retirement accounts: $1.27MM
Taxable: $1.0MM
Cash: $375k
529: $85k
Total: approx. $2.8MM

Liabilities: $0

I kept things high level as over-sharing makes me skittish. 

My big question is: can I quit?  I'd love to take some time to rest/recover from the stress of my job and get some clarity on next steps.  My goal was a NW of $3.5MM before I cut the cord but I don't think I have it in me anymore.

Thank you!

[rockeTree]

Sure. No chance you'll starve with those assets, even if your style could become somewhat cramped. A MCOL family can cheerfully live on either one of those salaries without touching savings (not sure if the higher or lower earner is quitting here) if your partner plans to continue working, doubly so if they will have access to healthcare for the family. Of course if you skip the country your expenses could change a lot in either direction. But if you want permission: you're free if it won't trash your relationship, and it sounds like you working isn't helping on that front. Go.

[draco44]

You save solid savings, no two ways about it. With that much much you have lots of possibilities.

I'm curious though, do you plan to rent forever, either abroad or stateside if you come back after being an expat for a while? It's a valid strategy if you do, but something to think about for the financial implications long-term. Also, do you plan to fund additional child expenses as your kid gets older (college, extracurriculars, etc.?) I see you have your $100/mo after school + babysitting line item, but I could see child-related expenses going way up if you let them get into specialty hobbies/sports, fancy summer camps, or want to fund their further education.

[legalstache]

I'll put your question back on you: Do you think you can quit? Because I'm seeing that you have nearly 39x expenses saved up, so just by the numbers its clear you can quit if you want to.

You say you have a lot of fear about leaving your job and salary behind, which is understandable. I think working through that fear and figuring out what's next is the most important part of this for you. Financially, you're there.

[zolotiyeruki]

Financially, you are ready to retire, no question about it.  $2.8M is enough to fund $112k of spending annually at a 4% WR.  Yeah.  You're fine.

Mentally, it sounds like you aren't ready yet.

WRT concerns about healthcare and your child's safety, I get the sense that you might benefit from a low-information diet.  Media, both traditional and social, thrives on making people scared, angry, and/or divided, and does so by cherry-picking the most alarming stories and presenting them as if they are representative of larger trends, rather than as the outliers they are.

[dougules]

Why are you holding so much cash?

[Blackeagle]

You could have quit about a million dollars ago.  You’re fine.

[lutorm]

So your annual expenses are ~$70k and your wife makes double that? What are you afraid would happen if you quit? You wouldn't even be close to needing to draw down your assets.

[CCCA]

You are definitely FI and should be able to RE at any point you want.


One option is to try to find a way to downshift your job to something less stressful. Even if you only made $50k doing part time consulting you'd still be accumulating rather than drawing down your stache. 


Or you could quit and if your wife still wants to work you'll still be more than totally fine.

[bacchi]

So your annual expenses are ~$70k and your wife makes double that? What are you afraid would happen if you quit? You wouldn't even be close to needing to draw down your assets.

You are definitely FI and should be able to RE at any point you want.


One option is to try to find a way to downshift your job to something less stressful. Even if you only made $50k doing part time consulting you'd still be accumulating rather than drawing down your stache. 


Or you could quit and if your wife still wants to work you'll still be more than totally fine.

luckyme13 might be the wife. It wasn't clear in the OP.

[flyingaway]

The question is NOT about: Can you quit?

The real question is  about: Do you want to quit?

The battle between more money and more time is constant. I like to have more money, but at some time, I have to value my time more.

Will more money make your future life better? Probably will, but how much. What do you plan to do if you do quit?

[2KidFIRE]

So your annual expenses are ~$70k and your wife spouse makes double that? What are you afraid would happen if you quit? You wouldn't even be close to needing to draw down your assets.

I agree with @lutorm, I don't see any reason why from a financial perspective you can't quit yesterday.  The fact that your spouse's salary will more than cover your annual expenses makes it a pretty easy decision in my opinion if you're really dreading your job so much.

Now, once your spouse decides that they want to stop working you'll both need to re-evaluate the situation, but that doesn't sound like it's an immediate concern.

[lutorm]

luckyme13 might be the wife. It wasn't clear in the OP.

Good point. I made assumptions. There may not even be a wife.

[luckyme13]

Hello,
Thank you for the responses, questions and feedback.

To answer a few of the questions.  We don't have a plan just yet on renting vs. owning.  We've owned three homes and while fun they are a lot of work.  Renting allows for more freedom no doubt.  We have so much cash on hand for that very reason.  The thought was to possibly pay cash for a house but we're sitting that out for the moment. 

 zolotiyeruki-I completely agree with the low-information diet.  I do that already but the industry I work in has a big current event component to it so that is hard to ignore although I try.  I am usually the friend who rarely knows what is going on but the past year has given me more time to get sucked into the mess. 

flyingaway-good questions.  Most days I really would prefer something part-time and just less demanding.  I don't want to have aimless days if I'm not working so if we expat I would be the main caregiver for our child and also the one to set up the move, visas etc.  That will be time consuming for sure so I'm fine taking that on if I don't have the workload I used to.

I appreciate the feedback regarding leaving if I want.  My friends don't save like we do and our parents can't understand how we have so much compared to them so my network of like-minded people is limited so I appreciate the help from this forum.

BTW-I am the wife.