Case Study: Removed

[shmoggy]

Removed

[feelingroovy]

First, I am very sorry for your loss.

To start with the ultimate question, on the surface, it looks like you are close, but not quite there.

But that might depend on some details.

How does the pension work? When does it pay or and how much? Or is it something you can take as a lump sum?

Do you have or anticipate college costs?

Can you come up with a better estimate of your irregular expenses? If I round your expenses up to $2500/mo you will need around $750k in invested assets (vehicles and home equity don't count.) That is slightly more than what you have.

And I am guessing you would need to buy health insurance if you didn't have your job?

You are close enough that you could try to go part time or even take a lower paying job for a few years that didn't take as much out of you.

[ZMonet]

Sorry for your loss.  Losing both parents is certainly not easy and I'm sure this is a difficult time.  I think at this point to decide on whether you should stop work or not falls under the category of not making hasty decisions immediately following an emotional loss.  I'm not saying not to think about it and work towards it, more that you need to be careful to not run away from something it sounds like you enjoy.  You should definitely look into things like when you can collect your pension, etc. to get a better sense of your new financial picture and what your options might be.

Right now, you should keep things simple financially.  I'd pay off the Discover card, even with the 1%, out of savings.  I would not pay extra towards the mortgage.  Follow the investment order advice provided by MDM.  https://forum.mrmoneymustache.com/investor-alley/investment-order I'm pretty sure this would have you max out, as you already seem to understand, the 403b.  Anything left over, aside for an emergency fund of 6 months expenses, should likely be placed in a low-cost fund, like Vanguard.   

Good luck.  You've done a great job controlling your spending and, with this influx of money, will have some great options to explore on what to do with your life going forward.

[Linea_Norway]

https://forum.mrmoneymustache.com/investor-alley/investment-order/

My condolences.

[BeanCounter]

  It’s hard for me to even write this post because losing someone close to you and then benefiting from it is the weirdest feeling I’ve ever experienced, so I know I need to slow down and not make any hasty decisions.

I’ve bounced a lot of ideas around in my head and I think I know how to handle the money but I’d love to hear what you did if you were in the same situation…or some opinions from anyone that would like to share. 

This is probably not very good advice, but I want to post because I'm in the same situation. I'm in my early 40s, married with kids. I am an only child. I lost my father when I was a teen and my mom last year. My father was a farmer my mother a school teacher, yet somehow I inherited just a bit over $1M plus my mothers trust (from her mother) of $1M (which I cannot touch until my grandfather passes).
I just wanted to chime in that benefiting from their death does seem so awful to me. I have invested the money so at least what was cash isn't just sitting there. But other than that I have ignored it for the last year. I'm going to suggest you do the same. Don't quit your job yet. Don't make any drastic moves with the money. Just rest. The answers of what to do will (I hope) be more clear when some of the grief has settled a little.
I would say that over the last year I have had two very distinct feelings. One is the guilt over inheriting money, and the second is this overwhelming feeling that life is too short, that I'm wasting my time working. I'd call it some sort of existential crisis.
I'm giving it some time before I act on any of those feelings.
I'm so sorry for your loss. I know it's not easy.

[Chrissy]

Do you receive child support or alimony?

No, you can't stop working.  Your asset total is incorrect.  Remove the cars and motorcycle from the list of assets; these do not produce income, they create ongoing expenses (gas, insurance, maintenance).  Remove the home equity from your assets.  Home equity doesn't produce income.  I've got your asset total at $656k, but I haven't included your pension, because I don't understand what that's worth on a yearly basis.  At a 4% SWR, you'd just miss meeting your yearly expenses.

Speaking of expenses, are you sure you've listed everything?  What's your health insurance situation?  I don't see anything for the kids:  tutors, school lunches & fees, lessons, hobbies, sports?

[Zamboni]

I'm sorry for your loss.

It seems that you like some aspects of your job . . . is there a way you can keep the enriching parts but scale back to fewer hours? 4 day work week? Shorter days? You never know til you ask, and then you're never sure until you press on without taking that first no as a definitive answer.

I definitely don't think you should completely stop working right now, but it might make sense to try to find more balance while you still have a few more years with the kids at home.

[beer-man]

Sorry for your loss and thank you for sharing I really enjoyed reading your post. I’d say keep the mortgage, keep the job, max out 403, and spend as much quality time with your kids as you can. You are doing just fine.
 


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[BicycleB]

Hi, @shmoggy. My condolences.

I suggest moving slowly, keeping the job for at least a year, tracking expenses, and then analyzing your options.

I lost a parent a few years ago too. It's a much bigger feeling than anything that relates to money. Like you, I inherited an amount that put me at or near FIRE, depending on expenses. I had been thrifty before but not quite FIRE. I lost my job during the caretaking-before-death era and never really went back to work.

I still worry some about running out of money later. So if you like your job and it pays well (as it seems to do), I would view that as an easier option for securing your future than feeling the need to add jobs later. Three or four years where the entire income is saved would still increase your assets by about 30-35%, it looks like. That's a biiiiig safety layer! Meanwhile, if you don't have your expenses completely tracked, you don't really know whether you're FIRE or not. So track first, decide later.

For insurance, check into Obamacare (Affordable Care Act) terms. I suspect you would qualify for good insurance (say, a "Silver" plan) that is much cheaper after subsidy than you currently anticipate. I pay about $22/mo after subsidy, and that's with rates having gone up this year.

PS. For the savings account, in your shoes I'd consider putting it into Vanguard's LifeStrategy Growth Fund, abbreviated VASGX. It provides long term growth at a fairly low cost by maintaining a balance between stocks and bonds, domestic and international. The target is 80% stock, 20% bonds. To me that means if you ignore it for many years, it will grow pretty well. Realistically you should at some point take into account the investments that are in the IRAs, decide your desired asset allocation, and adjust your overall investments accordingly. But to me VASGX seems like a wise default option for the long term. A more bonds-heavy option, theoretically a bit safer in the short term, is the similar fund LifeStrategy Moderate Growth Fund (VSMGX). VSMGX works the same way but with a target of 60% stock, 40% bonds.

https://investor.vanguard.com/mutual-funds/profile/VASGX
https://investor.vanguard.com/mutual-funds/profile/VSMGX

[Matthew82]

I don't have the financial knowledge to assess how you'd handle retirement accounts, but it seems to me that your only barriers to freedom are waiting for kids 2 & 3 to get out on their own or trading down in houses to get mortgage free (or just moving into your mother's home if it's in an acceptable location and pocketing the equity).  On either housing choice, I'd wait until you're past the shock of losing your parents.  On getting the kids out, it's just a matter of waiting a little longer.  Then you can say good bye to your high stress job and figure out what you really want to do with the next 40 years.