Author Topic: Family of four- we can retire...but should we? is it really happening?  (Read 2037 times)

Loripedi

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Life Situation:  Husband just retired from the military and our financial situation has changed a lot.  We are a Family of four. Husband 39, wife 42, son 12, daughter 10.  Live in San Antonio, TX.  Married filing jointly

Salary: Wife- Gov't employee $53k , Husband $115k.  Husband receives $24k military retirement.  We both receive an additional VA disability pay of $3k a month (tax free).

We max out our 401k's at $18.5k. We have $100k in cash (in money market at 1.8%), $100k in his military tsp (401k) @10%. Wife 401k has$75k @11%.

Our have prepaid 2 years of university for our kids and we have gifted them my husbands GI bill (36 months split between them two which will cover their last two years).

We only have our house debt of $222k. @ 3.25%

I have been tracking our expenses for about 6 months now. We currently live off of $5k each month.  We are saving $7k a month (literally into a savings account at 1.8% interest rate).

I love my job. I dont want to quit.  But what do you all think?  Do you think that my husband can quit his job now or should we pay the house off first and then he quits?  Our living expenses are $5k a month (and i think there are ways we can save even more) and we get $5k a month between veteran pay and military pay (which increases with inflation).  With me working still....that is just more money we can sock away.

Other odd thing is we know we do not want to stay in this house forever. This house is temporary until the kids finish school (here for the school district only).  Should we bother paying the house off then - knowing in 7 years we will be moving? 


ysette9

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Family of four- we can retire...but should we? is it really happening?
« Reply #1 on: October 10, 2018, 04:33:03 PM »
It isn’t clear whether you are both getting disability pay that totals $3k a month or each getting $3k a month for a total of $6k. Either way, it sounds like you have a lot of guaranteed, inflation-hedged income coming in between that and the military retirement. Is that enough to cover your corners? If yes, congrats, you are FI.

I would not pay off or pre-pay your mortgage  with a low rate like that, especially if you don’t plan on staying there forever.

Why are you saving your excess each month in cash? I would be investing it in your shoes

Re-reading your post it sounds like you are FI and there is no reason for your husband to keep working if he doesn’t want to. Do you have an idea of what your lives would look like if work wasn’t an obligatory part of your lives? Maybe have that conversation with your husband and see what comes of it.
« Last Edit: October 11, 2018, 06:47:03 AM by ysette9 »

reeshau

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Re: Family of four- we can retire...but should we? is it really happening?
« Reply #2 on: October 11, 2018, 02:59:43 AM »
Re-reading your post it sounds like you are FI and there is no reason for your husband to keep working if he doesn’t want to. Do you have an idea of what your lives would look like if work was an obligatory part of your lives? Maybe have that conversation with your husband and see what comes of it.

This.

You have just come through a big change in your life, and a number of things you say sound like you are planning for another big one, once your kids graduate.  Particularly coming from the structured life of the military, I would challenge yourselves to paint a picture of what kind of life you are going to, rather than just what you are leaving.  If that's a blank canvas, it may not be happy.  (at least, in the long run)  Also, while your cash flow is great, you don't yet have a lot large lump sum for emergencies.  Given all this, I wouldn't be in a hurry. Rather, take the time to work to the target you already stated: when the kids move out.  You will have a great cushion by then, and you can take some steps toward whatever's next:  travel to some places you think you might move (if it's not just the house, but the city)  Maybe get a vacation home that could become the next home.  Start a side gig or get involved in social groups that you might like to ramp up "after."  If you start to get a good enough picture that you feel anxious to get there, then you can look to pull your timetable forward.

And, get that savings into investments!  1.8% is losing money, after inflation.  With a horizon as long as yours, you need to win that battle.

cbr shadow

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Re: Family of four- we can retire...but should we? is it really happening?
« Reply #3 on: October 12, 2018, 03:54:58 PM »

Why are you saving your excess each month in cash? I would be investing it in your shoes


Why would she invest it in her shoes?!  I would think Vanguard would be a much better place to put it.
:-) When I read this originally I was confused LOL

DoNorth

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Re: Family of four- we can retire...but should we? is it really happening?
« Reply #4 on: October 13, 2018, 09:42:06 AM »
My numbers are pretty close in terms of pension and VA disability as well as your husband's salary.  I left my old gov job in DC (was a GS 14) and went from a salary of $115K down to $25K  doing PT work.  Instead of commuting all the time and spending all my time at work, I was able to take my kids to and from school and do a lot more with them in their free time.  I stayed really busy with my PT job and building our dream house. so I still had a lot of structure and purpose and the hands on work was really rewarding.  My wife kept working during this time and then 3 years later, I accepted another federal position, but overseas this time with way better quality of life and my wife quit her job. 

There's no right answer to your question or clear path forward.  If I were him, I would definitely try to take a break especially if he doesn't feel strongly about his job.  I was worried about being away from my military field too long and my skills becoming outdated when I did the 3 years of PT non-profit work, but it didn't even come up in the interview for the job I eventually accepted The skills and experience acquired over those many years will speak for themselves if your husband realizes he isn't ready to retire and wants to return to work.

ysette9

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Re: Family of four- we can retire...but should we? is it really happening?
« Reply #5 on: October 13, 2018, 11:26:28 AM »

Why are you saving your excess each month in cash? I would be investing it in your shoes


Why would she invest it in her shoes?!  I would think Vanguard would be a much better place to put it.
:-) When I read this originally I was confused LOL
Haha!