Semi-FIRE WAHM Trying to Convince Husband to Quit Corporate Job

[mamagoose]

Our background: two engineers, married with a toddler. Dad works corporate 9 to 5 M-F, Mom works from home self-employed ~20 hrs/week during naps & preschool. Debt-free, paid off mortgage, retirement savings maxed out and both pulling 6-figure incomes (Mom's hourly rate several times higher than Dad's, but Dad's job has health benefits). Mom wants Dad to quit his job since he's miserable with the commute and working among intellectual underachievers with pressure to put in overtime. Savings accounts are plentiful, expenses are low, so surviving on just Mom's income would still leave plenty of room for a safety net. Dad's job is offering him a 30k bonus in 1.7 years for staying put at the company (golden handcuffs), Dad is counting down the days until the bonus is paid and he will quit his job. Mom can make that bonus in 3 months and doesn't want Dad to suffer the next few years in an unhappy work environment. Mom's job can be done from anywhere in the world, and Mom dreams of living elsewhere before toddler hits kindergarten (one idea was for Dad to return to grad school and finish his PhD just for fun, another was to travel to the national parks, and Mom & Dad both expressed interest in potentially returning to work as math/science teachers when toddler is older, to excite our minds and be part of a community). Mom is already in the FIRE mindset and "feels retired", Dad is still anxious/afraid of the future. Family budget is healthy, based off roughly 1/2 Dad's take-home pay (after maxing out his 401K) and all of Mom's pay goes towards maxing out her self-employed 401K and investing the rest after-tax, so savings rate is hovering around 70%.

Looking for opinions on whether we should stay put for the next 1.7 years and delay gratification even more, or say screw it and start the adventure NOW, with Mom continuing to work part-time as long as her job is enjoyable and until FIRE is 100% reached (a few easy years, Mom loves her job).

Posted here since in the real world, most of our family & friends assume Dad is the breadwinner and Mom is for all intents & purposes a SAHM, so it's difficult to find folks to discuss this with.

Anything we should consider with making this big decision?

[beltim]

This is a really interesting scenario.  I think it comes down to balancing Dad's unhappiness at work with his anxiety at leaving work.  I'd personally say leave, especially considering that several of your plans involve making some additional money in the future.

How close are you to FIRE?  That might make a difference.

[Neustache]

First off, WTG mamagoose!  Nice!

I'd want to see more numbers than you are giving out - your budget and your savings amounts before I say one way or another.  My husband is the rare man who will not feel strange at all letting me be the bread winner - maybe this is an age thing (we are under 35) but some of his friends who are older would not be able to accept others knowing their wives were supporting them.  So weird to me, but whatever. 

Can he work from home with you and do what you do?  Both of you put in 15 hours a piece and then instead of him retiring it's the two of you going into business together?  Just wondering if he can do some contract work for his current company instead of being employed (at home, of course). 

[mamagoose]

We are 30, and we've talked about the emotional aspect of him not being the breadwinner, that doesn't seem to be a deal-breaker for him.

His company will not let him work remotely entirely, he can put in a few hours at the end of the day from home if he has to leave early but it's an older established company with a large campus that expects a full commitment. There's a possibility of him continuing to work there as a contract employee without benefits, but he'd still have to drive there and it would likely be 2-3 full days instead of a few hours here & there from home. What I do is a specialty niche, and I am not planning on hiring him as an employee of the company (and forfeiting my self-employed 401k eligibility), but with enough training he could perform some of the work as a sub-contractor. I'm open to that if it was something he wanted to do, but it isn't in the plan as of now.

Our current plan is what we call "Freedom 32", where he leaves his job after receiving the bonus and we do the 5-year Roth IRA conversion pipeline. We've run the numbers and at age 32, we will have 5 years living expenses in after-tax Vanguard to live off of during the 5-year conversion period, and after that will be living off the retirement savings funneled through the pipeline. The timing works out really well in that scenario. That is assuming that I didn't work at all after age 32 also (we're the same age). So we've done the math to show that we'll be OK at that point in time, but what I am suggesting to him is that he quit his job now and that would delay the start of our pipeline slightly while we live off my income (which would increase with him being at home with our child and allowing me to work more hours), so instead of starting the pipeline at 32, we might start it at 34, so we'd be trading the next 2 years of his drudgery for 4 years of a more balanced existence.

[WerKater]

I think you need to get to the bottom of why he does not want to quit yet. Does he want a larger margin of safety (so that the additional pay in the meantime and the bonus that is waiting for him would come in handy)? It does not seem particularly relveant in your situation but maybe it will give him a better feeling that he has pulled his weight in order to gain FI for both of you.
Or is it more nervousness that he will not know what to do once he has quit? Does he have hobbies/plans/goals that he can keep himself busy with after quitting?

Has he considered trying to bring more pressure on his employer? You are in the position of strength, you can do whatever the heck you want. But does his employer know this or does he assume that your husband will continue to have to work? If the employer actually wants him to stay and is faced with him just quitting, you guys might be able to dictate the terms of the continuing employment (-> work from home) more than you currently think.

[Neustache]

What WerKerter said.  If you need inspiration for the benefits of FU money (which you all seem to have) then there are loads of them out there.  I'll post a couple if I can remember where they are.

It seems as though policies somehow get changed when really great employees have FU money and are ready to quit. 

[simplified]

You will not lose individual 401k benefits by hiring your spouse. Spouses are exempted. Both can defer 17k plus 25% of compensation.

[mamagoose]

This is the first I've read about spousal exemption. Currently maxing it out at 57k/year (employer plus employee contribution), and I understood this to only be an option if it's a singular employee company.

[zolotiyeruki]

It seems as though policies somehow get changed when really great employees have FU money and are ready to quit.

Combine that with this:  "What is it about his job that DH dislikes?", and you get WerKater's post.

You've got the FU money.  You've got enough income and savings that you don't strictly *need* DH's salary.  So if there's something specific about his job that is making him miserable, he can ask to have it changed.  If they say "no", he can say "ok, well, here's my two weeks' notice."  Or, if there's nothing that will make his job more enjoyable, he can just quit.

[acroy]

Holy crap - Badass mamagoose !!
You are sitting pretty.
I'd suggest go the 1.7yrs for the $30k payoff. Hubby can learn to relax; provide value for $$ but learn to resist OT etc. SWAMI!!

preschool: wth?? you gonna do that with TWO RETIRED ENGINEERS IN THE HOUSE?  Figure it out ya'll! :)

best you to all

[mamagoose]

Preschool is 2 mornings a week, we walk our daughter there and it gives me uninterrupted time to work. I pick her up at lunchtime and she's smiling, covered in glitter and cookies. Worth it :) It's cheap too being a half-day nursery school.

[Neustache]

Half a day preschool, two days a week can be such a great deal - ours was 160 a month and went down from there as the kiddos get older.  Don't drop preschool if you can swing it and the LO isn't picking up bad habits.  I would be more inclined to have my little guy in one now that he's older but I'd have to driver 15 minutes there and it's not worth it to me, now.  But if I were making 6 figures while he was gone 6 hours a week, uh, yeah, I'd do it! LOL.

[Financial.Velociraptor]

WerKater nailed it.  Have hubby negotiate with gusto.  He should have no fear of being fired because he can afford it.  I was a lot more forward leaning with my employer as FIRE approached and it greatly improved my situation.  I never negotiated for more money but I did find there was surprising flexibility on hours, working from home (which I did rarely anyway b/c I'm less productive outside the office), extra unpaid vacation time off, and transferring to a department away from "the wicked witch of the West."

[regulator]

WerKater nailed it.  Have hubby negotiate with gusto.  He should have no fear of being fired because he can afford it.  I was a lot more forward leaning with my employer as FIRE approached and it greatly improved my situation.  I never negotiated for more money but I did find there was surprising flexibility on hours, working from home (which I did rarely anyway b/c I'm less productive outside the office), extra unpaid vacation time off, and transferring to a department away from "the wicked witch of the West."

If they will not budge on any of this (and my last cube employer was ironclad), another option is to "retire on the job."  Overtime?  Fuck you.  Weekends?  Fuck you.  Accepting extra work just because?  Fuck you.  What are they going to do, fire you?  Bring it on.

[pbkmaine]

I suggest you talk to a CPA who specializes in working with small companies. Ask about what kind of structure (partnership/corporation, etc.) would help maximize retirement for both of you and minimize health insurance costs.

[firelight]

Mamagoose, just curious. What do you do?

[Axecleaver]

This is the first I've read about spousal exemption. Currently maxing it out at 57k/year (employer plus employee contribution), and I understood this to only be an option if it's a singular employee company.

The contribution limit is 52k for 2014, and 53k for 2015. You are still limited to 25% of your earnings, it is not 25% plus 17k. A solo 401k plan is either just you, or you and your spouse (see http://www.irs.gov/Retirement-Plans/One-Participant-401%28k%29-Plans)

[mamagoose]

Mamagoose, just curious. What do you do?

Mechanical engineer.

[simplified]

This is the first I've read about spousal exemption. Currently maxing it out at 57k/year (employer plus employee contribution), and I understood this to only be an option if it's a singular employee company.

The contribution limit is 52k for 2014, and 53k for 2015. You are still limited to 25% of your earnings, it is not 25% plus 17k. A solo 401k plan is either just you, or you and your spouse (see http://www.irs.gov/Retirement-Plans/One-Participant-401%28k%29-Plans)

You are wrong. The contribution limit is 52k for each participant. Wife and husband can each potentially have 52k added to their 401k accounts for a total of 104k (for 2014). 17.5k of this is from your wages and the rest is profit sharing contribution made by the employer/company. The profit sharing contribution can not exceed more than 25% of the salary.

Hypothetical example - Lets say both husband and wife each draw a salary of 100k each. They can  each defer 17.5k to their 401k. The company can contribute 25k to each of the 401k accounts.

Total: 17.5 + 25 + 17.5 + 25 = 85k