Looking for some sanity checks from the collective mind here. I'm thinking of having my wife stop contributions to her 403B. She gets no matching by her work and goals are that we want to easier access to funds for 1) Business startup costs, 2) Buying an investment property to diversify our income stream, and possibly 3) Having a fund for helping kids with college expenses. The financial planner at her work was skeptical that anyone should stop contributing to their 403B, stating flatly "NOBODY has ever said they put too much in their 403B"
A little about us currently: Married aged 37 and 36, 3 kids, maybe 1 on the way. Living in HCOL area (well just housing, we don't partake in lavish luxury and are able to eat relatively inexpensively). Expenses about 38-40K a year for our family of 5, not including mortgage which is a hefty 25K a year. 26 more years to pay off the remaining 439,000. Currently about 300-350 in
imaginary zillow equity. No other debt besides the mortgage.
Wife brings in about 110,000/yr in a job she loves (I don't think she will quit willingly). I bring in about 100,000 in a part time stay at home job I tolerate but I'm thinking to make a transition to stay at home dad and take care of the kids full time while also starting my own business/writing/blogging/enjoying life. Life is too short to miss out, the kids are still young (aged 2, 4 and 6) and I love being with my family above all else in life right now. Realistically I'll be contributing more income to the family in the future as I like to keep active, but I am doing all my projects assuming I'm FIRE/dead weight in the $ calculations.
Currently we have about 450K in various retirement accounts (about 100K of that is in ROTH). Also have almost 100K in cash/taxable acct. and a 25K in 529 plans for kids (which I regret setting up and will not add more to).
Here is a mindmap I did of some possible outcomes for us.
If our mostly total stock market vanguard funds do what they have historically, then the 450K we have should be enough to reach a million in 23 years which should be able to fund a decent 40K drawdown by itself. Again, unlikely wife would want to stop working, so we can cover mortgage and expenses and still save some money until then.
As the main tier of support, the 450K retirement seems possible to support us (20-26 years from now) if we target spend about 35/40K a year after all kids are gone and mortgage is paid (at 26 years or paying down the 146K owed in 20 years) or we are in a smaller house that is paid for, or RV or whatever.
As a next tier of support, if the retirement disappears for some reason, she has pension vested at 7,000 but can get up to 23,000 a year if she works another 20 years. SSI if she continues to work may be as high as 30K possibly if I did the numbers right. If both of us were not working anymore after today it seems we should still have access to 22K combined SSI and the 7K pension she already has vested and we could survive frugally on that in retirement I think (we are talking one possible case scenario if all else fails). So as is we should have ~29K, but if SSI is to be solvent and she continues working this may be as much as 23K pension, 30K SSI, 11K my SSI (if I work no more), and that should be more than enough for a 35/40K bountiful lifestyle.
As a next tier of support, if for some reason we squander all our retirement and also have no pension or SSI, we may have hopefully paid off our mortgage we could cash out the house (potentially a 1 Million $ asset) in 26 years and then make due with the proceeds ~30/40K drawdown, living in an RV, slow travel, etc. I'm not particularlly attached to this house, it is just roof and walls to keep the family warm and is really more than we need now, but definitely more than we need with an empty nest.
As a final tier of support, we are not likely to squander the 100K in taxable accounts/savings and should be able to keep putting away some additional funds every year. Assuming we can put in 12K a year this route may give us close to a million retirement as well (assuming we invest with return of 6% after inflation). Ideally though this would be spent on things that might not provide a return on our money like business startup costs or money to kids for college, which is why it isn't really earmarked for retirement per se, but it may be there if all else fails.
So, in all, if multiple tiers of support collapses it seems that we should be ok as long as one tier can hold us through. However, it seems reasonable that based on
historical stock market/real estate performance a possible outcome is
much more than we really need if we are going by a minimum 30/40K retirement spend.
There are some potential high costs of having 3/4 kids and also having parents that may need help in the future, and health care expenses etc. So there has to be some leeway for some setbacks, but still it seems that having additional non-retirement funds would be good to have. I thought about continuing contributions and then trying a ROTH conversion ladder to get the funds out later, but if my wife continues working it will be taxed heavily on withdrawal anyway, so not sure if its worth the trouble?
The point of this whole post is that I don't see the point in continuing to put in ~15K into my wifes 403B which has no matching when I would rather be moving towards the other goals above (business, real estate, kids). What says the collective mind, what are some concerns that I didn't account for, or any other input? What would everyone here do with my goals in mind?