Ha, "enemabag" comment +1
Yes, I would only consider retiring early by following the principles stated here. Meaning, I want to do it in a way where I am not touching the principal, living only off the 4% SWR. Maybe dip into it only as needed for unexpected life events, college, weddings, etc.
Regarding the wife and her working or not working -- I continue to visit the threads about "getting your partner on board" -- She is not yet completely converted ;-)
Since some were indicating there's not enough yet for early retirement with 3 pre-teens, here's my more detailed plan. Please let me know if you think this is feasible:
- Work about two more years full time. At that time, total 401k/IRA = $650k, non-IRA funds = $125k, home equity (primary residence + 2 rental homes) = $440k
- Sell houses, move to lower cost area approximately 70 miles away. Primary residence in lower-cost area will be approximately $190k, leaving us a total of about $300k in remaining cash + non-IRA funds. New monthly budget should be about $3600/month, with no mortgage. That includes $10/month for tivo
- I'm blessed with a job where I can go to half-time, earning $75k per year. I will drive the 70 miles once per week, work one day, spend one night overnight in a hotel, and drive home following work the next day. Not a bad deal overall for $75k per year and 5-day weekends, in my book. Wife can quit entirely, or work part/full time if she wants
- At 75k per year (half time), I should net about $4000 per month (after taxes, commuting and hotel costs, 401k contributions, insurance, etc.). We can easily live off that (or less), in the new area, hopefully putting away even more.
- After doing the half-time gig for one year, quit entirely. We would then live off the non-401k/IRA assets ($300k or more) for the next 8 years. In reality, I'd try to keep $50k of this money intact after 8 years, to help pay for college for kids. Ex-wife (my "BFM") has to pay half of college too.
- After 8 years (age 56), 401k/IRA assets = $1 million. Then I can start taking some combination of pension payments (approx. $1200/month) and 72(t) withdrawals from 401k. If I wait on pension payments until I'm 60, they'd go up to $1800/month. So I'd gauge that as the time approaches. At age 62 can start SS payments (approx $1400/month in today's dollars), or wait for more
- Even if I start taking pension and SS at the earliest possible age, they'd be $2600+ per month in today's dollars (both are indexed to go up with inflation -- at least in theory)
This all feels like enough cushion to me, but am I missing the boat? Will teenagers make me poor and I'm not considering that our budget will have to go up?