Author Topic: I retire, wife keeps working case study  (Read 8228 times)

blockzilla

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I retire, wife keeps working case study
« on: July 15, 2014, 09:30:03 AM »
I'm going to ask for help with a different type of case study.  My wife and I are 35, and have agreed that I will retire around 40 and she will continue to work until 55.  The goal I'm striving toward is to maintain current standard of living by attempting to replace my full income in a variety of ways, so she isn't "punished" by my early retirement. Here is the breakdown, please rip it apart!:

My income: $5300 take home per month
Replaced by:
Eliminate childcare cost: $2000 per month gained
Wife moves from 32 to 40 hrs/week: $5400 to $6700 per month, $1300 per month gained
Lower traditional investments: $700 per month gained
Lower early mortgage payoff: $400 per month gained
Monthly withdrawal of traditional investments (<4%SWR): $300 per month gained
Periodic payment of my 401K: $600 per month gained until age 59.5 (current balance $350K)

This plan is focused on the "up to age 59.5" stage. For post 59.5 retirement, wife would continue maximum yearly 401K contribution, which already has a large balance now ($300K). She also has a VERY generous pension plan, and continued health benefits on top of the 401K that she will qualify for at age 55, and if I retire at 40 I will receive 17% of my highest yearly salary every year beginning at age 62. At age 55, we will also have a fully paid, expensive house (current market value: $800K) that would give some room to downsize.  Plus the traditional mutual fund investments used for the <4%SWR. So it seems in MMM terms, we'd almost have "too much" in our later years even if I deplete a good chunk of my 401K early via periodic payment. We also have in state college tuition fully funded for 2 children in this plan.

This is how I am selling things to my wife, and it is convincing in my own head, but please feel free to rip this apart! My wife enjoys her work, and gets to help people in her line of work which is something she is passionate about. She also wants money to travel, and enjoy occasional luxuries, which can be accomplished if we are able to replace my current income with the above gains.


Donovan

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Re: I retire, wife keeps working case study
« Reply #1 on: July 15, 2014, 09:56:06 AM »

Wife moves from 32 to 40 hrs/week: $5400 to $6700 per month, $1300 per month gained


I'm going to go ahead and start with "Holy crap you make a lot of money!" Sorry, new graduate earning for a one-income household.

Anyway, I'm curious about your wife's increase in work hours.  Is this something that is currently integral to the financial stability of your current plan, or just something that she wants to do since you will, presumably, be taking care of some things that she is currently handling in your new-found free time?  That later sounds fine, but it it's the former, I would re-evaluate the saving plan up until you retire and see if you can either reduce expenses or save further so that the hour increase is not a necessity. You never know, your wife may decide she wants to keep the lower hours and have more time at home with you and the kid(s?).  It seems like bad form to have that as part of the required plan for your retirement.

Outside that, I am simply jealous of your fantastic pension options :p Most of why I'm on sites like this is because I've got nothing like that to look forward to. Way to go!

blockzilla

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Re: I retire, wife keeps working case study
« Reply #2 on: July 15, 2014, 10:37:16 AM »
Wife is on board, she currently works 8am-4:30pm 4 days/week, would move to 6am-4:30pm 4 days/week. She reduced her hours to 32, but not really responsibility. So currently she is putting in 1-2 "free" hours in the evening she normally would have in the office. So her mindset is that she might as well get paid for it. I would assume the responsibility of waking the kids, and herding them to school, which is not an insignificant responsibility! She doesn't really view that so much as "quality time" right now since she is just hurrying them out the door so she can get to work by 8am.

The financial flexibility should be there if she wanted to cut back at some point, she'd just have to learn from me, and grow a bit of a 'stash herself the way I just happened to be trained at since birth by my OG 'stash loving parents :-)

DoubleDown

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Re: I retire, wife keeps working case study
« Reply #3 on: July 15, 2014, 11:03:23 AM »
I'd say as long as you and your wife are both on board with the plan, and she's in favor of increasing her hours, then all is well. But if you're trying to sell it to her, is she not in agreement? Or would she like to ER too if the option was available to her? Of course you don't want her resenting you taking off work while she's continuing to work out of necessity.

I'm currently ER'ed while my wife continues to work, so it can be done. She wanted to keep working, so there we are. You'll likely need to work out lots of expectations with your wife about earnings, future savings, annual budgets and spending, division of labor in the household, downsizing your house one day and where you will live, and so on. Just make sure you're both satisfied with whatever arrangements you come up with, and you should be fine.

Your plan sounds fair/reasonable to me, as long as she's okay with it. Not to be a doomsdayer, but please make sure your own future income and retirement is not dependent upon her pension/savings, unless you are certain you will get a share of it that will support you in the unfortunate (and hopefully unlikely) event of her early demise or divorce.

Numbers Man

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Re: I retire, wife keeps working case study
« Reply #4 on: July 15, 2014, 11:34:15 AM »
This plan may sound good to you on paper, but a 15 year gap from the time you retire until your wife retires is a bit much. How about working the 2nd shift instead of not building equity into your house through extra principle payments and investing less. How old are your children?

blockzilla

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Re: I retire, wife keeps working case study
« Reply #5 on: July 15, 2014, 11:57:38 AM »
The 15 year gap is my primary concern as well. Not financially, but for the balance of the marriage.  She doesn't want to retire early though (yet), so am I supposed to work an extra X number of years for money we don't necessarily need? It doesn't seem logical to me, though I know not everyone makes decisions purely based on logic :-) She would actually prefer that I be home so we don't have to do before/after school care and instead give them more direct parent time. The "selling" aspect is the financial one, to ensure her that we won't be requiring food stamps (her words) if I quit.

My kids are 4 and 2.  Numbers Man, I'm confused by the comment "How about working the 2nd shift instead of not building equity into your house through extra principle payments and investing less".  Are you suggesting working 2nd shift, literally? That isn't possible with my current job, and I'm not sure I'd want to do it anyway as I enjoy having dinner with my family and spending time with them in the evenings. 

Or if you mean how about I just work anyway, rather than paying less toward the mortgage and investments, that one should be pretty obvious and I think is the reason we're all here to begin with: if I'm secure financially based on spending habits, I'd like to quit my job :-) Sure, maybe more money is always better to most people so you can make more and spend more, but how much is enough? I don't really want, or need any more money to spend on "things", and would rather have time.

Angie55

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Re: I retire, wife keeps working case study
« Reply #6 on: July 15, 2014, 12:01:50 PM »
Maybe I'm making this too simple. You may be "retiring" as in you never go back to full-time work in your lifetime. But really in her world you would just be moving to be a stay at home dad. That seems like a much easier concept to accept than one spouse retiring 15 years earlier than the other. Really you just need to show that you can live up to her expectations on one income. Maybe once you stop using the word retirement it might seem less final and easier for everyone to swallow.

CommonCents

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Re: I retire, wife keeps working case study
« Reply #7 on: July 15, 2014, 12:06:19 PM »
Just a note, but the childcare cost is not a 15 year expense.  If they are 2 and 4, presumably they'll both be in school full time at age 6, in 4 years.  If you kept working they may still need some after school care cost after age 6 (though at a lower rate as time goes on, given their increasing age and reduced time), but even that would end after some time, before 17 and 19 I hypothesize...  It's fine if your math works out otherwise for retirement and your wife is on board, but this seems an inflated "savings" to me.

rujancified

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Re: I retire, wife keeps working case study
« Reply #8 on: July 15, 2014, 12:08:25 PM »
I'm confused. Do you currently have kids? If so, will they still need $2k/month worth of child care in 5 years? Seems odd to include it as a gain when it's something that will eventually simply cease to exist.

Your word choices are interesting: "punished" and "selling things to my wife."  Has she agreed to this or are you in the beginning stages of working it out? This question is borne out of curiosity, honestly. In my house, I'm the one who wants to retire asap and my husband wants to keep working so we can do all the things. The conversation is on hold until we actually make a kid or kids :)

Does she/do you have any interest in splitting the difference - You both retire at 45/47?  You guys are doing really well and could probably knock out a stellar retirement that meets both of your needs at that time.  Or you could both cut down to PT now?

Nosy question: What are you planning on doing in retirement? Hobbies, parenting, side hustles?  I would approach the next conversation with your wife from a place of passionate interest: THESE are the things that make me happy and I would do if I weren't working FT.

blockzilla

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Re: I retire, wife keeps working case study
« Reply #9 on: July 15, 2014, 12:24:13 PM »
Good call, I think in this sense "stay at home dad" would be much more appropriate. We just don't like the idea of being the first to drop our kids off in the AM care, and the last to pick them up in the PM care. Is that the kind of life experience that we both worked so hard to make 6 figures for? I don't think so. I do have the option to take up to 2 years of leave without pay, while still retaining my billeted position at work. Many women have done in this in the past for parenting purposes, and also some men I know for either parenting purposes, or an extended sabbatical. So it could be tested for up to 2 years.

I understand the childcare cost is not a 15 year expense. So if I keep working, absolutely that means we'd have a significant additional amount of "extra" money once they start school, even considering before/after school costs.  In my calculations though, it still ends the same as the $2K per month is money that is not, so it could be looked at two ways: $2K per month extra income after they start school, or $2K per month less that we'd have to spend once they start school. Either way, I think the math still ends up the same in terms of how much money is needed to maintain our current spending rate? 

Does that make sense? Meaning if we currently make $10, spend $5 of it on childcare, that means we have $5 left to spend. Once we don't need to pay $5 for childcare anymore, we still only need $5 to spend. That means we only need to make $5 to have $5 to spend. The word "gained" was poorly used by me, but the math is still the same.

We are still working it out, and I have far too many passionate interests and she knows it :-)  Other than my family time: playing guitar/drums, drawing/painting, hiking/camping/backpacking, surfing, stand up paddle, cycling (mountain and road), gardening, READING, exercising, cooking. We live in San Diego so access to all of these things year round would keep me more than busy as the kids grow up and there is more "me time" :-)  As anyone who does any of those things above knows, even just 1 or 2 of those things could keep someone busy for a lifetime.

train_writer

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Re: I retire, wife keeps working case study
« Reply #10 on: July 15, 2014, 12:31:28 PM »
But really in her world you would just be moving to be a stay at home dad. That seems like a much easier concept to accept than one spouse retiring 15 years earlier than the other. Really you just need to show that you can live up to her expectations on one income. Maybe once you stop using the word retirement it might seem less final and easier for everyone to swallow.

THIS! And the difference between 32 hours and 40 hours can be having fun at work and energy at home versus totally drained, even if she is doing almost the same assignments now. I also would be more concerned about the harmony in your marriage than about finances and 'selling it to the wife'. Also, kids aged 2+ are lots of fun to be around so she might want to spend that extra 1 day a week at home. Also, counting her extra 8 hours in YOUR covering of expenses wouldn't sell it to me ;). At all.

Instead of viewing it as a one option or the other, I would say you could first try and work parttime for a year while she works for 40 hours. *assuming you are working fulltime now. I mean parttime as in 3 days a week or a sabbatical. In that way, you can experience how it feels to be home and taking up more responsibilities on that front.

EDIT: I see your response now. GREAT that you have an option to test the waters for up to 2 years. In that case, be open and responsive and try it out
« Last Edit: July 15, 2014, 12:38:54 PM by train_writer »

Cpa Cat

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Re: I retire, wife keeps working case study
« Reply #11 on: July 15, 2014, 12:40:59 PM »
This is a long early retirement and if it's reliant on your wife actually working for 15 years, then I would say you should plan on working at some point in order to secure FI earlier for her.

In your shoes, I'd do it like this:
1. Retire early and become a stay at home dad. Save the child care costs and spend time with your kids. Cook, clean and generally ease the burden on your wife.

2. Once the kids are in school, start up a day-time business. The extra income will help secure things in case your wife gets tired of working or wants to cut her hours.

But I would make it part of your retirement goal to secure that 32 work week for your wife - there's a reason she scaled down in the first place, and she may wish to do it again, in the future. And your second retirement goal should be bring in some income (or reduce expenses) so that your wife has the option of backing down her retirement date. Until you're truly FI enough that your wife can also quit her job whenever she wants, you shouldn't count yourself out of the workforce permanently.

mak1277

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Re: I retire, wife keeps working case study
« Reply #12 on: July 15, 2014, 02:01:19 PM »
Until you're truly FI enough that your wife can also quit her job whenever she wants, you shouldn't count yourself out of the workforce permanently.

I agree with this, and it always surprises me when married people here talk about only one of the two spouses being FI.  To me, either you're both FI or neither of you are.

Now, I admit that different people have different views about what FI is, and it sounds like that's the case for OP. 

rujancified

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Re: I retire, wife keeps working case study
« Reply #13 on: July 15, 2014, 02:02:30 PM »
Good call, I think in this sense "stay at home dad" would be much more appropriate. We just don't like the idea of being the first to drop our kids off in the AM care, and the last to pick them up in the PM care. Is that the kind of life experience that we both worked so hard to make 6 figures for? I don't think so. I do have the option to take up to 2 years of leave without pay, while still retaining my billeted position at work. Many women have done in this in the past for parenting purposes, and also some men I know for either parenting purposes, or an extended sabbatical. So it could be tested for up to 2 years.

WOW! That's outstanding! Have you thought about doing it now, even if only for 6 or 9 months? See how it goes and then decide if it's a good full time plan.

I'm with you - you both work so hard to have money, but it doesn't leave a ton of time in your life for life. Jobs are shitty that way.

Do you have plans to relocate after retirement (either yours or hers)?  I get that moving is not an option for many people. If you moved to where I live* you could have a giant house for a third of your costs and your wife could probably find a 20 hour a week job to cover expenses (unless she's in a region-specific job, I suppose!).

*where it is currently the one millionth day in a row over 90 degrees, so trust me, I see the allure of non-humid, normalized temperatures.

Regardless, I think you could swing retirement mathematically. And marketing the "retirement" to your wife as a transition to SAHD'ing a good way to get her on board. BUT. Digging into what makes her unsettled with this decision is critical, so that you can stop resentments from building up.


Snow White

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Re: I retire, wife keeps working case study
« Reply #14 on: July 15, 2014, 02:40:46 PM »
My hubby ER'd six years before me and I was quite happy with the arrangement. Like OP's wife...I had a job with warn fuzzy benefits to me (RN) and could have retired at the same time but chose to work. In reality, his timing for retiring sucked (2008) so it was good I was planning to keep working as we didn't draw in retirement assets at all.  We could watch the value of our assets drop without panicking as we left them alone and of course the market has recovered plus.

I think your plan looks good as long as your wife is happy with it and you are willing to revisit the plan in the event she gets tired of carrying the load!

blockzilla

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Re: I retire, wife keeps working case study
« Reply #15 on: July 15, 2014, 02:59:20 PM »
Thanks all for the replies! I agree, the biggest challenge has been getting on the same page, when one of us (me) is over the top MMM badassity all the way, and the other is normal person :-)

We have no plans to move, but I like to consider that as a playing card in the game as well. Its a good emergency play to have, to be able to either downsize locally or move to a cheaper locale. No family or anything tying us to this area specifically, but we do like it here.  That, combined with reducing my wife's spending habits (if she chooses), could easily lead us to a joint FI situation much earlier than 55.  At this point, she'd rather work and spend more but if that does change in the future, I've explained to her how it could work that both of us could be done working, or at least drastically reduce hours depending on what combination of things we wanted to do (move, downsize, reduce spending, etc.)  I love planning all this stuff out, mixing the variables to examine the effects, etc. :-) My wife does thank me for that as she has no interest in financial planning!

One other thing I did find amusing, in a couple of replies the poster seemed to insinuate that I'd need to ease the burden on my wife in terms of cooking, cleaning, etc. if I stayed home. Who's to say I'm not doing those things already??? :-)


RapmasterD

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Re: I retire, wife keeps working case study
« Reply #16 on: July 15, 2014, 11:21:56 PM »
I'm trying to sell my wife on an eight year gap...because that is our age gap. We will see. To me, that's a good max #.

dude

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Re: I retire, wife keeps working case study
« Reply #17 on: July 16, 2014, 07:34:30 AM »
First off, we have similar plans, though there's only a 7-year gap in the DW's and my staggered retirements (worst case, I think).  Second, I'm jealous you get to do this while living in San Diego!

Anyway, I'm of the same mentality, for better or worse, regarding being "punished," though mine is rooted in our respective age differences.  I'm 7 years her senior, so I don't think it's a stretch to ask her to retire at the same age I'll retire at (just shy of my 55th birthday).  Moreover, I've been the aggressive saver for many years while she's been the aggressive spender (until recently), so yeah, I feel entitlted to reap what I've sown (we had a long courtship, with separate finances, and have only been married for the past 8 years).  But fortunately for me, she likes her work a hell of a lot more than I like mine, and so she isn't hot to split the 9-5 gig like I am.  We are a two-income couple, and our spending (mortage, vacations, etc) reflect that.  If she were willing to downsize the lifestyle considerably, she could retire with me --- but she's not interested in doing that, so she needs to continue to work and save.  I can easily replace my pre-retirement share of our joint expenses, so there is no good reason why I need to work past 55.

The 15-year gap would be concerning if you weren't going to be a SAHD.  I would think your wife would be ecstatic about you doing this. If not for that, i.e., if you were just gonna be off doing your fun things every day while she schlepped off to work, you might have some issues.  But I think the SAHD thing should be the saving grace here.

JCfire

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Re: I retire, wife keeps working case study
« Reply #18 on: July 16, 2014, 07:45:32 AM »
Maybe I'm making this too simple. You may be "retiring" as in you never go back to full-time work in your lifetime. But really in her world you would just be moving to be a stay at home dad. That seems like a much easier concept to accept than one spouse retiring 15 years earlier than the other. Really you just need to show that you can live up to her expectations on one income. Maybe once you stop using the word retirement it might seem less final and easier for everyone to swallow.

+1

You are planning to become a stay-at-home dad until the kids leave the house, which is conveniently enough only a couple of years or so from the time your wife plans to retire.  The finances won't equalize if you're being honest, otherwise you're working for free in your current job and the real question is why you haven't quit already.  But your children will benefit from having a parent with more time to be involved in their life and it's hard to put a price on that.

ShortInSeattle

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Re: I retire, wife keeps working case study
« Reply #19 on: July 16, 2014, 08:29:04 AM »
In the end, the only thing that matters is what makes the two of you feel happy.

I admit, if my DH tried to sell me on his ER being 15 years before mine, but that he could "replace" his income by us saving less money, that would sound like a bum deal to me.

But if your wife is genuinely happy with this idea as well... why not?




BFGirl

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Re: I retire, wife keeps working case study
« Reply #20 on: July 16, 2014, 09:36:03 AM »
I think I could buy the SAHD thing for a couple of years, but once they were in school full time and you were getting to do your "fun things" during the day, I think I would start to feel some resentment.

Only you and your wife know your marriage.  If she is making comments about "food stamps", she may not be as on board as you think she is.  Maybe you could try the 2 year sabbatical and see how it works out during that time before deciding to completely retire.  At that time, at least one of your kids will be in school, so it may make it easier for you to keep working if you jointly decide that is what needs to happen.

For me, I have always viewed marriage as a partnership.  I guess everyone has their own views, but I in my experience, I found that when one or both spouses make unilateral decisions that effect the other spouse, resentment tends to build and cause problems in the relationship.

blockzilla

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Re: I retire, wife keeps working case study
« Reply #21 on: July 16, 2014, 09:58:04 AM »
BFGirl, would you feel the same resentment toward your husband if you could also retire early by reducing your spending levels?  Or if your husband offered you the same option, but in reverse? Meaning you quit now, be a stay at home mom, then he would continue working and retire once FI? Of course you'd stil lhave to reduce your spending in this case also. The only way you'd get to keep your current INDIVIDUAL spending level is that you continue to work more.  Maybe there is a deeper issue here, the question of whether or not it is "fair" to ask your spouse to work more years so that you can partake in more things that solely benefit you (fancy dinners out, spa days, girls trips, lots of new clothes/shoes, nice car, staying in nice hotels, etc.), then on top of enjoying all those expensive tastes that solely benefit you, you're going to ask him to work more years so you can retire early on top of all that.

JCfire, of course saving more money is better than saving less, but how much is enough? If we have enough money to maintain current spending levels, I'm not sure how you could view it as a "bum deal". You get to spend the same amount you always have on luxuries, but you have to work to do it. If you don't want to work and want to do all those fun things during the day that I am, then you can do that too, it just means you have to spend less money.

Ultimately, she would have the freedom to make the same choice.  Work more and spend more, or work less and spend less. There has to be a compromise? If it were up to me, we'd live in 1200sqft instead of 3500, drive 15k car instead of 40k car, bought a 400-500K house instead of 800K, etc.  We have done the more expensive option on all of those things and I've given her what she wants.  So in summary: we've gone her way on all the above major purchases, I have come up with a financial plan in which she can maintain her current "fancypants" lifestyle spending (trust me, its lifestyles of the rich and famous compared to MMM), all while I just ask to be done working sooner.  Is that really a bum deal for her?

I do think she is onboard, we communicate wonderfully and she talks about food stamps in a joking manner. I think it is just up to me to take the big plunge. I'm such a conservative person, it just seems like a surreal thing to do, something I've thought about for 20 years and now that I'm knocking on the door, maybe a part of me is looking for someone to tell me I'm crazy and talk me out of it :-)

BFGirl

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Re: I retire, wife keeps working case study
« Reply #22 on: July 16, 2014, 10:12:14 AM »
I don't think it is healthy in any relationship for the circumstances to be dictated by any one person's terms.  I think compromise is necessary in order to see that both spouses have a fulfilling life.  If your compromise is that your wife keeps working to support her spending and you don't need to and each of you feel it is a fair compromise, then that may be what works for your marriage.  I am now divorced because of a spouse who refused to make compromises, so this is a sensitive issue for me personally.

I was the spendypants and my ex was super frugal and we could have both retired years ago.  He didn't want to come up with a budget or make any compromises.  I would have been happy to reign in my spending if we could have sat down and come up with a joint plan together.  However, it was his way or he refused to discuss it.  Early retirement is not something he is interested in.  I now have a budget and am cutting back my spending because I don't want to work at my current job forever.

I am glad that you and your wife have good communication.  I believe that is essential in a marriage.

JCfire

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Re: I retire, wife keeps working case study
« Reply #23 on: July 16, 2014, 11:50:36 AM »
JCfire, of course saving more money is better than saving less, but how much is enough? If we have enough money to maintain current spending levels, I'm not sure how you could view it as a "bum deal".

I think you meant this as a response to ShortinSeattle!

Noodle

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Re: I retire, wife keeps working case study
« Reply #24 on: July 16, 2014, 07:59:12 PM »
There have been a number of posters here who have had one spouse retire, but it seems they are generally couples (often married later in life or with an age gap) where each spouse contributes financially but for one it is through investments and the other through salary.

If I understand the budget given here, the only actual income your investments are generating is $900/mo. Would that really cover half the household expenses, if you and your wife agree that the baseline will be the Mustachian lifestyle you prefer instead of her preferred spendiness? That's not to say that you couldn't agree that your contributions of running the house and doing more kid management balance out her income contribution, or that it would make a better life for your family to structure it this way, but if your wife has to work so the family bills get paid, I'm not sure you can consider yourself retired.

Also, if you are feeling any reluctance from your spouse, you might want to consider this...at least in your postings here, we hear a lot of "I"--I don't want to pay for luxuries I don't believe in; I look forward to my interests and hobbies--and, other than not wanting the kids in daycare for very long days, not so much "us." If a spouse proposed this to me, I would be much more likely to agree to something for "we" than something for "me."

In the end though, it really just matters what makes you and your wife happy. If you have enough income to cover expenses and savings, and you're both satisfied, then go for it!

James

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Re: I retire, wife keeps working case study
« Reply #25 on: July 16, 2014, 08:18:28 PM »
Good god, so much complicated talk about this!

You are not retiring, you are becoming a stay at home dad. YAY! enjoy!

Your wife is not postponing retirement, she is just continuing to work a job that she likes. YAY!

You have plenty of fat to cut if she wants to keep her 32 hour work week, or in two years you can start working again for a few years if you spend down savings because she cuts back to 32 hours or expenses grow. YAY! This isn't a permanent decision!

I understand your hesitation, and appreciate your post to see if you are thinking everything through. Unless there is things we don't know, it all looks in order to me. Just enjoy it! You earned it!

CommonCents

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Re: I retire, wife keeps working case study
« Reply #26 on: July 16, 2014, 09:13:18 PM »
The only way you'd get to keep your current INDIVIDUAL spending level is that you continue to work more.  Maybe there is a deeper issue here, the question of whether or not it is "fair" to ask your spouse to work more years so that you can partake in more things that solely benefit you (fancy dinners out, spa days, girls trips, lots of new clothes/shoes, nice car, staying in nice hotels, etc.), then on top of enjoying all those expensive tastes that solely benefit you, you're going to ask him to work more years so you can retire early on top of all that.

Is it really all individual spending?  I ask from genuine curiosity.  Do you join on none of the dinners out?  Do you not take rides in the nice car or stay together ever at the nice hotel?  (Also, be honest whether some of the things are physically for her, you appreciate as well.  For example, do you like having her dress in the nice outfits even though she's the one wearing them so it's "her" spending?  Or do you genuinely think and tell her she looks great in the thrifted/discount store clothes?  I splurged with a groupon for my first ever wax before our beach vacation this summer, and my husband was surprised - and quite pleased.  He's hoping I'll go again, though I told him a regular habit is expensive and most definitely not in the budget!  So is that spending for me...or him? ;)

I'm also surprised this all adds up to 15 more years of work, but hey I guess that's what MMM is all about - it slips through some fingers so quickly.

CaptainFrugal

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Re: I retire, wife keeps working case study
« Reply #27 on: July 16, 2014, 09:56:48 PM »

You are not retiring, you are becoming a stay at home dad. YAY! enjoy!


This is the most appropriate comment thus far on this thread.

To Blockzilla:

I agree with James, you aren't retiring early since you'll only be withdrawing $900/month from your investments. With a take home pay of $5,300, massive 401K contribution (likely the 17.5K max for a $350K balance at your age), and a traditional pension you're giving up a TON of income by not working. You are merely proposing a move to a single income household.

Looking at your numbers it appears the only true expense reduction is the $2K/month for daycare, although it's been accurately pointed out this will decrease as the kids age.  You would also lose the tax deduction/credit you currently save on the daycare as well. If you or your spouse contribute to a dependent care FSA you'll also lose this tax advantage as well. In the grand scheme of things this is a minor benefit compared to the money you'll lose over 10-15 years of not working.

The only benefit I can see you haven't factored is the tax savings by reducing your household income, especially in California with your high state income tax. I would re-compute last year's tax return with just her income to see what the tax difference works out to be. With a high state tax it may be significant.

If this plan leaves your wife 15 years from retirement, I see your plan as potentially dangerous. Unless you treat her like a queen (zero housework for her plus a massage and meal when she gets home) I can't see most marriages remaining harmonious with this setup for so long. Proposing your "retirement" while she increases working hours sounds like a tough sell. Once your kids are in school all day you'll be out hiking and riding your mountain bike all day while she works. If you continue to work I suspect you both could retire before your younger child starts high school. My final suggestion is try the risk-free two year sabbatical and go from there. Worst case is you get to keep your young children home with a parent all day plus save daycare expenses while they're at their maximum then go back to work if the plan isn't working perfectly.

theonethatgotaway

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Re: I retire, wife keeps working case study
« Reply #28 on: July 16, 2014, 10:21:12 PM »
You're going to be a stay at home dad.
I just want to point out that it's not at all retirement and can be more work than work. It's rewarding, but you aren't going to magically have tons of free time, unless you keep the kids in a care arrangement. You'll be pretty busy with two young kiddos. Just my two cents.

I'm a 'retired?' Stay at home mom. :)


Also that's probably what your wife is trying to wrap her head around if you've been working all this time with the kiddos in care. She might be having trouble envisioning how you'll be as a stay at home dad or if the kids are going to be elsewhere, still, while you pursue your interests.
« Last Edit: July 16, 2014, 10:26:19 PM by theonethatgotaway »

MsRichLife

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Re: I retire, wife keeps working case study
« Reply #29 on: July 16, 2014, 10:33:57 PM »
My husband is a Stay at Home Dad to our two year old son. We have no intention that he will go back to work, so I guess he's 'retired'. In reality though, he has the job of keeping the house and family ticking along. He does the shopping, cooking, most cleaning and child-care. This is an important job and I certainly do not begrudgingly go to work while he stays home.

Having said that, we have a plan that I'll be retired in 2-3 years time. I think I'd be resentful if I had to keep working for 15 years, while our son is at school and hubby is off doing whatever retired men do :)

I'm 37 and he's 35 if that provides any context.

MRL