Hi Everybody,
Some quick background info: I'm 27 and my wife will be turning 26 in a couple of months. Our current retirement goal is no later than age 50, but I think mid-40s is probably more realistic. We have no children and no plans to have any (at this time). We are not as dedicated to early retirement as most of you. We like to buy new things, go out to eat, and take vacations (all of which we find the best deals on of course).
With our current budget, we set aside $400 a month for travel. My wife is going to Ireland in August with a friend, we are going to Santa Barbara in November, and we are planning an all-inclusive trip to Mexico in February. This is easy for us to do because my wife is a hair stylist and she can take off as much time as she wants and my current job offers lots of time off...20 days vacation, 12 days PTO (which roll over if unused), and 13 holidays for a total potential of 45 days off a year.
So here's the dilemma...
I have a manager from another company that I've worked with in the past who really wants to hire me onto his team. At first I was not interested because the starting pay was roughly the same as my current job, but he asked me again what I would need to be interested and I told him about a $12,000 pay increase (I currently make $68k, so I told him I'd probably need about $80k). He sounded like that was probably doable. The problem is, that his job offers about half the time off as my current job. I would only get 12 days vacation with 10 holidays for a total of 22 days off a year. Because we want to travel and we have lots of family and friends visit us from out of state (and we have to go visit them too), I can't imaging only have 12 vacation days a year.
The good news would be that I would make $1,000 a month more and my wife and I already decided we would put all the extra income towards savings. Putting roughly $700 a month more (after taxes) into savings would mean we could retire earlier.
I'm meeting with a couple of guys to discuss details of the new job on Monday. They know my dilemma and want to make sure this job is a good fit for me and that I'll be happy. They want to know I'll accept the job before making me an official offer (because the job is currently closed and they plan on re-posting it so I can apply and then closing it right away to hire me).
Here's some numbers I've run in my spreadsheets:
Current plan is, after paying off some debt, to save $1,500 a month in an early retirement fund. This fund would need to get us by until age 59.5 when we can withdraw from our retirement accounts. On top of that $1,500 a month, my wife is 10% owner in her salon and brings home roughly $10,000 a year in profit from that. After taxes (25% federal and 4.6% state), we'd have about $7,000 to invest a year. For my calculations, I'll assume a 4% growth in profit a year.
I don't know yet exactly how much money we'll need to retire early, but lets assume I'm aiming for $1M.
With current job, earning 7% annually on our investments, our $1M date would be June, 2034.
With new job, earning 7% annually but investing an additional $700 a month, our $1M date would be June, 2031.
So the final questions is (assuming all other things about the jobs are equal): Is it worth giving up 23 days off a year just to bring home another $700 a month and retire 3 years earlier? What would you guys do?
I'm just looking for some opinions here. I'm leaning towards keeping my job because of the extra time off, but it is going to be hard turning down a job offer of $80,000.
Logan