Author Topic: All Clear to Downshift or FIRE?  (Read 1721 times)

WI_FIRE

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All Clear to Downshift or FIRE?
« on: June 13, 2023, 07:25:47 AM »
Life Situation:

Me: 45, Spouse: 40. 3 children, ages 12, 11, 9.

Long-time reader of the MMM forums but first time posting.

I’ve been working as an attorney since 2004 and have hated most things about it for almost that entire time. I’ve wanted to pull the plug for a while now on my legal career, but the golden handcuffs have mentally kept me from doing so, as I realize any career change would come with a significant paycut – probably a 50-75% cut realistically.
My wife is an educator, so the benefits are good but the pay is average at best without much hope for it increasing significantly going forward.
I don’t know if I see myself retiring and doing nothing, but ideally I’d either (1) like to take a year or two off while I possibly go back to school to prepare for pursuing another more fulfilling career (still not sure exactly what that would be), or (2) just work part-time at a very low stress job to bring in 15-20K per year going forward. My spouse plans to keep on working for the foreseeable future, as she generally likes her job & it provides good benefits/insurance.

Gross Salary/Wages:

Before any deductions – Me: around 200K, Wife: 60K

Current expenses:

No mortgage or car payments

We don’t break down our spending by category, but over the last few years our spending has averaged about 60-65k/yr, which includes: groceries, restaurants, basic healthcare expenses, auto, travel, entertainment, utilities, insurance, fitness, gifts and charity. We don’t see expenses changing much going forward, as we’re generally pretty frugal, but I could see expenses for the kids going up a little bit for the next 5-10 years.

We recently had some large expenses in the past year (basement remodel, vehicle replacement – 2007 Honda CR-V finally gave out), but don’t foresee any other large expenses (knock on wood) at least for the next 4-5 years.

Expected ER expenses:

I would expect expenses to go down slightly when all the kids are out of the house in 10 yrs, so would guess expenses would be 50-60k.

Assets and Liabilities:

No debt or liabilities – house & cars paid for (house value: ~450-500k)

Checking account: ~55k
Trad IRA/401k/403b: 827k
Roth: 52k
457: 92k
Brokerage: 525k
Variable Life Policy: Cash value of 227k (may not have been a great investment, but I’m 15 years in now and the cash value is building nicely, I view this as a “bond” type investment, so I’ll likely keep this until age 65, at which time I can withdraw about 50k/year for the next 20 years)
Pension: Spouse has a pension indicated now to have a value of 111k – should pay out 20k+/yr if she works another 15 years (until age 55)
529 Accounts: about 100k total for the 3 kids, plus another 150k from grandparents, so that will help with college expenses, but not including this in our assets
TOTAL LIQUID ASSETS: 1.89 mil

Specific Question(s):

Do we seem to be in a good position for me to take a step back to no/minimal income at least for a couple years? I feel like we’re in a good place, but realize that if I pull the plug, it likely would be difficult to get back in the game and make a similar salary to what I do now. From a mental health & quality of life standpoint, I have no doubt I’d be much happier were I to quit now, but I’m finding it hard to make a change.

Omy

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Re: All Clear to Downshift or FIRE?
« Reply #1 on: June 13, 2023, 07:56:16 AM »
Your plan seems sound to me. You wouldn't need to make much since your wife's salary covers most of your expenses. How does she feel about this plan?

WI_FIRE

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Re: All Clear to Downshift or FIRE?
« Reply #2 on: June 13, 2023, 08:54:04 AM »
Your plan seems sound to me. You wouldn't need to make much since your wife's salary covers most of your expenses. How does she feel about this plan?

She's indicated multiple times that she's on-board with it - if only for the reason that I'd be more enjoyable to be around without the stress from my current job. :)

poetdereves

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Re: All Clear to Downshift or FIRE?
« Reply #3 on: June 13, 2023, 09:36:12 AM »
Based off of your numbers alone, you're solid. The mental struggle of actually pulling the trigger and filling your time will be the hardest part. Have you thought about your ideal schedule and what you'd actually fill your time with? "Not working" isn't usually enough of a plan for most people to feel satisfied with their decision. It may be nice for a couple months, but eventually you'll have to change your identity from working attorney to something else. This is often a really rough hang up for a lot of people.

Louise

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Re: All Clear to Downshift or FIRE?
« Reply #4 on: June 14, 2023, 05:29:03 AM »
You have plenty of money, so that's not an issue. I think the biggest thing to be concerned about is the shift from highly paid attorney to stay at home dad. Be prepared to take over most of the domestic duties and kid transportation since you have all the free time. Some people thrive and enjoy that role, but others do not.

zolotiyeruki

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Re: All Clear to Downshift or FIRE?
« Reply #5 on: June 14, 2023, 09:04:38 AM »
My brother-in-law told me once that you must answer three questions before you retire:
1) Do I have enough (money)?
2) Have I had enough? i.e. are you emotionally ready to leave the workforce?
3) Will you have enough (to do)?

You can say "yes" to #1.  From what you've posted, I'm not convinced you have adequately answered #2 and #3. 

Laura33

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Re: All Clear to Downshift or FIRE?
« Reply #6 on: June 15, 2023, 11:13:20 AM »
Yes, financially, you're good.  My one caveat on that is that you seem to be viewing the "one-time" expenses as unique, non-recurring things that you thus don't need to account for.  That's not accurate.  You may never have to remodel your basement again, but you're going to need to replace your roof/HVAC/appliances/etc. at some point, you're going to need a new car, etc.  So to the extent your $50K-60K historical average don't include a sinking fund for those types of expenses, you should add that into your budget for planning purposes.

That said, you're still totally fine.  Your wife covers almost all your expenses, and your investments are definitely solid enough to cover the delta, even with adding a sinking fund. 

For perspective:  you have about $1.5M without even considering the life insurance, pension value, or college funds.  That alone would cover your $60K/yr future expense projections, even if neither of you worked another day in your life.  So, yeah you're there. 

So stop worrying about "whether" and start thinking about "what."  And congrats!