Author Topic: How much longer do I have to work in tech?  (Read 4221 times)

determinedcat

  • Stubble
  • **
  • Posts: 143
    • Journal
How much longer do I have to work in tech?
« on: March 04, 2020, 08:04:04 AM »
I've been a Bay Area software engineer for the last 7 years. I love coding, but I'm tired of office politics and unrealistic deadlines. I aspire to pursue a more creative career. For as long as I can remember, I've wanted to be a writer. (Cliche, but true.) I'm also pregnant with my first child. I'm better off than most, but I can't be happy if my whole life is tech + children; I need something more.

Lots of changes on the way. My employer, where I’ve worked for 5 years, is being acquired. If the government approves the deal, I'll be a millionaire at 38. The deal is expected to close in the next 6-9 months. Our child is due in August. When he’s born, I plan to max out my maternity leave -- 3 months fully paid, 3.5 months partly paid.

I’m married to another engineer who’s perfectly happy to work in tech the rest of his life. He’s had a great job for the last 5 years, but his project just got cancelled. His current employer (BigCo) will pay him full wages & benefits until December to wrap up his current project and “transition” to another project. This includes 3 months of paternity leave :)  He’s not interested in staying at BigCo and will likely join a smaller startup that can only pay half his current salary.

And now for the numbers! My husband isn’t interested in FIRE and we haven’t truly combined our finances, so I’ll focus on my own numbers for now.

Life Situation: Married (37F/40M) with a little baby (-0.5M) on the way! :) We live in Oakland, California.

Salary/Wages in 2020:
Me: 206k (+600k if the merger goes through)
My husband: 300k

Assets:
- Cash: 17,233
- Taxable Brokerage: 269,523
- 401(k): 138,414
- Rollover IRA: 147,952
- Roth IRA: 86,689
- 529: 7,556
My total net worth: 670,191
Husband’s net worth: ~900,000

Liabilities: None for me, my husband has about $700 left in student loans

Investment contributions (yearly):
- 401(k): 31,984 (19,500 + 6% employer match)
- 529 Plan: 3,660
- Taxable Brokerage: 78,000
My total contributions: 113,644 (+ 350k this year, if the merger happens)
Husband’s contributions: ??? (but he saved almost $1M in 5 years, so he’s doing fine)

Projected net worth in January 2021:
Me: 750k (min, if the merger fails AND the stock markets go down) to 1.1M (merger succeeds, stocks hold steady)
My husband: 1M(?)

Current expenses (monthly):
- Rent: 820 (2 bedroom apartment in a crime-ish neighborhood)
- Food & Dining: 600
- Gifts & Donations: 500
- Auto & Transport: 300
- Shopping: 300   
- Health & Fitness: 185
- Personal Care: 150
- Travel: 100 (I used to spend a LOT more money on this, but not this year.)
- Bills & Utilities: 62
- Entertainment: 50
- Education: 50
My total expenses: 3,117/month (40k/year, rounded up for random expenses)
Husband's total expenses: ???

Projected future baby expenses:
- Childcare: $2k at cheap daycares to $4k for an exclusive nanny
- Baby Supplies (diapers, formula? etc): $200
My share of baby expenses: 1.1k to 2.1k
My total projected expenses: 4k-5k/month (48k-60k/year)

Potential future expenses:
- ??? IVF for Baby2 ??? - $20k-$40k total. My husband's job paid for Baby1, but later we'll have to thaw out Baby2.
- ??? Mortgage ??? - Around $3-4k/month. We've resisted buying a house for a long time, but it's a possibility. I want Baby1 to have a back yard to play in, not a driveway littered with garbage in a semi-dangerous neighborhood :( If we stay in the Bay, we'd probably put half down on a $1M+ house.

Medium-term options and long-term plans:
This year, my goal is to have a healthy pregnancy and baby. My question is what to do after maternity leave is over and my husband changes jobs. My husband's new salary will be around $130k-$175k and the baby will be 6 months old. These are my options:

- Stay with my current employer. Pros: Salary is good, work/life balance is great, and we’re opening a new office 10 minutes away from home. Cons: It’s taking me forever to get promoted to a “senior” position. Company bureaucracy is terrible and makes it hard to ship code quickly. Our acquiring company is somewhat Evil. I’ve been here too long and am bored/unhappy :/

- Find another high-paying tech job at a similarly sized company. Pros: Higher title (always easier to achieve by job-hopping), high salary, new and interesting problems to work on, sweet benefits (maybe even IVF for Baby2). Cons: 45m commute to SF (few companies are in Oakland), office bureaucracy/ politics (the good jobs are at bigger companies w/similar political dysfunction)

- Find a lower-paying tech job at a startup. Pros: Higher title / can move up quickly, new and interesting problems to work on, fewer meetings & more time for code!!!, potential stock option payout. Cons: Lower salary, higher stress, fewer benefits, worse work/life balance, 45m commute to SF

- Quit tech to work on personal projects & take care of the baby. Pros: Better for the baby. Cons: Being a full-time SAHM would drive me crazy. We’d have to get a caregiver, at least part-time, but can we afford it?

In the next 3-5 years, we want to make another IVF baby and possibly leave the Bay Area. My husband loves traveling and wouldn’t mind being nomadic for awhile. He also has a claim to German citizenship; if that goes through, we can probably live anywhere in the EU. However, the most interesting tech jobs are here, and we may end up coming back for my husband's career.
« Last Edit: March 04, 2020, 10:53:40 AM by determinedcat »

lhamo

  • Bristles
  • ***
  • Posts: 374
  • Location: Seattle
Re: How much longer do I have to work in tech?
« Reply #1 on: March 04, 2020, 08:26:50 AM »
What is your plan for housing?  Your current rent is amazing, but I'm guessing you can't keep your housing costs that low as you add 1-2 kids.  If you are not sure you are staying in the bay area it probably doesn't make sense to buy.


I wouldn't make any firm decisions now except to have a couple of alternatives for after you have the baby.  Definitely set aside some money to hire help for the first 1-2 years, even if you end up not going back to work.  See how the merger pans out for you financially.  You are in a much better position than most, regardless.


Laura33

  • Magnum Stache
  • ******
  • Posts: 2714
  • Location: Mid-Atlantic
Re: How much longer do I have to work in tech?
« Reply #2 on: March 04, 2020, 09:18:31 AM »
I think you are in the enviable position of being able to fund whichever option you want.  What you need to figure out now is what kind of work/home balance do you want, and then figuring out the lifestyle that you can afford with that option.

If you guys have $1.6M between the two of you, you could both choose to FIRE after the baby is born, pull up stakes, and move somewhere else where you can live on about $60-65K/yr and never have to work again.  Not that you have to do that, of course.  But I mention that to highlight that you have already won the race; now you have the luxury of working for challenge/enjoyment/location/fun/etc., not because you need the money.

I'm going to agree with lhamo:  this is not the time to make any quick decisions.  No one can possibly know what they will want once they have kids until the kid is sitting there in their hot little hands.  There are parents who always planned to work full-time who suddenly found themselves unable to leave their child and quit; there are parents who always planned to SAH who suddenly discovered that that was not for them and were more than happy to run back to the office; and there are parents who have done just about everything in-between.

You are in a great position because you have extended parental leave options for both of you, and you have a significant 'stache to weather some additional downtime if you use all that up and still haven't decided what you want to do.  That means your job over the next year-ish is to figure out which of those various options you want your life to look like.  What's the driver?  Is it staying close to home and avoiding a commute?  That means looking at different kinds of jobs and probably making serious compromises on buying a house, but it gives you a much more relaxed lifestyle.  Is it the challenge/excitement of new projects?  That's probably going to entail a longer commute or a move to a more expensive area.  Is it the housing?  That may mean going back to BigCorp to get the BigBucks to pay for what you want.  Etc. 

While you're doing all of this, track your expenses, to the penny.  Seriously.  You cannot make rational decisions about the path you want to follow if you don't know what your current path is actually costing you.  This may mean talking more with your DH about his finances, too, particularly if you get to the point where one of you takes time off work or cuts back in order to spend more time with the baby; you can't really just throw some of your money into a black box and end up with accurate numbers.  Particularly if you're planning on a major life change, like quitting and traveling, you both need to understand the resources you're dealing with to support that dream.

Finally, don't feel like you have to figure it all out now.  Do some thinking, do some financial planning, do some talking with your DH, and just start to think about the various options -- the good, the bad, and the ugly.  Then see how you both feel and what you're thinking a year from now, once you've both had a chance to decompress from the job stress and adjusted to life with baby.  By that time, you'll have really good data on your current costs as a basis for your decision, and you'll also have more certainty on your buyout issues (and possibly even future employment options for both of you).

Congratulations, and good luck!

determinedcat

  • Stubble
  • **
  • Posts: 143
    • Journal
Re: How much longer do I have to work in tech?
« Reply #3 on: March 04, 2020, 03:27:30 PM »
What is your plan for housing?  Your current rent is amazing, but I'm guessing you can't keep your housing costs that low as you add 1-2 kids.  If you are not sure you are staying in the bay area it probably doesn't make sense to buy.
Good point! We live in a 2-bedroom apartment and have enough room for Baby1. Maybe even Baby2, if they are able to share a room. Our place is close to public transit and unbelievably cheap for the location (most 2-bedroom apartments go for 3k+). I don't feel safe walking around at night and the closest playground / dog park has turned into a homeless encampment. That said, there are plenty of little kids in my neighborhood. We *can* make it work indefinitely, but I want to give my children something better :/ A safe neighborhood, a back yard with a treehouse... That means moving to a new place and either renting or buying for 3.5-4k/month. This is more of a "want" than a "need" though.

@Laura33, thanks for the thoughtful feedback! Yes, I agree that now is not the time to make any sudden moves. I want to max out my maternity leave before making any major decisions. I've been afraid of combining finances with my husband because I don't want him to judge me for occasional splurges :P Now that we're about to have a lot of shared expenses (for Baby1, different housing, and hopefully Baby2), this needs to change.
« Last Edit: March 04, 2020, 04:52:02 PM by determinedcat »

ysette9

  • Walrus Stache
  • *******
  • Posts: 6683
  • Location: Bay Area, CA
    • The Best Is Yet To Come
Re: How much longer do I have to work in tech?
« Reply #4 on: March 04, 2020, 04:15:01 PM »
Ill second Laura’s recommendation to wait and see for now. Things changed in my mind after I had my kid(s) in ways that I would not have been able to predict. As others have said, it is easier to go back to work after having a baby and then decide you want to quit than quit work and later decide you want to get back into the workforce.

However.

Personally I found that my tolerance for being in places where I feel less than 100% safe went down to pretty much zero after having a baby. In your position I would prioritize moving to a place where you feel comfortable taking a solo walk at night. This is something my husband still doesn’t really understand, but I chalk it up to the difference of going through life as a woman versus being a man. When we moved to a from a slightly sketchy place to one where I feel completely comfortable being out alone at dark the difference in my own psychological well-being was noticeable. I quite frankly don’t want to waste the mental energy of being on constant alert of the threats of my surroundings. You and I have the luxury of high enough income to just remove that nonsense from our lives. In my personal situation that is money well spent.

Parks aren’t necessary for at least the first year but I have found that a nearby park is more important than a back yard. Even with a play structure out backyard our kids still ask to go to the park instead.


Bettersafe

  • Stubble
  • **
  • Posts: 103
  • Age: 44
Re: How much longer do I have to work in tech?
« Reply #5 on: March 05, 2020, 01:56:40 AM »
I totally agree on not making any drastic decisions right now. Focus on what's important (last weeks of pregnancy etc) and enjoy baby1 the first weeks of his/her life (and all thereafter of course but those first weeks are so important).

After my firstborn I made some drastic decisions about work I wasn't expecting up forehand. But him coming in our lives made a huge difference on how I looked at (work-)life.

If I read correctly you will be on leave voor 6 mo. Maybe you can use part of that time to find out if writing is for you, or something like painting, cooking, etc? It's something you think about but I'm not sure if you have any experience in it yet?


determinedcat

  • Stubble
  • **
  • Posts: 143
    • Journal
Re: How much longer do I have to work in tech?
« Reply #6 on: March 05, 2020, 08:17:09 AM »
If I read correctly you will be on leave voor 6 mo. Maybe you can use part of that time to find out if writing is for you, or something like painting, cooking, etc? It's something you think about but I'm not sure if you have any experience in it yet?
Yup, I'm going to be on leave for 6.5 months! And my husband is on paid leave from June to the end of the year. My parents may also come and help out, though they're more likely to drive me crazy than actually be helpful :) I would like to get a couple of hours to myself every day to exercise & write, but I assume we'll be in survival mode for at least the first 3 months.

I've always wanted to be a writer, ever since I was small, but prioritized making money instead. To be honest, I would be happy if I could get 2 hours of uninterrupted time to write every day. It is hard, but possible, to do this with a tech job. Now that I have more experience, my job is 40% coding and 60% dealing with people. It's exhausting in a way that my other jobs were not. All the same, I could make it work if I weren't about to have a baby. I can have a tech job and write, or be a full-time mom and write, but it seems impossible to do all 3 -- at least for the first 4-5 years.

I also enjoy coding, cooking, and making art. I might be able to last in tech longer if I can find a job with a good salary that lets me focus on code. That said, I want to give myself space to pursue the writing dream.

Paper Chaser

  • Stubble
  • **
  • Posts: 187
Re: How much longer do I have to work in tech?
« Reply #7 on: March 05, 2020, 11:55:32 AM »
I also think it's wise to hold off on major life changes until you've gotten your feet under you as new parents. I'd take the time to adjust and stabilize your new lives.
 
That being said, it makes no sense to me for young millionaires with a family to live someplace with questionable safety. You've earned the right to feel safe in your neighborhood. If you're committed to your HCOL area that's fine but it might be worth considering cheaper places to live, even if they came with smaller salaries. You can code from just about anywhere these days if that's what you want.

rambo

  • 5 O'Clock Shadow
  • *
  • Posts: 5
Re: How much longer do I have to work in tech?
« Reply #8 on: March 05, 2020, 03:11:46 PM »
Hey determined cat! how's it going?

What you shared on starting a family and thinking through whether to continue to live in Bay Area really resonated with me.

We are in a similar family situation -- married, with 5 month old baby and wanting to have more. I work in SF at a small consulting company, wife is a social worked and therapist in Oakland. We live in West Oakland -- if you happen to be close by (your neighborhood's description sounds like it could also describe mine, though I know it describes so many places in Oak) we could even meet up.

Best of luck on your decision!

wellactually

  • Stubble
  • **
  • Posts: 132
Re: How much longer do I have to work in tech?
« Reply #9 on: March 05, 2020, 03:36:53 PM »
Generally agree with not having to make a huge decision right now. But as a fellow IVF-er, that kind of decision making might not be able to wait. Also, CONGRATS, it's a hard battle and I hope pregnancy is smooth and filled with joy.

My questions on the assisted reproduction front:

-You said you'll have to thaw out for baby2 but then said you'll need to do another IVF for baby. Do you have embryo(s) in the freezer right now and is the quality generally good according to your embryologist? (ie. should not cost you 20k if you can do an FET!)[/li][/list]

-Have you talked to your RE about timeline for baby2 and new IVF if you to actually need to do another round or more? Is he/she concerned about your ovarian reserve, or do you feel like you can wait a bit to start another IVF cycle?

Depending on how much you want another child or children, I'd honestly prioritize that timeline ahead of anything else. Even if you don't want to carry a pregnancy for 3-5 years, you could do retrieval much sooner. It sucks to have to think about it while you just now got to the baby part, but IMO it's worth knowing the facts now so that you can make the right decisions for yourself.

In general though, it sounds like you could probably afford several different options. Perhaps you could find some part time coding work or remote coding work by contract and then have more time to pursue writing while still paying for childcare. As you define what you want, I think you'll find yourself becoming aware of more opportunities around you.

determinedcat

  • Stubble
  • **
  • Posts: 143
    • Journal
Re: How much longer do I have to work in tech?
« Reply #10 on: March 05, 2020, 03:52:35 PM »
-You said you'll have to thaw out for baby2 but then said you'll need to do another IVF for baby. Do you have embryo(s) in the freezer right now and is the quality generally good according to your embryologist? (ie. should not cost you 20k if you can do an FET!)
-Have you talked to your RE about timeline for baby2 and new IVF if you to actually need to do another round or more? Is he/she concerned about your ovarian reserve, or do you feel like you can wait a bit to start another IVF cycle?
Hello, fellow IVFer! That is a very good point. Completely agree it would be better to retrieve & freeze soon, even if we won't use the embryos until later. In this round we froze a couple "good" embryos in addition to the fresh transfer. They are not PGS tested. I was disappointed because I thought we'd get more embryos; there were 15 eggs at retrieval. However! I froze 18 eggs when I was 34 and anxious about fertility. I know that eggs don't thaw as well as embryos, but hopefully that gives me another shot at a baby. I would also consider one more retrieval shortly after the baby's born, because I'll be 38 by then. After that, no more -- 3 cycles is enough for me :) So we have 2 frosties, 18 frozen eggs as backup, and I'm willing to create additional backups if the RE thinks it's a good idea.

« Last Edit: March 05, 2020, 03:58:19 PM by determinedcat »

determinedcat

  • Stubble
  • **
  • Posts: 143
    • Journal
Re: How much longer do I have to work in tech?
« Reply #11 on: March 05, 2020, 04:05:32 PM »
We are in a similar family situation -- married, with 5 month old baby and wanting to have more. I work in SF at a small consulting company, wife is a social worked and therapist in Oakland. We live in West Oakland -- if you happen to be close by (your neighborhood's description sounds like it could also describe mine, though I know it describes so many places in Oak) we could even meet up.
Thanks Rambo! :) I live south of Temescal, by Mosswood Park. More upscale than West Oakland, but there's still a lot of crime. There are flyers all over the neighborhood about a peeping tom who follows women home from BART and looks in their windows, and a woman was raped & robbed just one block away from me. (We don't go to West Oakland often, but there's a diner there we love -- the Pretty Lady!)

I just can't be happy if all I do is work and raise kids, especially when the cost of living is so high. We probably need to double our savings AND buy a home if we want to FIRE in the Bay Area. With double tech jobs, we might be able to do it in another 5-10 years, but is it worth it? I already feel exhausted and the baby hasn't arrived yet!

Retireatee1

  • 5 O'Clock Shadow
  • *
  • Posts: 84
  • Location: Fort Mill, SC
    • Retireator.org
Re: How much longer do I have to work in tech?
« Reply #12 on: March 05, 2020, 05:40:43 PM »
Hello,

I did a quick case study using my own Retireator tool (discussed in other threads here) with the data provided.  I assumed savings of $1.8M and monthly expenses of $5000.  It appears you can meet these expenses quite comfortably.  I added a major recession next year.  I've attached the spreadsheet if you care to take a look.

https://www.retireator.org/

Retireatee1

  • 5 O'Clock Shadow
  • *
  • Posts: 84
  • Location: Fort Mill, SC
    • Retireator.org
Re: How much longer do I have to work in tech?
« Reply #13 on: March 05, 2020, 05:57:41 PM »
Also I set the Auto and Transportation expense to $300 per your data.  This is probably too low to be the total cost of ownership.  You want to estimate how frequently you buy new or used cars and average the depreciation over that time in addition to maintenance and fuel. 

determinedcat

  • Stubble
  • **
  • Posts: 143
    • Journal
Re: How much longer do I have to work in tech?
« Reply #14 on: March 05, 2020, 08:34:44 PM »
I did a quick case study using my own Retireator tool (discussed in other threads here) with the data provided.  I assumed savings of $1.8M and monthly expenses of $5000.  It appears you can meet these expenses quite comfortably.  I added a major recession next year.  I've attached the spreadsheet if you care to take a look.
https://www.retireator.org/
Wow, thanks for doing this analysis @Retireatee1! Unfortunately, our expenses today are probably higher than $5k/month. When I calculated expenses, I only provided *my* half of the expenses. I don't actually know my husband's expenses in detail -- something I need to work on :) Fortunately, he is generally more frugal than me.

I think it is quite possible to live on $5k/month with two children, but not in the Bay Area. Even with half down, we'll have to pay $3-4k/month for a house in a safe neighborhood with good schools. We can't keep living in this sketchy neighborhood forever. According to the BLS, the average household in SF spends $80k/year. I think we could easily end up spending $100k/year after we have two kids. I have a coworker who makes close to $300k/year and has 4 kids, and he says he's living paycheck to paycheck! I would love to see a yearly budget for a Mustachian family in the Bay Area.

Bettersafe

  • Stubble
  • **
  • Posts: 103
  • Age: 44
Re: How much longer do I have to work in tech?
« Reply #15 on: March 06, 2020, 01:10:40 AM »
In general though, it sounds like you could probably afford several different options. Perhaps you could find some part time coding work or remote coding work by contract and then have more time to pursue writing while still paying for childcare. As you define what you want, I think you'll find yourself becoming aware of more opportunities around you.

This sounds like an option to have 'best of both', but it depends on you being comfortable with work by contract?

I guess you stick to you current employer till you know if the deal goes trough so that will give you some months to think about your options.

Besides, I'm with Paper Safer on safe housing :).

And one more to consider: don't whip out all the hormones in your body at this moment! It makes you feel different, act different, want to pursue different goals etc. It takes about 9 mo after giving birth to return to normal levels (depending on breastfeeding or not). It may sound a bit surreal but I literally woke up someday thinking 'wait a minute, this is how I felt before getting pregnant.... yeah... I'm back to being me again".

wellactually

  • Stubble
  • **
  • Posts: 132
Re: How much longer do I have to work in tech?
« Reply #16 on: March 06, 2020, 07:24:28 AM »
@determinedcat - sounds like a thorough fertility plan with a lot of back-up options! I've never felt worse in my life than during IVF stims, but then after waiting for the call every couple days to find out how many had made it to the next stage was so traumatic. I'm sorry you saw such a drop, but it's awesome that your first transfer worked! If you can stand to do another retrieval with an infant at home, more power to you.

For the rest of the plan, I always like a good list...

- Understand more fully your husband's part of the financial equation. Combining isn't 100% required here, but knowing more would help.
- Decide if/when you might want to do another retrieval.
- Make a plan for where you want to live and how quickly you want to get to that.
- Update some of your resumes, portfolios, etc to be ready for a potential change after the sale goes through.
- Find a childcare setup and nail down how much that will cost
- Have baby and don't worry about the rest of it for a bit!
- Consider how to dip your toes into the job market. Maybe this is an alert on some job keywords or mentioning to some in your network that you're considering a change.

ysette9

  • Walrus Stache
  • *******
  • Posts: 6683
  • Location: Bay Area, CA
    • The Best Is Yet To Come
Re: How much longer do I have to work in tech?
« Reply #17 on: March 06, 2020, 07:38:08 AM »
I did a quick case study using my own Retireator tool (discussed in other threads here) with the data provided.  I assumed savings of $1.8M and monthly expenses of $5000.  It appears you can meet these expenses quite comfortably.  I added a major recession next year.  I've attached the spreadsheet if you care to take a look.
https://www.retireator.org/
Wow, thanks for doing this analysis @Retireatee1! Unfortunately, our expenses today are probably higher than $5k/month. When I calculated expenses, I only provided *my* half of the expenses. I don't actually know my husband's expenses in detail -- something I need to work on :) Fortunately, he is generally more frugal than me.

I think it is quite possible to live on $5k/month with two children, but not in the Bay Area. Even with half down, we'll have to pay $3-4k/month for a house in a safe neighborhood with good schools. We can't keep living in this sketchy neighborhood forever. According to the BLS, the average household in SF spends $80k/year. I think we could easily end up spending $100k/year after we have two kids. I have a coworker who makes close to $300k/year and has 4 kids, and he says he's living paycheck to paycheck! I would love to see a yearly budget for a Mustachian family in the Bay Area.
I’ll chime in as a family with three kids on the peninsula. We probably spend something like $120k now with childcare. It is a shocking amount for these forums but with our incomes we have still been saving boatloads. Housing is close to $5k/month for us with property taxes, a bit lower as I refinanced recently. There is no reason at all I can see for a family of four to be living paycheck to paycheck on a $300k salary; that is crazy even for that many kids and even for living here in one of the mast expensive parts of one of the most expensive areas of the country.

Childcare is expensive but otherwise I don’t think kids cost much if you choose to not have them cost much. You can get almost everything you need used at baby consignment stores, FB marketplace, or Buy Nothing.

Car Jack

  • Handlebar Stache
  • *****
  • Posts: 1633
Re: How much longer do I have to work in tech?
« Reply #18 on: March 06, 2020, 01:00:39 PM »
I just can't be happy if all I do is work and raise kids, especially when the cost of living is so high.

I already feel exhausted and the baby hasn't arrived yet!

When IVF failed 3 times for us, we adopted our first son.  DW stayed home under maternity, vacation, unpaid for 5 months, then I used FMLA for 12 weeks.  I can tell you that even without work, just taking care of one baby, you will be exhausted all the time.  Open your dictionary and block out the word "sleep" because it will be meaningless.

On the good side, your thoughts that you need to do more are going to disappear.  You won't have time to think about that.  I have friends who don't have kids.  They have the problem of thinking they want more.  I sort of envy them, then laugh to myself that they have way too much free time.

Retireatee1

  • 5 O'Clock Shadow
  • *
  • Posts: 84
  • Location: Fort Mill, SC
    • Retireator.org
Re: How much longer do I have to work in tech?
« Reply #19 on: March 06, 2020, 01:28:47 PM »
I did a quick case study using my own Retireator tool (discussed in other threads here) with the data provided.  I assumed savings of $1.8M and monthly expenses of $5000.  It appears you can meet these expenses quite comfortably.  I added a major recession next year.  I've attached the spreadsheet if you care to take a look.
https://www.retireator.org/
Wow, thanks for doing this analysis @Retireatee1! Unfortunately, our expenses today are probably higher than $5k/month. When I calculated expenses, I only provided *my* half of the expenses. I don't actually know my husband's expenses in detail -- something I need to work on :) Fortunately, he is generally more frugal than me.

I think it is quite possible to live on $5k/month with two children, but not in the Bay Area. Even with half down, we'll have to pay $3-4k/month for a house in a safe neighborhood with good schools. We can't keep living in this sketchy neighborhood forever. According to the BLS, the average household in SF spends $80k/year. I think we could easily end up spending $100k/year after we have two kids. I have a coworker who makes close to $300k/year and has 4 kids, and he says he's living paycheck to paycheck! I would love to see a yearly budget for a Mustachian family in the Bay Area.

I boosted your expenses to $10K/month and removed the recession.  Social Security begins at 67.  Attached is the update (Microsoft Excel for Windows is required).  The retirement date calculation for this simulation is 8/11/2023 with a savings goal of $3,474,559.

affordablehousing

  • Bristles
  • ***
  • Posts: 472
Re: How much longer do I have to work in tech?
« Reply #20 on: March 06, 2020, 01:59:01 PM »
I think you guys are at a solid point that is pretty standard in the bay area. Just keep plugging away. That's the sad thing, we're all just still middle class unless we were willing to move. One thing to consider that we've witnessed with friends is that if you can avoid having to buy a starter home, and then a family home and go right to the family home, it is a lot less hassle adjusting to new environments twice. Enjoy your time off!

waltworks

  • Magnum Stache
  • ******
  • Posts: 3995
Re: How much longer do I have to work in tech?
« Reply #21 on: March 06, 2020, 09:22:12 PM »
You can have a "normal" life of working a lot and sending your kids to daycare, and live in the Bay area.

Or you can move somewhere else and be FIRE and do something else (write, even if you don't make any money at it?) and spend as much time with your kids as you want.

I mean, that's really the question here. You have plenty of money to do lots of stuff, but living where you live costs a fortune, especially if you want your kids to grow up with a nice yard and fun safe neighborhood to play in.

-W

Dicey

  • Senior Mustachian
  • ********
  • Posts: 13050
  • Age: 62
  • Location: NorCal
Re: How much longer do I have to work in tech?
« Reply #22 on: March 07, 2020, 09:46:48 AM »
PTF due to lack of time now. Would you please elaborate on your fears of financial transparency with your spouse? It's like you're trying to play a hand without seeing all the cards. I'm not saying you should combine finances specifically, but you should have complete transparency. Second, putting 50% down on a house is sub-optimal. Can we chat later about why you believe that's the best way to go? Hint: "So we can have a lower payment" is not the mustachian answer.

Finally, and I probably should have led with this, congratulations on the baby making and nest egg creation. You're in a great position!

determinedcat

  • Stubble
  • **
  • Posts: 143
    • Journal
Re: How much longer do I have to work in tech?
« Reply #23 on: March 07, 2020, 01:41:06 PM »
Thanks for all of the feedback, everyone! I'm drinking a mug of decaf tea and mulling over your responses while enjoying a cozy, rainy day in Oakland.

Second, putting 50% down on a house is sub-optimal. Can we chat later about why you believe that's the best way to go? Hint: "So we can have a lower payment" is not the mustachian answer.
It's true that I'll probably make more money if I invest that money in equities instead. Mortgage rates are still fairly low and we're likely to get a good rate, having excellent credit and substantial assets. It's simply that I've never owed anything to anyone before. My parents paid for college and for my first car, which I'm still driving. (I'm very lucky in that regard.) I'm terrified by the idea of a $1M loan. Our family is all about paying for everything in cash.

My mom, who's a wealthy doctor, offered us a zero-interest loan on our first home so we "don't have to owe anything to a bank". My parents want nothing more than to move in with us and raise their grandchild full-time. On the surface, this seems like the solution to all our problems: free childcare AND help buying a house! Alas, they are highly controlling Tiger Parents, and it's probably better to be indebted to a bank than to owe money to them.

Would you please elaborate on your fears of financial transparency with your spouse? It's like you're trying to play a hand without seeing all the cards. I'm not saying you should combine finances specifically, but you should have complete transparency.
Honestly, it all goes back to my parents' marriage. For years, my mother was the primary earner and my dad stayed at home with me. My mom paid for everything and did all the housework, even after my dad finally established himself as a nurse. He kept his finances and savings completely separate. To this day, he hasn't paid for so much as a lightbulb. He is a wonderful father, but a lousy partner. They're still married, partly because my mom didn't want to give him any more of her money.

I developed a fear of having to combine MY finances with anyone else's. What if my partner were financially irresponsible? What if I ended up getting a divorce? Fortunately, I married someone who is financially prudent and also has a high salary. I still enjoy the freedom of having separate accounts. He doesn't judge me for the occasional spa day; I don't judge him for buying too many linear algebra textbooks. I'm actually more worried about his reactions to my expenses; he managed to save $10k while earning a $20k salary, so I know he's naturally frugal.

But having a baby changes things. We have to make a lot more joint decisions these days, ranging from what stroller to buy to how much we need to save for college. (I'm a believer in 529 plans; he's half hoping the higher education system collapses and college won't exist.) With all these joint expenses, it makes sense to have more insight into our combined finances.

-----------------------------
@affordablehousing and @waltworks, we're definitely open to moving. I would love to live in Portland or Austin or the EU. I'm just not sure if we've saved up enough money yet. There are also compelling reasons to live in California, mostly from my husband's perspective. The most interesting engineering jobs are here, and he is a native Californian with a huge extended family here.

@Retireatee1, thanks for the analysis! I have all operating systems except for Windows, alas :) I was able to open the spreadsheet in Google Docs. I need to go over the numbers more closely, but I think $3.5M-$4M is a good target if we want to stay in the Bay.

@ysette9, thanks for the intel on the cost of raising a family here. I've been curious about your case in particular; I think that we're in very similar situations. $120k/year probably sounds crazy to a lot of Mustachians, but definitely normal here.

@wellactually, I also love making lists :) Working on the "childcare setup" part right now -- it seems impossible to get a daycare spot here! We have such different views on daycares... my husband thinks my favorite daycare is too "sterile", and I think his top pick seems like a squalid baby warehouse. I'll see if my husband is open to tracking our accounts together. Not sure what the best solution is. I use Mint and Personal Capital, like a lot of people here. He used to have a Mint account but got rid of it because of privacy concerns.

Retireatee1

  • 5 O'Clock Shadow
  • *
  • Posts: 84
  • Location: Fort Mill, SC
    • Retireator.org
Re: How much longer do I have to work in tech?
« Reply #24 on: March 07, 2020, 02:14:52 PM »
@Retireatee1, thanks for the analysis! I have all operating systems except for Windows, alas :) I was able to open the spreadsheet in Google Docs. I need to go over the numbers more closely, but I think $3.5M-$4M is a good target if we want to stay in the Bay.

Cool let me know how that works out.  I do test Excel Online but I don't test Google Docs.  The spreadsheet simulation is designed entirely in formulas so technically it should work.  What you lose is the Dashboard ability to "Retireate" and calculate the FIRE date automatically as well as some UI enhancements.

So to get started I would focus on the "Expenses" tab.  If the "accumulation phase" has a value and the "distribution phase" is blank, the accumulation value is used as a default.  In Excel these defaults are displayed, but online they are blanks.  You can just fill in the whole table with numbers.  Then flip over to "Annualizer" and check the Code column.  A is accumulation (working), D is distribution (retired), and I is insolvent.  If there are any "I"'s you need to flip over to the Main tab and move your Retirement Date back.

ysette9

  • Walrus Stache
  • *******
  • Posts: 6683
  • Location: Bay Area, CA
    • The Best Is Yet To Come
How much longer do I have to work in tech?
« Reply #25 on: March 07, 2020, 03:10:18 PM »
Thanks for all of the feedback, everyone! I'm drinking a mug of decaf tea and mulling over your responses while enjoying a cozy, rainy day in Oakland.

Second, putting 50% down on a house is sub-optimal. Can we chat later about why you believe that's the best way to go? Hint: "So we can have a lower payment" is not the mustachian answer.
It's true that I'll probably make more money if I invest that money in equities instead. Mortgage rates are still fairly low and we're likely to get a good rate, having excellent credit and substantial assets. It's simply that I've never owed anything to anyone before. My parents paid for college and for my first car, which I'm still driving. (I'm very lucky in that regard.) I'm terrified by the idea of a $1M loan. Our family is all about paying for everything in cash.

My mom, who's a wealthy doctor, offered us a zero-interest loan on our first home so we "don't have to owe anything to a bank". My parents want nothing more than to move in with us and raise their grandchild full-time. On the surface, this seems like the solution to all our problems: free childcare AND help buying a house! Alas, they are highly controlling Tiger Parents, and it's probably better to be indebted to a bank than to owe money to them.

Would you please elaborate on your fears of financial transparency with your spouse? It's like you're trying to play a hand without seeing all the cards. I'm not saying you should combine finances specifically, but you should have complete transparency.
Honestly, it all goes back to my parents' marriage. For years, my mother was the primary earner and my dad stayed at home with me. My mom paid for everything and did all the housework, even after my dad finally established himself as a nurse. He kept his finances and savings completely separate. To this day, he hasn't paid for so much as a lightbulb. He is a wonderful father, but a lousy partner. They're still married, partly because my mom didn't want to give him any more of her money.

I developed a fear of having to combine MY finances with anyone else's. What if my partner were financially irresponsible? What if I ended up getting a divorce? Fortunately, I married someone who is financially prudent and also has a high salary. I still enjoy the freedom of having separate accounts. He doesn't judge me for the occasional spa day; I don't judge him for buying too many linear algebra textbooks. I'm actually more worried about his reactions to my expenses; he managed to save $10k while earning a $20k salary, so I know he's naturally frugal.

But having a baby changes things. We have to make a lot more joint decisions these days, ranging from what stroller to buy to how much we need to save for college. (I'm a believer in 529 plans; he's half hoping the higher education system collapses and college won't exist.) With all these joint expenses, it makes sense to have more insight into our combined finances.

-----------------------------
@affordablehousing and @waltworks, we're definitely open to moving. I would love to live in Portland or Austin or the EU. I'm just not sure if we've saved up enough money yet. There are also compelling reasons to live in California, mostly from my husband's perspective. The most interesting engineering jobs are here, and he is a native Californian with a huge extended family here.

@Retireatee1, thanks for the analysis! I have all operating systems except for Windows, alas :) I was able to open the spreadsheet in Google Docs. I need to go over the numbers more closely, but I think $3.5M-$4M is a good target if we want to stay in the Bay.

@ysette9, thanks for the intel on the cost of raising a family here. I've been curious about your case in particular; I think that we're in very similar situations. $120k/year probably sounds crazy to a lot of Mustachians, but definitely normal here.

@wellactually, I also love making lists :) Working on the "childcare setup" part right now -- it seems impossible to get a daycare spot here! We have such different views on daycares... my husband thinks my favorite daycare is too "sterile", and I think his top pick seems like a squalid baby warehouse. I'll see if my husband is open to tracking our accounts together. Not sure what the best solution is. I use Mint and Personal Capital, like a lot of people here. He used to have a Mint account but got rid of it because of privacy concerns.
I didn’t open up your spreadsheet to look at your details. How much do you expect to spend? I did a bunch of simulations in cFIREsim and got comfortable with $2.3M, which is investments to cover our expected retirement spending plus $800k lump sum to cover the outstanding mortgage balance. I’d be surprised if you needed $4m. That is a lot of retirement spending, even in the Bay Area.

It sounds like your parents’ situation is tricky and made it more difficult for you to navigate finances as a married couple. Maybe it helps or maybe not, but California is a community property state. That means that it doesn’t matter if you want to manage your finances jointly or separately, the state only views them as joint. So keeping your money separate does not insulate you from the risks of having a financially hopeless spouse. From your description you have a frugal and responsible spouse (congrats!) so perhaps over time you can find a way to be more transparent and cooperative? Like you say, a baby will force your hand there to a certain extent.

We have joint finances but still have a separate “play money” allowance for each of us to spend on frivolous things if we want. My husband is too responsible for that so it really ends up being me alone who pulls from mine on occasion for my little splurges. Having us be on the same team financially makes us so strong, so I hope you can at least get to the point of talking openly about your situation so you can make good decisions for your family overall.
« Last Edit: March 09, 2020, 01:43:21 PM by ysette9 »

ysette9

  • Walrus Stache
  • *******
  • Posts: 6683
  • Location: Bay Area, CA
    • The Best Is Yet To Come
How much longer do I have to work in tech?
« Reply #26 on: March 07, 2020, 03:14:57 PM »
The comment you made about your oarents stuck out to me. Are you and your spouse from the same cultural background? Even if so, it is really important to talk plainly and openly about what each of you expect with regards to extended family once the baby comes. My husband comes from the cultural background of in-laws moving in and taking care of the baby once it comes. There is little else in the world that terrifies me more than that idea.

As an introvert it is usually tough having extended family visit, even my own family after some time. I found that after a baby came i was at my very worst, my most vulnerable, and my reserve of sucking it up was most limited. So having my in-laws visit then was a double whammy for me: difficult in the best of times and downright intolerable when I was hormonal and sleep deprived and stressed and vulnerable.

I have spent hours and days and weeks and months of my life dreading then coming, struggling with them visiting, hating the tough position that puts my husband in, and awkwardly trying to come to some compromise with him we can both live with.  I have also had a total meltdown and told him he had to limit his parents visiting because it was going to put me in an institution.

Tl;dr - talk about this stuff like rational adults and not like a petulant child as I did and things will be easier. Also allow that your wants and needs may be different after the baby comes in ways you can’t anticipate now.
« Last Edit: March 07, 2020, 03:24:52 PM by ysette9 »

Retireatee1

  • 5 O'Clock Shadow
  • *
  • Posts: 84
  • Location: Fort Mill, SC
    • Retireator.org
Re: How much longer do I have to work in tech?
« Reply #27 on: March 07, 2020, 06:31:21 PM »
Google Sheets looks like a bust, I did some quick testing.  Something about the named ranges isn't compatible.  I'll tackle it again at some point.  Excel Online works fine though.

EDIT: The basic Google Docs viewer shows the data OK (although it strips off the chart).  If you enter Google Sheets, the named range incompatibility creates a wall of errors.
« Last Edit: March 08, 2020, 06:26:48 AM by Retireatee1 »

determinedcat

  • Stubble
  • **
  • Posts: 143
    • Journal
Re: How much longer do I have to work in tech?
« Reply #28 on: March 07, 2020, 10:24:09 PM »
I didn’t open up your spreadsheet to look at your details. How much do you expect to spend?
That's exactly what I'm trying to figure out. I'm having trouble estimating the cost of childcare & education. I have a clearer picture on daycares and nannies, but know nothing about preschools, summer camps, or anything past the immediate future. I guess it depends on where we buy a house. It's reassuring to know that $2.3M is your number! I think we're probably 2-3 years away from that, which doesn't seem too bad.

The comment you made about your oarents stuck out to me. Are you and your spouse from the same cultural background? Even if so, it is really important to talk plainly and openly about what each of you expect with regards to extended family once the baby comes.
Good point! My husband's family is German/Irish and his parents are a LOT more easygoing than mine. We've talked about who's allowed in the delivery room (no grandparents!), but nothing beyond that. I'd prefer to have 1-2 weeks alone with the baby before my parents or in-laws come and visit. I'm conflicted about how much I want my parents' help with the baby in those first few months. My mom's a neonatologist (literally a baby doctor), in addition to being a compulsive house-cleaner. She always works hard and is helpful but will eventually drive me crazy. Curiously, my husband is better able to tolerate my parents than his own, and the reverse is true for me...

ysette9

  • Walrus Stache
  • *******
  • Posts: 6683
  • Location: Bay Area, CA
    • The Best Is Yet To Come
Re: How much longer do I have to work in tech?
« Reply #29 on: March 08, 2020, 02:37:32 PM »
I think it is okay to not know what you will want. I could not have predicted how I would feel and behave or what I would want once the baby came. There was a lot of growing I did just in terms of knowing myself that occurred after I became a mother. So maybe you could leave it more open-ended, like “I’ll reach out when I need help” rather than making set plans in advance?

Dicey

  • Senior Mustachian
  • ********
  • Posts: 13050
  • Age: 62
  • Location: NorCal
Re: How much longer do I have to work in tech?
« Reply #30 on: March 08, 2020, 10:23:17 PM »
Ysette9 is completely right about California and Community Property. To be clear, I'm not suggesting that you need to merge finances, but that you will both benefit from knowing more about each other's financial picture. You most likely married your husband because he is not like your father, and your relationship with each other is different than your parent's relationship. It seems that avoiding this topic is a source of stress. Shine the light on it and the shadows will disappear.