[USER]

Hello! Spouse and I are both 43 and combined make around 450k per year. We have one kid in elementary and we live in HCOL US.

We have around $2.2 Mn net worth mainly in:
– 1.6 Mn combined in brokerage, 401k
– 100k cash in savings / emergency fund
– 500k equity in primary home

Besides the above, 45k in kid’s 429, 35k in HSA – not counted in net worth above

No debts except less than 200k in mortgage with very low rate, cars paid off.

I wonder if we have enough so that one of us can retire now/ take a break for a couple of years to focus on other pursuits?

My reasoning is – if we take our current 1.6 Mn in savings and just let it be in the market invested in ETFs, and just max the 401k contribution every year for the one person employed (without any additional savings), with a conservative 6% annual return we should have around 4-4.5 Mn by the time we are 60.

With the 4% rule, that should give us around 100k / year – which on paper should be enough but who knows in reality what will it amount to in 14 years!

It’s so difficult to know when it is enough but I often feel we are working and wasting our life in meaningless corporate jobs ..

whereas we can actually do something worthwhile in life like working for a cause / pursue hobbies (which are difficult to manage along with our hectic current jobs).

But the thought of a sabbatical / retirement is scary as we never know how easy or difficult will it be to get a job again after a few years, so the path of least resistance is to continue working.

Also, with one job our annual income will reduce to half and there will be some adjustments needed to our standard of living.

What would you do?

[Noa]

How much is in brokerage vs retirement accounts? You definitely have enough to do something more meaningful if you so choose

[Niloufer]

Congratulations! You both have done very well with savings. One of you could take some time off from work, if you plan well and live conservative $$ lifestyle.

I would keep any professional licenses active if the desire to re-enter the workforce surfaced after some years.

[Alexandra]

Run the numbers and then trust the numbers. Assuming 6% growth should account for inflation from what I understand. You have more money than most people will ever see in their entire lives.

Go do something worthwhile that you enjoy – god forbid you have to learn to live on $60,000 with a $2 million dollar cushion.

I don’t mean this to sound harsh but I think this group and the wider culture warps our view of what “enough” is in very sick ways.

If you don’t love your jobs or feel that they’re meaningful, please go do something else that will make you happy and ideally make a real difference in the world.

[Nick]

Life is short and nothing is forever. Give it a shot. Worst case scenario you can go back to work.

In my experience you will realize it isn’t bad at all living with less.

Western society has us fooled that money and possession will make us happy.

Truth is after our basic needs are met it doesn’t.
Congrats on your success.

[Amy]

Why not try living on one income for at least six months, a year would be better. Also, you don’t say whether you would be open to moving to a lower cost of living area.

I assume this isn’t possible while working, but maybe it is?

Also, do you plan on retiring early, both of you at some point? You are in the FIRE blog after all.

You probably can afford for one person to take some time off. But one thing you haven’t thought of is how this will effect the working partner.

My hubby retired 3 years before me and we agreed on it at the time. Really I was OK with it, but you know it did wear on me a bit.

He cooked for me and cleaned and everything but it was a bit annoying after I had a hard day when I came home and he was all perky and relaxed. Lol.

Just saying. It might be something to think about.

Why not just keep at it, both retire at 50 and move to a low cost of living area then.

You would fir sure be set for life if you did that. And 50 is still very young

[Nicholas]

I would keep working and accumulating wealth at this stage and plan for an early retirement as a couple later on in your mid to upper 50’s (certainly by 60).

While you have a nice start, 1.7 counting savings in liquid investments is not that much these days. As you always need a house I would not even count home equity in your Fire plan.

In my opinion you are right where you need to be at this point but are not yet ready to slow down as a couple.

I suspect others will disagree, which is why there are different levels of FIRE.

Future FatFire will require much more than five million by the time you reach 60.

Good luck and congrats on your success to date.

[Cheryl]

Go for it! Everything will shift in your life with one of you at home (for the better).

You’ve worked hard and have a sizable foundation of $$$.

Use it wisely and it will serve you well

[Tom]

As an experiment, try living on a 100k for a year or two now and invest the rest. It will do at least two things.

1. Allows you to experience the 100k way of life.

2. Will accelerate your investments/net worth and hopefully add more stability to your future retirement plans.

[Jeff]

4% of 4M is 160k a year and then you can also collect SS at 62. 17 years from now the buying power will be lower so it all depends on what you think your monthly costs will be then.

[Author]

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