If you left Big Law…

[Anonymous]

DH has been a Big Law partner for five years now (one of the top grossing firms in the country). He makes 7 figures including his bonus. And he hates it. He’s miserable. He wants to take a government job for a few years and test it out- says he doesn’t want at the end of his life to say he never tried something else. He’s in a pretty specialized law section and has been successful so he’s pretty confident he would get hired by the government and go back to private if/when he needs.

My question is for anyone who did this- what was your financial cushion? We have about $800,000 equity in our $1.6 M house, with a $4500 monthly mortage. Three kids, one in private preschool and two in public schools in bethesda. Two cars paid for. No debt. Close to $2M in savings not counting house equity. Close to $700,000 in 529’s for the kids (also not counted toward savings). DH feels comfortable living below our means for a few years and draining some of our savings so he can have a job that brings him happiness for some time, knowing he could go back to private if need be. It makes me more anxious. (And I do stay at home, it was a choice we both made when our oldest child was born. I was a preschool teacher and the cost of a nanny or daycare would have been more than I made.). We don’t live extravagant lives- no country clubs, not much expensive travel, no second homes, only once a month cleaners, etc. I want him to be happy more than anything but I worry about whether we can afford to live off of one government salary, even for a few years.

[Anonymous]

Partly depends on what the $2m in savings is in, ie., equities, treasuries, mutual funds, etc. and does he forfeit any vesting/service credit by leaving the law firm at this point?

[Anonymous]

Do you already know exactly how much you spend vs. save per year?

[Anonymous]

Anonymous wrote:Do you already know exactly how much you spend vs. save per year?

I don’t. I’m sure he does- he does all the money management. I know he saves a ton (like more than 1/3 of his salary). But to be honest we don’t track our spending. We’ve never had any sort of budget because we haven’t had to. But neither of us are big spenders so we’ve always lived way under our means.

[Anonymous]

I would start from the attitude of we need to find a way to make this work because it sounds like he really needs that.

Also even if he is pulling in 160k, 4500 mortgage means you still have money to live on. You might not be saving much and sure you might dip into savings but I don’t think you’ll need to pull $5-10k a month.

[Anonymous]

Oh gosh, give the poor guy a break! He’s wildly unhappy? Let him try something else. I’m sorry but this seems wildly selfish. Nice your youngest is out of preschool, you could get a job because even though you discussed it, things have now changed. He’s begging you to let him stop being miserable. Please, let him.

[Anonymous]

Anonymous wrote:Oh gosh, give the poor guy a break! He’s wildly unhappy? Let him try something else. I’m sorry but this seems wildly selfish. Nice your youngest is out of preschool, you could get a job because even though you discussed it, things have now changed. He’s begging you to let him stop being miserable. Please, let him.

+1 it makes you anxious? Hea the one dealing with this crazy busy job day in and day out. He is more than just a cash cow and deserves a break.

[Anonymous]

You could have a 0% savings rate for the rest of your working life and still be more than fine in retirement. You have a $2.8 million net worth, and that has decades left to compound.

If he takes a job making $160K and pays a 25% tax rate, you’re still left with $10,000 per month. You said you’re not big spenders so you should be able to live on that (and remember that part of your $4,500 mortgage payment is principle and therefore really savings).

Life is too short to spend all of it doing something you hate. He’s already established a very solid but financial footing for your family; you guys can definitely afford to do this.

[Anonymous]

Anonymous wrote:Oh gosh, give the poor guy a break! He’s wildly unhappy? Let him try something else. I’m sorry but this seems wildly selfish. Nice your youngest is out of preschool, you could get a job because even though you discussed it, things have now changed. He’s begging you to let him stop being miserable. Please, let him.

Wow. I’m not not letting him do anything. I said I want to support him. I just am asking for anyone who has done this how the financial element worked for them. And he has always wanted me to stay at home because I handle 100% of everything else so he doesn’t ever have to stress about it. Kids are sick or off school yet again for a mcps holiday? No worries because I’m home to handle it. I made $30,000 as a preschool teacher. We aren’t retiring off of my income if I go back to work.

[Anonymous]

I was working in government, and DH left big law to take a high level, non-political position for 4 years at an agency. He says it was the best 4 years of his career. We had a budget and stuck to it. Our big expense was daycare, but we didn't use savings at all, just lived frugally. He went back to Big Law and hated it. Luckily we never raised our standard of living much and saved like crazy while we both worked. We both retired last year in our late 50s. You can do it.

[Anonymous]

Anonymous wrote:You could have a 0% savings rate for the rest of your working life and still be more than fine in retirement. You have a $2.8 million net worth, and that has decades left to compound.

If he takes a job making $160K and pays a 25% tax rate, you’re still left with $10,000 per month. You said you’re not big spenders so you should be able to live on that (and remember that part of your $4,500 mortgage payment is principle and therefore really savings).

Life is too short to spend all of it doing something you hate. He’s already established a very solid but financial footing for your family; you guys can definitely afford to do this.

I agree with this. He deserves a break and your family will be fine. I left Biglaw and never looked back.

[Anonymous]

Plus if he stays in govt the retirement health benefits are pretty good (only having to pay a quarter of his health insurance costs is nice too)

[Anonymous]

OP, this might depend on where DH is going and how carefully he researches his move. If it is a valuable government post where he does good work, meets people and gains experience, he can cash in on it when he leaves. But if he's just grasping at random staff attorney positions, maybe not.

When I left a top firm, we curtailed some spending and vacations. DH stayed in BigLaw tho. Our kids were all public school then. We had a smaller mortgage, but this was 12 years ago. Yours seems pretty reasonable for today!

I think that if you budget carefully, meal plan and aren't crazy shoppers, you can totally do this without dipping into savings.

[Anonymous]

Anonymous wrote:Plus if he stays in govt the retirement health benefits are pretty good (only having to pay a quarter of his health insurance costs is nice too)

And the BigLaw healthcare benefits are expensive, especially as a partner who gets a K1 and pays for it all.

[Anonymous]

OP you have more than enough in savings IF you actually are not big spenders. The first thing you need to do so that you both feel prepared is look at how much you are actually spending. How much is actually going out the door each year? I think you mentioned dipping into savings, ideally I just would not do that. You are set for life if you just figure out how to bring expenses down and let your current savings compound. Your husband can be one of the smart ones - got out and lived his life while letting the money he made compound. So you all will be super duper rich instead of staying another 20 years, missing your kids childhood, and being SUPER DUPER DUPER rich. It's a great move. But don't just spend down your savings. Adjust your lifestyle - it shouldn't be too hard, you have kids in public, another one joining soon. The mortgage is probably be biggie as that's pretty high.

But basically if you let your savings compound and keep expenses from ratcheting up - you don't have to save much from gov salary so just live below that and you will be good. You have more than enough for 529s (will continue to compound and grow), more than enough for retirement (will continue to compound and grow), and eventually a paid off house. Kind of the dream - you can stay home while he works a reasonable job where he gets to be present with his family.