I cannot imagine retiring when my kids are still in school. Too many unknowns.

I'd want them to be established in their own careers before I quit.

I don’t see why you should step back either, OP. It makes no sense to say DH needs to stay at a high income but you can retire to a hobby job.

Anonymous wrote:Since you don’t want to decrease your spending, you do not have enough to retire now.

I wouldn’t down shift either, since you are the one who doesn’t want to lower your expenses.

Keep the status quo for a year and reassess then. If your DH really wants to retire. Have both of you keep working, but lower your savings to match your spending, including anticipated healthcare costs and see if you can deal with it for a year. At the end, your saving will be better and you will know if that is what you want to do.

Also, plan for healthcare costs to increase substantially in the 60-65 range. The ACA is quite high for those ages.

Op here. DH spends too, not just me😛

I agree the ACA expenses down the road will be a lot and that is one of the biggest variables in our calculations.

Anonymous wrote:

Anonymous wrote:Retire when house is paid off and kids are finished college.

+1

Without the mortgage and the tuition obligation, it would be easier for the two of you to manage your expenses. At that point, at lease one of you can retire for sure.

We also have 500k on our primary residence. DC1 has graduated and we are waiting for DC2 to finish college in 3 years before DH or I fully retire. Although DC2’s tuition is covered by 529, these last 3 years are great for saving up. We have a 3% rate on the mortgage and we are paying it down faster by adding to principle. Even if we still carry a mortgage at 3%, it won’t be too terrible for one of us to stop working.

Op here. I agree that paying off the mortgage and waiting until kids are done with college would be the most conservative thing to do. But that would mean waiting 12 years until retirement. Like I said above DH has thought about retiring now, so waiting 12 years is probably not going to make him happy.

Each kid will have $250k for college which is plenty for in-state, but admittedly not enough for a small liberal arts school at $100k a year. If a kid was super excited about the $100k a year school, we would figure out how to make it happen, but I would first want to walk them through all the numbers, because I really think that is an excessive and unnecessary amount for tuition.

As far as paying off the mortgage before retirement, I know that is a perennial debate on this board. What I have to say will not put everyone at ease, but we have looked at our own numbers, and we come out ahead keeping our money in the investment accounts rather than paying off the mortgage early and are comfortable with that level of risk. We will sell the house when last kid is done with HS, and should have enough equity cashed out at that time to pay cash for something else in a lovely, but lower cost area. We have our eye on a few locales in one of our home states on a beautiful peaceful lake.

Since you don’t want to decrease your spending, you do not have enough to retire now.

I wouldn’t down shift either, since you are the one who doesn’t want to lower your expenses.

Keep the status quo for a year and reassess then. If your DH really wants to retire. Have both of you keep working, but lower your savings to match your spending, including anticipated healthcare costs and see if you can deal with it for a year. At the end, your saving will be better and you will know if that is what you want to do.

Also, plan for healthcare costs to increase substantially in the 60-65 range. The ACA is quite high for those ages.

Anonymous wrote:

Anonymous wrote:How on earth do you spend $18k a month? I’d think with that kind of spending you absolutely can’t retire with $5 million saved. I could but my spending is probably 1/3 of yours. So you need to keep working.

Op here. I know $18k a month is a lot. Our “base” spending in a month is probably closer to $11k with the mortgage payment, but we like to travel and spend a lot on that, so that is averaged into the 18k a month along with other less frequent but higher cost items like home maintenance. Fortunately, we are past daycare years and starting to ramp down on aftercare/summer camp needs, too. I don’t scrimp when it comes to fixing up the house or other “nice to have’s.” I know we don’t need these things, but we have had good salaries the past couple of decades and we definitely got used to that. The 529s are set for undergrad.

I think with my ramped down job and DH at his job a few more years, and without a stock market tank (fingers crossed), DH could retire in three years. With my ramped down job right now, I should be able to take some of the daily stress out of our lives just by being able to handle more around the house and being there for the kids and their activities. I am not trying to keep us on the hamster wheel forever.

If he agrees with the high monthly spending (college, kids stuff, house stuff), then he should keep working. If he does not agree with the high spending (travel, extras, high end purchases), then he should be allowed to retire in peace. OP, your tastes and desire to spend should not force him to keep working when he could retire. But if he is all for spending but doesn't want to keep contributing then he needs to suck it up buttercup and pick one or the other.

I get where your DH is coming from. I am done with the rat race and I am only in my 40s. I would completely resent my spouse if they demanded I keep working to pay for their high end house renovations and luxury vacations.

Anonymous wrote:Retire when house is paid off and kids are finished college.

+1

Without the mortgage and the tuition obligation, it would be easier for the two of you to manage your expenses. At that point, at lease one of you can retire for sure.

We also have 500k on our primary residence. DC1 has graduated and we are waiting for DC2 to finish college in 3 years before DH or I fully retire. Although DC2’s tuition is covered by 529, these last 3 years are great for saving up. We have a 3% rate on the mortgage and we are paying it down faster by adding to principle. Even if we still carry a mortgage at 3%, it won’t be too terrible for one of us to stop working.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:350k each or together? If together, how did you amass 5 million?

I’m wondering this too. We are a few years younger than OP, make close to $400k combined and have been maxing out retirement for ages. We have just under $3M total (incl house equity) and I’m not sure exactly what we could have done differently to get to $5M. There was either some impressive market picks or they have a non-standard form of income.

You could have started earlier. DH and I are your ages. We have never made more than $200k a year and most years have been below that. We have the same NW that you do. The only difference I can name, based in the info given, is that I opened my first IRA at 19 and contributed the max every year.

If we had your income, we would be well over $5m.

What was the situation that allowed you to contribute the IRA max at 19? I realize that we are all outliers here talking about our multi-million dollar net worths, but you take that uniqueness to another level.

Anonymous wrote:Why does everyone keep insisting that the mortgage needs to be paid off before retiring? I’ve been early retired for 10 years, I’m still not 65, and we still have a mortgage. I could pay it off tomorrow, but it makes no sense to do that financially. It all depends on the interest rate, the tax deductions, and how diverse your overall portfolio is. You are all retirement planning amateurs for focusing so much on mortgages.

Totally agree

Anonymous wrote:

Anonymous wrote:Why does everyone keep insisting that the mortgage needs to be paid off before retiring? I’ve been early retired for 10 years, I’m still not 65, and we still have a mortgage. I could pay it off tomorrow, but it makes no sense to do that financially. It all depends on the interest rate, the tax deductions, and how diverse your overall portfolio is. You are all retirement planning amateurs for focusing so much on mortgages.

You almost always need more money to retire if you have a mortgage because your 3-4% withdrawals have to cover the mortgage payment, which is comprised of principal and interest. I don’t feel like drawing up an example, but do the math and you’ll see that I’m right.

At a certain point, it’s about retiring and enjoying your life, not maximizing net worth. Otherwise, people age 60 would use their entire nest egg to buy 10 rental properties, which would not generate any cash flow because they would be highly leveraged. They would have an extremely high return but could never retire. Glad I could help you understand this.

2.75% mortgage rate on a $500K < 4% growth on $5million.

You would be net positive by keeping the $500K in a 4% growth. Sure, you net out only 1.25% on $500k, but it's still a positive.

And then there's the possibility of a down market. They would have $500K less to be able to live on.

Anonymous wrote:

Anonymous wrote:350k each or together? If together, how did you amass 5 million?

I’m wondering this too. We are a few years younger than OP, make close to $400k combined and have been maxing out retirement for ages. We have just under $3M total (incl house equity) and I’m not sure exactly what we could have done differently to get to $5M. There was either some impressive market picks or they have a non-standard form of income.

You could have started earlier. DH and I are your ages. We have never made more than $200k a year and most years have been below that. We have the same NW that you do. The only difference I can name, based in the info given, is that I opened my first IRA at 19 and contributed the max every year.

If we had your income, we would be well over $5m.

Anonymous wrote:He be unemployed not retired at 50

Unemployed means "can't find a job". Retired means "I don't need to find a job because I have enough money not to".

Anonymous wrote:How on earth do you spend $18k a month? I’d think with that kind of spending you absolutely can’t retire with $5 million saved. I could but my spending is probably 1/3 of yours. So you need to keep working.

+1 this is what I'm thinking.

Our expenses are about $12K, and that includes some travel and contributing $1100/month to kid's 529. Our mortgage is $150K, PITI is about $2500, but the mortgage part is $1400, and the interest is 2.75%. So, we won't be paying it off.

We can retire with $3.8 to 4 mil. We will stop contributing to 529 when we retire, which is when DC is in college.

We ran the numbers, and we can do it.

But $18K? Assuming a 4% conservative growth rate, given that you do want to be conservative if you are retired, you would be pulling out more than the investment is growing. This is not accounting for down markets within the 40 years, either. I assume you also don't have a pension?

As for the 529 tax deduction... have you been contributing more than $5000 per year? If you have, and you live in MD, the difference can be carried over to the next year's tas deduction. We've been over contributing for over 10 years, so we have a lot of tax deductions accumulated which we will be using long after the kids have graduated college.

I think you should talk to a financial advisor. We did. They ran the numbers and also said we would be fine.

He be unemployed not retired at 50

Anonymous wrote:

Anonymous wrote:350k each or together? If together, how did you amass 5 million?

I’m wondering this too. We are a few years younger than OP, make close to $400k combined and have been maxing out retirement for ages. We have just under $3M total (incl house equity) and I’m not sure exactly what we could have done differently to get to $5M. There was either some impressive market picks or they have a non-standard form of income.

Op here. There was some generational transfer. The rest was our saving. I recognize how fortunate we have been. This does factor into some guilt I have about not just pulling the cord now and celebrating my DH’s immediate retirement. I should add he is not devastated by not retiring right now. He agrees that my ramping down to a less time consuming job that includes health insurance is going to help out the family overall.