OP, give the higher paying job a few more years. Work hard to build up your investments. I would live on 240K even while making so much more. This way you see what it's like on that salary AND you are packing away money to invest.

I am doing something similar. Technically we need 150K after tax. I am trying that now. 3 months in and it is surprising how so many little things add up. The stress of it is hard.

Revisit in 3 years.

Run Firecalc with your details and see what you find. I don't think it's smart to pivot at this point with young kids. Does the 15K include income tax?

You really need to live on the 240K and let your savings and investments grow.

450k isn't a relatively high earning job. It *is* a high earning job.

I make a fraction of that, but even at 150k + bonus, I still have plenty of stress and long working hours. Don't confuse your husband's easy 140k fed job for what corporate jobs are like in the 150k bracket.

Sell the house, move to something much cheaper,
stick to your job as long as you can and ride it out. The next 10 years will fly by and you'll be in a much stronger financial position. Then consider shifting to a lower paying, less stressful role.

Yes, that’s insane. Don’t do it. Obviously it’s appealing to take the job you want and not have to make any lifestyle changes but that’s not realistic.

Don't quit the job yet. You will regret it and it is unlikely you will ever be able to make this salary again in your life if you switch industries. The grass is always greener somewhere else and your passion for this new job will fade quickly. Downsize your house first and buy a new one that you can purchase with cash. Hire help to outsource all of the tasks you don't like or don't have time to do (while you stay at the current job). Good private schools are not affordable if you take that lower paying job. So I would suggest that you consider staying in NOVA, but downsizing to a house in a good school attendance zone. Once you have moved and lived there for a year or so reevaluate your budget and determine if it is financially feasible or desirable to change jobs. Most people do not love their jobs so I would not assume that you will be happier in the new job.

OP here. Thanks to those who provided feedback or had thoughtful comments. Seems like clear consensus is that it is a terrible idea to live off savings for the long term. This is basically what I think, so appreciate the confirmation that my husband is insane.

And to immediate PP, i would never put my mom in a shitty nursing home! She lives with us but we don’t support her — she has more money than she’ll be able to use over the next 20 or so years given how she lives.

Anonymous wrote:

Anonymous wrote:
You can't keep living as if you make 530 if you only make 370---Something has to give.

But fundamentally, why not? So let's say we hypothetically use all the earnings in our brokerage account to account for shortfall (but not touch the principal, at least not much). Our brokerage principal will still be $1.5 mil+, and our retirement will continue to get an annual boost of our contribution and continue to grow for 20 years. We can downsize once the kids are out and hopefully add to our savings from the home equity.

Your kids are young. The market takes a dip, and your brokerage principal could go down to $1.1/1.2M. You are planning to do this for 10+ years to "get the kids out of the house". Not a smart financial plan. You will be 10 years older, might have less than $1M (most likely will) and your house might not be worth much more. Also, big homes are expensive to maintain. Need a new roof--that's $50-60K on a house like that----you should be saving/planning for that. What about other maintenance. You likely should be saving/planning to spend $10-15K per year for maintenance (likely more).

I wouldn't stay in a ridiculously expensive/huge home that I couldn't' afford to pay the bills for without dipping into savings. You are not on a sabbatical. Once you take the new job, there is no guarantee you will ever get back into a position that pays what you are leaving (if you wanted to).

You say you help support your mom. What if she need home nursing care or gets dementia, or anything else. I'd hate to put my parent in a cheap ass home simply because I refused to budget for the last 10 years and live within my means.

Anonymous wrote:

Anonymous wrote:Why is it that the dumbest people make the most money? Honestly. OP can’t figure out how to put 2.5 million in savings towards a house that must accommodate the oh-so-rare situation of having one extra adult? And then live on a meager 240K per year?

I know DC is expensive but come on, OP. There’s zero reason for you to have a mansion, and there’s zero reason for you to have a mortgage.

And LOL to your husband being an economist. That’s the major the engineering dropouts pivot to in a panic because it’s such an easy degree to finish in a truncated timeline.

I'm confused. Obviously we could spend our brokerage on a house -- we could pay off our current mortgage and continue to live in our house (with insurance, taxes and upkeep ongoing). We could theoretically do that at any point. The rate is low, so we've elected not to do that because we make money that exceeds 3% in our brokerage. Doing that, in my mind, is equivalent to living off our savings (whether we do it all in one fell swoop or over time). And I agree we don't need such an expensive house (though you'd be surprised how hard first floor bed/bath with no steps to enter is to find!) -- likely a bad decision, but we're here now so that's the starting point.

Ad hominems on my husband seem unnecessary -- he's a fed, he's happy -- but okay.

Stop. We all live or have lived here so we all know this is bullsh!t.

And of course you are confused. This is a “problem” with SEVERAL obvious solutions that you are too stupid to think of yourself or too spoiled to understand.

(Obvious solution #1 is to sell the house, take the proceeds plus some small amount from your brokerage, and buy a reasonably sized, reasonably priced house outright while letting the remainder of your savings continue to grow and lowering ALL of your monthly housing costs. That is not “living off your savings”, it’s not being an idiot.)

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I saw you said the housing spend was $15K per month. What is your actual cash shortfall per month if you change jobs?

Our projected annual shortfall with my hypothetical job change is about $80K/year (going up to $90K by the time the youngest kid graduates high school, assuming 2% inflation), assuming we both continue to max 401K contributions. If kids become substantially more expensive as they get older, it's possible that could change. I think our budget estimates $30K for camps, lessons, etc.

I think we'd need to find a house in the $750K range to live within earned income. Not super excited about the prospect of moving further into suburbia. Would happily live EOTP in NWDC if we had a private school option for kids, but $750K seems impossible. (And yes, I am aware of DC crime.). But I realize that these are tradeoffs and that I should perhaps keep my high-paying job if I don't want to move further out.

PP here and I think the biggest issue with your approach is that you are going to have to adjust your lifestyle when you retire. An $80K shortfall is more than just your housing it is a lot of spending you would need to cut. Even if you keep maxing retirement you won't be able to sustain this level of spending in retirement. I mean an $80K shortfall, what does that translate to in terms of annual expenses when you factor in your net from a $240K income?

We expect about $175K net. We have about $160K in housing and $100K in non-housing expenses, based on last few years of actual spend. That includes at least $20K for donations and $20K for vacations each year, which obviously can be cut.

PP here and that could work. You said your DH is a fed so I'm going to assume $30K in pension income plus SS plus your retirement accounts plus brokerage. Let's say 0 from your current house and you use that money to move/downsize and buy a house in cash when your kids are out of the house and you move. Say your retirement accounts grow to 2 million total that's another $60-$80K per year if you draw down at 3-4% per year. You'd also have whatever is left in your brokerage accounts as a safety net.

That $100K per year will probably increase with inflation plus you will have taxes/insurance/maintenance on a house so maybe $160K total expenses in future dollars.

The price of your decision will likely be both of you working longer but if you're OK with that the math seems like it could work.

One caution would be that the market is at record highs so what you have in stocks might not reflect longer term growth trends.

But it will be hard on $240 to continue saving for retirement—and you don’t have enough that you won’t have to. You will also still want to go on vacation. Perhaps you can trim, but it’s unreal to cut it all. It’s wishful to live in a very expensive house but think you will be okay cutting all expenses to the bone. Surely there is a middle ground.

Anonymous wrote:Why is it that the dumbest people make the most money? Honestly. OP can’t figure out how to put 2.5 million in savings towards a house that must accommodate the oh-so-rare situation of having one extra adult? And then live on a meager 240K per year?

I know DC is expensive but come on, OP. There’s zero reason for you to have a mansion, and there’s zero reason for you to have a mortgage.

And LOL to your husband being an economist. That’s the major the engineering dropouts pivot to in a panic because it’s such an easy degree to finish in a truncated timeline.

I'm confused. Obviously we could spend our brokerage on a house -- we could pay off our current mortgage and continue to live in our house (with insurance, taxes and upkeep ongoing). We could theoretically do that at any point. The rate is low, so we've elected not to do that because we make money that exceeds 3% in our brokerage. Doing that, in my mind, is equivalent to living off our savings (whether we do it all in one fell swoop or over time). And I agree we don't need such an expensive house (though you'd be surprised how hard first floor bed/bath with no steps to enter is to find!) -- likely a bad decision, but we're here now so that's the starting point.

Ad hominems on my husband seem unnecessary -- he's a fed, he's happy -- but okay.

Why is it that the dumbest people make the most money? Honestly. OP can’t figure out how to put 2.5 million in savings towards a house that must accommodate the oh-so-rare situation of having one extra adult? And then live on a meager 240K per year?

I know DC is expensive but come on, OP. There’s zero reason for you to have a mansion, and there’s zero reason for you to have a mortgage.

And LOL to your husband being an economist. That’s the major the engineering dropouts pivot to in a panic because it’s such an easy degree to finish in a truncated timeline.

Why would you need savings? Just change your lifestyle.

Anonymous wrote:

Anonymous wrote:Good God. What’s insane is the degree to which some people—apparently including you—are wedded to the idea that one should never pay off one’s house and that low-interest-rate mortgages are some kind of manna from heaven.

Essentially you’re asking, “Should I permanently live above my means so that I can keep my low-interest mortgage?” I hope others reading this realize all of the second-order effects that come from the decision not to pay off one’s house if one has the means to do so. For me personally, the day I paid off my house was one of the best days of my life and I have not regretted it for one minute.

Ignorance is bliss. DH and I snagged a 30-year fixed rate at 1.6% in 2020 for $3.7M on our $4.5M home. We’ve transformed that $3.7M into $7.5M since then. Leverage is how smart people get wealthy.

In your case, wealth is how wealthy people get wealthier.

Seriously, STFU

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I saw you said the housing spend was $15K per month. What is your actual cash shortfall per month if you change jobs?

Our projected annual shortfall with my hypothetical job change is about $80K/year (going up to $90K by the time the youngest kid graduates high school, assuming 2% inflation), assuming we both continue to max 401K contributions. If kids become substantially more expensive as they get older, it's possible that could change. I think our budget estimates $30K for camps, lessons, etc.

I think we'd need to find a house in the $750K range to live within earned income. Not super excited about the prospect of moving further into suburbia. Would happily live EOTP in NWDC if we had a private school option for kids, but $750K seems impossible. (And yes, I am aware of DC crime.). But I realize that these are tradeoffs and that I should perhaps keep my high-paying job if I don't want to move further out.

PP here and I think the biggest issue with your approach is that you are going to have to adjust your lifestyle when you retire. An $80K shortfall is more than just your housing it is a lot of spending you would need to cut. Even if you keep maxing retirement you won't be able to sustain this level of spending in retirement. I mean an $80K shortfall, what does that translate to in terms of annual expenses when you factor in your net from a $240K income?

We expect about $175K net. We have about $160K in housing and $100K in non-housing expenses, based on last few years of actual spend. That includes at least $20K for donations and $20K for vacations each year, which obviously can be cut.