There are always tradeoffs.Fed gov employee with approx. $2.6m in investable assets (75% stocks), expected $40k a year pension at age 60 (I'm 56 now), and $1.2m in home equity. Live on East Coast but would like to move to West Coast (perhaps North County San Diego) for retirement. Looking at spending $1.6-2m for a home when we move. Would like to retire at 60. Wife and I may work very part time in retirement. One kid in college, one on the way to college with 90% of college covered by 529 plans. Would likely have around $3.6m in four years if I stay at my current job. Would like to live mortgage free so may have to take $ from investments to pay for new house. Other than anticipated travel, we live pretty frugally - only spend around $100k a year. Should I work 4 more years and retire at 60 or stay until 62 where I would have closer to $4m plus slightly higher pension and SS? Job is pretty low stress but I'm a bit burned out. One other option is to take a higher paying job now with more stress for 3 years (could likely command salary of around $500k with my unique skillset). I know we could retire somewhere cheaper but it's important to us to have great weather, cleanish air, culture, outdoor activities. Thoughts?
You have far more money than most Americans will ever have in retirement. Plus of course a pension.
You cannot have the 2 years back in your life. If your mind says it is time to finish working at this role, it is time to finish working. You have to make the lifestyle numbers fit. A smaller home, perhaps. $400k is ... just not worth sticking another 2 years at a job that does not reward you. It would be at 50, say, to be clear, but not at 60.
I read this as you want to do this, but you are not sure you can afford to? In which case, you need to put your spending under the microscope and see what you really need. That will give you a sense of your budget for travel etc.
You do have to have a sense of what a bear market might do to your plans -- if stocks drop 30% in the next 3 years, which is a mild bear market in size, but long in time elapsed (ie more like 2000-03 than 2008/9 when market dropped 50% nearly), how does that feel for you?
Housing rears its ugly head. Where does the pain point hit where you cannot afford your dream lifestyle/ home on the West Coast? What would be your alternatives. Double digit housing inflation is, unfortunately, something that has occurred regularly in recent years in America.
High stress jobs are tricky. They can kill you. Directly via heart disease or stroke etc, subtly via cancer and reduced resistance to disease. I would say do it because you want a new challenge, one that appeals, not just for the chance of working 1 fewer years.
Statistics: Posted by Valuethinker — Fri Apr 05, 2024 1:56 pm — Replies 7 — Views 460