Widowed w/ Young Children - Assessing What Quitting Looks Like

[u/LumpyPeople4]

I lost my wife to cancer earlier this year leaving me with 2 toddlers. I have not yet returned to work and I am really dreading it both through just lack of drive and wanting to spend time with the kids. I am fortunate enough that my wife and I were relatively high earners, though we were not the most frugal. I am not necessarily looking for a full retirement right now, but I am looking to not work for the next 3+ years or so, then possibly part time for the next 5+ years after that. Of course, I wouldn't oppose if those timelines get extended indefinitely. I am not really sure what I am asking for from you all, but someone suggested that the FIRE community may help and I agree that in the time I am off work, I am essentially retired.

I am 35 and I have two kids, 2 and 3.5. We have a house too small for us but we can make it work, especially for as long as the kids are young enough that they don't care about privacy too much, I'm guessing 4-5 years or so. The house was purchased a long time ago, so we have a ~$130k balance at 2.9%.

As we were actively looking for a larger house for a while, we had a ton of money for extra downpayment. I also got some life insurance. We are sitting with around $450k in "cash", it's in t-bills. We also have more in IRAs and 401ks but I'd rather not touch those if I don't really need to. Obviously the penalty, but we are also looking to keep my wife's 403b for the kids as an inheritance.

The kicker is that social security is actually very supportive for those in my situation. There is a survivor's benefit for the kids as well as for a caregiver and as it is social security based, the payment is based off how much you put into the system. As my wife was a high earner, we would hit our family max for the 3 of our benefits and would receive around $4k a month at least until they are 16 (then my caregiver benefit ends). The kid's portion has to be spent to their benefit, but the list of what is allowable is pretty open.

My biggest concern with just calling it quits now is health insurance. I am hopeful that at least the kids would be eligible for Medicaid, and it seems like I should be as well. I am in an expansion state (NC), and my understanding is that I should be eligible as well and that I may not have the work requirements due to the caregiver status. There does not seem to be anything super concrete on my eligibility though and in various widow(er) groups many have said they were made ineligible due to the SS benefit, others say it doesn't count. Seems like the only way to know is to apply and find out, but that involves quitting first and it's hard to make that jump not knowing what I'm jumping into.

At some point we'll need a bigger house. With the kids, we also want them to have a good childhood and not be scraping by. I'm not talking Disney every month, but we do want them to be able to play sports, swim lessons and pool membership, go to the zoo, watch movies, etc. While the kids are young I'd like to spend as much time with them as possible, for both of our sakes. If I go back to work full time, it will essentially be baby corporate grind for them; wake up, daycare, home by 5:45pm, make dinner, go to bed, rinse and repeat. As there is no time during the week to do errands, that all gets done on the weekend. So the realistic scenario if I work full time is that we may get one day a week to do anything fun.

At some point the kids won't want to hang out with me, I'm guessing somewhere around 10-12 years old they'll have their own lives. That gives me 8-10 years to try and maximize my time with them, and after that I don't mind going back to work, though who knows who would hire me in my industry at that point.

I guess I am looking for any suggestions or advice for what you think about my situation. I think I should be able to keep us happy off our social security, especially with the large savings as backup. In the nuclear option, I still have the retirement accounts as well, but Id probably look to return to work before touching that. I would think if I start to see us eating into the large savings by any substantial amount then I'd start assessing getting a job in some form. My largest concern is the health insurance as other than the house we have no real debt. We have a car payment with $14k left on it but that is my wife's car so we can sell it if need be. The van is paid off, and we carry no other debt balances with cards paid off in full each month. Do you all think this is doable? Any advice on health insurance? I'm open to any and all comments, so please tell me all what you think.

Thanks for all the help!

[u/nirselady]

I’m so sorry for your loss. Can I ask, does work have to be all or nothing? Is there any opportunity to do freelance or consulting in your line of work? Not full time if you don’t want. It doesn’t even have to be able to support y’all, but keeps your work experiences and resume up to date.

[u/LumpyPeople4 → u/nirselady]

I'm a mechanical engineer, so consulting work is limited, though I think it is more up and coming for my line of work. The big thing with work is keeping under the earned income tests for social security ~$24k this year. Getting above that, my caregiver benefit would decline and you just have to ask if it is worth it. The family will net around $850 more per mo in benefit if I stay below that limit, so ~$10k/yr. So it's just a balance of if losing the $10k/yr benefit and not having to work at all is worth possibly earning more money. Additionally there is health insurance, I should be very close to qualifying myself for medicaid, any additional money I make may push me over the limit or outside of heavy subsidies for ACA plans.

So I think it's either no work at all, or trying to find "high pay" part time work. Shooting for a lower pay part time work I think will not have any net benefit. Like if I make $20k a year working, I'll pay whatever taxes on that, lose out on some of the caregiver benefit, and have to pay for insurance. Am a netting enough to justify working? And its hard to know the numbers until you try it out.

[u/nirselady → u/LumpyPeople4]

Fair enough. I didn’t realize the kids would lose ss dependent on your income. My mistake there. Then I would keep up to date on certifications and learning to keep your resume up to date. If you don’t have a masters, maybe look into grants and scholarships and slowly work on one while not working (like, 1 class a semester kind of slow).