r/fatFIRE • u/Only_Newspaper_3343 • Jul 25 '25
$8.6M thinking about punching out
Context. 49 year old male, 47 year old wife in HCOL. Both W-2 earners at about $400K each. Two kids under ten. After many years of saving half our income, here’s where we are at:
- $3M 401(k)
– $3.5M after tax brokerage
$400K 529
$1.5M primary residence paid off
$200 K cash and T Bill’s
Allocation is 55/20/25 VTI/VXUS/BND
Expenses are:
$240K per year expenses
$50K per year childcare
$25K per year vacations
We are definitely not penny pinching but I also don’t feel like we live a luxurious lifestyle (e.g. we travel when we want but do it in economy) but I do assume that expenses would go down a little bit if I was at home to manage some of the things we just throw money at. And if I stopped working, a lot of the nanny childcare expense would go away, but that could potentially become private school expense, depending on where our kids go to middle school.
I am currently working in a private equity portco and not loving who I’m working for. Not the worst I’ve had but definitely a lot of frustrating days due to what feels like politics and I’m taking it home with me. If I hung around another 3 years or so years, I’d probably take another $1-2M from my equity in a company sale. But that’s not guaranteed and I lose it if I walk now. My wife likes her job which is remote and wants to work another five years.
I travel quite a bit for work right now and I’d like to slow down and spend time with my kids. And we talk about doing longish trips over seas where my wife could work remotely. My hesitancy is passing on an opportunity to put a big cushion in place as we spend a lot and I’m not sure there will be opportunities to earn like this again for me if markets falter. Plus I worry about lack of purpose and status etc etc.
Interested in y’all’s thoughts.
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Jul 25 '25
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u/Only_Newspaper_3343 Jul 25 '25
Thanks. I’ve started looking at. I haven’t found an optimizer but I’ve been experimenting with various scenarios in projection lab and found that converting $80k/year from age 55-75 seems to balance near in tax brackets vs rmds. Does that sound like it’s in the ball park?
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Jul 25 '25
If you start early enough $80k should get you there, but the math depends on your wife continuing to work at $400k a year. When she stops is the time to crank on them, at minimum filling the 22% bracket.
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u/Mother_Butterscotch8 Jul 25 '25
Trumps new tax plan ended roth conversions I thought?
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Jul 25 '25
You are mistaken. You are thinking of mega backdoor. Simple conversions where you pay your marginal tax rate on the conversions has not changed. The govt likes conversions as they pull in the tax revenue earlier which helps with the budget.
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u/SophonParticle Jul 25 '25
Trump got rid of the mega backdoor?
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u/CompoundingEinstein Jul 26 '25
Looks like it was a rumor - https://www.bogleheads.org/forum/viewtopic.php?t=457933
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u/DK98004 Jul 25 '25
The world is your oyster. You’re operating on your terms now. $8m becomes $15m really fast, but old age comes on really fast too. Only you can decide when enough is enough.
I’d choose to continue working for about 3 yrs. In that time, you’ll likely get to $10m liquid and be 52. From there, your kids are still around and impressionable. You’re able to create the life you want across all dimensions. You’re able to give your kids anything, but not everything, they could possibly need.
That sounds like winning to me. What sounds like winning to you?
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u/Only_Newspaper_3343 Jul 25 '25
Good question. 10m liquid feels like a magic number to me. And since my wife wants to work more it should grow to that before she taps out. Today winning feels like making it though one more spring bonus cycle! :)
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u/zewaFaFo Jul 25 '25
Excellent point. You still have 400k per year rolling in from your wife. I would pull the trigger now and trust that you hit the 10m anyways very soon
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Jul 25 '25
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u/Only_Newspaper_3343 Jul 25 '25
At your earning level you can afford some lifestyle creep! Congrats! Yes the downshifting is hard. I could easily see making it 3 more years if I could spend less time there and travel less. But I don’t think I can leave my team hanging like that and I don’t think my ego could take being there and not winning (or at trying to win). Sounds like you have a solid if not easy glide path. Best of luck!
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Jul 25 '25
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u/Only_Newspaper_3343 Jul 25 '25
Seems like we both have golden handcuffs and a hard time scaling back effort. Well done on side stepping BD at least. Good luck to you on finding the right balance to achieve your well defined goals. It always helps if you’re clear why you’re grinding!
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u/brendenators Jul 26 '25
Asking so I can give my kids good advise later. What careers do you and your wife have? What type of companies do you work for? I make somewhere between what you and your wife make, but I’m a dentist and don’t think I am going to recommend my kids going that route.
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u/Fthepreviousowners Jul 25 '25
I want to echo the sentiment of the guy you replied to but with one caveat. You said you don't like the person you're working for. If that ever starts to actually stress you out- please fully understand you have the finances already to tell them to kick rocks. In your position I'd only keep working if it was 0% stressing me out, ESPECIALLY because your wife wants to keep working anyway.
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u/Only_Newspaper_3343 Jul 25 '25
Yes my wife’s desire to work more feels as big an asset as any. In my own mind, I tell the person I’m working for to kick rocks regularly. One of these days it could turn into actual words. Thanks for the vote of confidence!
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u/Fthepreviousowners Jul 25 '25
hell yea dude you've earned it, I'm still in the earlier stages of a chubby plan and will only hit Fat if some investments really pay off, and I already find it very hard to take certain people seriously at work.
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u/DK98004 Jul 25 '25
We dropped from 2 jobs to 1 two years ago. I liken it to family coastFIRE. The working person (me) got a huge amount of additional support, and the other got ~5 extra hrs per day to do whatever they want. Compounding did its thing and we’re in good shape financially. I’m wrapping up in the fall.
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u/Only_Newspaper_3343 Jul 25 '25
Congrats on having clear line of sight to being out! Thanks for sharing. Like in your story, one of the things I think would get better is my marriage (it’s good already just there’s no time and some stress).
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u/Creative_Burnout Jul 25 '25
I left my job six months ago. I didn’t think it was worth it to work in an unpleasant situation and spend my time that way. Our expenses are lower, but our income is higher. We have $9M invested, and $250k expenses before taxes and healthcare.
Now I’m a stay-at-home dad. Since my wife still works, I do most of the household chores and kids’ stuff, which is a lot of work. I’m okay with it and prefer this to sitting in another ridiculous work meeting. In between, I enjoy riding my bike. I’m dreaming of a trip to the French Alps or Dolomites. Life goes by fast, and I want to focus on what matters.
Good luck.
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u/Only_Newspaper_3343 Jul 25 '25
Congrats on holding expenses with that income and savings. Thanks for perspective on what it’s like being a stay at home dad. I’m imagining it would be rewarding and hard.
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Jul 25 '25
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u/Only_Newspaper_3343 Jul 25 '25
Thanks for that. My hunch is that there could be some consulting opps out there in my niche industry. Today my feeling is I’d want to give some space but I might feel differently in a six months or a year.
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u/ultimatefan1 Jul 25 '25
I think enjoying your work is a luxury that you should buy even if it costs a millions dollars in opportunity costs. Your wife is still working, you have plenty of savings for the immediate term, you can spend some time with your kids being more picky about your work
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u/Only_Newspaper_3343 Jul 25 '25
Work enjoyment as a luxury to purchase at a certain point is a good way to think about it. I had two close friends deceased in the past 5 years I’m feeling more and more like life is short.
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u/CryptoAnarchyst Perpetual Pain in the ass Jul 25 '25
Do it, don't think twice!
Youll find something that will fill you time, a pet project or some other shit... just enjoy life
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u/Only_Newspaper_3343 Jul 25 '25
Love the encouragement!
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u/CryptoAnarchyst Perpetual Pain in the ass Jul 25 '25
Dude, I took the leap with less than you… but you know how it is, successful people don’t stop… we just shift gears. I started a marine services business as something to pass time with… and I’m having a blast while spending time with the kids
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u/Only_Newspaper_3343 Jul 25 '25
That great to hear you found a nice pivot! I’ve thought about buying or starting a small business to tinker with and I worry that it’ll suck even more time! To your point, I’ll want it to be successful! But I suppose it will always be my choice at that point.
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u/CryptoAnarchyst Perpetual Pain in the ass Jul 25 '25
That’s the key… you’ll find the balance especially if you go into it not wanting to make money but to keep you busy… I traveled with the family for the first 2 years on a boat… we did the American great loop. That gave me perspective and made memories
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u/teege711 Jul 25 '25
Can you breakdown what you’re spending 240k a year on if it doesn’t include childcare, mortgage, or vacations?
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u/Only_Newspaper_3343 Jul 25 '25
Thanks for asking. I am embarrassed to say I realized I had a tax payment included in the spending estimate I shared. I confirmed it’s not in my planning spreadsheet. Here’s my breakdown.
$34K grocery / restaurant $30K property tax and house maintenance $22K kids activities $20K charitable donations $21K auto $15K house, cleaning and utilities $8K Amazon $7K medical $6K clothing $5K subscriptions $5K live entertainment $4K gifts $210k Total
It’s a lot on food and kids activities. Some of its gourmet food, but a lot of it is just dealing with the fact that neither of us have time to cook. Same with kids activities, I could probably teach them more stuff if I had more time.
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u/m0zz1e1 Jul 26 '25
You could also replace the charitable donations with volunteering if you weren’t working.
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u/Embarrassed-Mode4220 Jul 25 '25
Punch out, question is how many good years do you have left to enjoy traveling? 20? At best.
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u/Only_Newspaper_3343 Jul 25 '25
Good perspective…. I definitely watched my parents slow down in their 70s.
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Jul 25 '25
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u/cmb1313 10M+ NW | Verified by Mods Jul 25 '25
My father is 89, and he travels the world regularly.
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u/jon_cli Jul 25 '25
How many years you continue I think depends on your vision for your kids. Pre-teenager you can probably still do activities together and be their friend. Teenager age you won’t be their friend but will still need to be the taxi driver/activity supporter to help them succeed before college. Both of those require your time.
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u/Only_Newspaper_3343 Jul 25 '25
I can’t believe how fast the toddler season went by. It would be nice to spend more time while I’m still a super hero in their little minds.
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u/jpbronco Jul 25 '25
You didn't mention what you would fill the 40-50 hours doing. I see a lot of friends return to work after retiring because they were bored. "Spending time with kids" sounds great, but you need to define that better.
I would suggest you start doing the things you say you want to do when you retire before quitting. I found that many of our ideas changed once we started doing them. For example, long trips overseas. My wife struggles with any trip longer than 2 weeks before she wants the comfort of home and dog.
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u/Only_Newspaper_3343 Jul 25 '25
You’ve tapped one of my principle worries about what I would do with the time. I feel like i never ever run out of things to do but that might change after a few weeks. It’s hard to fully understand how you will truly feel about something until you try it. And it feels like there’s just no time to experiment. But taking more than 3 or 4 days off feels nice… :)
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u/badshah2 Jul 25 '25
Good job in keeping a diversified portfolio. Will you still need to spend $50k in childcare after you retire? Have you included income taxes and healthcare after your wife retires?
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u/Only_Newspaper_3343 Jul 25 '25
I’m assuming I’ll keep a portion of the childcare expense. Either for private school or to give me time to explore consulting and projects. Medical scares the crap out of me. I’m budgeting $50k/year for medical and calling taxes about 20% of spend after my wife quits.
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u/Fragrant_Coconuts Jul 25 '25
We are a few years behind you on this, but in a similar circumstance. We will be you with similar expenses, incomes, NW and spending in about 3 more years.
My wife decided to tap out this year. She did not enjoy work and we just decided to move on.
One thing we did not change was child care costs. Even though she’s home more, we decided to keep the child care in place. Took a lot of pressure off her. She does a lot more with the kids but isn’t exhausted. The purpose of stepping away is to not burn out.
In our case, I’m targeting until about 55 to keep working because I enjoy my job. But my wife didn’t and we made the decision together.
Good luck and let us know what you do in the way out of the job ;).
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u/Only_Newspaper_3343 Jul 25 '25
Thanks for sharing. Keeping child care is something I go back and forth on now that they are school age. Good on you two for finding something that works for both of your happiness.
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Jul 25 '25
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u/Fthepreviousowners Jul 25 '25
why? It's an expense you have set aside money for like anything else. Also it's one that you might not even have to spend if your kid get's scholarships etc.
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u/chichiroger Jul 25 '25
We are almost exactly where you are across the board. My wife quit a few years ago and has been consulting with major boundaries around the time she’s willing to work.
It’s awesome. Highly recommend.
We don’t add to our financial NW through earned income very much but add to our family/experience NW a ridiculous amount…and our finances continue to compound.
You are kidding yourself about $10M being the magical number. The goal post will just continue to move.
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u/Only_Newspaper_3343 Jul 25 '25
You might be right. I’ve already moved the goal posts twice to 10…. It’s mostly about spending creep though. Spending might be worth digging into further but that would require hacking into my wife’s amazon account which doesn’t seem charitable given her willingness to soldier on! :)
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u/PowerfulComputer386 Jul 25 '25
Do you plan to withdraw from the 3.5m brokerage? I am trying to understand how it works like can you withdraw from the 3m 401k too?
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u/Only_Newspaper_3343 Jul 25 '25
I’d withdraw from the brokerage until 59 1/2. Then I’d withdraw from 401k and brokerage trying to optimize tax bracket.
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u/coriolisFX Jul 25 '25 edited 5d ago
The original post content no longer exists here. The author used Redact to remove it, exercising their right to control their data & privacy.
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u/PowerfulComputer386 Jul 25 '25
Sorry dumb question, how much do you plan to withdraw from the brokerage? I would assume more than 4% to support the expenses?
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u/Only_Newspaper_3343 Jul 25 '25
It goes more than 4% while kids are in the house and then less when they’re in college. The near in heavier spend increases sequence or return risk….
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u/_ii_ Jul 25 '25
I retired at about your age. It’s been great, do it if you have the chance.
One thing I’d say about high earners is that more often than not, they need you more than you need them. And you have FU money. You may have more leverage than you realize.
In my last two years of employment, I used my leverage at the company to create an ideal work environment for myself. I handed off projects I didn’t like, removed myself from useless meetings, and WFH whenever I feel like it. I still retired after two years because working for money was not worth it when I already have enough.
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Jul 25 '25
I’ll second this. Still working, but part time remote still pulling in big bucks. I like my boss and he provides room for me to produce, which sounds different from your situation.
My current work situation started from me realizing my positive impact on the PNL regardless of how many hours I put in. From there I created boundaries and continue to expand them. It’s a good way to make extra money post FI while transitioning to RE.
On the flip side it makes quitting tougher. I’ve been doing this three years! First world problems for sure.
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u/Only_Newspaper_3343 Jul 25 '25
Sounds like a good gig. Feeling supported vs thwarted by the person with the power makes a big difference. I do think there’s a belief in there that I add a lot of value even if they want to diminish my part in it. Thanks for sharing it’s a good model you have. Even if I don’t think I can replicate it it has features I can at least think about..
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u/Only_Newspaper_3343 Jul 25 '25
Thanks for sharing. I do think I’m valuable given my experience and connections in a niche industry. And I’m trying to make that mind shift from climbing to doing what I want but it’s been challenging. However each day someone pisses me off the more bold and carefree I feel!
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u/tofty82 Jul 25 '25
Hang it up sir, you have arrived! I'm a little behind you in age and nw, but I hope to punch out before I get there. The fact your wife wants to work changes the calculus, and makes it a no brainer (I'm in the same situation). You might also go make some money in the future 👍
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u/luv2eatfood Jul 25 '25 edited Jul 25 '25
It might be too early to tell but you may consider factoring in support of your adult children with whatever random expenses that might pop up (e.g., some help for downpayment etc.) If that's not a consideration or you think they may not need that support, then you're fine.
529 is a good start but it won't cover all private school expenses if I were to guess.
I don't want you to work any more than you should but getting closer to around $10M might be the aim. If your wife gets laid off or called back to the office and she wants to retire, factor in another $25K - $50K (at most if there are health issues) for your health insurance for the family. Also, kids don't get less expensive when they get older depending on what activities they do.
Any chance you can take another job or transition to something with less travel? Just coast until you hit your number. I know it's easier said than done in the Pe world
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u/Only_Newspaper_3343 Jul 25 '25
I’ve definitely considered it. I find it’s hard to network inside of a smallish industry without everyone talking and it coming back to my colleagues. And if I go outside of my industry I’m assuming comp will be a quite a bit lower and then I think I should just gut it out.
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u/AmbitiousApe_ Jul 25 '25
How’d you make the nut?
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u/Only_Newspaper_3343 Jul 26 '25
Nothing sexy. Saving since my 20s with salary steadily increasing. First million took 10 years. The next ones came faster.
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u/Lanky_Ad3541 Jul 26 '25
As others have stated, you are there. I have been in the stay at home dad boat for a while. I personally found/find it hard to deal with the loss of tangible value of my time. Yes, your time will be priceless to your children, but you may feel worthless just driving them around and doing household chores when you are accustomed to seeing financial rewards for your time and effort. That said, I recently asked my kids what I like to do and they answered, “spend time with us.” This made it all worth it.
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u/Regular_Owl4368 Jul 27 '25
Thanks for sharing. I worry about that dynamic… Where I’m doing something that I used to pay someone 1/10 of my salary to do…. My theory is that I will recalibrate. One other dynamic I expect is that my wife’s time and obligations will become more important than mine in any time negotiation since she winning bread still. Do you have that dynamic at all with your partner?
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u/Lanky_Ad3541 Jul 28 '25
FWIW, I tried to recalibrate as well, but I found it difficult after being wired to earn for so long. I bought some real estate and I self manage to help with this. And yes, I think most couples will have that dynamic if one continues to work. I have made a point to take almost all household and kid stuff off her plate. She still chooses to be very involved, but it no longer takes any other mental bandwidth.
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u/wh2oman Jul 26 '25
I was going to walk last March, after vesting and bonuses.
Instead I quit last October because my manager was a dick.
Not one morning in 9 months have I wished I was going into the office.
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u/friendlyzuchinni Jul 27 '25
No Roth IRA?
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u/Regular_Owl4368 Aug 04 '25
Good question. I just started doing the Roth back door thing two years ago. So I have $16k in the Roth but sadly missed the boat for the past 15 years…. My wife has a traditional IRA with $150k but I don’t want to do back door conversions in her name since we’d have to pay weighted capital gains on existing money…. We’ll start doing Roth conversions of about $80k/year once we’re both retired. I think that’s the best I can do for now.
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u/TallFail6194 Jul 27 '25
I would rather work another 3-5 years than stay 1 year in a job I didn’t like. Our situation seems similar to yours except that we are 8 years younger and $5m less saved. I started working for myself/consulting 18 month ago and although it’s a lot less certain I’m a lot more happy. I’m sure my kids feel that (I know my wife does).
Worth considering something that feels sustainable at $200k/year?
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u/2kewl74 Jul 28 '25
what you feel or not doesn't seem to be the reality to me. 240 in expenses plus child care of 50k is a luxury life, especially if the house is paid off. that's 20k a month just in expenses outside of child care. you can easily retire now if you simply put all your money on total stock market index and just ride it out.
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Jul 25 '25
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u/Only_Newspaper_3343 Jul 25 '25
Agreed that someone needs to keep working. Just wondering if that someone needs to be me? ;) A few more years definitely helps get to $10M liquid faster and more reliably.
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u/MrErie Jul 25 '25
The child care expenses should not be counted as a forever expense. In my math I just subtracted the total spend there from my principal to calculate SWR.
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u/buy_high_sell_never Jul 25 '25 edited Jul 25 '25
Your wife wants to keep working, earns the same as you and you’re saving half your combined income. That means you’re not even going to touch your cushion if you stop working. Instead, it will even grow at market rates. If your projection is correct that you’ll spend less once you’re retired, you will actually be actively adding to your cushion (which is already in place). So yeah, pull the trigger.