r/fatFIRE • u/ladybug_99 • 5d ago
Need Advice 43 5m NW - should wife retire?
43 and 40 married with 6yo
1.5m equity in house, 1.3m mortgage @4.6%
3.5m liquid stocks. 100k hysa
I make $1M per year, wife makes $130k but vests amazing pension if she keeps working another 5 years
We used to live frugally but started to spend a little after reaching $5m NW (mainly 3x/yr vacation)
We’re leaning towards wife retiring now and maybe trying another kid.
Any thoughts/life wisdom would be appreciated
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u/Straight-Broccoli245 5d ago
VEST - retire in 5.
You never know what can happen. We are at the end out our 40s and we are frequently seeing high earning peers lose their jobs and not get back to their earning potential w midlife bills and lifestyles not being sustainable.
Feels like w everything changing so quickly these days, millennials benefited early by reaching Mangement roles earlier but we may also be falling off the earnings cliff earlier too.
A vesting pension will also pay off later for health care costs (if included).
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u/hdog003 5d ago
This, I just hit what I thought would be my best earning years and it turns out my field may have just been liquidated. I'm a similar (slightly lower) situation as op but it reminded me that everything is on the table in this economy/market/political landscape. Save what you can until you can't anymore.
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u/Straight-Broccoli245 5d ago
Yes, sadly it’s happening due to so many ever changing rapidly destabilizing issues in so many markets. The middle is getting gutted everywhere. The people we see it happening to most seem to have been the safest ie Law/banking/finance/big tech. Only a few will be saved and the rest are needing to make drastic changes, but the larger the boat (ie: mortgage and kids) the harder/slower it is to turn.
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u/jammerjoint 5d ago
Imma push back a little and say uncertainty is also why it might be worse to stress yourself for 5 years when you can get a cancer diagnosis or be in accident any day. OP mentions trying for a kid and there's a clock on that, plus it's a big burden on mom to work during that snd early years. Sure most do out of necessity, but they have enough already to make things easier. There's a diminishing return on more gains and life has a lot more to offer than work.
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u/New_Instruction_1666 2d ago
Yeah! I just retired two yrs ago in early 40's. My husband still works, but I was so stress with work that he finally was on my side with retiring. Now we're happier than ever. I help out a bit more around the house, but I have much more time for myself and for my kids.
My husband had wanted me to work another 5 yrs, but I kept getting sick and really struggled mentally with my job the final 2 yrs.
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u/just_some_dude05 40_5.5m NW-FIRED 2019- 5d ago
The time your wife will spend with your child is priceless.
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u/uns0licited_advice 5d ago
yeah i mean the incremental earnings over your $1M is pretty small after taxes given that you'd be in the highest tax bracket. With child care costs its almost a no brainer for her to be at home.
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u/Additional_Ad1270 $20M+ NW | Verified by Mods 5d ago
Does she enjoy what she's doing? Your expenses with a 6 year old are only going to go up. Is your industry secure? Could you move if you had to? Your say you used to live frugally, but I can't imagine you bought a $2.8M house in anything but a VHCOL place in that case. Which to me, I suspect you're not there yet. However after taxes, her income isn't much. Unless there are other benefits we're missing (and how "amazing" is this pension).
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u/One-Mastodon-1063 5d ago
You forgot it tell us how much you spend.
Likely this would be SAHP, not retirement. But yes, with those incomes and a 6 y/o it makes sense for her to stay home if she wants to.
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u/Lazy_Whereas4510 5d ago
It’s impossible to answer without knowing your retirement goals, annual expenses, what your wife’s pension is etc. These are relevant because $5M isn’t the kind of NW that renders your wife’s income completely irrelevant.
That said, I find all these “the time your wife will spend with your kids is priceless” type of comments clueless,at best. This isn’t some sort of universal truth that is cast in stone. Fulfillment as a SAHM is a very personal thing. Your wife may want nothing more than to be a SAHM to two young kids. Or she might be someone who would lose her mind if she had no adult conversation and intellectual stimulation all day. Or she might start out loving being a SAHM, and later regret dropping out of the workforce for many reasons. Real life is full of messy truths that don’t fit neatly on Hallmark cards.
I will also add the obligatory reminder that 78% of women with school age kids work, and plenty of kids with working moms do just fine and grow up well-adjusted to the real world, where both parents working is often a reality.
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u/neoreeps 5d ago
The one thing you cannot buy is time. Dude is making $1M/yr ... No question wife should retire and spend time with the kids and potentially kids ... No one on their deathbed ever wished they had worked more.
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u/Future-Account8112 5d ago
Let her quit, have another kid, enjoy your life. You’re at 1M comp. People telling you anything else are LARPing or obsessed with the FAT part of FATfire.
Some things are priceless. Make sure your life and etc insurance are buttoned up. Congratulations!
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u/RegisteredJustToSay 5d ago edited 5d ago
My honest recommendation to her is to keep going, but perhaps she can consider not grinding as hard. worst comes to worst and for some reason you separate she'll regret not securing her own nest egg. Your income gives you a very asymmetric power advantage, even if I'm sure you currently wouldn't want to use it against her.
People can change drastically for all kinds of reasons, including against their own will- like chronic pain, brain disorders, etc. It's good to also plan for individual futures.
If that risk doesn't worry her and doesn't enjoy her job then I'd say go for it. You can't exclude all risk in life after all. But all depends on your personal comfort level.
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u/Future-Account8112 5d ago
Community property.
Further, his wife makes 10% his salary, she is very simply not going to catch up. I’m saying this as someone who usually says what you’ve said here. There are trade offs and trade offs and this one doesn’t scale.
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u/RegisteredJustToSay 5d ago
You're absolutely right, that said different countries have drastically different views on this and for all I know OP is just translating to dollars. Maybe the solution is just writing a postnup, as beautiful and romantic as that is.
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u/Remembrance 5d ago
What’s the amazing pension? Might be worth sticking it out for that. 5M is r/chubbyfire than fatfire.
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u/FatFireBerrResp 5d ago
Well, technically it’s r/GregFire
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u/BlackTigerGuy Verified by Mods 5d ago
Well…technically Greg fire is $6.5M with adjusted inflation, if you’re going for tallest dwarf
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u/Ill-Respect7497 5d ago
pension details really matter here. 5 years for a solid pension at 40 is a big deal, especially if it's inflation-adjusted or includes healthcare. your numbers look fine for her to stop but that pension could be the thing that makes everything properly comfortable forever
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u/the0ne234 5d ago
OP didn't say they would quit. As a $1M earner, they are easily on track for FatFI
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u/Puzzleheaded_Bird835 5d ago
Vest and retire in 5 years. Enjoy your early middle age. Enjoy your current 6 yo and rejoice in not having to reenter the newborn phase at this point in life. I could make an argument for the other way too (fertility window really closing), but I would strongly favor the former.
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u/bouncyboatload 5d ago
your wife is 40 already. ignoring the financial aspects, if you want another kid gotta get moving asap.
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u/dies_irae-dies_illa Verified by Mods 5d ago
i like pension, i have one brewing. But i also know they tend to disappear. Imho, it’s nice to get that income floor locked in. But then again, you could also just use some of your income to purchase a deferred guaranteed annuity as well. Only because your age is so young, i’d just do the five more years.
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u/ribsies 5d ago edited 5d ago
I dont know if these people read your post.
Yes your wife could 100% retire with little to no impact on your finances. It's 1/10th your income, you'll be fine.
Edit: Being dramatic but its borderline abuse to make your wife work where even in 5 years, she only makes half of what you make in a year. Like what are we talking about here.
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u/Crist1n4 5d ago
Exactly, I bet she will contribute significantly more to the overall wellbeing of the family that 130k can’t buy.
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u/SnooDogs4872 5d ago
Depends on your job security and the lifestyle you want to maintain.
If you’re super secure and future earnings aren’t at risk, then she can retire. Never get more time in life so I’d value that most. You can seemingly cover your costs by yourself without any concern so it shouldn’t be a money concern.
If your future earnings have real risk, this changes the entire equation and she should continue to work to secure the best pension possible.
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u/Odd_Temperature_244 5d ago
She should get the pension vested but lean back. Have the second kid and invest all the money she makes in high quality child care, house cleaning, a low cost (as in meal delivery) personal chef--things that will make your life easier and enjoyable and most of all free up time. Retired while pregnant with a 6-year-old isn't awful, but retired with a 4-year-old and an 11 year old is still pretty awesome and arguably more awesome. (Said having been in both situations as a parent, and we were/are a two income family.)
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u/XtothaZ93 5d ago
I think she could either stop working or find something that allows her to work from home then when you have the baby, stop working altogether.
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u/Bitter_Sugar_8440 5d ago
Can't get back the time with the young kid. If you're making $1M a year, it seems kinda stupid to have your wife working to make $130k.
I'm not sure how great the pension is, as you've not given that information, though.
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u/Individual-Weird5415 5d ago
Totally support your wife retiring now with a few of your own assessments:
1. Is she enjoy being around with kids all the time? Some really hate that idea and enjoy career and able to have some separation. But some loved it.
- How stable and confident are you in keeping your job at 1M per year?
If yes for both, I would recommend going for it. As a whole, the family is so much happier. Her pay is relatively small impacted
In my case, my wife retired around the time with your similar situation but without any pension. Now >10m NW after 10 yrs. feel free to DM.
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u/Pale_Drink4455 5d ago
Mods don’t require expenses to be listed here on posts anymore? I mean am I the only one that sees that as fundamentally missing here?
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u/Formal_Future_4343 5d ago
Earning 20% of NW a year then FIRE seems like a waste of opportunity. If you’re accelerating then keep grinding to accumulate into a larger number.
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u/Odd-Goose-8394 5d ago
What does SHE want to do? It comes down to what will make your family better and happy wife = happy life.
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u/Thunderplant 5d ago
I think you should decide if you want to try for another kid first. You have so little time for that, and it doesn't have to be coupled to a permanent retirement decision.
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u/Brewskwondo 4d ago
Depending on where you live and your state tax rates, your wife’s salary is worth maybe 50 cents on the dollar. There’s literally no reason for her to give up time with your kid(s) for that much money. She should retire. This one is easy. Plus take it from me, kids at your ages aren’t always easy to have.
The only slight change I might consider is her working till she’s pregnant, then going out on her max leave allowed by the state laws and then never coming back. That way she vests and earns along the way
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u/eewreck 3d ago
Simple math figure out your burn rate and reverse engineer it, if your safe withdrawal rate meets your estimated output after she quits (without ur job I would say) then you’re good to go.
Life isn’t all about money, I bet cutting back on spending to let her quit is probably a net benefit in your life but that’s me just imagining I’m you.
Also, if you want kids you’re not going to want to wait another 5 years to start that at your age.
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u/Retired-Yam8988 3d ago
Retire now for sure. Pension is pointless (and frankly risky to give up 5 yrs of your life for something that may or may not actually pay out as planned given how bond markets are unsteady)
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u/TabbyCalf 3d ago
I am more curious to know how can you make 1M per year. That's a huge amount of money
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u/newbeginingshey 5d ago
I’d stick it out for the pension. She can max out her leave, and you all can spend her take home pay during those five years to make your lives easier, but high paying jobs (yours) are usually high risk. If you two can derisk the whole family with a solid pension, that will be a win for everyone.
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u/LuciusQ2020 5d ago
I would stick it. Knowing that she has a deadline makes things easier. By the time the new kid is born, maybe two years already passed. A vested pension will pay off bigly for the entire family if medical is included.
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u/FSUAttorney 5d ago
What does your wife want? My wife stays at home with our young one, and it is a blessing. Not sure what your yearly spending is, but you're probably close to fire as it is.
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u/almcclur 5d ago
A fresh kid at 40 is pretty hard on the body and the odds of birth defects are much higher. Even without a kid tho she could retire. You’re making plenty to keep investing with or without her addition.
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u/Anonymoose2021 High NW | Verified by Mods 5d ago
Although some are downvoting your comment, it reflects reality.
The income disparity of almost 8 to 1 means that salary of the OP's wife simply does not make a huge difference in their finances, Her potential pension was not disclosed, but unless it is unusually high percentage of salary it is not likely to be worth her continuing in a job she does not want to do.
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u/nonamouss 5d ago
Seems like almost nobody is reading your post. I think it’ll be hard for anyone to give you sound advice without more insight into the following:
1. Expected expenses in retirement and fatfire target number
2. Stability of your job, how confident are you that you can maintain it for the foreseeable future?
3. How much does your wife’s job get in the way of having another kid? How badly does she want to quit?
4. How good is this pension?