We both have set a target date of three years from now when we are 42.
We currently own our house and cars completely debt-free.
We live in a suburban/rural area of Missouri, so the cost of living is below the national average.
Further, my wife owns one third of the business Im currently running, which is a family business.
After purchase, the dividends will go into a trust fund and should be around $750,000 a year.
We plan to accumulate that money and live off the interest from her trust and our aforementioned assets.
Our kids have fully funded 529 plans and starter accounts that will have restrictions on age for them.
Are we nuts for wanting to just drop out of the workforce and live our lives with our kids?
Are we missing something here?
To further complicate things, Im an only child.
Its a great predicament to have, but not one that is openly discussed.
-M.
Dear M.,
You and your wife are really good at working and saving money.
But have you considered whether youll actually be good atnotworking?
Boredom can take a toll on retirees of any age.
Most people can expect somewhat lowerexpenses in retirement.
So at a minimum, Id plan to replace the full $125,000 you live on.
In the best-case scenario, you wont need this money.
But youll also be grateful for the income in the event that things dont go as planned.
You have a lot riding on one small family-owned business.
What if its fortunes flipped, even temporarily?
If that business income dried up, youd have to take bigger withdrawals from your investments.
One common recommendation is for retirees to limit their withdrawals to no more than 4% of their portfolios.
What if that happened as part of a wider downturn?
Taking significant withdrawals from your investments after the market has tanked could be a severe blow to your wealth.
Astock market crashis a big risk, particularly in the first years of an early retirement.
You say that you and your wife are counting the days until retirement.
Is that excitement talking, or is it burnout?
see to it youre not discounting the value of the present.
The next three years matter, too.
These are years youll never get back with your sons.
So make spending time together a priority now.
No matter how hectic work is, schedule at least a couple of weeks of family vacation time.
Youve worked hard to makeearly retirementviable for yourselves.
It sounds appealing right?
Check it out here!
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.
Send your tricky money questions to[email protected]or chat with her inThe Penny Hoarder Community.
