This forum has been a tremendous help in sorting out my finances the past few years. Thank you. I am hoping to benefit from the forum’s wisdom on a specific question: Can I semi-retire in Fall (at the start of the next school year)?
- Married with two kids: this fall, the older one will be in 3rd grade, the younger one will start kindergarten (school is a public school)
- I am 47, wife is 44
- Savings: $1.8M (including $280K in two 529s; $650K in taxable), invested 60% stocks, 40% bonds + cash
- Social security will be ~$3K/mo for me (this is likely an overestimate if I semi-retire); wife will not have any social security (she is a former public school teacher and has a very small pension based on 7 years of work as a public school teacher) [EDIT: Wife has not paid into the social security system which is normal for public school teachers in California; she is eligible for spousal social security benefits but won't be eligible for social security outside of that]
- Live in a paid-off house; no debt [EDIT: value of house not included in Savings above]
- Current yearly expenses: $55K (excludes $13K property taxes, health insurance premiums, federal and state taxes) [EDIT: $55K excludes all taxes and health insurance premiums]
- Yearly expenses will drop to ~$45K in fall, as we won’t have to pay for pre-school anymore (That’s ~$10K/yr currently). We expect that $15K of the $45K will be kids related expenses (based on spending over the last ~2 years)
- Live in a VHCOL area (SF Bay area) and would like to continue to stay here for family reasons (moving to a MCOL in northern california is a backup plan - we have some family in cities outside the bay area)
- Wife does not work currently but is applying for teaching jobs in public schools. If she gets a full-time job and I am not working a regular job, we will have just enough to meet all expenses and contribute to her pension but not save anything else
- In the fall, I want to semi-retire and work as a consultant to make up any shortfall (relative to expenses) from my wife’s income (in case her employment is less than full-time or in a school district that does not pay well). I will take care of the kids and the house. If there is time left over I will progress a small business idea that I have been working on
- I semi-retire and become a consultant in the fall. Wife gets on a path to returning as a full-time public school teacher. We do this for ~13 years when both kids are out of the house and in college or in a trade school. At this point we would consider fully retiring (but not before).
[I didn’t go into the details of why I want to semi-retire. I have some strong reasons, but didn’t want to distract from my main question. Happy to post these or other details if it helps answer my question above.]