Looking for a bit of a community gut check. I have a 6 month old kiddo and my wife and I are considering the idea of having my wife stay home from work for a few years to take care of the kids.
We are both 31. I make $98k + $15-20K bonus annually, the wife makes about $78k.
We have roughly $250k in retirement savings (different flavors of 401k, IRA, HSA, etc.)
We have about $55k in our emergency fund right now. $40k cash, $15k brokerage.
We have two paid off vehicles with less than 50k miles each. Only debt is our mortgage.
Monthly expenses on the conservative/high budget side come in just under $6k. If we're realistic, it's more like $5k.
I believe my net income after taxes/health insurance would be about $6,500 a month. I left my bonus out of this calculation since it's not a guarantee.
That leaves about $6,000 annually in cash savings/buffer.
All I'm asking is for feedback, are we crazy for thinking about this? Is this cutting it too tight from a risk perspective? My main concern is that to swing this, we'd need to stop contributing to retirement savings for a few years. Not ideal, but at the same time, I'm not overly concerned about it. If we work another 35 years, that $250k nest egg is likely to balloon to roughly $1.5-2mil in present dollars even if we never contribute another dime. That'd be roughly a $60-80k annual safe withdrawal rate which is just fine as far as we can guess. We do plan to hit retirement hard once the kids get into school and the wife goes back to work.
Submitted June 21, 2022 at 10:20PM by grahamfiend2 https://ift.tt/FW7Gw3T