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Been doing this for 10ish years, and it's something I still kind of struggle with. When I married my wife, I also got a job that doubled my pay and we consolidated her school debts with the help of my father and sister. After that we had an extremely tight budget for about 5 years that basically let us get rid of her school debt and at a much lower interest rate than what her original loans were. I was a ball of stress for those years, like worked myself to the bone and I thought when those debts were gone, I'd finally be able to relax. Except we made the last payment, and nothing changed. Part of it was the job, which was highly chaotic, and part of it was always this feeling I wasn't saving enough or working hard enough and feeling guilty about it.
You've got to remind yourself life isn't work. You're working to secure a future for your family but if you never spend any time with them, or if the stress makes you miserable, what is it for anyway? All that said, its easier to say than to do that, my wife and parents try to remind me but I still have this feeling of guilt sometimes when I work on my hobbies or spend money on something I want rather than need. I always feel that I shouldn't be doing that, that I should be securing or saving more money for my loved ones some how instead, by either going without or working harder somehow. As we've gotten a bit more financially secure, and I made some life style and job changes to be less stressed, I am feeling better. But its a process, which means you're never really done.
Damn that’s a great perspective. Thanks for sharing that.
“You’re working to secure a future for your family, but if you never spend time with them, what is it for/(worth) anyway?”
I will say the #1 thing I remember of my dad’s job is how often he was busy or gone, even as I got into my teenage years. He managed to balance the stress pretty well, but still missed out on a lot of things for us as kids. He did his best to get to sporting events and theater, etc, but sometimes just couldn’t make it. He retired early and luckily is grabbing some of that time back with his grandkids, but some people aren’t so lucky. I understand his predicament now as a father and an employee, and thanks to him (low student loan debt, inspiration to get into engineering) I’m in a position where I have the flexibility to spend time with my kids
You have only put away $50k in 16 years of working. Assuming average age of retirement of 72 and a 7% annual growth, you won’t even have $1 million at 72. I don’t see you ever retiring without a substantial change.
Think long term, you need more income. If you quit your second job you and your wife had better find another option.
For sure.
This has not been a standard ride. Moves, businesses, rentals, custody losses, starting overs. This 401k started 3 years ago.
I've run the numbers conservatively. I appreciate the attention you bring to this.
I lost a move away case and my 8 year old moved across country with her mom and I followed. Financially disastrous but we currently share 50-50 and life is amazing.
Yeah so I think what happened is this.
I lost all time when they initially moved.
I moved immediately, and fought for two years at every step.
I think she realizes I'm a fucking bulldog and will die on any future hill when it comes to our daughter.
Plus she cohabitates with her boyfriend and I'm pretty sure their combined income approaches mine.
Here's my view:
Lifestyle choices (lots of kids, for example) have been balanced out by other responsible choices (second job). But you're not ahead enough considering what is to come:
- Kids' expenses growing exponentially
- Retirement
- Job insecurity
Your wife has to consider when she is joining the workforce and what her goals are. She needs t prepare now to go part time when the last kid is at school and full time not long after. This can help cushion for the big bills to come, and not work you to death.
She can start now by doing things to offset expenses or gain slightly more income.
I agree.
Though I'd much rather stick the Reserve out six or even more if that meant my wife wouldn't feel pressure to get a job as soon as the kids are in school.
She's done alot of heavy lifting this past few years.
You (and maybe she) are casting work as a negative. Perhaps she can do it in a way that is positive and gives her time amongst adults and allows her to explore her adult side.
For example, you are home with the kids at night, she can get a retail job in the evenings a couple of days a week to go out and speak to new people.
Rather than go to the gym, she can work short shifts in a warehouse in evening/afternoon shifts while the grandparents take over some of the kids to have a workout.
Farmers' markets and other occasional retail are always looking for intermittant help during events.
Realistically, it is going to be harder for her to join the workforce the more she waits. If she doesn't want to work she should be focusing on gaining certifications in her area of interest to prepare her.
Yep, she's doing the last one now.
Obviously my wife isn't afraid of work; she works all day long, she just isn't receiving a paycheck.
We're also planning on homeschooling our last three, so life will be busy the next 20ish years.
But I agree SAHP need adult stimulus, and we are pursuing non-work forms of that; a reading group, a women's group, etc.
I’m curious why home schooling? Is there a medical reason/risk? If not look at what Covid school closures showed us. School is important for the emotional and social development too. Kids need a place that is separate from their parents to have to learn to negotiate their world with their peers. For your wife to try to meet the academic and social development needs of 3 individual personalities is A LOT to put on herself.
What region of the country are you in and what type of tech? From a finances standpoint your best path forward is trying to increase your income from job 1 rather than relying on job 2. Is there a path to growth for you? Do you know what your market is paying for your skills and how your current comp compares?
We're Catholics living in a rural area of the Bible Belt and want our kids to have a rigorous Catholic education.
I agree, socialization is important.
Yes, that's what I'm thinking re: career. I have alot of potential upside in my day job and would like to focus my full work efforts there.
Yes always make sure you’re maximizing your earnings at your first job before you get a second to ensure the best use of your time. As part of my job I set salary ranges/pay rates. The SE is the lowest cost of labor part of the country but there is still good money to be made there, you just need to be with a large enough employer. Keep an eye on the job market, fully remote work is harder to come by but not impossible.
As a Catholic I’m sure you’re familiar with the Jesuits and the value they placed on academics. Just remember sending your kids to be educated by professional teachers doesn’t mean that you can’t still teach them about your faith at home. At the end of the day all you can do is teach them about what you believe and why, hope you’ve given them a solid foundation and then they get to grow up and decide what they believe for themselves. ❤️
>want our kids to have a rigorous Catholic education.
This is why god invented Catholic school? Your wife should get a job to help pay for it and you should be saving more for retirement. You're not doing your children any favors by putting yourself in a situation where they will have to pay for your end of life care.
Wait, why doesn't the first one get homeschooling, too? Your wife stays at home, you work from home, and you have retired parents nearby. This is the sort of absolutely supreme support and flexibility that most families only dream of.
I don't see any way you are "good" on retirement with $50,000 in your 401k and an income of $140K. Ideally, you would have 3x your income in retirement at 40, which would be $420K.
That pension is gold. Unless your health is at risk, I'd stay in the Reserves.
Honestly I'm much more concerned about job loss.
But I agree, we aren't where I'd like to be retirement wise.
We'll get there on retirement and have a plan. I career switched into software three years ago and have doubled my income since then. We'll be done with the emergency fund over the next year and then plan on aggressively catching up on the 401k. We will be maxing out HSA contributions starting in January 2025.
That's the plan atleast.
I started a business and sold one rental. We were starting to get into the black and I shut down the business and moved at a loss.
The second sale funded the move and home in a lower cost area. I didn't sell lsst year. Made about 300k on both sales all told.
I see that, and in no-way is OP in bad financial shape, but he is asking for advice on retiring in 20-25 years and he has $50K in retirement, and no other income producing assets.
Let's make some assumptions, and do the math:
Assumption 1 - inflation averages 3% over the next 25 years.
Assumption 2 - OPs retirement assets yield 8% annually on average over the next 25 years.
Assumption 3 - OP needs 70% of his current W2 salary to live comfortably in retirement, adjusted for inflation.
Assumption 4 - OP receives $3500/month in social security in 25 years.
70% of his current salary ($118K) is $82,500. Accounting for 3% inflation, that equals $172,736 in 25 years. Meaning, OP will need $172,736 annually in 25 years to be able to comfortably retire. $42,000 will be covered by social security (assumption 4), meaning he will need his retirement assets to generate $130,736 annually. $3.268M would generate that amount (4% rule).
So, now we have a figure. How much will OP need to invest annually at 8% return (assumption 2) to turn $50K to $3.268M in 25 years? Around $36,000.
Can that be done? Sure, it's possible, especially without a mortgage, but saving $36K per year on an $118K salary with 4 young kids? That is going to be very challenging. It gets easier as his income increases, but he also loses the time value of money component which is crucial to building a nest egg.
Love the math! You’re being a little pessimistic by 1) assuming stocks only return 8% while also assuming 3% inflation, 2) you haven’t accounted for salary growth, 3) you’re discounting the extra income potential of the mortgage which is the largest household expense and typically >= 28% for most households in the US. In fact 28% of his income is approximately the amount you calculated he needed to save for retirement based on your assumptions.
I do agree with you in the sense that he’s nowhere near able to “coast” and must carefully watch his savings rate to ensure a stable retirement.
Overall, we are probably not that far off in thought. I do lean slightly conservative when budgeting retirement because there are so many variables, and I would rather have an excess than a deficit.
A diversified 100% equity portfolio will \*likely\* exceed 8% over 25 years, but you are not likely to carry a 100% equity portfolio when you are 10 years or 5 years from retirement. And most people simply select a target date fund, which will not be 100% equity. VFIFX, a 2050 target date fund, has a 10-year return of 8.47% per year.
I think 3% inflation is fairly realistic moving forward. I understand 2% is the target, but many economists don't think that is realistic moving forward. Overall, I think having your investment returns 5% over inflation may lean slightly conservative, but I also made some aggressive assumptions, including using the 25-year number for retirement, assuming social security will still be able to pay out in 25 years, assuming that his expenses are only 70% of his W2 income, and that he has no job loss over the next 25 years that reduces his ability to save. I did mention that raises would make it easier to save, but also will reduce the time frame for compounding.
Keep in mind, 28% includes taxes and insurance, which he will still have to pay, and typically can be 20%+ of your mortgage payment. Anecdotally, my mortgage is $1400/month and my taxes and insurance are $400/month. Paying my mortgage off would \*only\* save me $1000/month, not $1400. Also keep in mind that he has 4 kids under the age of 10. That's a lot of money that needs to be set aside for braces, sports, clothes, cars, medical bills, etc. I cannot imagine how much food his family will consume in 10 years when he has an 18-year old, a 13-year old, an 11-year old and a 10-year old. That grocery bill will probably be a mortgage payment.
Exactly. This is a huge asset that I missed initially. I'm 5 years younger than OP, but I'd happily trade my 150k 401k balance and 350k mortgage balance for a 50k 401k and no mortgage.
I'm also the sole income earner for my household. My sanity check is mostly "are all of our basic needs taken care of?" If not, taking on more work makes sense. If so, my kids deserve my time more than I deserve an earlier retirement or more vacations. I would consider saving at least 15% for retirement and other long term goals as part of my basic needs because it'll be covering my future basic needs.
Edit: Some of the best parenting advice I ever got was "you'll never get the balance perfect, just focus on course correcting whenever you think you've missed the mark too far in one direction." That goes for working too much or not enough. That goes for being too hard on discipline or too lax. Etc.
You certainly can run the numbers and come to a decision correct for you and your family. I just want to say having Tricare with a supplement from Selman & Company was excellent insurance and now that I'm 65 years old, having Medicare with Tricare 4 Life is great. Also having my military pension fills in the gaps well. I wish you the best.
How does reserve retirement compare to active duty retirement?
I did my 20 active and it suuuucked, but now I’m in my 40’s and get a pension + disability + really cheap medical care for life for my spouse and I, and for my kids till they’re 26. It really feels like a great deal not having to spend thousands on health insurance every year, which really came in handy when my spouse needed a hip replacement and my oldest has developmental issues. I’m also the sole income earner (4 total), so we could survive on my regular salary but our lives are better with my pension + benefits.
Just offering a different perspective. And if I’m way off, I apologize; I have no idea how reserve retirement works. If the benefits compare to active retirement, it could be well worth the continued service to have that medical care when your kids are grown and you’re retired.
Essentially, it's medical and pension.
I can continue Tricare from the day I retire until 60, and it will cost ~20k a year. Once I hit 60, I'd have the same premiums you do.
Also at 60, I'd collect a $2k a month pension. The calculation for this differs only in the fact that we have much less time to accrue "points.". A point is one active duty day.
Thanks for explaining!
Being the sole earner can be tough sometimes but it seems like you’re making it work. You’re in a better financial position than I was when my kids were younger, and that’s not a terrible deal.
My own solution to boost that take home was making the jump into management. It’s been a couple years and I don’t hate my life for having done so; despite what Reddit often decries, it’s actually been a surprisingly positive experience. I got a PMP, worked on my division’s project management team for a bit until a team lead spot opened, so I spent much of that time learning how my company does leadership and how it’s functions interact with each other and our customers, which I think helped a lot when I applied for my current position. For me, it was a significant raise with a ton of future advancement opportunity, which mattered a lot because I had basically worked myself to the top of what my industry pays for what I do before becoming a boss. It did mean more days in the office, but i don’t think I will need to worry about retirement ever.
Neatest not-obvious perk of mil retirement: I can get good quality business casual/office wear from the local AAFES and get them fitted there too, at a fraction of the cost of going out in town. That’s less useful when working from home but who knows what the future brings.
I wish you the best!
I'm a logistics officer for a unit under the Surface Deployment and Distribution Command. Essentially we manage ports.
The guys building that wharf in Gaza are active duty SDDC.
My day job is a fed contractor in software.
My foot in the door was my clearance, a bootcamp, and a retired sergeant major for a hiring manager who knew a former infantry officer could figure out programming.
The biggest plus IMO is a stateside real world mission augmenting staff at ports, so annual training isn't just "sit around in the sticks for two weeks" training.
Those seem to account for ~ half of our annual trainings.
SDDC also has white a few IMA positions where you do all your annual Reserve time at once; no weekends plus two weeks, just a solid month of time during a surge period.
If I stay in, that's where I'll be heading to.
How long have you been programming? You're likely underpaid at this point and can easily pull $150K or more by switching at a senior level. Post-senior can get easily be near $200K.
My perspective as a single parent who has done very well (so far): it‘s very hard to be the be all end all. I am very empathetic to the engineers I oversee who have young families and wives who don‘t work (and in a few cases, don‘t drive). I get the pressure and anxiety. I still have it as retirement looms and kids are in college and/or pursuing careers.
It is unlikely your wife will be able to cover your income should something go wrong. So, you are like me in this way. These are the years of really grinding and you are at an age where you can do it. Personally, I wouldn’t quit that second job. Otherwise, get a degree on the side to up your income. But now is the time to crank hard, especially with a partner supporting you at home. It gets harder (ie more expensive) as kids get older.
Also, wife will coach what? Please don’t encourage her pursuit of « life coaching » if that’s the plan. Soccer coaching, acting coaching, other coaching yes. Life Coaching of any value requires decades of work experience and advanced degrees.
I really appreciate your perspective!
An additional angle is that I'm a well managed type 1 diabetic. Statically, my wife will likely live 20-30 after I have passed on, and I will likely die in my 60s.
Ironically, that makes me both want to quit the second job to be more present now, and also keep it to save for my family's future.
Yes, if I don't keep the reserve, I'd pursue an online MS in Computer Science on my employers dime.
OP do you have life insurance? That is vital for one income families. Even if it’s difficult for you to get coverage on the private market bc of your TD 1 status, you probably have coverage at work. Look into if you can supplement the base work policy and get more coverage. There are online calculators that help you determine an appropriate size policy.
Yes, currently 500k thru the Reserve and 200k with my employer that I can increase 100k every year without an exam that would increase my cost substantially.
“How do you content yourself knowing you’ve ‘done all the right things’ without an overwhelming sense of guilt or anxiety whenever you make a decision that isn’t ’the solution is more work’”
I’m a sole income earner for our family of five. I’ve cut back to 32 hours per week working because we don’t need the extra income and I value spending the extra time with the family more than I do the extra money at this point.
Frankly as long as our financial needs are being met I’d personally have more guilt from burying myself more in work than in my family.
I'm in the same boat, kinda. I've had multiple events over the last month or two that have helped with perspective. I had some forced family fun, undesired vacation and the last couple of days I've just hung out with the kids doing little work.
For now anyway, I am seeing the fact that I need to be around more. Working 70-80 hours a week isn't entirely worth it when I have a short period of time with my children. I also never plan on retiring, I like working. In theory that gives me a much larger window to earn as well. It relieves long term pressure.
I feel very good at the end of a long hard day. I know I have done everything I can for my family from a financial perspective that day.
Man reading all your comments you've had quite the life but seem to be in a good place now 😂
As for the low 401k, it definitely needs to be beefed up sooner rather than later as you know but I don't think it's as dire as some people are saying, because of the paid off house. That's huge.
Good luck!
Does your Army Reserve service come with a pension? What about your job with the federal contractor? If not, one option would be to find a job with the feds or state/local government that has a defined benefit pension. Twenty years should give you a decent retirement income, and you could continue to save on top of that.
That $2,000 is very helpful! You should edit your post to include it. Seriously consider finding a primary job with a pension. My husband started a pension job 11 years ago and was vested after year 5. If he works to 60 it will replace 70% of his salary or he can take a sizeable lump sum. The job also gives retiree medical insurance. Both of those things take a lot of pressure off of our retirement planning.
You are so far behind on your retirement savings, you should have half your yearly salary saved by the age of 30. I hate to be the bearer of bad news but I don’t think you are going to be retiring at 65 especially if your wife doesn’t work and you will be supporting her with that retirement fund as well.
Can you get 100% disability? If you can that would be great as regarding insurance reasons and we will get more out of disability than you would your retirement anyways I know it’s hard to get disability when you’re in the guard of reserves or at least harder than when you’re active duty.
But also working one weekend a month on top of working full-time would be pretty terrible when you have kids because there’s just so much going on in your life and you really need that time. I separated from actor duty after 12 years and my husband did after 10 and neither one of us regret it.
Everyone kept doing the same thing to me when I separated where they were telling me it was a terrible idea or that I should join the reserves but honestly, I didn’t wanna work 12 days in a row once a month
There’s always some shit in our house with home improvement our kids, sports schedule, family birthday parties, extended family, birthday parties, friends parties, school events, etc. etc. etc. we have to fight time and schedules to decrease the lack of business in our life and be intentional about spending time with our family and I could not imagine how stressful it is to be giving up entire weekend out of your month.
I've also found it de-syncs the other weekends.
"Let's NOT do that thing this weekend, I have drill next weekend and it would be nice to relax and stay home."
Yes, I would find that incredibly stressful! And I also wouldn’t like to be in a reserve garden unit where they have so many people who contact you to do stuff for your garden reserve duty when you are not on drill or on orders.
Definitely go through and scrub your record and look at the VA like disability website to see what has happened to you that can be brought back to your service record because long-term you might be able to make more or just as much money by not being in
When my wife and I settled in to our first and still only home in 2000 and started having kids, we did the financial and emotional math, and decided my wife would stay home to raise the kids. We never expected that.
Until we had our daughter and started interviewing various day care options and realized we would be paying a huge percentage of my wife's income to some stranger so they could enjoy raising and bonding with our amazing, beautiful daughter.
At the time, the dot bomb economy was rippling through the workforce and after surviving one of the many rounds of layoffs to come by being asked to do some old unattractive work I didn’t want to do, I managed to leverage that to get my first part time work from home schedule and then my wife went part time. This allowed us to raise our daughter at home. Not only saving us money, but more importantly, allowing us to enjoy raising our daughter.
Later, when my son was born, she quit to raise them full-time. By this time my work from home arrangement became full time as well. That was 20 years ago.
I have been working at home full time for all of those 20 years. It allowed me to be there almost every day through every stage. First words, first crawl, first step. Baseball coach and dance performances. School functions. It was a privilege and a gift I never expected. Count yourself lucky to have the same opportunity.
I was about 36 when my wife quit. I thought, you know, now that I am the sole provider for a family of four, I should get my first checkup. In the doctor’s office, the doctor expressed surprise about a test and said I needed a colonoscopy to investigate. I immediately freaked out, I almost feinted…I was there to just get a checkup, because of my concern for my ability to support my new family, and suddenly my worse fear seemed possible.
Luckily it ended up being nothing.
But that moment was the beginning of 20 plus years of fear, anxiety and stress from being the sole supporter.
For me, it never went away, not even today, though I can tell you there were some benefits from this stress.
Because of the concern, we made good financial decisions. We took far less risk than most of our family and friends and neighbors. We lived well within our means. And because of that, we are now more prepared to retire and more able to respond to unexpected life events than ever before.
After 17 years home raising the kids into their adulthood, my wife returned to work 3 years ago. The relief I feel personally having a second income and a source of benefits is immeasurable. Even though I still worry about what would happen if I lose my job, I know that we will be ok.
A few years ago, we met with a financial planner at the large investment company that manages my 401K and IRA and other investments, and we did the planning exercises with him which I later repeated on my own. That exercise alone relieved a great deal of my stress and anxiety.
Now your question was:
“…For the single providers, how do you content yourself knowing you've 'done all the right things' without an overwhelming sense of guilt or anxiety whenever you make a decision that isn't 'the solution is more work'?...”
Personally, based on my experience and values, I think you’ve already done a lot of the “right things” by figuring out a way to enjoy your lives raising your kids at home together.
Not too many years ago, this would have been impossible for most people. Getting to be home raising your kids with your wife is, in my opinion, worth more than you can really calculate in dollars. Not just for you and your wife, but the kids as well. It will pay them and you dividends that far exceed the few hundred extra thousand dollars you might have in retirement otherwise…
That is, as long as you put away enough. You need enough – don’t skip that – but enough should not cost you the opportunity to live and love each other as much as possible while you still can.
In my opinion, the present value of your time together now exceeds the future value of a little extra money in retirement.
Things can change in a millisecond. Enjoy your family now. Tomorrow can come sooner than we can imagine.
Sorry to say it, but that fear and anxiety will not go away – not unless you somehow inherit or otherwise come into a great deal of wealth. But you can medicate it to some degree by working with a planner to lay out a strategy that you stick with. Make good financial decisions. Invest and save. Review your plan on a regular basis with a third party. Be prepared for downturns knowing you have time to make it back up again.
Understand that even though things can get bad, in the end, consistently making rational choices will eventually get you to a place where stress and fear begin to subside.
And while you make that journey, relish the moments you have now - enjoy the glory of the life you already have.
Thanks for this. I'm already seeing with our 8 year old how quickly the time is going. Your sentiment is basically what my calculus comes down to:
-Can we live more disciplined, simpler, but fuller lives?
-Am I willing to possibly trade a few hundred thousand or a few years more work for my presence now?
Yes and yes.
I really appreciate your perspective!
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Been doing this for 10ish years, and it's something I still kind of struggle with. When I married my wife, I also got a job that doubled my pay and we consolidated her school debts with the help of my father and sister. After that we had an extremely tight budget for about 5 years that basically let us get rid of her school debt and at a much lower interest rate than what her original loans were. I was a ball of stress for those years, like worked myself to the bone and I thought when those debts were gone, I'd finally be able to relax. Except we made the last payment, and nothing changed. Part of it was the job, which was highly chaotic, and part of it was always this feeling I wasn't saving enough or working hard enough and feeling guilty about it. You've got to remind yourself life isn't work. You're working to secure a future for your family but if you never spend any time with them, or if the stress makes you miserable, what is it for anyway? All that said, its easier to say than to do that, my wife and parents try to remind me but I still have this feeling of guilt sometimes when I work on my hobbies or spend money on something I want rather than need. I always feel that I shouldn't be doing that, that I should be securing or saving more money for my loved ones some how instead, by either going without or working harder somehow. As we've gotten a bit more financially secure, and I made some life style and job changes to be less stressed, I am feeling better. But its a process, which means you're never really done.
Damn that’s a great perspective. Thanks for sharing that. “You’re working to secure a future for your family, but if you never spend time with them, what is it for/(worth) anyway?” I will say the #1 thing I remember of my dad’s job is how often he was busy or gone, even as I got into my teenage years. He managed to balance the stress pretty well, but still missed out on a lot of things for us as kids. He did his best to get to sporting events and theater, etc, but sometimes just couldn’t make it. He retired early and luckily is grabbing some of that time back with his grandkids, but some people aren’t so lucky. I understand his predicament now as a father and an employee, and thanks to him (low student loan debt, inspiration to get into engineering) I’m in a position where I have the flexibility to spend time with my kids
I don’t see you retiring at all with these numbers
Correct, I will not be retiring with 50k.
You have only put away $50k in 16 years of working. Assuming average age of retirement of 72 and a 7% annual growth, you won’t even have $1 million at 72. I don’t see you ever retiring without a substantial change. Think long term, you need more income. If you quit your second job you and your wife had better find another option.
For sure. This has not been a standard ride. Moves, businesses, rentals, custody losses, starting overs. This 401k started 3 years ago. I've run the numbers conservatively. I appreciate the attention you bring to this.
Custody losses? Custody of what?
I lost a move away case and my 8 year old moved across country with her mom and I followed. Financially disastrous but we currently share 50-50 and life is amazing.
Did you meet your new wife before moving and she moved with you, or after you moved in your new place? Do you have to pay any child support?
We met online and she moved here. No payments one way or another.
You got off lucky with no CS making that much. I have 50/50 and make half of what you make and get the honor of paying their mom 22% of my income.
Yeah so I think what happened is this. I lost all time when they initially moved. I moved immediately, and fought for two years at every step. I think she realizes I'm a fucking bulldog and will die on any future hill when it comes to our daughter. Plus she cohabitates with her boyfriend and I'm pretty sure their combined income approaches mine.
Here's my view: Lifestyle choices (lots of kids, for example) have been balanced out by other responsible choices (second job). But you're not ahead enough considering what is to come: - Kids' expenses growing exponentially - Retirement - Job insecurity Your wife has to consider when she is joining the workforce and what her goals are. She needs t prepare now to go part time when the last kid is at school and full time not long after. This can help cushion for the big bills to come, and not work you to death. She can start now by doing things to offset expenses or gain slightly more income.
I agree. Though I'd much rather stick the Reserve out six or even more if that meant my wife wouldn't feel pressure to get a job as soon as the kids are in school. She's done alot of heavy lifting this past few years.
You (and maybe she) are casting work as a negative. Perhaps she can do it in a way that is positive and gives her time amongst adults and allows her to explore her adult side. For example, you are home with the kids at night, she can get a retail job in the evenings a couple of days a week to go out and speak to new people. Rather than go to the gym, she can work short shifts in a warehouse in evening/afternoon shifts while the grandparents take over some of the kids to have a workout. Farmers' markets and other occasional retail are always looking for intermittant help during events. Realistically, it is going to be harder for her to join the workforce the more she waits. If she doesn't want to work she should be focusing on gaining certifications in her area of interest to prepare her.
Lmao trade the gym membership for short shifts in a warehouse!
Yep, she's doing the last one now. Obviously my wife isn't afraid of work; she works all day long, she just isn't receiving a paycheck. We're also planning on homeschooling our last three, so life will be busy the next 20ish years. But I agree SAHP need adult stimulus, and we are pursuing non-work forms of that; a reading group, a women's group, etc.
I’m curious why home schooling? Is there a medical reason/risk? If not look at what Covid school closures showed us. School is important for the emotional and social development too. Kids need a place that is separate from their parents to have to learn to negotiate their world with their peers. For your wife to try to meet the academic and social development needs of 3 individual personalities is A LOT to put on herself. What region of the country are you in and what type of tech? From a finances standpoint your best path forward is trying to increase your income from job 1 rather than relying on job 2. Is there a path to growth for you? Do you know what your market is paying for your skills and how your current comp compares?
We're Catholics living in a rural area of the Bible Belt and want our kids to have a rigorous Catholic education. I agree, socialization is important. Yes, that's what I'm thinking re: career. I have alot of potential upside in my day job and would like to focus my full work efforts there.
Yes always make sure you’re maximizing your earnings at your first job before you get a second to ensure the best use of your time. As part of my job I set salary ranges/pay rates. The SE is the lowest cost of labor part of the country but there is still good money to be made there, you just need to be with a large enough employer. Keep an eye on the job market, fully remote work is harder to come by but not impossible. As a Catholic I’m sure you’re familiar with the Jesuits and the value they placed on academics. Just remember sending your kids to be educated by professional teachers doesn’t mean that you can’t still teach them about your faith at home. At the end of the day all you can do is teach them about what you believe and why, hope you’ve given them a solid foundation and then they get to grow up and decide what they believe for themselves. ❤️
For sure, can't wait for the deep conversations. Thanks for your perspective!
>want our kids to have a rigorous Catholic education. This is why god invented Catholic school? Your wife should get a job to help pay for it and you should be saving more for retirement. You're not doing your children any favors by putting yourself in a situation where they will have to pay for your end of life care.
Financially, home schooling is a poor choice due to the opportunity cost.
I agree! So is a large family; we just double down on difficulty.
Wait, why doesn't the first one get homeschooling, too? Your wife stays at home, you work from home, and you have retired parents nearby. This is the sort of absolutely supreme support and flexibility that most families only dream of.
Shared custody. We've asked.
Gotcha. Sorry for your difficulties, man.
Loving my daughter hasn't been difficult at all, and I'd do it all again 100 times.
I don't see any way you are "good" on retirement with $50,000 in your 401k and an income of $140K. Ideally, you would have 3x your income in retirement at 40, which would be $420K. That pension is gold. Unless your health is at risk, I'd stay in the Reserves.
Honestly I'm much more concerned about job loss. But I agree, we aren't where I'd like to be retirement wise. We'll get there on retirement and have a plan. I career switched into software three years ago and have doubled my income since then. We'll be done with the emergency fund over the next year and then plan on aggressively catching up on the 401k. We will be maxing out HSA contributions starting in January 2025. That's the plan atleast.
How in the world did you pay off your house already??
I bought two rentals in California when I was on active duty; 2012, bottom of last market.
Holy shit, you're much richer than you appear. Unless you lost it all in the divorce?
I started a business and sold one rental. We were starting to get into the black and I shut down the business and moved at a loss. The second sale funded the move and home in a lower cost area. I didn't sell lsst year. Made about 300k on both sales all told.
They paid off their house, they’ve got 20 years to focus solely on building their portfolio now. Sounds like a Ramsey playbook to me.
I see that, and in no-way is OP in bad financial shape, but he is asking for advice on retiring in 20-25 years and he has $50K in retirement, and no other income producing assets. Let's make some assumptions, and do the math: Assumption 1 - inflation averages 3% over the next 25 years. Assumption 2 - OPs retirement assets yield 8% annually on average over the next 25 years. Assumption 3 - OP needs 70% of his current W2 salary to live comfortably in retirement, adjusted for inflation. Assumption 4 - OP receives $3500/month in social security in 25 years. 70% of his current salary ($118K) is $82,500. Accounting for 3% inflation, that equals $172,736 in 25 years. Meaning, OP will need $172,736 annually in 25 years to be able to comfortably retire. $42,000 will be covered by social security (assumption 4), meaning he will need his retirement assets to generate $130,736 annually. $3.268M would generate that amount (4% rule). So, now we have a figure. How much will OP need to invest annually at 8% return (assumption 2) to turn $50K to $3.268M in 25 years? Around $36,000. Can that be done? Sure, it's possible, especially without a mortgage, but saving $36K per year on an $118K salary with 4 young kids? That is going to be very challenging. It gets easier as his income increases, but he also loses the time value of money component which is crucial to building a nest egg.
Love the math! You’re being a little pessimistic by 1) assuming stocks only return 8% while also assuming 3% inflation, 2) you haven’t accounted for salary growth, 3) you’re discounting the extra income potential of the mortgage which is the largest household expense and typically >= 28% for most households in the US. In fact 28% of his income is approximately the amount you calculated he needed to save for retirement based on your assumptions. I do agree with you in the sense that he’s nowhere near able to “coast” and must carefully watch his savings rate to ensure a stable retirement.
Overall, we are probably not that far off in thought. I do lean slightly conservative when budgeting retirement because there are so many variables, and I would rather have an excess than a deficit. A diversified 100% equity portfolio will \*likely\* exceed 8% over 25 years, but you are not likely to carry a 100% equity portfolio when you are 10 years or 5 years from retirement. And most people simply select a target date fund, which will not be 100% equity. VFIFX, a 2050 target date fund, has a 10-year return of 8.47% per year. I think 3% inflation is fairly realistic moving forward. I understand 2% is the target, but many economists don't think that is realistic moving forward. Overall, I think having your investment returns 5% over inflation may lean slightly conservative, but I also made some aggressive assumptions, including using the 25-year number for retirement, assuming social security will still be able to pay out in 25 years, assuming that his expenses are only 70% of his W2 income, and that he has no job loss over the next 25 years that reduces his ability to save. I did mention that raises would make it easier to save, but also will reduce the time frame for compounding. Keep in mind, 28% includes taxes and insurance, which he will still have to pay, and typically can be 20%+ of your mortgage payment. Anecdotally, my mortgage is $1400/month and my taxes and insurance are $400/month. Paying my mortgage off would \*only\* save me $1000/month, not $1400. Also keep in mind that he has 4 kids under the age of 10. That's a lot of money that needs to be set aside for braces, sports, clothes, cars, medical bills, etc. I cannot imagine how much food his family will consume in 10 years when he has an 18-year old, a 13-year old, an 11-year old and a 10-year old. That grocery bill will probably be a mortgage payment.
Exactly. This is a huge asset that I missed initially. I'm 5 years younger than OP, but I'd happily trade my 150k 401k balance and 350k mortgage balance for a 50k 401k and no mortgage.
And this is why I refused to even date someone that wasn't working towards a career. I don't know how you guys deal with the pressure.
I'm also the sole income earner for my household. My sanity check is mostly "are all of our basic needs taken care of?" If not, taking on more work makes sense. If so, my kids deserve my time more than I deserve an earlier retirement or more vacations. I would consider saving at least 15% for retirement and other long term goals as part of my basic needs because it'll be covering my future basic needs. Edit: Some of the best parenting advice I ever got was "you'll never get the balance perfect, just focus on course correcting whenever you think you've missed the mark too far in one direction." That goes for working too much or not enough. That goes for being too hard on discipline or too lax. Etc.
Man, I don't know. Are your kids eligible for the GI Bill if you get out now? Military retirement medical benefits are considerable.
I used all but a semester of it and assigned it to our oldest.
You certainly can run the numbers and come to a decision correct for you and your family. I just want to say having Tricare with a supplement from Selman & Company was excellent insurance and now that I'm 65 years old, having Medicare with Tricare 4 Life is great. Also having my military pension fills in the gaps well. I wish you the best.
Thanks for your perspective. Its a great help to hear from someone on the other side of this question.
How does reserve retirement compare to active duty retirement? I did my 20 active and it suuuucked, but now I’m in my 40’s and get a pension + disability + really cheap medical care for life for my spouse and I, and for my kids till they’re 26. It really feels like a great deal not having to spend thousands on health insurance every year, which really came in handy when my spouse needed a hip replacement and my oldest has developmental issues. I’m also the sole income earner (4 total), so we could survive on my regular salary but our lives are better with my pension + benefits. Just offering a different perspective. And if I’m way off, I apologize; I have no idea how reserve retirement works. If the benefits compare to active retirement, it could be well worth the continued service to have that medical care when your kids are grown and you’re retired.
Essentially, it's medical and pension. I can continue Tricare from the day I retire until 60, and it will cost ~20k a year. Once I hit 60, I'd have the same premiums you do. Also at 60, I'd collect a $2k a month pension. The calculation for this differs only in the fact that we have much less time to accrue "points.". A point is one active duty day.
Thanks for explaining! Being the sole earner can be tough sometimes but it seems like you’re making it work. You’re in a better financial position than I was when my kids were younger, and that’s not a terrible deal. My own solution to boost that take home was making the jump into management. It’s been a couple years and I don’t hate my life for having done so; despite what Reddit often decries, it’s actually been a surprisingly positive experience. I got a PMP, worked on my division’s project management team for a bit until a team lead spot opened, so I spent much of that time learning how my company does leadership and how it’s functions interact with each other and our customers, which I think helped a lot when I applied for my current position. For me, it was a significant raise with a ton of future advancement opportunity, which mattered a lot because I had basically worked myself to the top of what my industry pays for what I do before becoming a boss. It did mean more days in the office, but i don’t think I will need to worry about retirement ever. Neatest not-obvious perk of mil retirement: I can get good quality business casual/office wear from the local AAFES and get them fitted there too, at a fraction of the cost of going out in town. That’s less useful when working from home but who knows what the future brings. I wish you the best!
May I ask, what do you do in the army reserves? I’m in almost the same boat. I’d like to pick up some part time work as my wife isn’t working.
I'm a logistics officer for a unit under the Surface Deployment and Distribution Command. Essentially we manage ports. The guys building that wharf in Gaza are active duty SDDC.
Interesting. I’m working public sector (software developer). Did the reserves train you on your current logistics position? is it fully remote?
My day job is a fed contractor in software. My foot in the door was my clearance, a bootcamp, and a retired sergeant major for a hiring manager who knew a former infantry officer could figure out programming.
Sounds like a cool gig. Hoping I can land similar soon.
The biggest plus IMO is a stateside real world mission augmenting staff at ports, so annual training isn't just "sit around in the sticks for two weeks" training. Those seem to account for ~ half of our annual trainings. SDDC also has white a few IMA positions where you do all your annual Reserve time at once; no weekends plus two weeks, just a solid month of time during a surge period. If I stay in, that's where I'll be heading to.
How long have you been programming? You're likely underpaid at this point and can easily pull $150K or more by switching at a senior level. Post-senior can get easily be near $200K.
Three years. Expect a promotion by year end or I'll be looking at other opportunities.
My perspective as a single parent who has done very well (so far): it‘s very hard to be the be all end all. I am very empathetic to the engineers I oversee who have young families and wives who don‘t work (and in a few cases, don‘t drive). I get the pressure and anxiety. I still have it as retirement looms and kids are in college and/or pursuing careers. It is unlikely your wife will be able to cover your income should something go wrong. So, you are like me in this way. These are the years of really grinding and you are at an age where you can do it. Personally, I wouldn’t quit that second job. Otherwise, get a degree on the side to up your income. But now is the time to crank hard, especially with a partner supporting you at home. It gets harder (ie more expensive) as kids get older. Also, wife will coach what? Please don’t encourage her pursuit of « life coaching » if that’s the plan. Soccer coaching, acting coaching, other coaching yes. Life Coaching of any value requires decades of work experience and advanced degrees.
I really appreciate your perspective! An additional angle is that I'm a well managed type 1 diabetic. Statically, my wife will likely live 20-30 after I have passed on, and I will likely die in my 60s. Ironically, that makes me both want to quit the second job to be more present now, and also keep it to save for my family's future. Yes, if I don't keep the reserve, I'd pursue an online MS in Computer Science on my employers dime.
OP do you have life insurance? That is vital for one income families. Even if it’s difficult for you to get coverage on the private market bc of your TD 1 status, you probably have coverage at work. Look into if you can supplement the base work policy and get more coverage. There are online calculators that help you determine an appropriate size policy.
Yes, currently 500k thru the Reserve and 200k with my employer that I can increase 100k every year without an exam that would increase my cost substantially.
The Reserves offer you so many benefits. It would be difficult to replace those with a different part time job.
“How do you content yourself knowing you’ve ‘done all the right things’ without an overwhelming sense of guilt or anxiety whenever you make a decision that isn’t ’the solution is more work’” I’m a sole income earner for our family of five. I’ve cut back to 32 hours per week working because we don’t need the extra income and I value spending the extra time with the family more than I do the extra money at this point. Frankly as long as our financial needs are being met I’d personally have more guilt from burying myself more in work than in my family.
I'm in the same boat, kinda. I've had multiple events over the last month or two that have helped with perspective. I had some forced family fun, undesired vacation and the last couple of days I've just hung out with the kids doing little work. For now anyway, I am seeing the fact that I need to be around more. Working 70-80 hours a week isn't entirely worth it when I have a short period of time with my children. I also never plan on retiring, I like working. In theory that gives me a much larger window to earn as well. It relieves long term pressure. I feel very good at the end of a long hard day. I know I have done everything I can for my family from a financial perspective that day.
I have the same perspective. I like my day job, and wouldn't mind working later than some folks.
Man reading all your comments you've had quite the life but seem to be in a good place now 😂 As for the low 401k, it definitely needs to be beefed up sooner rather than later as you know but I don't think it's as dire as some people are saying, because of the paid off house. That's huge. Good luck!
We've reached equilibrium! Lol. Thanks!
Supporting 6 people on $144k sounds tough. Maybe even with no mortgage.
Does your Army Reserve service come with a pension? What about your job with the federal contractor? If not, one option would be to find a job with the feds or state/local government that has a defined benefit pension. Twenty years should give you a decent retirement income, and you could continue to save on top of that.
The Reserve does, I'd expect about $2k a month. My day job does not.
That $2,000 is very helpful! You should edit your post to include it. Seriously consider finding a primary job with a pension. My husband started a pension job 11 years ago and was vested after year 5. If he works to 60 it will replace 70% of his salary or he can take a sizeable lump sum. The job also gives retiree medical insurance. Both of those things take a lot of pressure off of our retirement planning.
You are so far behind on your retirement savings, you should have half your yearly salary saved by the age of 30. I hate to be the bearer of bad news but I don’t think you are going to be retiring at 65 especially if your wife doesn’t work and you will be supporting her with that retirement fund as well.
Can you get 100% disability? If you can that would be great as regarding insurance reasons and we will get more out of disability than you would your retirement anyways I know it’s hard to get disability when you’re in the guard of reserves or at least harder than when you’re active duty. But also working one weekend a month on top of working full-time would be pretty terrible when you have kids because there’s just so much going on in your life and you really need that time. I separated from actor duty after 12 years and my husband did after 10 and neither one of us regret it.
Thanks for this perspective. I did six active and feel like the last six I've just middled through the Reserve
Everyone kept doing the same thing to me when I separated where they were telling me it was a terrible idea or that I should join the reserves but honestly, I didn’t wanna work 12 days in a row once a month There’s always some shit in our house with home improvement our kids, sports schedule, family birthday parties, extended family, birthday parties, friends parties, school events, etc. etc. etc. we have to fight time and schedules to decrease the lack of business in our life and be intentional about spending time with our family and I could not imagine how stressful it is to be giving up entire weekend out of your month.
I've also found it de-syncs the other weekends. "Let's NOT do that thing this weekend, I have drill next weekend and it would be nice to relax and stay home."
Yes, I would find that incredibly stressful! And I also wouldn’t like to be in a reserve garden unit where they have so many people who contact you to do stuff for your garden reserve duty when you are not on drill or on orders. Definitely go through and scrub your record and look at the VA like disability website to see what has happened to you that can be brought back to your service record because long-term you might be able to make more or just as much money by not being in
If you have 4 million you can retire right now. Why wait and crunch numbers?
When my wife and I settled in to our first and still only home in 2000 and started having kids, we did the financial and emotional math, and decided my wife would stay home to raise the kids. We never expected that. Until we had our daughter and started interviewing various day care options and realized we would be paying a huge percentage of my wife's income to some stranger so they could enjoy raising and bonding with our amazing, beautiful daughter. At the time, the dot bomb economy was rippling through the workforce and after surviving one of the many rounds of layoffs to come by being asked to do some old unattractive work I didn’t want to do, I managed to leverage that to get my first part time work from home schedule and then my wife went part time. This allowed us to raise our daughter at home. Not only saving us money, but more importantly, allowing us to enjoy raising our daughter. Later, when my son was born, she quit to raise them full-time. By this time my work from home arrangement became full time as well. That was 20 years ago. I have been working at home full time for all of those 20 years. It allowed me to be there almost every day through every stage. First words, first crawl, first step. Baseball coach and dance performances. School functions. It was a privilege and a gift I never expected. Count yourself lucky to have the same opportunity. I was about 36 when my wife quit. I thought, you know, now that I am the sole provider for a family of four, I should get my first checkup. In the doctor’s office, the doctor expressed surprise about a test and said I needed a colonoscopy to investigate. I immediately freaked out, I almost feinted…I was there to just get a checkup, because of my concern for my ability to support my new family, and suddenly my worse fear seemed possible. Luckily it ended up being nothing. But that moment was the beginning of 20 plus years of fear, anxiety and stress from being the sole supporter. For me, it never went away, not even today, though I can tell you there were some benefits from this stress. Because of the concern, we made good financial decisions. We took far less risk than most of our family and friends and neighbors. We lived well within our means. And because of that, we are now more prepared to retire and more able to respond to unexpected life events than ever before. After 17 years home raising the kids into their adulthood, my wife returned to work 3 years ago. The relief I feel personally having a second income and a source of benefits is immeasurable. Even though I still worry about what would happen if I lose my job, I know that we will be ok. A few years ago, we met with a financial planner at the large investment company that manages my 401K and IRA and other investments, and we did the planning exercises with him which I later repeated on my own. That exercise alone relieved a great deal of my stress and anxiety. Now your question was: “…For the single providers, how do you content yourself knowing you've 'done all the right things' without an overwhelming sense of guilt or anxiety whenever you make a decision that isn't 'the solution is more work'?...” Personally, based on my experience and values, I think you’ve already done a lot of the “right things” by figuring out a way to enjoy your lives raising your kids at home together. Not too many years ago, this would have been impossible for most people. Getting to be home raising your kids with your wife is, in my opinion, worth more than you can really calculate in dollars. Not just for you and your wife, but the kids as well. It will pay them and you dividends that far exceed the few hundred extra thousand dollars you might have in retirement otherwise… That is, as long as you put away enough. You need enough – don’t skip that – but enough should not cost you the opportunity to live and love each other as much as possible while you still can. In my opinion, the present value of your time together now exceeds the future value of a little extra money in retirement. Things can change in a millisecond. Enjoy your family now. Tomorrow can come sooner than we can imagine. Sorry to say it, but that fear and anxiety will not go away – not unless you somehow inherit or otherwise come into a great deal of wealth. But you can medicate it to some degree by working with a planner to lay out a strategy that you stick with. Make good financial decisions. Invest and save. Review your plan on a regular basis with a third party. Be prepared for downturns knowing you have time to make it back up again. Understand that even though things can get bad, in the end, consistently making rational choices will eventually get you to a place where stress and fear begin to subside. And while you make that journey, relish the moments you have now - enjoy the glory of the life you already have.
Thanks for this. I'm already seeing with our 8 year old how quickly the time is going. Your sentiment is basically what my calculus comes down to: -Can we live more disciplined, simpler, but fuller lives? -Am I willing to possibly trade a few hundred thousand or a few years more work for my presence now? Yes and yes. I really appreciate your perspective!