I’m considering a job change – can we afford to only live off my wife’s $500k salary?

A Reddit user is considering a job change that would allow him to make more money, but that increases the risk of losing his job. He’s wondering if he should make the move, which could make them richer or could potentially force them to live only on his wife’s $500K per year salary. 

The Redditor is worried not just about the immediate impact of the job change, but also about how his decision could affect their long-term plans to save. So, is he better off gambling on the higher-paying job or should he stay where he has job security?

Should you change jobs to make more, even if there’s a bigger risk of having to live on less?

The Reddit poster explained that his current job running a large IT team pays him $300,000 per year and offers excellent job security. He’s also able to work from home. And, when he does need to go into the office, he has only a 60-minute commute. However, he has been offered a job at a private equity firm that would pay $600K per year. It would require him to go into the office daily, which is a 75-minute commute, his team would be smaller, and his job security would be totally unknown — but he feels like he would be under more pressure to produce results. 

He did indicate that if he lost his job, his wife would still earn her $500K annual income and her job security is excellent. However, while this may seem like the couple would have plenty to live on, they are in a high-cost-of-living area with many financial commitments. As a result, he thinks it might be a struggle to keep up with all their obligations if he loses his income. 

So, the question is whether he should take the risk. This will be a personal decision, of course. However, a $300K annual salary bump is a big increase to pass up.  Since he’d be making so much more money at the new job, he always has the option to step up his savings. He could quickly use that new income to build a hefty emergency fund, which would eliminate the risk of having to make major lifestyle changes if he lost his job and had to live on his wife’s earnings alone. 

Cutting back to live on just $500K also shouldn’t be too difficult if it became necessary, especially since he indicated that they spend a lot of money on things like clubs and nannies. If he lost his job, he could handle the kids for a while to save on that expense and they might be able to temporarily give up some of their luxuries to get by more easily. 

Saving for retirement is a key goal, and the new job could help make that effort easier

The Redditor also explained that saving for a comfortable retirement is a top priority. He estimates that if he works for another 20 years and earns a 7% average annual rate of return, the couple would be on track to retire with around $12 million. At a safe 3.7% withdrawal rate, that would leave them with about $444,000 to spend. That’s a pretty big pay cut to take considering they’re currently earning around $800K and said they’d struggle to get by on $500,000 a year. 

If he wants to make certain he can maintain his lifestyle as a retiree, taking the higher paying job to invest more might pay off. He should think about whether he’d be able to find another job easily if he lost it, and he might want to talk with a financial advisor to help guide his choice. However, with his wife’s $500K to fall back on, the added risk may be well worth it for the additional income the new job would bring in. 

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