We’re in our 40s with $4.6 million in net worth – how do we calculate the cost of healthcare if we go part-time and travel more?

Parents in their 40s with a lot of money can’t usually just pick up and travel for weeks at a time when there are kids involved. And it can be difficult for parents to cover their costs on a part-time income alone.

But without kids, there’s often more flexibility to make career changes that allow for mid-life travel. And such is the case for the couple in this Reddit post.

They’re 40-somethings with a $4.6 net worth, and they’re looking to scale down to part-time work so they can travel more while they’re younger. But they want to make sure they’re budgeting appropriately for travel as well as healthcare.

I think what they’re planning to do is wonderful. But they also need to think things through carefully.

Don’t wait until retirement to do the things you’ve always wanted

I see a lot of people who don’t really get to travel until they’re retired. And to be fair, people with children would have a much harder time doing what this couple is planning.

The problem with putting off travel until retirement, though, is that you don’t know what your health will be like at that stage of life. You can hope you’ll still have the energy and mobility for longer trips, but you just don’t know. So if traveling is a big goal of yours, don’t put all of it off until you’re older.

Sure, you may not be able to move to part-time work and take months-long trips if you have kids at home or college to pay for. But you should prioritize one decent trip a year in your budget if you can swing it.

Running the numbers

Getting back to the couple’s question, they’re trying to adjust to both a smaller income and added expenses, like travel and healthcare. I’m assuming that going part-time will mean losing their employer insurance. Otherwise, their healthcare costs (other than those related to travel insurance) would likely stay the same.

Health insurance can be a huge expense, so it’s important to shop for plans and see what that expense will amount to. And it’s also important to see how much travel is doable when accounting for other non-negotiable costs. For example, the couple here owns a home. If they want to keep it, they’ll need to continue paying their mortgage, even if they’re not using their house as much due to traveling more.

Plus, the couple here can’t afford to just spend down their savings. Even though they have a lot of money, because they’re so young, they might need their funds to last for many decades. So an ideal thing would be to make sure their part-time income can cover all of their expenses.

To that end, I’d suggest that they sit down with a financial advisor and work through different budgets and spending scenarios. An advisor can help them figure out how much annual spending they can afford to take on based on their new circumstances.

Plus, an advisor can set them up with investments that continue to generate income for their portfolio. If they’re able to cover their costs on their part-time income, they can use their portfolio income to occasionally splurge on even more robust travel experiences while leaving their principal alone to grow for when they’re older.

Finally, if this couple will be traveling for months at a time, they could consider renting out their home for income on a short-term basis. While there are clear downsides to going this route, like the potential for property damage, that extra money could make their plan work even more from a financial perspective.

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