We’re in our late-30s with $3 million in liquid assets – can my spouse’s $550k salary alone support our family if I retire?

Some people end up retiring early because they want to. Others end up retiring early because they lose their jobs and can’t find another one.

The latter situation seems to apply to this Reddit poster.

They’re part of a couple in their late 30s with two young children in a very high cost of living area. The poster lost their job and has been having a tough time finding another one. So they’re thinking of retiring now rather than stressing out about finding a new source of income.

That’s not necessarily a poor financial choice, though. Not only does this couple have $3 million in assets to fall back on, but the working spouse makes $550,000 a year.

The poster is wondering if they can live on that income alone, and the answer is probably yes. But that doesn’t necessarily mean that the poster should not try to go back to work.

A tricky but manageable situation to work though

A $550,000 salary may seem like it would be more than enough to live on. But in a very high cost of living area, it could disappear pretty quickly — especially with kids in the mix. Even if this family can live on $550,000 a year, if they’re used to earning more, the loss of one income has the potential to impact their long-term financial goals.

That said, with $3 million in assets and another large salary to fall back on, the poster should not feel pressured to take any old job. It’s not like this family can’t keep the lights on. Rather, the poster should take the time to think about their next career move.

If the job market is tough right now, the poster can go back to school to develop some skills or think about starting their own business. Or, they can mostly take a career break for a few years while their kids are very young and perhaps consult on occasion to keep their resume and skills current.

But retiring in one’s late 30s may not be optimal, even if money isn’t an issue. The poster here may find that once their kids get older, they’re at a loss for what to do during the day while they’re busy at school. And if they’re used to working full-time, they might miss it, despite being able to keep busy with their kids in the near term.

So while the poster could potentially retire now from a financial standpoint, from a mental standpoint, that may not be the best move. The good news is that with a $3 million cushion and a spouse who earns a lot, the poster has plenty of time to decide what happens next.

Get a financial advisor involved

Any time there’s a big decision to be made relating to money, it’s a good idea to consult a financial advisor.

A financial advisor can help this couple understand the impact of losing their second income on a long-term basis. They can also help the family take steps to maximize their savings if they’ll be living on only one salary for a number of years while the poster figures things out.

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