I’m worried with putting so much away to DH’s retirement this year (maxing out the 403(b) and the 457, possibly a Roth) that we’re setting ourselves up so we won’t be able to save enough to live on next summer meaning a very tight August or September. The requests have already been made so going back would be difficult. (In retrospect, given the US problems, perhaps the 457 was not the best choice and we should have gone for the mortgage… more on that decision Oct 1st.)
The rationale is that if he loses his job, we’ll have to live on my salary alone. We might as well get used to it now, so it doesn’t hurt so much then and the sacrifices to fund retirement, pay off the house etc. won’t be as deep because we’ll have done a lot already.
Is it ridiculous?
DH loses job… then what?
Should we just assume it will be short term unemployment and have a larger emergency fund? (I can’t figure out if he would be covered by unemployment… I kind of assume not as he’ll be given a year contract after being denied tenure.)
Will he really be bringing in no money?
We’d really like to allow him to use the time as an opportunity to try things out. Maybe work on entrepreneurial or consulting projects that might not pay out in the short term (and that don’t have their own retirement plans) rather than having to take any job he can get in this small town.
What if we use the job loss as an opportunity to move to a city? Our salaries will probably go up, but of course the cost of living will as well. But on net, we would probably be making more money.
At the latest round of conferences, I was strongly encouraged to apply to a couple of jobs close to family (but away from the weather I prefer). I wasn’t expecting that. A job offer would mean a nice raise for me, whether we ended up moving or staying. We could go the other direction and DH could find an industry job, while I follow for a soft money position.
So I don’t know… worst case scenario we drop down to just my (raise-free) salary (and perhaps have small start-up costs for DH’s next career stage)… but is that worst case scenario really what we should be planning for?
On the one hand, planning for the worst allows us freedom. We won’t be stuck if the house doesn’t sell or DH can’t find a job he likes in town. On the other hand, perhaps we’re cutting things down too much for an unlikely future. Or perhaps it is all too likely.
A final question is what are we sacrificing… what are we cutting that we would otherwise not need to cut. The short answer is, I don’t really know. The easy answer from our financial fire drill is savings and charitable contributions. But that answer is still not satisfying. And also isn’t sustainable long-run.
What do you think? What do/would you do when you see a potential jobloss for one partner on the horizon?