Ask the grumpies: Can I Retire Early?

Middle class revolution asks

By the time you post this, I may already be out of a job. However, i can always use your money wisdom and that of your readers. I may also ask Frugalwoods but they want so many details.

Here is some background info about me and my family:

– Family = me (50), my husband (poor health), 2 young kids – one with special health issues and low functioning autism. We don’t plan to pay for college but want to support spec needs kid with a trust (from home sale?).
– My parents live nearby and currently offer babysitting help.
– We own a single family home in a high cost west coast state. It is safe, blue collar, ethnic neighborhood with so-so schools. Valued at $500,000 to 600,000. We are 2 years away from paying off mortgage. May do this sooner if possible.
–  I have a 401k, rollover IRA, Roth IRA totaling . My husband has no retirement savings. Total value of approx. $470,000 depending on stock market.
– I will get social security but don’t know amount.
– Husband earns approx $5k per month from state as our kid’s caregiver. I will take over this role. He can get health insurance thru this job but I don’t know how good it is.
– My income was $3k per month after taxes, 401k contributions and health care premiums.
– Currently spend about $4k per month. Want to reduce this.
– We own 2 cars and will sell one.
– We have no debts.
– We don’t have a will or life insurance (very bad, I know)
– Both sets of our parents are financially fine. His parents already gifted us to help buy our house. No inheritance expected.

I am resigning due to a bad work situation (horrible boss). I do not expect to find a similar job since I won’t have my boss as reference and I’m 50.

Did I make a horrible mistake? Will I end up eating cat food or worse?

Please advise!

With a low functioning disabled child, you need to get a will AND life insurance NOW.  This will probably be pricey if you’re thinking about a trust.  Along with the thinking about a trust, the law office will likely be able to recommend someone to think about the financial aspects of your plan for your child.  How much will they need after you are gone?

I always think that the FrugalWoods are overly optimistic about retiring.  I mean, I guess that’s their brand but also they haven’t lived it (since Mr. FW has never stopped working for an employer and Mrs. FW has her own business), so…

Looking at your numbers, with half your wealth locked up in your house and a low functioning child and spouse with health issues… I would not personally retire early.  If my job were terrible, I might leave that job, but I would definitely keep looking for another opportunity or get more education to switch fields or *something*.  I don’t think you have enough to safely retire because your life right now is highly dependent on the whims of a state government.  And we just can’t count on governments.

You should figure out social security amounts for you and your DH.  We used to get printouts from social security on a regular basis, but I think they’ve stopped doing that (possibly because they know the social security trust fund will be running out sooner than it should).  They have a retirement estimator on their webpage but the interface is not great.  I think you may be able to get it to do what you want by choosing “add a new estimate” after it gives you the stupid initial estimate that assumes you will work until 62/6?/70 and then telling it you want to work 0 at your current age.  I ran through it that way and if I stop working today (or age age 50), I will get about $900 less per month than if I keep working until 62, and 1900 less than if I keep working until age 67 (I’m guessing my big salary years are still replacing low income years in my work history).  Keep in mind that you will need more future dollars than you do now because of inflation.  (Low estimate:  2%, high estimate: 7%… any more than that and Social Security will have worse worries than keeping up with inflation because we’ve turned into a Banana Republic and nothing is safe.)

A big worry is that $5K/month won’t last.  That is extremely generous and it is likely that when your state hits financial difficulties in the future or gets a Conservative governor that this program will get trimmed if not cut entirely.  Even if it doesn’t get trimmed it could not keep up with inflation.  You cannot count on it as safe income.  Also, looking up the program, the amount you get depends on where you live, so it will be dangerous to tap into your house or to move someplace less expensive.

You’ll need to find out the costs of health insurance and what it doesn’t cover and what the copays are and so on and if the people your husband and child have been seeing take it.  Along with property taxes, that’s a big necessary expense.

I like this Nerd Wallet calculator.  Be sure to click on the “optional” so you can put in spending and retirement age and so on.  It’s not going to be perfect because social security will be hard to figure in there.

Yes, age discrimination exists.  Fortunately although it happens sooner for women than for men, there’s also a bump up in hiring for women at older ages, so you shouldn’t give up on finding a new job.  I don’t know if resigning your current job without a new one lined up is a mistake– if it’s affecting your health etc. sometimes just quitting is the best thing you can do.  But if you haven’t quit yet, I would like to encourage you to sweeten up your boss so you can get a good reference, explore other options within the company if possible (can you cut to part time?  are there other units within the company?), and so on.  Think strategically– knowing that you will likely quit, how can you put yourself in the best position possible for finding new work (possibly after the pandemic is over).  When you quit or get fired with cause you don’t get unemployment insurance unless the government steps in because it’s an emergency.  It might make sense to wait until the Heroes act has been passed (and call your senator to get it passed) to see if it covers unemployment for your situation.

Or you can hope to get laid off or negotiate a voluntary separation package with your company, since it’s difficult to fire people from middle-class jobs in those west coast states.  It might be worth talking to your management about this possibility.  Be strategic.  Or if they don’t actually want to lose you, they might be willing to fix some of the problems you’ve been having with your immediate boss.  Who knows!

So… bottom line, no I don’t think you can retire early in this situation.  If everything goes well, then you might be able to do it… a 60K/year income with a paid off house and health insurance might be fine even in an expensive city given savings and Social Security kicking in in 12-20 years.  But you can’t really count on the income increasing with inflation or not being cut, you can’t necessarily count on your property taxes staying put (and you need to stay where you are for the benefits), you can’t count on health insurance not bankrupting you, you can’t count on getting more than 70% of your anticipated Social Security claim, etc.  And your responsibilities (husband with health problems, low functioning child who will need lifetime help) are much too high to allow for you to cut expenses to the bone should things go wrong.

Update from Middleclassrevolution:

Family

– Me Middle Class: 50, good health, the one quitting her job ASAP.
– Husband: 60, declining health, home caregiver
– Kid 1: 10 years
– Kid 2:  9 yrs, Special health issues and low functioning autism.
– My parents: 80s, fairly good health but I am not counting on their babysitting help for much longer.

Assets (conservative estimate)

– Single family home valued at $500,000 to 600,000.
– $470,000 in various retirement accounts.
– $30k emergency fund
– Two cars (both owned 100%)

Income

– Me: $60k per year. Much of it goes toward insurance premiums and 401k contributions. Take home pay is closer to $2k per month.
– Husband: $4.5k per month income from state as caregiver. Income is not taxed.

Future Income

– Social Security: amounts unknown.
– No inheritance expected.

Liabilities

– Mortgage : We are 2 years away from paying this off but may do this sooner if possible.
– No debt
– No will, no will, no life insurance. (Bad I know!)
– Both sets of parents are financially sound and will not need our help.

Health insurance

– Three of us are covered by my employer’s high deductible plan.
– Special needs kid is covered by state programs due to health issues.

Career

– I plan to quit and take over the Caregiver role. This job does offer health insurance but I don’t know copays or premiums.
– Unlikely to find another job due to ageism and inability to get a reference from current boss

Spending

– Currently spend about $4k per month. Want to reduce this.
– We plan to sell one of the cars ASAP.

Other factors

– My husband is very impatient with special needs kid. He is good at stepping in when needed to get kid to change clothes, brush teeth, etc.. However on a daily basis, he tends to ignore him, [ed. deleted by request]. I never understood why my mom felt the need to help every other day (alternating with part time nanny). I thought my husband was capable of being sole caregiver. Now that I WFH, I am not so sure he can manage much longer.
– Without school for months and re-opening unlikely, special needs kid will continue to regress.

So… some of the numbers are different compared to when we gave our first advice and the husband [doesn’t sound as good].  If you really do need to stay at home with your child during the pandemic (a common story for many women, and not indicative of their underlying quality of workers), then maybe paint the leaving your job narrative that way and make sure that everyone else is on board with that narrative at the company because it is likely when you do try to return to the labor force (and you will likely have to) your former boss will likely be elsewhere and somebody else at the company will be providing a reference for you.  Hopefully your DH has some redeeming qualities or will be bringing home Social Security in a couple of years, [ed. deleted].  Though since he is close to 62, if he has Social Security benefits, it is unlikely that those will drop (though they may not keep up with inflation) and you may be able to transition to retirement with them, so figure out what they are.  He’s got to be useful for something once he’s no longer being paid to ignore your kid.

Also given your husband’s age and health, it’s probably not cost-effective to get life insurance for him, even term, so just get it for you.  But you can still look into costs.  You do need it for you.

Update:

No honestly he has good points too. He does most of the cooking and a lot around the house and yard. I am often impatient with my special needs kids too. The situation has taken a toll on us. I cannot manage both kids alone.

I realized that I changed 5k to 4.5k…I am not sure of exact amount so I lowered it. I guess that 500/mo makes a difference..

$6000/year when you’re not bringing in a lot does matter (as does knowing if your current take-home pay is 24K/year or 36K/year).  But more importantly, before you make your next move at work, you need to figure out the values of all of these numbers (including Social Security) so that you can make an informed decision.  30K in cash emergency fund does buy you some time, but will schools be reopened in 7.5 months?  It does sound very likely that you will quit this job, but before you do, get all of your ducks in a row.  It might be worthwhile getting all those numbers that the FrugalWoods want even if you don’t actually email them for advice.

Update:

I checked my husband’s monthly income and it is 5k , not 4.5k if that makes a difference.

Finally my son is already stronger than my me, my mom, and nanny. When he gets angry, he hits hard, scratches, twists our fingers and sometimes bites. It is probably when not if he will do more serious harm. Yes we are looking unto meds. Bottom line: I can’t physically manage him without my husband. I would like to keep my son home with us as long as possible.

Grumpy Nation:  Would you retire early in MCR’s situation?  What things should she be thinking about?  What questions would you ask?  Do you have any suggestions for how to best separate from a bad job when you’re in your 50s (especially a state with employer protections)?  Any other advice?

15 Responses to “Ask the grumpies: Can I Retire Early?”

  1. omdg Says:

    I worry that the OP’s long term plan for the son may not end up being pragmatic as he grows stronger as he hits adolescence. The behavior problems don’t sound like they are going to improve, and are likely to only get more challenging (and dangerous) for her to deal with as he grows. Many families just cannot deal with this, and setting your son up to be cared for by professionals at a facility who can safely manage his behavior is not abuse or neglect may be safer for you and him in the long run. It is not an easy choice to make, obviously, but it may be worth reaching out to social services or some support groups to find out what options are available.

    • nicoleandmaggie Says:

      That last long-term care and trust piece seems like a really important unknown. How much will the state/Medicaid/Medi[State] finance, how much is needed in cash for an annuity (is an annuity even the right vehicle?)? I often wish leightpf were still a regular to help with questions like this where we’re way out of our zone. (We did get an email update from her! Sounds like she’s doing great! But also can’t save our readers from our dubious advice anymore…)

  2. bogart Says:

    I would not, partly for the reason OMDG mentions. Also, by my thinking MCR has nowhere near enough money saved/available, full stop. But! If MCR is committed to leaving the workforce to prioritize sanity/health and family well-being (and those are all very important) I would 110% frame that in a very public way as a decision made (a) only for the last reason listed (family well-being, not personal well-being), (b) with deep regrets, and (c) made necessary only by the unfortunate effects of the pandemic on needed services (school, etc.). And I think I’d frame it that way in my own mind as well (insofar as possible) and plan on returning to the workforce. I do realize doing so may be difficult and that a departure could become a retirement, desired or not. But a break rather than a departure (not a break from this job, a break from the paid work force) would I think be a much more sensible decision.

    I don’t know how this works in the pandemic era, but when I have left jobs, including jobs I wanted to leave, I have tried to return to my prior workplaces in positive ways/contexts (e.g. in my case to celebrate the graduations of prior students) and in ways that show to my prior colleagues that (a) yes I am glad I left because I am now doing really great things other places but also (b) I like and miss them and regret that we are no longer able to work together as we did before. I have found that this sets a good tone (and, honestly, is pleasant — even the ones I didn’t particularly like, it’s OK to see and reconnect with again briefly and think to myself but not show to them, “Man, I am so glad I don’t work with you anymore.”) and can lead to good connections down the road.

    GL to MCR whatever she decides.

    • nicoleandmaggie Says:

      Great advice! As you frame it, these are also decisions being made all over the country right now and thus will seem understandable and normal when getting back to work. The advice on reframing and seeming regret is also great because it can often change the narrative people have in their heads… if repeated enough other people start believing it too. It’s the story they remember.

  3. Alice Says:

    I wouldn’t retire early in this situation. To me, the household situation sounds pretty precarious as-is. Retiring early seems to me like the equivalent of pressing a button to accelerate the problems and add new ones. In this situation, I would be holding onto my current job while actively looking for another one. Yes, age discrimination exists, as does discrimination against women. But I would still do a full job search until I found something new, even if the process was longer and more frustrating than I wanted it to be.

    I also think it may be worth getting either individual or family counseling for yourself and for your husband, if it’s covered by insurance or you can find an affordable option. It sounds to me like you’re both in really rough situations and you could each benefit from having professionals listen and help formulate strategies for progressing to a happier state all around. Including making it through in your current job, the potential job search or retirement, dealing with your husband’s health, engaging with your kids, managing the aggressive behaviors, and coping with the pandemic school situation . Well-meaning people on the internet are fine, but what’s going on with you sounds really complex. I know that I worried about saying the wrong thing just in writing this response. I find myself really wanting to figure out a way to make things better and just not knowing what to say that would be genuinely useful.

  4. Angela Howard Says:

    There are a couple other states where parents may be able to paid as caregivers for their special needs child. Those states may not have considerably cheaper cost of living, but they might be worth considering as a destination if considering other locations for possible job hunting. It does sound like the trade off may not be worth it at this time due to the help from grandparents.

  5. SP Says:

    It seems like the pandemic (and more specifically, the US gov’t response to it) has created all of these no-good-solution situations all over the country.

    No, I would not feel at all comfortable retiring in such a scenario. But sticking it out at her job seems to have some serious problems with the husband remaining primary caregiver in an environment without schools. So, yes, the career break idea is the best, but also precarious due to the struggle with jumping back in in your mid/late 50s.

    I agree that pulling together all the numbers is important. https://ssa.tools was useful for me for estimating social security (which I was doing as part of an investigation on life insurance, since also functions as that when you have kids).

    • nicoleandmaggie Says:

      The pandemic really has. There’s a video on the NBER YouTube page explaining how it’s hurting women especially.

      Yes on ssa tools! And be careful that you’re getting the numbers that don’t assume you keep working until SS receipt.

  6. Linda Says:

    I think others have had good suggestions here, so I’m just adding my voice in regards to job hunting as a woman in her 50’s since I was in this situation just a couple years ago. My particular situation wasn’t exactly like MCR’s, and the economy is different now that it was at that time, but I know that panic that comes with thinking of looking for a new job at that age. (I’m single with no dependents and was laid off due to headcount reductions and had a severance package. I had worked for my employer for just shy of 20 years, and took a hard negotiating line around the severance offer which netted me several months to look for a job with no loss of income.)

    First, when it comes to references know that legally in most states if a new employer reaches out to check references they will be directed to the HR/Talent group who will share limited information. Most managers/bosses are counseled NOT to do anything other than verify employment and to refer callers to HR. It’s a risk mitigation approach to keep the employer from getting sued. Even if MCR works for a small business or company that doesn’t have rules like that handed down from “corporate,” there are ways for the applicant to set themselves up for success in situations like this.

    MCR should not rule out her skills and desirability as an employee. As someone with such a long work history, she has an advantage over someone with much less known about their ability to function well in a work setting or who may not have as many years of experience in the industry. I’d encourage MCR to keep her current job while job hunting. Perhaps she could negotiate a reduced schedule or workload and she could use that extra time to job hunt. Maybe she even finds that she can handle the demands on her by working part time or a reduced schedule, and that shapes her job search.

    I’d also advise her to start skimming the Ask a Manager blog for insights and tips on working with bad bosses, job hunting, and interviewing.

    • nicoleandmaggie Says:

      Great advice, thank you!

      • middle_class Says:

        Thank you everyone for their advice. You and your readers have great suggestions, esp. in regards to how to frame my departure. I have decided to hold off resigning for now and wait for the layoffs, which I think will happen by end of year if not sooner. At least I will get severance and unemployment. As for work, I am mentally training myself to expect the worse in terms of my boss. Nothing I do will change her mind about me. I will do the minimum because doing my maximum yields the same results with her/him. I think it will be healthier for me to just not give a F##@. My work relationship with others will not be affected.

        I did go to nerd wallet and crunch numbers. Financials are not as bad as I expected but definitely not early retirement ready.

      • nicoleandmaggie Says:

        Severance and unemployment are good things!

  7. retirebyforty Says:

    There is a very nice and easy to use SSA calculator here. https://ssa.tools/calculator.html
    The advice above is good. Try to hang in there instead of quitting, If they lay you off, then you can get some kind of severance package and unemployment.
    Your finance is okay, but it could be better.
    I suggest trying to find a part-time position. That way, you can bring in some income and help out at home also.
    The other pieces are tough. Best wishes with your kids. It’s a very complicated situation.


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