A Reddit user with $6 million in liquid assets is deliberating on becoming a stay-at-home mom while spending $550K annually. Despite her husband’s substantial salary of $500K, the couple's current expenses raise concerns about the sustainability of their lifestyle. With a 3.7% safe withdrawal rate, their investments would yield only $222K a year, falling short of their needs. The OP grapples with the decision to leave the workforce despite lucrative job offers or to prioritize family life and risk financial stability.
Spending $550K a year is a lot of money, so it is understandable for the OP to wonder if this is sustainable. While a $6 million nest egg is a lot of money, the reality is that it is not enough to allow for $550K in annual spending.
At a safe withdrawal rate of 3.7%, a $6 million nest egg would only produce $222k per year. That's less than half of what the OP wants to be able to live off of.
Her husband earns $500,000 with the potential for significant compensation increases, and he wants to work until retirement age. However, the OP is in her early 40s and is thinking of staying home with the kids.
The original poster is concerned about whether their money is likely to last, given how much they spend, and is contemplating whether to resume work or embrace stay-at-home motherhood.
#personal-finance #stay-at-home-parenting #investment-strategies #spending-habits #financial-planning
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