It’s hard to believe that I haven’t work a formal job since 2012. That’s almost 7 years now! Time really flies when you’re having fun. Life has been outstanding as a stay-at-home dad/blogger/early retiree. I’m looking forward to many more years of operating in this capacity. On the other hand, Mrs. RB40 has been working full-time* while I’ve been taking care of the home front. You may think that’s unfair to her, but some people just aren’t made for early retirement. Mrs. RB40 enjoys working and contributing to society in a formal capacity. She also LOVES having a steady income. Her job is great for our finances because we can put off withdrawal from our savings. However, the question remains. Can our finances survive dual early retirement? Can my wife retire yet? Today, we’ll go over our finances from last year and see what it’d be like if Mrs. RB40 was retired and had no income. Then we’ll have the answer to the financial part of the question.
*Mrs. RB40 is actually taking a mini-retirement right now. You can read more detail at the end of this post.
Here is a quick recap of our current situation. Actually, it’s probably easier to look at our earnings and follow along.
- I started working full time as a computer hardware engineer in 1996. I retired from my engineering career in 2012 to become a SAHD/blogger. Blogging generated very good income in 2017 and 2018. However, 2019 doesn’t look good.
- Mrs. RB40 joined the Peace Corps for 3 years after college. She started working full time in 1999, but didn’t make much. She went back to school and got her Master’s degree in 2007 and improved her income significantly. Currently, she is taking a mini-retirement, but she plans to go back to work full-time soon.
- Wow! Our household income hit a new high in 2018. This isn’t even counting passive income.
It’s been almost 7 years since I retired and life has been fantastic. Some readers, aka the internet retirement police, insist that I’m not retired because my wife is still working. However, I disagree. Why does it matter if Mrs. RB40 is still working or not? This wouldn’t be an issue if I was 65. Most couples don’t retire simultaneously. Mrs. RB40 could have retired with me in 2012, but our finances would have taken a big hit. It would have been okay because the stock market did very well over the last 7 years. However, we wouldn’t have been able to invest and doubled our net worth like we did.
Anyway, let’s look at 2018 in detail and see if she could have retired that year.
Can we maintain our lifestyle if my wife retires?
Okay, it’s the moment of truth. If you’ve been following my monthly cash flow reports, then you’d already know the answer. Our income was very good in 2018. Mrs. RB40 could have retired without any money problems. First, let’s see how we funded our modest lifestyle in 2018.
- Mrs. RB40 works full-time.
- I blog part time and generate some online income.
- We have passive income from real estate crowdfunding, dividend stocks, rental properties, and other investments.
We had good cash flow with this model, but it’d be different if Mrs. RB40 wasn’t working full time. First, we’d lose her earned income. Then, we’d need to purchase health insurance. Let’s crunch the numbers.
If my wife was retired in 2018…
First of all, we’d have less income if we didn’t have her income.
- Online income: about $81,000
- Passive Income: about $57,000
- Total income (pre-tax) = ~$138,000
Second, we’d spend way more money on health insurance.
- 2018 expense: about $60,000
- Healthcare: estimated $12,000
- Tax: $18,000 (casual estimate)
- Total Expense =~$90,000
A quick look reveals that income is higher than expense so the financial side looks good. Of course, it was a banner year here at Retire by 40. In previous years, I made closer to $30,000. Even with less online income, we’d still be fine. In that case, we’d pay much less tax as well. The numbers still work out with $30,000 of online income. Our passive income has grown quite a bit since 2012. We only need a little supplemental income to make it work. 2019 looks like it will be a lean year with blogging. I’m making very little income so far. We’ll have to see how the rest of the year goes.
In conclusion, Mrs. RB40 could have retired in 2018 if she wanted to. Our finance looks good. We’d still have a surplus even if she didn’t have any income.
|Year||Surplus without her income||Can Mrs. RB40 retire?|
She doesn’t want to retire yet
Unfortunately, Mrs. RB40 doesn’t want to retire yet. It doesn’t look good for me because this site is focused on early retirement, but life isn’t all about me. If she wants to work, then why should she retire? Early retirement is a great fit for me, but it isn’t for everyone.
Most people want to be productive members of society. They need to contribute and a job makes them feel important and useful. A job gives your life some structure. You have goals and missions to accomplish. Now, I believe 90% of the population prefers working to retirement. Working is just an easier way to live if you have a good working environment. Early retirement sounds good in theory, but it’s not a good fit for most people in real life. You have to set your own goals and structure your own life. Work is central to most people’s lives and Mrs. RB40 is no exception. Here are some reasons why my wife doesn’t want to retire yet.
- Mrs. RB40 likes work. She is a model employee. Mrs. RB40 excels at her job and usually gets excellent annual reviews. She continues to perform very well at work so why retire? Nobody wants to quit when they’re a star.
- Mrs. RB40 needs her healthcare. Her employer-sponsored healthcare is awesome. We all have some minor health issues and we really appreciate the solid health insurance policy. I’m not looking forward to purchasing health insurance on HealthCare.gov at all.
- Mrs. RB40 likes being busy. I enjoy relaxing and doing things at my own pace. My perfect day would be hanging out at home, reading, playing games, and cooking. Mrs. RB40, on the other hand, seems to find something to do whenever she has a day off. She’d garden, bake cookies, fold origami, visit the museum, volunteer, or rearrange the furniture. I suspect she’d be bored if she doesn’t go to work. (Not to mention, she’d drive me nuts if she was home all day every day.)
- Mrs. RB40 likes being a productive member of society. She has a social conscience. I don’t mind doing my own thing and I don’t care what other people say. She cares about other people’s opinions. Being unemployed isn’t how she sees herself at this time in life.
- Mrs. RB40 does not have a post early retirement plan. Currently, she doesn’t know what she would do if she retires. She has many interests, but she doesn’t have a passion project. Also, she’s not sure what to do with an unstructured schedule. I suggested that she work for Retire by 40, but she doesn’t seem enthused about it. It’s not her passion. It would just be another job for her even though she’d probably excel at it.
- Mrs. RB40 likes being social. She has friends at work. Adjusting to a smaller social circle is one of the most difficult things about early retirement. I did fine because I’m an introvert. Mrs. RB40 is an introvert, too, but she also likes being social occasionally. Also, I have online friends through blogging. It’s not the same as in real life, but the online social interaction is adequate for me.
- Mrs. RB40 enjoys making money. She loves seeing her retirement account grow every year. She also likes buying nice work clothes. Now that she brings home the bacon, she feels like she can afford nicer stuff. Don’t misunderstand — she doesn’t like spending money on random stuff. She’s very careful where the money goes. If she didn’t have any income, she probably wouldn’t spend any money.
These are some of the reasons why she isn’t quite ready to retire yet. That’s perfectly fine with me being retired because she’s doing very well at work. She’s not stressed out all the time like her previous job and she rarely brings work home. Her job is actually quite good. If I had a job that I enjoyed and paid well, I probably wouldn’t have retired either.
We are in an ideal situation right now. Our household income is solid and our net worth continues to grow. Mrs. RB40 enjoys work and I like being home. This SAHD/blogger lifestyle is a much better fit for me. Mrs. RB40 wouldn’t be happy in this environment just as I wasn’t happy at my old job. Life is good for both of us so why change? Let’s keep it going like this while it’s still good.
An early retirement is an option for Mrs. RB40, but the timing just isn’t right yet. She’s happy at work so she should enjoy it while she can. Actually, she was starting to dislike work in the first half of 2018. There were some management changes and it caused heartburns. However, she changed job internally and the rest of 2018 wasn’t too bad. We’ll see how it goes in 2019. You never know what the future will bring. We’ll keep evaluating her options every year to see if she’s ready to retire at some point. She might feel different about work when she’s a bit older.
Breaking News: Mrs. RB40 is currently taking a mini-retirement! She has been on leave from her job for a month now. Unfortunately, she couldn’t come to Thailand with us because she had a few things to address in Portland. She used the time to prepare for the holidays and catch up on a few non-work projects, but she also realizes that early retirement isn’t that interesting to her.
Fortunately, we’re planning to move very soon so that is keeping her busy. She has been cleaning up our house, selling off some stuff, consolidating a few things, and donating items we don’t want to move. Beyond that though, she still doesn’t have a long-term passion project to work on. She’s good at a lot of things, but there isn’t that one thing that she feels she wants to make her life’s purpose. Not everyone wants to be a blogger*. I don’t think puttering around the house is enough for her at this point in life.
Without a solid post-retirement plan, it’s probably best to keep working until she either doesn’t enjoy it anymore or she figures out how she’d like to spend her retirement. She’ll qualify for a pension in 6 years and that’s really not long in the grand scheme of things. Once she starts receiving a pension, then she wouldn’t have to worry as much about money. Then she can retire without feeling like she needs to get a part-time job or work on some side hustle to make a little income.
*Mrs. RB40 may not want to be a blogger, but starting a blog is a great way to build your brand, and generate some extra income. I think everyone should try it and see if it works for them. Check out my tutorial to get started – How to Start A Blog and Why You Should.
Alright, that’s it for today. We’ll let Mrs. RB40 get back to her mini-retirement and figure a few things out. For now, she still prefers working to retirement. We’ll evaluate the situation again in early 2020 to see how 2019 went. Thanks for reading!
Joe left his engineering career behind to become a stay-at-home dad/blogger at 38. Today, he blogs about financial independence, early retirement, investing, and living a frugal lifestyle. See how he generates Passive Income here.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help DIY investors analyze their portfolio and plan for retirement.