I have $2 million in stocks, mutual funds and exchange-traded funds, $500,000 in retirement funds and $250,000 in cash. I have no debt other than two properties valued at about $300,000 each. The mortgage on one is almost paid off, and although the other one has a while to go, they are rental properties so they pay for themselves. I also hold the majority share of my parents’ home after my mother passed away. It’s valued at about $500,000, but I can’t touch that unless my siblings agree to sell.
So before the end of the year, I will no longer have a job, and I will likely need to find a new home and move, as I was only in this neighborhood for the job. My wife wants to live in New York City, but $3 million won’t go as far in the Big Apple! I’ve worked hard so that my children will have it easier, but I had originally planned on retiring in five years. Once I reach 59 1/2, I can draw from my retirement funds, which will be another $20,000 annually, but that’s still over a decade away.
But there’s lots of good news here. You have two rentals, a share in a family home — which your siblings could decide to buy you out of — $2 million in stocks, mutual funds and ETFs, $500,000 in retirement funds and $250,000 in cash. Certainly, many Americans would be happy to have that much by the time they retire. You have done a lot by the age of 43, but I urge you not to allow the job loss to bring you down. You have not even entered your peak earning years.
I asked Paul Karger, co-founder and managing partner of TwinFocus, a wealth advisory firm in Boston, about your predicament. “You must balance this with the very real risk that inflation erodes your purchasing power over time and the portfolio will not be able to support your personal expenditures,” he says. Otherwise, you will have to increase the risk profile of your portfolio beyond your comfort level. “That is by no means a prudent, or advisable, solution,” he says.
Taking, say, a year off — while applying for jobs and looking into other business opportunities — will also give you perspective on your work-life balance, something millions of people can relate to since the pandemic. You may wish to go back to college, or you might decide that your working life was not so bad after all and say, “Hey, I had a good life, and I took it for granted. I want that life back.