They've spent the last eight years working part-time so they can enjoy more time with their kids, and they wouldn't change a thing. But with expensive school years ahead and full retirement still on the horizon, one couple in their mid-40s is starting to wonder whether they've sacrificed their financial future for more freedom today. Have they slowed down too soon, or are they actually in a much better position than they realise?
In this listener case study, Dave and Hayden unpack the finances of a couple who have been semi-retired for eight years but are worried they won't have enough to stop working altogether by 60. With an investment property, shares, substantial super balances and two young children, there's plenty to consider before deciding whether anything needs to change.
In this episode we'll discuss:
๐จโ๐ฉโ๐งโ๐ฆ How working just 25 hours a week for the past eight years has allowed this couple to enjoy many of the benefits of FIRE without actually reaching financial independence.
โ๏ธ The trade-off between working less while your children are young and staying in full-time employment to potentially reach financial independence sooner.
๐ธ Why their reported $90,000 in annual expenses might actually represent closer to $60,000 in underlying lifestyle costs, and how that could dramatically change their retirement target.
๐ How their $200,000 share portfolio and $600,000 in super could potentially grow to around $1.9 million over the next decade, even while they continue working part-time.
๐ Whether holding an investment property with $500,000 in equity makes sense, or if selling it and investing elsewhere could provide greater flexibility as retirement approaches.
๐ณ๏ธ Why uncertainty around property markets and government tax policy complicates the decision to sell an investment property, and whether making big changes now could be premature.
๐ฐ The challenge of funding retirement before age 60 when a substantial portion of your wealth is inside super, and why having investments outside super remains important.
๐ซ Whether private school fees are worth potentially working another five years, and how parents might weigh the financial benefits of education against the value of spending more time with their children.
๐ฑ What investing the money otherwise spent on private school fees could mean for a child's financial future, and whether that presents a compelling alternative from a purely financial perspective.
๐ฅ Why semi-retirement doesn't mean wealth creation stops, and how the assets you've already accumulated can continue compounding even when you're no longer saving aggressively.
Perhaps the most interesting part of this case study is that the couple may already have achieved something many people spend decades working towards: more freedom, less work and more time with their family. Their biggest challenge might not be building more wealth, but recognising what they've already achieved, understanding what their future expenses will actually look like and deciding what they want the next stage of life to be.
Questions, disagreements or your own scenario: hello@aussiefirepod.com or reach out on socials at Strong Money Australia and Pearler.
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Disclaimer:
Any advice is general and does not consider your financial situation needs, or objectives, so consider whether it's appropriate for you. You should also consider seeking professional advice before making any financial decision.
Pearler is an Authorised Representative 1281540 of Sanlam Private Wealth Pty Ltd AFSL 337927. Read the FSG available from https://pearler.com/financial-services-guide
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