Would love the groups thoughts on my ability to retire if I got laid off.

52 year, married, wife is a teacher, i'm in tech, income over $200K, excluding bond income.
House is paid off and kids have 2 years left of college.

$2.5M total in investments, 401K and breaks down as following and all is managed by Morgan Stanley.
$1M in bonds that is actively managed and provides over $80K in income. Inherited.
$1M in 401K accounts
$500K in mutuals

If I were to get laid off, my plan would be to add $500K to the bonds to increase income and essentially live off that income and hopefully wife keeps teaching for income and insurance.

So, thoughts on bond income and trying to live off that and not touch principle as well as dividend income from stocks.

For bonds, my guy actively manages and makes changes as coupons change and interest rates change.

Could I live off of income and not touch principal?

Seems low but depends on what you will spend in retirement. I also live in a hc area

Good point. I track most expenses and this covers most of it but excludes vacations and other purchases.

Expenses:
$4000 / month in car payments, house/car insurance, property taxes
$4000 / month in college expenses (room / board / tuition)
$2000 / month in food
$1000 / month in utilities.

~ $12,000 in monthly expenses, current monthly income $14,000

In 2 years, $5000 in expenses end (car payment, college expenses).
So, I would think $8000 in monthly expenses and even budgeting for excess is a fair estimate.
I guess my main worry is reliability of income through bonds and dividends. I surely do not expect any social security once eligible.

CS78 said:

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If you're spending all of the bond yield, then inflation is heavily eating your principal. The younger you are, the more thats going to matter.

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Yeah this. Fixed income is exactly what it sounds like. Fixed.

In a world where costs are constantly rising, if your income isn't rising too then you have a recipe to either run out of money or be a theft to your own legacy.

How much equity is in the house? Thats a source you "could" tap into at some point.

Would you receive any severance if laid off? Anything material?

Over $800k in the house. Yes, severance would be close to 6 months salary and then probably $2k a month in unemployment for up to 2 years.

Make sure you take what you live on and apply 2-4% per year compounding. Doesn't take long for it to reach eye opening levels. Feels pretty heavy on fixed income

What happens to that bond income if interest rates decline? If you're paying a guy to manage that, he should be able to tell you.

You could potentially downsize the house and free up some of that equity to invest.
I think you're too pessimistic about not getting ANY social security.

I'd be more worried about what you would do with your free time if you retired that early. Finance wise, it feels like you have some good options and wouldn't need to sweat it too terribly much.

Free advice…you get what you pay for