My wife and I, both 40, have a combined income of $500K with $1.65M saved — but my wife’s stressful job is killing her. Can we afford for her to quit?

But Maya worries about retirement, the job market and stepping back during what she thought would be her peak earning years. She wants to make sure that if she quits, it won’t put their future in jeopardy.

High income, high cost

Maya’s high-stress role as a manager at a tech company has taken a heavy toll over the past year. As her salary has risen, so has the pressure. She says the cutthroat nature of the work has made it impossible to continue, to the point where she cries every day.

Ed is seriously worried about Maya’s mental health, and he should be. She’s likely suffering from extreme burnout and needs a break from the stress. Still, Maya fears that even if she quits, financial stress will take its place.

Luckily, Ed and Maya are in a strong position to take a step back. As long as they make a short-term plan, they can still reach their long-term goals.

Crunch the numbers

In recent years, Maya and Ed have seen their salaries grow rapidly. They now each earn about $250,000 before tax. They have $1 million in savings, which they had earmarked to buy a home, $500,000 in retirement savings and another $150,000 in investments, with no debt.

It’s not really a question if of whether they can “survive” on just Ed’s income — of course they can.

After tax, his net income is about $156,000. Because the cost of living in California is so high, they spend $60,000 a year on rent, with total yearly expenses — necessities and non-necessities, including vacations — hitting $110,000. Ed believes that with tighter budgeting, they could trim spending to at least $90,000.

So why is Maya still worried? Even if they saved $66,000 a year, that’s far ahead of most Americans. According to a 2022 Federal Reserve survey [1], the median retirement savings for those ages 35 to 44 is just $45,000.

Still, Maya sees the hole left without her income. With both salaries, they could be saving $222,000 a year, which could put them on track to retire early, a dream they’ve shared since they met.

They had planned to retire with savings equal to 25% of their pre-tax incomes [2], rather than the often-suggested 45%,given their high earnings. That would mean funding $125,000 in annual retirement income. For a 40-year retirement plan — since they hoped to retire at 50 — that’s $5 million.

Maya calculated that with an 8% rate of return (which some experts say [3] is too optimistic), their savings could grow to $3.66 million in 10 years if she stays at her job. Added to what they’ve already saved, that could put them close to their $5 million goal. That’s what makes the decision so difficult.

Will quitting be too costly?

Maya and Ed can manage if she quits. It just means adjusting their savings plan. That could include pushing back their target retirement age or reducing their projected retirement income. A financial advisor could help them run the numbers based on different scenarios.

The truth is, Maya and Ed have more saved at 40 than many Americans will ever have. Maya shouldn’t put money above her health, especially when she has a safety net and a partner whose income can cover their lifestyle.