Moving to a one-income household

Post date: 2021-09-16 02:38:21

Due to increasing and incompatible personal and work demands, my wife is strongly considering quitting her full-time job, possibly consulting on a project basis for her current employer (or new clients), or possibly just taking some time off. We can live comfortably on my salary. If you've been in a similar position, what should we be thinking of as we consider this important decision? We're in the US.

Wife works full-time a not-for-profit, doing work she's good at and enjoys. However, it's the familiar story of too few people to do the Important Work, leading to unreasonable demands and expectations. There's no end in sight. I'm in a for-profit field, and make, frankly, close to 9x her salary. We are deep in our MFJ tax bracket, so every dollar of her salary is being taxed at our marginal tax rate.

We both agree that my wife's time is worth more to her and our family than she's being paid. She's strongly considering giving notice and either taking some time off or offering to consult for her employer on a project-based basis.

I am aware that quitting may impact wife's average indexed monthly earnings for US Social Security purposes, will impact our ability to save for retirement (since she'll no longer be covered by her employer's 403(b)), and aware that she would be a 1099 recipient for any consulting work she does and will have different tax payment obligations. And, of course, one wonders about how and whether she would re-enter the workforce in the future, if she should so desire.

If you or your spouse have made similar transitions, what would you advise we consider as we ponder this decision? Also, do you have any specific recommendations for the unique transition from employee to consultant working on an hourly basis on projects that were previously in your full-time remit?

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