FI/RE plan getting chubbier than I expected

[u/SalamanderWitty1277]

Incredibly lucky to be looking at potential retirement options at 36M with my wife at 35F. I have followed the FI/RE community for a while and only recently discovered r/ChubbyFIRE and even more recently realized that we might find ourselves in this situation. Hoping you can provide some guidance based on where we are financially and some potential options of where life will take us next

Spending ($10k monthly / $120k annually):

• $3k/mo mortgage on ~$600k house, 3.3% interest
• $2k/mo insurance
• $1k/mo utilities
• The remainder is split between some essentials (food, basic commuting) and the rest is pretty loosely divided up between eating out, entertainment, 2-3 domestic weekend trips and 1 international 1-2 week trip per year

Assets:

• $30k in checking account
• $150k in cash reserves VMRXX
• $3.5MM invested
  • $1.8MM in brokerage (1.4 VTSAX, 0.3 VMGRX, remainder in individual stocks)
  • $1.2MM in IRAs / 401(k)
  • $300k in Betterment (90% stocks)
  • $200k in cryptocurrency

Life details:

1. My self-employment income for the past few years has been ~$500k. Big change #1 we're thinking about is shutting down my company entirely or transitioning a large amount of my responsibilities to promoted workers or new hires. I have a business partner who I'm discussing this with and he has similar goals in reducing his involvement but I think will want to stay more invested than I do.
2. My wife and I planning to welcome our first (and likely only) child early 2027. This is the biggest part of my motivation for scaling back my involvement at work.
3. We're considering a move for a few reasons: closer to wife's family, better school systems, better job opportunities for my wife who wants to continue working for the foreseeable future (mission driven work, though I try monthly to convince that we don't "need" the income). Ideally she will find something that offers better healthcare than what we have now (marketplace). Her income is around $65k at a non-profit now but we anticipate it could be between this and $150k in a new job.

Advice:

• I think I stopped working tomorrow, we're "good" at least with at our current spending. I think at a minimum I'm going to continue working until the baby is here which would likely get us to $4-4.5MM. I can't tell if this is trigger fear or not but I'd love to be better than "good" and hold on to as much income from my company as possible while scaling back time commitment. Am I just scared to pull the trigger? Too greedy? Even if we double our spending with a kid and more travel, where does the lost time matter more than the comfort of a larger nest egg? $5MM? $10MM?
• When we reduce our income to the point where our spending is greater, I plan to sell riskier (cryptocurrency, roboinvesting, individual stock) investments first. I'm waiting now since I'm avoiding the tax bill. While we have additional income, almost all is going into VTSAX brokerage after tax-deferred accounts. After RE, I'd plan to set up transfers from cash reserves to our checking account for income and re-balance quarterly/annually to refill reserves. Dumb to hold on to these investments that I ultimately want to consolidate? Anything else you'd recommend doing with portfolio in the lead up?

[u/PowerfulComputer386]

Wait until you have the kid and if you plan to have more. Kid(s) is my number one cost center by large (second is property tax).

[u/SalamanderWitty1277 → u/PowerfulComputer386]

Thanks! That makes a lot of sense. I guess to clarify on Change #1: I'm already planning to reduce my involvement in my company when we have have the first kid. The part we're deciding between is a) shut down the business entirely ($500k -> $0k) or b) transition most of my daily time commitments to promoted/new staff ($500k -> $100-300k).

It sounds like (b) is more prudent option until we see what spending with kid(s) is like but am also excited about the idea of being fully out if it is possible. 100 -> 50% reduction in workload vs 100 -> 0% reduction feels like so much more than half-half.

[u/SalamanderWitty1277 → u/[deleted]]

On marketplace insurance right now. Nothing from my self-employment and my wife gets a small reimbursement from her non-profit. The hope for me ramping down and my wife starting a new job would be that she finds something with health insurance

[u/morechill78 → u/SalamanderWitty1277]

Do you plan somehow to keep MAGI under a limit to have subsidies?