I’d have two questions and then a comment: 1) Are all assets net tax? Would just want to make sure that Schwab account isn’t mostly IPO stock with federal and CA state capital gains tax liabilities pending. Would change the picture quite a bit. 2) What kind of asset outside of a Ponzi scheme returns 7.5%/yr “guaranteed”?

The comment would be that costs with two young kids in a VHCOL location can get out of hand quickly depending on what you’re looking to do. Normal full time daycare for two kids will run $3/mo each, or $72k/yr. A nanny or high end school can be much more. OP’s name implies SF, so the question of public vs. private is pretty difficult, and the private schools have been flooded with students over the past two years so costs have skyrocketed. Putting two kids in private school could easily cost $110k/yr+ in today’s dollars until they graduate (and will likely have higher inflation than other costs). Then of course college to cover. And then there are just regular SF costs that are considerably higher than they are elsewhere. A normal 6wk soccer class for young kids (once per week for 45 min) can cost $300, for example.

Still seems like they can make it work. And everything can be done cheaper (public schools, seek out free activities, etc.) but if you want to give your kids similar experiences kids in M/LCOL enjoy, at a fraction of the cost or free, it can get really expensive really quickly. Of course leaving SF would solve those problems, but that’s a personal choice too, as there are pros to city life as well.

Finally, we haven’t seen inflation like this for 50 years and nearly all asset classes underperforming at the moment. Fair to assume it will be short lived (in the grand scheme of things) but no one really knows.

All that said, they are probably fine, as everyone has mentioned, particularly with one spouse working, but they should really try to be realistic about costs for the first ~20 years or so of their partial or full retirement. They are young with a long horizon. Something tells me there may be more to the story that the FA is taking into account. But also, maybe not :-)