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NEW YORK (CNN/Money) - I'm a 34-year-old homemaker and my husband, 42, makes about $100,000 a year as a software manager. He's in danger of losing his job, so we're thinking of packing up and moving to a different state and living off the assets we currently have.

At this point, we've got about $750,000 in 401(k)s, IRAs and other retirement accounts, another $100,000 or so in individual stocks and $200,000 in CDs and Savings Bonds. We also have about $50,000 in 529 plans for our three kids, ages seven, four and two, and we estimate we would net $500,000 in profit if we sold our house. Do you think we have enough to retire?

-- Chris, San Francisco, Calif.

Wow, you guys really give new meaning to the phrase "early retirement." But impressed as I am with the assets and savings you and your hubby have been able to accumulate up to this point in your lives, I don't think you've got enough money to walk away from the work-a-day world just yet, especially considering that you've got three kids.

That said, I think you probably have enough socked away to allow you to dramatically scale back the amount of time you work, which at your tender young ages is probably a better way to go anyway.

Here's how I analyze your situation.

You've got just under $1.6 million in your retirement accounts, CDs and other financial assets. Let's assume you'll use $50,000 of your home-sale profit as a down payment on a new home and that you'll invest the remaining $450,000, bringing your total investment stash to an even $2 million. (We'll leave the kids' college money aside for the purposes of this exercise.)

The first issue is how much you can draw from your $2 million each year with a reasonable expectation that your investment stash will last the rest of your lives. I'd say that at the very most you might withdraw 4 percent of your savings, or $80,000 your first year of very early retirement.

A mere 80 grand might not sound like much, but, remember: you and your husband are likely to live at least another 50 years or so. And prices are going to be rising during that time. So when I talk about a 4 percent, or $80,000 initial withdrawal, I'm assuming that each year you will increase your draw to adjust for inflation. This way you'll maintain your purchasing power.

Now, if you move to a lower-cost state, getting by on $80,000 might seem quite do-able. But there are a few things to consider.

One is the cost of health care. Without an employer, you and your husband are going to have to pick up health insurance and other medical costs for your family. Maybe you can keep costs down by setting up a Health Savings Account that has a high-deductible or perhaps you can find an HMO or other type of health plan that's relatively affordable.

But any way you slice it, insurance premiums, co-pays, deductibles and the inevitable items that aren't covered can run into a fairly considerable expense -- one that you're probably not paying for in full now.

There's also the issue of taxes. You can probably hold the line on taxes a bit by taking draws from your taxable accounts and by taking advantage of the tax laws as much as possible -- selling stocks with a high cost basis to reduce the taxable gain, selling shares you've held more than a year so you pay capital gains tax rates rather than generally higher rates on ordinary income, that sort of thing.

But once you run through those assets, you'll have to start tapping your retirement accounts. And when you do that, the tax bill is likely to be a lot higher for three reasons: first, your entire withdraw will be subject to tax, as opposed to just the gain in your taxable accounts; second, it will be taxed at ordinary income tax rates; third, if you withdraw these funds before age 59 1/2, you'll also have to pay the 10 percent federal tax penalty.

So there's going to be a big gap between what you pull out and what's actually available to spend. (Of course, if any of your retirement accounts are in Roths, taxes won't be a problem, as long you've had the account at least five years before you start withdrawing any gains on your contributions.)

Of course, you could always increase your withdrawals a bit to compensate for the tax bite. But a 4 percent initial withdrawal rate is already pushing it a bit in my opinion if you want your money to last 50 years. Increasing the withdrawals only increases the odds that you may outlive your assets.

I think there's a better way to go, however. If you and your husband are really interested in getting off the treadmill, why not move to a lower-cost area with a slower pace of living but stay in the workforce?

Your husband doesn't have to get a high-pressure job. He can look for something that's not quite as demanding. Or, he could freelance or do consulting work or maybe even move in and out of the workforce a few years at a time.

Naturally, that means his pay is likely to come down substantially. But even if your husband makes, say, half of what he was making in San Francisco, you can probably get along quite well on a combination of his salary and occasional withdrawals from your assets, especially if he lands a job that pays for all or most of health-care costs.

And because you're not drawing down as much on your assets as you would if your husband doesn't work at all, your portfolio will likely continue to grow over time, or at least until your husband is ready to leave the workforce altogether.

I think this type of scenario -- continuing to work, but not like some mad driven careerist -- is likely to be more sustainable economically for you, your husband and your children than totally dropping out. And I suspect it will be more fulfilling emotionally too.

If after a few years of this arrangement your husband decides he's recharged enough and wants to get back to a more challenging work environment, well, the fact that he's kept his hand in the job market will make re-entry easier, and probably more lucrative.

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "We're Not in Kansas Anymore: Strategies for Retiring Rich in a Totally Changed World."