Reader Case Study: Ready for FIRE? School + Career Change worth it?

[AliInKY]

Hi all,

I could use some objective feedback on my situation.  I very much want to retire early - more like earlyish since I'm already 46 years old.  More importantly, I desperately want to get out of the corporate environment.  I have always wanted a vocation that is spiritually fulfilling and that I believe is meaningful.  To that end I'm considering returning to school to obtain a degree in nursing.  It would be a substantial income decrease but I'm not worried about that.  At this point it's a question of ROI - - is it worth it for my remaining years of work?  My blocker for early retirement is a need for health insurance premiums that won't cut our legs out from under us. 

PERSONAL DETAIL:
- Married, no children. 
- I'm 46; husband is 53. 
- Tax filing status:  Married, no exemptions/dependents
- Live in Kentucky, USA
- I am the primary breadwinner.  Husband has just returned to a part-time job after 1.5 years of searching.  We plan to put $6500 of his income to a catch-up contribution in a Roth IRA, then any additional to house principle.
- Our game plan has been to retire (maybe part-time work as desired) when I'm 55 and he's 62.  We'd have him go ahead and file for SS benefits at that time.

INCOME:
Gross Salary/Wages: $7446 monthly (that's mine only; too early to know on his as he just started)
401k contribution:  $1100 monthly
Savings account contribution:  $850 monthly   (Note: We set a clip level of $20K on the savings account.  A couple of times a year we do a sweep and move the 'extra' to an investment account.)

TOTAL ASSETS: 
Savings - $20,000  (high-yield account at credit union)
Beneficiary IRA - $60,600  (required to take disbursement each year)
Investment account - $425,000
IRA - $270,500
Combined 401k accounts - $133,000
Equity in home - $40,000
2006 Mercury Mariner - Paid off (value ~$5,300 - low mileage)
2008 Mercury Milan - Paid off (value ~$5,000)

Typically I receive a yearly incentive bonus of ~$3,000.  We don't count on it, however.  If it happens we throw it at the mortgage principle or stash it in savings or an investment account. 

LIABILITIES:
Mortgage - $144,000
- 30 year fixed at 3.75%
- Purchased in 2012
- Expect it to be our 'house for life' unless we get a wild hair and head someplace salty

Other considerations:
1. Instability with my employer
Lots of people around me have been cut over the past year.  I've considered leaving for greener pastures but the flexible schedule and golden handcuffs keep me here.  If I were to be cut I would receive an exit package based on my years of service.  It wouldn't be the lottery but it would be substantial enough to where I could take several months off, if I wanted. 

2. Nursing program
My thinking has been to do nursing classes in the evening or weekend while continuing to work.  By the time I finish that I will be 50 years old and could work the shifts no one really wants (nights, weekends), ensuring I have health insurance for myself and my husband.  I expect the cost of the five-semester degree program would be around $17,000 when all is said and done.

3. Expenses
We are our own worst enemies in terms of restaurants/fast food and alcohol.  We are continuing to work on that and have made strong strides in lowering those expenses.  The really good news is that my husband and I are 100% on the same page about what we want (early retirement, at least from our perspective) and how to get there.  We have an execution problem, as we'd say in IT.   

So there you have it.  I'd appreciate your sanity checks on:
- Readiness for FIRE
- Nursing degree
- Objective to pay off mortgage by 2025
- Anything else you feel could use some deeper examination or additional TLC

Thanks much.

Ali

[Tay_CPA]

I very much want to retire early - more like earlyish since I'm already 46 years old.  More importantly, I desperately want to get out of the corporate environment.  I have always wanted a vocation that is spiritually fulfilling and that I believe is meaningful.  To that end I'm considering returning to school to obtain a degree in nursing.

You say you very much want to retire early. Do you want to retire early so that you don't have to work at all for the next 20 years? Or do you want to retire early so you can then become a nurse?

Also, what are your annual expenses? Not including equity in your home, you already have over $900,000 saved. That's $36,000 a year for the rest of your life using the 4% safe withdrawal rate. Maybe I'm making this too simple, but besides healthcare, is there something else stopping you from retiring right now?

If you quit your current job, could the five semester nursing degree take less time than spread across four years of night classes while continuing to work your current job? Are there other ways you could fulfill your desire to help others, besides getting a $17,000 nursing degree? Is there a specific area you are interested in that could help you narrow your focus and potentially get more specialized education or training - such as elderly care, cancer treatment, neonatal care, etc.? Maybe something like that could take less time to complete and get you out there caring for others sooner :)

How long do you plan to work as a nurse before retiring?

These are just some of the questions I had after reading your post :) Personally, I would not want to work a full-time job AND go to school at night. If I had enough savings, I would prefer to not be working so I could focus all my energy on school. Don't forget there are labs, homework assignments, projects, exams to prepare for, papers to write, research to be done, office hours to attend, clinicals to complete, etc. that will take up a lot of time and energy outside the hours you are in classes. I'm sure you've thought about those things, but wanted to bring them up just in case.

[AliInKY]

Hi Tay,

Thanks for the thoughtful response.  In short, I want to retire so I can get out of the rat race.  Working part-time somewhere would be perfectly fine, assuming it's something I enjoy.  Earning a little pocket money or something towards a vacation would be the goal.

My husband and I had a long talk last night about nursing.  As much as my heart has always wanted to do it, the push now would be to get in a job/career that would allow me to work just a few days a week and still get health insurance.  In looking at it from all angles, we reached the conclusion that it's probably not worth it at this point.  No matter what, I want to stop working by 55 latest.  That's just 8ish years from now, and only 5 of those would include actually practicing nursing. 

Our annual expenses, including mortgage with some extra toward principle, are about $35,000.  We can tighten up in the restaurant and alcohol arena, as mentioned previously.  There are really just three factors stopping me from retiring right now:
- Mortgage (I don't want one if I'm not working)
- Health insurance
- Fear factor instilled by financial planners saying it can't be done

So assuming nursing is out of the mix, those are the things we need to address.  The part-time 'work for funsies' money could be put toward mortgage over the next few years, I suppose.  My husband's part-time work could conceivably be put toward health insurance.  Thoughts?

[Tay_CPA]

Hi Ali,

If you want to be done working full time by 55, then you're right, probably makes sense to not go the full nursing-degree route. (But it wouldn't be impossible if that's always been your dream!) However, I am sure there are many ways you could get involved in something similar on a part-time basis. This may be silly, but my first job was at a retirement community - I worked in the dining room and served meals to residents; it was a bit like a slower-paced restaurant with a limited menu and lots of dietary restrictions :) I served about 25 people at a time, and it was a wonderful way to interact with elderly folks, get to know them, and hopefully put a smile on their face. Maybe you could do something like that? Or even something more involved, like visiting people at their homes and helping around the house, cooking, etc. I don't know much about nursing or what else you are interested in, so those are the only suggestions I have right now! And again, maybe there are shorter training programs for specialized areas that could get you working in a new field sooner.

Hey, your annual expenses (including mortgage) are less than 4% of your net worth! That's great. If you are able to take the plunge, you could theoretically retire now :) I am at the start of my FI journey though, so these thoughts are only from what I've gathered here on MMM and through discussions with others. I'm definitely not an expert by any means!

The part-time work idea seems like it could work though! Especially if it's something you enjoy doing and gives you a feeling of stability regarding paying your mortgage. I haven't explored the topic of health insurance outside of a full-time job, so I don't have any feedback on that. It would be great if you could get it through your husband's part-time work though.

As for the financial planners that have instilled fear around retiring early - look at all the awesome early retirement stories here on the forum! And MMM's own story. It absolutely can and has been done :) The people instilling fear are the ones who won't ever be retiring early, because they don't believe it can happen. That's their loss! Someday they will be looking at your life wondering why they didn't do what you did by retiring early and enjoying your life :)