Author Topic: LONG Help me plan for going to a single income  (Read 11327 times)

Rural

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LONG Help me plan for going to a single income
« on: December 10, 2014, 07:28:03 PM »
**Apologies; I've written a book here. I appreciate anyone who'll read through it. I need outsider perspectives and thoughts on what we're not thinking about.**


Okay, we're 99% sure my husband is going to leave secondary ed altogether after this school year (his tenth, eighth in public education) because it's getting worse, less and less opportunity to teach each year, more drama, and it's making him miserable. I like my job.


He'll probably go to grad school to finish a hard science master's degree, and he'll almost certainly get an assisstantship, given his background. That would cover his tuition and enough stipend to buy books and gas. The degree he's looking at should take two years. He nearly finished a hard science master's once before, but felt his thesis was indefensible because of needed results rechecked at the time that his federal research grant ran out. Those credits are now ten and more years old, and we don't think he'll be able to salvage any.


On the job front, he'll work through the end of May and be paid through the end of next September. We live in a state that witholds some of teachers' pay each month to pay out over the summer after the school year because teachers can't be trusted to save for their own predictable expenses ( often true, sadly).


We can live, easily, on my salary- currently we're putting everything I make into retirement accounts and living on his slightly smaller salary.


I do not get paid in the summers on my regular contract, but for three more years, I'm in an administrative role that pays for summers. One thing I need to do is sit down with some of the new leadership we have and make sure everyone's aware of this - fortunately, it's in the college budget, so I think what I'm doing is just making sure no one is blindsided. -- The "slightly smaller" reference to his salary is before my summer work, so that's bonus. I should get a small raise with tenure and promotion for next year. (Or no tenure and I'm out of work, too, but the chances of that are so small that frankly, even my usually over-the-top worrying can't get going on that.)


One complication: he's almost vested in what is a pretty secure government pension, but he'll be two years short (of ten) at the end of the year. We can buy in anytime up to five years after he leaves by buying back military years for him - the two he needs to be vested would run around $10,000 if the estimate I have from the pension fund is correct (need to check that; it's more than I thought). He's also eligible to buy the two years based on private school employment. That's supposed to cost more, but I don't yet have the estimate. His pension payout if we choose for me to get a full survivor's pension (probably a good idea since women in my family routinely live past 100) would start at about $670 a month and would get some COL increases once it starts, but not before. He'll be eligible to draw in 2030. I figure we get back the base $10k we'd need to put in to buy vested status in 15 months, though we of course would lose any compounding interest we could get on that elsewhere. We could wait out the five years before buying in, but the cost goes up. He could pull out what he put in, but none of the employer match and no interest. I don't know what that amount is, not yet.


One thing I intend to check into is whether any of his 403(b) options at work would allow for a rollover into a pension. I don't remember if he has a 457 available - his fund options were so bad we just decided to max mine instead, and we couldn't do both. But if we could get the $10k in there and buy the time pretax, it would save us a ton and would be short enough time frame that I'm thinking the fees won't matter as much as the pretax benefit. I need to check into this more, too.


Other considerations:


I am also paying into the same fairly secure (good as they get these days) state pension. It's mandatory, and I have 5.5 years to vest. I know that puts some more eggs into that particular basket.


I make (base pay) 44,050 a year - that reflects a merit raise since the last time I disclosed, if anyone's counting. My summer stipend is $10,000,  none of which can go into retirement accounts.


He's already on my employer health insurance, which is so much better than his that it's cheaper to buy that way than to take the employer subsidy on rates through his (no subsidy for spouse through my place, but still cheaper, just in premiums, in deductible, and in out of pocket max, and more coverage besides). So that's not an issue.


I'm slightly ashamed to say I don't know offhand what we have in non-pension retirement accounts, but it's roughly 1x my gross, not all that much.


On a related note to the low savings above, we own our home free and clear. Property taxes are under $1k a year and about to go down next year because we're putting a conservation easement on the acreage.


We have about $26k in cash, so if we had to pay out on his pension from post-tax funds, that would leave (right now) an emergency fund of $16k, which we could easily make last a year if I were to lose my job. I pay for LTD insurance which pays out 60% of salary after 90 days, and I'm definitely not wanting to change that now. That's cheap through work. We have a little over $200k of life insurance on me, also cheap through work, and $30k on him. Until he leaves work, we have similar coverage on him through his work, both life and LTD.


We don't have/ can't yet get homeowner's insurance. Getting the house finished enough to insure is something we need to do before we go one income. We have the supplies we need, I think. May need some more fuel for the backhoe, but nothing much. He can do that this summer - he built the house.


We will have about $27k net coming in from his job before the checks run out, assuming we don't start dumping some into a 403(b) designated for a pension rollover.


We get $75 of salary a month for me (retirement funds, remember)? We can raise that to ~$2500 a month if we quit with the 403b and 457k. We're also maxing a family HSA and I don't think I want to change that because we do use it for medical expenses. Why pay tax?


My car has nearly 250k miles on it, and it's not a Honda. We don't need to replace it yet, but we need to keep about $2500 laying around for replacement, I'd say. If he goes to the masters program, we either fix up his 86 Tercel so it's more reliable or he drives his 15mpg Jeep. He's advocating the Tercel, and I think I agree. In a pinch, I can drive the Jeep to work, but not the Tercel unless we can find a replacement seat- the current one no longer slides forward or back, and I can't reach the pedals.


The college where I teach doesn't offer any master's degrees; we're strictly a four-year school. My university system doesn't offer any tuition discount at all for family members, sadly, or  he might be looking at more schools - as it is, he's looking at the closest, which is out of state, but which wouldn't matter at all if he gets an assistantship, and even without, we pay in-state prices because we're in an adjacent county to the one the school is in.


He already has a professional license in science. He could go back to work for twice what he's making now, maybe a little less to start since he's been out for a decade, but not starting pay since he's qualified to stamp projects now. But it would mean lots of travel, lots of wear and tear, and, anyway, he doesn't want to, I don't think. We're not FI, but there's no reason he needs to work a job he doesn't want. The masters degree would give him options where he could make as much or more and come home every night. Given how low a teacher's salary is, with an assistantship I'd put the break even point at four years from the day the last check comes in from the high school, more like six if we have to pay tuition.


So, I have some more research to do. What else do I need to be thinking about? What would you do? What else do I need to tell you?


Thanks to anyone who's read all the way through.

Kwill

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Re: LONG Help me plan for going to a single income
« Reply #1 on: December 10, 2014, 07:58:02 PM »
Congratulations on getting to this point--close to tenure, house nearly finished, both of you with income and retirement plans and so forth.

You haven't told us how much your monthly expenses are and how that lines up with your new monthly income after taxes and deductions for health insurance. You should probably figure out exactly how much is in your accounts, even if you don't tell us. You might also check to see that your 403b and other accounts are in the best options you can find within your retirement plan(s).

Why is most of your savings in cash? Could it work for you more effectively if it were invested somewhere? I'm sure folks here have opinions on that.

On your husband's degree: The credits may not transfer to a different program, but I would double-check with his former advisor about whether he might be able to be readmitted in order to be allowed to do his thesis and graduate. Different schools have different rules about that, and there might be paperwork and multiple people you'd have to talk to. Still, if he could finish the degree based mostly on work already done, then it would be worth the headache.

BPA

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Re: LONG Help me plan for going to a single income
« Reply #2 on: December 10, 2014, 08:09:44 PM »
How stable is his pension plan?  I didn't buy back into mine when I was on maternity leave years ago and I'm glad for it since they've since cut benefits.  In fact, right now I'm planning to take the commuted value of my pension instead of leaving it in the fund.

My sympathies for your husband.  I know how he feels (as we've discussed in another thread).  I am burning out so quickly now. 

Good luck with everything!

sheepstache

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Re: LONG Help me plan for going to a single income
« Reply #3 on: December 10, 2014, 08:12:02 PM »
I don't really have any relevant experience to share from... your plan to stop 403(b) contributions for a little while makes sense to me since your tax burden will be much less the years he's not/partially employed.

Gin1984

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Re: LONG Help me plan for going to a single income
« Reply #4 on: December 10, 2014, 08:27:55 PM »
Does your state allow for 529 deductions?

Rural

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Re: LONG Help me plan for going to a single income
« Reply #5 on: December 10, 2014, 08:34:55 PM »
Congratulations on getting to this point--close to tenure, house nearly finished, both of you with income and retirement plans and so forth.

You haven't told us how much your monthly expenses are and how that lines up with your new monthly income after taxes and deductions for health insurance. You should probably figure out exactly how much is in your accounts, even if you don't tell us. You might also check to see that your 403b and other accounts are in the best options you can find within your retirement plan(s).


Good points. I'm in the lowest fee index funds we have (TIAA-CREF).


 I'll be able to bring home just over $2,500 a month with insurance and maxing the HSA for the school year, which is ten months, and ~$3,300 each for the two months of the summer. Expenses without us trying very hard to save run about $2,200 a month figuring in all the fixed expenses, irregular expenses like utilities, vehicle insurance, tags, tax, property tax, fuel (our biggest single expense after electricity), and varying discretionary expenses. The discretionary is where there's some room to cut - food, eating out, and a little bit of entertainment probably run us $150 more a month than we have to spend. Maybe more.

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Why is most of your savings in cash? Could it work for you more effectively if it were invested somewhere? I'm sure folks here have opinions on that.

I figure someone(s) will. :-) Mostly, that's a relic of cash flowing the house build, but the big expenses with that have been done for almost a year now. A small part is in a Navy Federal CD at 5%, but the rest is sitting in checking that doesn't yield anything and savings that basically doesn't. I don't want to tie too much up with the uncertainty now, but we can do better than that. I'm still relatively new to this investing thing and have just gotten to the point where I feel like I'm not an idiot with the pretax funds. So now I need to see what I can do post tax, keeping in mind the maybe $10k to maybe buy into the pension.
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On your husband's degree: The credits may not transfer to a different program, but I would double-check with his former advisor about whether he might be able to be readmitted in order to be allowed to do his thesis and graduate. Different schools have different rules about that, and there might be paperwork and multiple people you'd have to talk to. Still, if he could finish the degree based mostly on work already done, then it would be worth the headache.


Yes, and I forgot to put into my book- length post above that I'm encouraging him to do just that, though with the department chair because his advisor was always a bit lost when it came to requirements - one reason for the thesis problem. I think he will, but I'll likely have to push. Which I'll do. Finishing there, now, would pose other problems- it's about a five hour drive away. But it might be manageable.


Thanks for the input!

Rural

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Re: LONG Help me plan for going to a single income
« Reply #6 on: December 10, 2014, 08:40:15 PM »
How stable is his pension plan?  I didn't buy back into mine when I was on maternity leave years ago and I'm glad for it since they've since cut benefits.  In fact, right now I'm planning to take the commuted value of my pension instead of leaving it in the fund.

My sympathies for your husband.  I know how he feels (as we've discussed in another thread).  I am burning out so quickly now. 

Good luck with everything!


Thanks. The pension will almost certainly pay out, I'd say. COL raises are iffier and at the whim of the state legislature. There won't be health insurance, but if I were for some crazy reason to work to full retirement, I could cover us both through retiree health.


But of course these things can change with politics. Right now this is one of the better funded state pensions in the country, but it's not quite at 100%.

Rural

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Re: LONG Help me plan for going to a single income
« Reply #7 on: December 10, 2014, 08:41:38 PM »
Does your state allow for 529 deductions?


I don't know, but I'll go and find out. What am i looking for, exactly - I've never researched it at all since we don't have kids. Thanks!

Edit to add: yes, my state allows some, but state income tax is low. Still, it's something. Thanks.
« Last Edit: December 10, 2014, 08:45:08 PM by Rural »

Gin1984

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Re: LONG Help me plan for going to a single income
« Reply #8 on: December 10, 2014, 09:26:25 PM »
Does your state allow for 529 deductions?


I don't know, but I'll go and find out. What am i looking for, exactly - I've never researched it at all since we don't have kids. Thanks!

Edit to add: yes, my state allows some, but state income tax is low. Still, it's something. Thanks.
Remember to use it for whatever the school says is living expense, and therefore leave any school fees to your normal budget so you can take the federal deduction on the fees.

Rural

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Re: LONG Help me plan for going to a single income
« Reply #9 on: December 10, 2014, 09:30:26 PM »
Does your state allow for 529 deductions?


I don't know, but I'll go and find out. What am i looking for, exactly - I've never researched it at all since we don't have kids. Thanks!

Edit to add: yes, my state allows some, but state income tax is low. Still, it's something. Thanks.
Remember to use it for whatever the school says is living expense, and therefore leave any school fees to your normal budget so you can take the federal deduction on the fees.


Woo! Thanks!

MDM

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Re: LONG Help me plan for going to a single income
« Reply #10 on: December 10, 2014, 09:56:32 PM »
**Apologies; I've written a book here. I appreciate anyone who'll read through it. I need outsider perspectives and thoughts on what we're not thinking about.**
...
I'm slightly ashamed to say I don't know offhand what we have in non-pension retirement accounts, but it's roughly 1x my gross, not all that much.
...
So, I have some more research to do. What else do I need to be thinking about? What would you do? What else do I need to tell you?
You seem to understand the need to understand your overall situation, and the wherewithal to comprehend and analyze it.  The only thing that stood out was the "don't know offhand" comment.

If by that you meant "I know exactly where I could find it because we have all our finances tracked and projections made in Quicken (or whatever) but don't have that window open right now," all is well.
If by that you meant "I could probably find a paper or online account statement somewhere, but we've never organized all our current and projected finances into one place," then that could be a worthwhile effort for the two of you.

Rural

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Re: LONG Help me plan for going to a single income
« Reply #11 on: December 11, 2014, 03:41:57 AM »
**Apologies; I've written a book here. I appreciate anyone who'll read through it. I need outsider perspectives and thoughts on what we're not thinking about.**
...
I'm slightly ashamed to say I don't know offhand what we have in non-pension retirement accounts, but it's roughly 1x my gross, not all that much.
...
So, I have some more research to do. What else do I need to be thinking about? What would you do? What else do I need to tell you?
You seem to understand the need to understand your overall situation, and the wherewithal to comprehend and analyze it.  The only thing that stood out was the "don't know offhand" comment.

If by that you meant "I know exactly where I could find it because we have all our finances tracked and projections made in Quicken (or whatever) but don't have that window open right now," all is well.
If by that you meant "I could probably find a paper or online account statement somewhere, but we've never organized all our current and projected finances into one place," then that could be a worthwhile effort for the two of you.


You're right, and I actually meant "it's the middle of the night, and I can't go digging into that filing cabinet without risking waking up my husband, who has to go to his stressful job at the crack of dawn." I don't track those balances online as a rule, because while I think I'm unlikely to react to daily fluctuations, I also don't see the reason to worry about them. I couldn't remember my password to look it up last night.


So, at the end of September, but before Septembr's deposit, the 457 and 403b stood at just over 32,000, which means once December pay hits this week, they will be at just over 47,000, ignoring any market gains and losses in the interim.


The HSA is at $8,690; that won't go up this week since it's already maxed for the year. Will go down a bit soon, in fact, since we use it for medical expenses and have been sick - waiting on a couple of hundred in doctors bills.

MB1443

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Re: LONG Help me plan for going to a single income
« Reply #12 on: December 11, 2014, 04:46:34 AM »
I think your husband needs to suck it up.  Most jobs have drama.  He is an able bodied man and should be employed unless he can quit to retire.  Especially since has two years left before vesting.  I would not encourage him to quit his job.  Instead I would have him go to school while he is eorking, get a new job or get a new job and go to school.  He needs to have a job with your income. End of story.   Do you even own a home?  How old is he?  Has he explained why going back to school will allow him to get a different kind of job?  Why will this new job not have any drama or stress like his current job has?   I've just seen so many people make this mistake.  Once he has graduated he will face similar problems but with student loans.

Rural

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Re: LONG Help me plan for going to a single income
« Reply #13 on: December 11, 2014, 05:02:39 AM »
I think your husband needs to suck it up.  Most jobs have drama.  He is an able bodied man and should be employed unless he can quit to retire.  Especially since has two years left before vesting.  I would not encourage him to quit his job.  Instead I would have him go to school while he is eorking, get a new job or get a new job and go to school.  He needs to have a job with your income. End of story.   Do you even own a home?  How old is he?  Has he explained why going back to school will allow him to get a different kind of job?  Why will this new job not have any drama or stress like his current job has?   I've just seen so many people make this mistake.  Once he has graduated he will face similar problems but with student loans.


I'll be happy to talk to you more about it when you've read the post. Since you ask about home ownership and seem to think we're considering student loans, clearly you haven't.

ETA: Sorry for the snark. But I really do need advice that's specific to our situation, which it sounds to me is rather different from the situations you reference.
« Last Edit: December 11, 2014, 07:29:53 AM by Rural »

Gin1984

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Re: LONG Help me plan for going to a single income
« Reply #14 on: December 11, 2014, 07:39:24 AM »
I think your husband needs to suck it up.  Most jobs have drama.  He is an able bodied man and should be employed unless he can quit to retire.  Especially since has two years left before vesting.  I would not encourage him to quit his job.  Instead I would have him go to school while he is eorking, get a new job or get a new job and go to school.  He needs to have a job with your income. End of story.   Do you even own a home?  How old is he?  Has he explained why going back to school will allow him to get a different kind of job?  Why will this new job not have any drama or stress like his current job has?   I've just seen so many people make this mistake.  Once he has graduated he will face similar problems but with student loans.


I'll be happy to talk to you more about it when you've read the post. Since you ask about home ownership and seem to think we're considering student loans, clearly you haven't.

ETA: Sorry for the snark. But I really do need advice that's specific to our situation, which it sounds to me is rather different from the situations you reference.
You were less snarky than I would have been.

Rural

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Re: LONG Help me plan for going to a single income
« Reply #15 on: December 11, 2014, 12:49:25 PM »
So, someone told me in a pm that they weren't sure what question I was asking (thanks, someone!)


Questions (pick your favorites):


1. Can you think of things we should be doing to prepare for this period of unemployment/ limited employment?


2. Thoughts on the pension buy-in?


3. Do you think we should continue to put as much cash as we can into my retirement accounts while he's still working or start saving in something more accessible during the down time?


4. What should we do with the big cash buffer (which, correction, is 23K, not 26k)?


5. Are there tax/ college payment strategies that might help that I haven't mentioned? Like I said to Gin1984 when she brought up 529 deductions, paying for college has been completely off our radar since no kids.


6. Just because it can't hurt to ask, does anyone know of an online masters program that will accept old credits for transfer?

Edited to clarify that question 3 is about the time he's still working the high school job.
« Last Edit: December 11, 2014, 01:02:59 PM by Rural »

MDM

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Re: LONG Help me plan for going to a single income
« Reply #16 on: December 11, 2014, 05:33:14 PM »
1. Can you think of things we should be doing to prepare for this period of unemployment/ limited employment?
2. Thoughts on the pension buy-in?
3. Do you think we should continue to put as much cash as we can into my retirement accounts while he's still working or start saving in something more accessible during the down time?
4. What should we do with the big cash buffer (which, correction, is 23K, not 26k)?
One could address these individually, and there is a good chance that the best answer for each individual item will also be the best answer for your overall situation.  Even better strategies, however, might result if you take a look at your cash flow expectations from now to ~90 years of age.
More or less, you need estimated expenses (including taxes) and estimated income for each year.  Start with this year's liquid assets, calculate next year's assets as (current assets) + (income) - (expenses), and repeat.
One could do this with pencil & paper, but software of some sort makes it easier.  We have everything in Quicken so using its "Lifetime Planner" capability is most convenient for us.  Tools such as www.cfiresim.com may also be useful - we have looked at it, and it looks good, but not "better enough" to have us move away from Quicken.  It's possible that if we had started with cFIREsim we wouldn't have done the Quicken Lifetime Planner - don't know.  Rolling your own spreadsheet may be the quickest way for you to make a rough first pass.

When you have the overall framework in place you can answer all the above questions within the context of how they affect "everything else."
Or do you have something like this in place already?

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5. Are there tax/ college payment strategies that might help that I haven't mentioned? Like I said to Gin1984 when she brought up 529 deductions, paying for college has been completely off our radar since no kids.
6. Just because it can't hurt to ask, does anyone know of an online masters program that will accept old credits for transfer?
For graduate work, the best "payment" strategy is for someone else to pay (for) you.  This could be a current employer (might not apply here), or the university itself (i.e., as a teaching and/or research assistant).
No idea on credit transfers.

Rural

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Re: LONG Help me plan for going to a single income
« Reply #17 on: December 11, 2014, 05:59:55 PM »
Thanks, MDM. I haven't played with cfiresim since we decided for sure he's leaving. I need to do that - doesn't work from iPad, I've just discovered.


I don't know Lifetime Planner - sounds interesting, and it would be right in place where all the data is (if I were to use Quicken, that is). Might be worth looking into.


I do have a number of spreadsheets, some very complex. I'll go and dig through those, but I don't think I have anything up to handling the investments.


I guess all the unknowns just bug me. I need that crystal ball we none of us have, you know?


Yes, definitely agree on getting someone else to pay for grad school, and I don't think that's going to be a problem, most likely. Can't start applying for anything until the 2015 FAFSA is released, though - everything starts with that these days.


 Thanks again.

MB1443

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Re: LONG Help me plan for going to a single income
« Reply #18 on: December 12, 2014, 08:48:48 AM »
PP here.  I apologize for not fully reading the post, especially about you owning your home in full.  That being said, I make some comments that you should take in account.  I simply don't believe your husband should completely quit his job or not work while going to school.  That is the ultimate luxury and not one you have enough money to support.  I would encourage him to find another job or have his employer at least partially support his education.   

Gin1984

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Re: LONG Help me plan for going to a single income
« Reply #19 on: December 12, 2014, 09:01:47 AM »
PP here.  I apologize for not fully reading the post, especially about you owning your home in full.  That being said, I make some comments that you should take in account.  I simply don't believe your husband should completely quit his job or not work while going to school.  That is the ultimate luxury and not one you have enough money to support.  I would encourage him to find another job or have his employer at least partially support his education.
Do you not get that some advanced programs do partially support the student?

MB1443

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Re: LONG Help me plan for going to a single income
« Reply #20 on: December 12, 2014, 09:43:22 AM »
PP here.  I apologize for not fully reading the post, especially about you owning your home in full.  That being said, I make some comments that you should take in account.  I simply don't believe your husband should completely quit his job or not work while going to school.  That is the ultimate luxury and not one you have enough money to support.  I would encourage him to find another job or have his employer at least partially support his education.
Do you not get that some advanced programs do partially support the student?

Why not have additional support?  Also no need to talk down to me.  If there wasn't an issue with paying for school or losing an income, then I assume the OP wouldn't have even posted to begin with! 

SunshineGirl

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Re: LONG Help me plan for going to a single income
« Reply #21 on: December 12, 2014, 09:50:40 AM »
PP here.  I apologize for not fully reading the post, especially about you owning your home in full.  That being said, I make some comments that you should take in account.  I simply don't believe your husband should completely quit his job or not work while going to school.  That is the ultimate luxury and not one you have enough money to support.  I would encourage him to find another job or have his employer at least partially support his education.

They do have enough money to support it.

I think the pension buy-in is the biggest thing to get right. A pension is a great thing to have. Even for that relatively small amount, it could cover your property taxes and utilities, etc. Question: If he doesn't buy-in, can he cash out, and what would be the projected amount if you invested it conservatively yourself for all those decades? (knowing it's not a sure thing)

Rural

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Re: LONG Help me plan for going to a single income
« Reply #22 on: December 12, 2014, 10:10:56 AM »
PP here.  I apologize for not fully reading the post, especially about you owning your home in full.  That being said, I make some comments that you should take in account.  I simply don't believe your husband should completely quit his job or not work while going to school.  That is the ultimate luxury and not one you have enough money to support.  I would encourage him to find another job or have his employer at least partially support his education.
They do have enough money to support it.


That's what I think, too. He won't be willing not to work for pay - he's too driven and in some ways too traditional, but there's no financial reason why he has to work at all, ever. Our retirement will be richer since he will, but we don't have to worry about a couple of years.


Quote

I think the pension buy-in is the biggest thing to get right. A pension is a great thing to have. Even for that relatively small amount, it could cover your property taxes and utilities, etc. Question: If he doesn't buy-in, can he cash out, and what would be the projected amount if you invested it conservatively yourself for all those decades? (knowing it's not a sure thing)


He can cash out to the tune of $16k and change, because he doesn't get any of the employer contributions if he cashes out. My quick back-of-the-envelope calculations for that between now and retirement, growing in the stock market at 7%, and then taking out from that at a 4% SWR, nets us $149 a month. Well. I think that helps with the decision-making.
« Last Edit: December 12, 2014, 10:21:17 AM by Rural »

Rural

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Re: LONG Help me plan for going to a single income
« Reply #23 on: December 12, 2014, 10:19:52 AM »
PP here.  I apologize for not fully reading the post, especially about you owning your home in full.  That being said, I make some comments that you should take in account.  I simply don't believe your husband should completely quit his job or not work while going to school.  That is the ultimate luxury and not one you have enough money to support.  I would encourage him to find another job or have his employer at least partially support his education.
Do you not get that some advanced programs do partially support the student?

Why not have additional support?  Also no need to talk down to me.  If there wasn't an issue with paying for school or losing an income, then I assume the OP wouldn't have even posted to begin with!


The question really is how to optimize. I was asking for input like much of what I've gotten here, things like the suggestion to fund living expenses while he's in school with a 529 for the tax benefits. Also just wanting to talk it through, see if there's anything we're overlooking.


But I did lay out my monthly income and our monthly expenses, as well as our savings, upthread. My income > expenses without starting yet on the cutting back I also mentioned upthread, so I don't think I understand why you keep insisting we don't have enough money. Yes, if we had to pay full out of pocket for two years of grad school, it would deplete our cash savings, but I also pointed out we think he'll get an assistantship which will pay for school with a stipend which should cover books and gas. Those also usually prohibit moonlighting, but I'd want him to focus on school, anyway.


If you want to help, and I believe that you do, then lay out what it is you're seeing here that makes you think we can't afford to do this. If there's a trap out there I'm missing, I really want to know. But you just saying it isn't enough without any specifics isn't helping me to see anything more clearly.

mollyjade

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Re: LONG Help me plan for going to a single income
« Reply #24 on: December 12, 2014, 11:09:36 AM »
PP here.  I apologize for not fully reading the post, especially about you owning your home in full.  That being said, I make some comments that you should take in account.  I simply don't believe your husband should completely quit his job or not work while going to school.  That is the ultimate luxury and not one you have enough money to support.  I would encourage him to find another job or have his employer at least partially support his education.
Here are the sentences you're overlooking:

...he'll almost certainly get an assistantship, given his background. That would cover his tuition and enough stipend to buy books and gas.

Assistantship = working at the university in some capacity

MB1443

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Re: LONG Help me plan for going to a single income
« Reply #25 on: December 12, 2014, 12:20:44 PM »
PP here.  I apologize for not fully reading the post, especially about you owning your home in full.  That being said, I make some comments that you should take in account.  I simply don't believe your husband should completely quit his job or not work while going to school.  That is the ultimate luxury and not one you have enough money to support.  I would encourage him to find another job or have his employer at least partially support his education.
Do you not get that some advanced programs do partially support the student?

Why not have additional support?  Also no need to talk down to me.  If there wasn't an issue with paying for school or losing an income, then I assume the OP wouldn't have even posted to begin with!


The question really is how to optimize. I was asking for input like much of what I've gotten here, things like the suggestion to fund living expenses while he's in school with a 529 for the tax benefits. Also just wanting to talk it through, see if there's anything we're overlooking.


But I did lay out my monthly income and our monthly expenses, as well as our savings, upthread. My income > expenses without starting yet on the cutting back I also mentioned upthread, so I don't think I understand why you keep insisting we don't have enough money. Yes, if we had to pay full out of pocket for two years of grad school, it would deplete our cash savings, but I also pointed out we think he'll get an assistantship which will pay for school with a stipend which should cover books and gas. Those also usually prohibit moonlighting, but I'd want him to focus on school, anyway.


If you want to help, and I believe that you do, then lay out what it is you're seeing here that makes you think we can't afford to do this. If there's a trap out there I'm missing, I really want to know. But you just saying it isn't enough without any specifics isn't helping me to see anything more clearly.

I think I'm just coming from a completely different place.  We make close to 400k a year. 

Rural

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Re: LONG Help me plan for going to a single income
« Reply #26 on: December 12, 2014, 12:47:16 PM »
PP here.  I apologize for not fully reading the post, especially about you owning your home in full.  That being said, I make some comments that you should take in account.  I simply don't believe your husband should completely quit his job or not work while going to school.  That is the ultimate luxury and not one you have enough money to support.  I would encourage him to find another job or have his employer at least partially support his education.
Do you not get that some advanced programs do partially support the student?

Why not have additional support?  Also no need to talk down to me.  If there wasn't an issue with paying for school or losing an income, then I assume the OP wouldn't have even posted to begin with!


The question really is how to optimize. I was asking for input like much of what I've gotten here, things like the suggestion to fund living expenses while he's in school with a 529 for the tax benefits. Also just wanting to talk it through, see if there's anything we're overlooking.


But I did lay out my monthly income and our monthly expenses, as well as our savings, upthread. My income > expenses without starting yet on the cutting back I also mentioned upthread, so I don't think I understand why you keep insisting we don't have enough money. Yes, if we had to pay full out of pocket for two years of grad school, it would deplete our cash savings, but I also pointed out we think he'll get an assistantship which will pay for school with a stipend which should cover books and gas. Those also usually prohibit moonlighting, but I'd want him to focus on school, anyway.


If you want to help, and I believe that you do, then lay out what it is you're seeing here that makes you think we can't afford to do this. If there's a trap out there I'm missing, I really want to know. But you just saying it isn't enough without any specifics isn't helping me to see anything more clearly.

I think I'm just coming from a completely different place.  We make close to 400k a year.


Fair enough. Here, we'd need to make that for two years, tops, before retiring. :-)

Rural

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Re: LONG Help me plan for going to a single income
« Reply #27 on: March 21, 2015, 04:40:58 PM »
A bit of a necro thread, but it's my necro thread, so maybe that lets me of the hook, huh?


Anyway, update. A tragedy at school that he was able to help a lot of the kids through had him reconsidering staying for several months, but... No. The latest idiocy is a bridge too far. He's done with public education. Frankly, I'm mostly relieved.


Now, though, is really too late for the master's program for the fall. He may take a couple of useful background courses (undergrad) at the college where I teach - no family discount, but it's one of the lowest cost colleges in the country, so no significant expense there. We're not sure what else. Maybe the grad program next year, or in the spring semester, even, but I know my husband, and I don't think he's likely to be willing not to work for that long, and once he starts a job, he won't want to quit.


I want him to take some time to decompress, and I don't think I'll have too much difficulty getting him to do that while he's still getting a paycheck, but after is another issue.


I don't want to press him. I don't think its likely to be helpful for me to stress him out about his need to destress... :-)


Anyway, on the financial front, I went back through his retirement options and found a couple of Vanguard funds in his 457 option, so we're maxing that starting this month (his full paycheck). We can do a rollover to the pension (5% penalty fee, sadly, but that's lower than taxes). I think we'll wait a few months on that; if he takes a job at the college with me, even a low level lab support or tutor job, he's back in the pension plan and won't need to buy time in order to vest. His payout wouldn't change because it's based on the three highest paid years, not the last three. If nothing opens up for the fall, we'll have to think hard about it, because the buyout amount goes up over time,


We've dropped our expenses considerably in the last few months just by paying more attention. We're spending $1,700 a month and should be able to sustain that, including annual and semiannual costs. This is good but it does mean we were spending too much. :-)


So, anything we need to think about accomplishing while he's working? He carries some legal insurance for us for very low cost through work, so I'm thinking it would be a good idea to revisit our wills - we haven't looked at them since before we bought the land here, and now we have a house and land paid off. Should we consider independent life insurance on him? I think we can get a good deal on term through Navy Federal, but I'm not sure we absolutely need it.


Anyway, there's the update.
« Last Edit: March 21, 2015, 04:44:26 PM by Rural »

MrsPete

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Re: LONG Help me plan for going to a single income
« Reply #28 on: March 23, 2015, 05:57:47 AM »
Though your husband wants out of public education, I think he ought to do whatever is necessary to become vested in the pension plan before he leaves.  I'm inclined to say, Put in the two more yearsReach ten, and then be done.  I know you say he's miserable (and as a teacher, I know where he's coming from -- things have changed drastically in the last decade, and the general public seems not to notice or care, even when it affects their own children), but looking at it from a perspective of, "I'm on the downhill side.  I only have two years to go" is a whole lot different from saying, "I'm in this for 30 years".  He may find that he can handle it more easily with that mindset.  OR, if he just can't stomach that, do the buy-in.  But leaving with 8 years and foregoing the pension is a bad plan. 

UNLESS you feel that the pension is unstable.  I don't have a feel for your age, but I'm thinking it'll be years 'til he can collect.  If the facts don't look so good and you fear that he might end up with nothing, then disregard the above. 

And I suggest he NOT make any decisions at the end of this school year.  All high school teachers know that the last month of school is just insane, and we all end up emotionally drained.  That's not a good time to make any decisions.

Next topic:

You say he already has a professional license in something scientific and could get a job tomorrow at twice what he's making now.  As such, I don't see the point in getting another degree.  You're making a good salary, you own your home ... I'd think this degree would put y'all in the category of "plenty" without bothering with the second degree and the short-term sacrifices it would entail. 

Next topic:

Why can't you insure your house?  If you have roughly 1X your annual salary in savings, loss of this house (while unlikely) would be life-altering.  This needs to be a priority. 

Final topic:

You asked in the opening line about preparing to downsize to one income.  The best advice I can give is, Stop spending his salary NOW.  Put it all away into savings.  If you're still living comfortably on only your salary, then things are fine. 

« Last Edit: March 23, 2015, 06:01:44 AM by MrsPete »

Dee18

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Re: LONG Help me plan for going to a single income
« Reply #29 on: March 23, 2015, 07:49:27 AM »
The piece that seems missing to me is how you are sure he will find a job he likes with a significant salary increase after he completes this masters degree....and now it looks like at least three years until he could even complete the degree.  My SO teaches chemistry at a large research university.  He agonizes over the fact that they keep taking in grad students on assistantships, for both masters and PhDs, when there are not jobs for them upon graduation.  He says some of these grads are brilliant, but there simply are no jobs for them...so in the end many take high school teaching jobs or they continue in post docs devoting even more of their best earning years to low salaries in the name of further education.

fartface

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Re: LONG Help me plan for going to a single income
« Reply #30 on: March 23, 2015, 09:35:19 AM »
Though your husband wants out of public education, I think he ought to do whatever is necessary to become vested in the pension plan before he leaves.  I'm inclined to say, Put in the two more yearsReach ten, and then be done.  I know you say he's miserable (and as a teacher, I know where he's coming from -- things have changed drastically in the last decade, and the general public seems not to notice or care, even when it affects their own children), but looking at it from a perspective of, "I'm on the downhill side.  I only have two years to go" is a whole lot different from saying, "I'm in this for 30 years".  He may find that he can handle it more easily with that mindset.  OR, if he just can't stomach that, do the buy-in.  But leaving with 8 years and foregoing the pension is a bad plan. 
, k
I agree w/Mrs. Pete. I'm also a teacher and I KNOW how awful public education is presently...HOWEVER, it's in his best interest to stick it out...maybe get some professional counseling? I've thought about it myself things are so bad here in WI.

Good luck to you both. I'm sorry they've pushed him to the edge. In the coming years there will be a mass exodus of talent leaving our schools...and like Mrs. Pete said...nobody seems to care. Yes, it's discouraging, but in the end those two years will make a big difference towards your long-term retirement goals.  Me? I'm finishing up my second master's degree in administration. I figured if they're going to work me like a dog, and treat me like sh!t, I might as well be better compensated for it!

Gin1984

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Re: LONG Help me plan for going to a single income
« Reply #31 on: March 23, 2015, 09:52:04 AM »
Though your husband wants out of public education, I think he ought to do whatever is necessary to become vested in the pension plan before he leaves.  I'm inclined to say, Put in the two more yearsReach ten, and then be done.  I know you say he's miserable (and as a teacher, I know where he's coming from -- things have changed drastically in the last decade, and the general public seems not to notice or care, even when it affects their own children), but looking at it from a perspective of, "I'm on the downhill side.  I only have two years to go" is a whole lot different from saying, "I'm in this for 30 years".  He may find that he can handle it more easily with that mindset.  OR, if he just can't stomach that, do the buy-in.  But leaving with 8 years and foregoing the pension is a bad plan. 
, k
I agree w/Mrs. Pete. I'm also a teacher and I KNOW how awful public education is presently...HOWEVER, it's in his best interest to stick it out...maybe get some professional counseling? I've thought about it myself things are so bad here in WI.

Good luck to you both. I'm sorry they've pushed him to the edge. In the coming years there will be a mass exodus of talent leaving our schools...and like Mrs. Pete said...nobody seems to care. Yes, it's discouraging, but in the end those two years will make a big difference towards your long-term retirement goals.  Me? I'm finishing up my second master's degree in administration. I figured if they're going to work me like a dog, and treat me like sh!t, I might as well be better compensated for it!
I care, but I am a union brat, so it is unlikely that members of the GOP would listen to me.  We used to have balance between business and unions and that is gone.  I think the only true way to stop this is for the middle class to come down on the side of unions and say enough.  Teachers should not be spending their money for the classrooms, that is on the taxpayer, teachers should be paid enough to attract and keep good teachers and finally teachers should have support from the general populous including parents.  Kids can't learn in some of the environments teachers are trying to teach in.  You can't teach fourth grade math to students when half or more can't do second grade math and judging a teacher on not being able to, is inane.  But, again, I am a union brat, no one is going to listen to me, except others who already agree.

CheapskateWife

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Re: LONG Help me plan for going to a single income
« Reply #32 on: March 23, 2015, 10:34:11 AM »

One complication: he's almost vested in what is a pretty secure government pension, but he'll be two years short (of ten) at the end of the year. We can buy in anytime up to five years after he leaves by buying back military years for him - the two he needs to be vested would run around $10,000 if the estimate I have from the pension fund is correct (need to check that; it's more than I thought).

Is this US federal and buying military time under the FERS retirement system?  If so, you definitely need to read up on the regulation for how the buyback is calculated, and compare to the estimate you got.   I bought 4 years of Officer time after a 6 year wait (interest accumulating), and it was half of what you are quoting.


Rural

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Re: LONG Help me plan for going to a single income
« Reply #33 on: March 23, 2015, 04:11:07 PM »
Though your husband wants out of public education, I think he ought to do whatever is necessary to become vested in the pension plan before he leaves...




We are planning to buy in; that's why we're putting his full salary into a 457, which we'll use to roll over the buy-in amount if he doesn't get another job in the state retirement system fairly soon. But staying is out. The point of FIRE is to buy time, right? We're buying time and health for hm, and $10k is a real bargain price.


Quote

Next topic:

You say he already has a professional license in something scientific and could get a job tomorrow at twice what he's making now.  As such, I don't see the point in getting another degree.  You're making a good salary, you own your home ... I'd think this degree would put y'all in the category of "plenty" without bothering with the second degree and the short-term sacrifices it would entail. 





This may happen. Especially with the delay, I don't see him waiting. But the jobs he could get quickly are 80% travel or in that ballpark. Not something either of us is interested in him doing anymore. An advanced degree would make it Easier to find something in commuting distance with limited travel, but I expect him to be unwilling to wait. He's not the sort to "lay out" for long (his terminology).


Quote

Next topic:

Why can't you insure your house?  If you have roughly 1X your annual salary in savings, loss of this house (while unlikely) would be life-altering.  This needs to be a priority. 




Because it's visibly unfinished. We knows it's a priority, and it can be fixed this summer. I said that above, but I know this thread is full of long posts.


Quote

Final topic:

You asked in the opening line about preparing to downsize to one income.  The best advice I can give is, Stop spending his salary NOW.  Put it all away into savings.  If you're still living comfortably on only your salary, then things are fine.


Well, we have been spending his salary, but only because we've been saving all of my larger salary. This month, at least, we're saving all o both, gross, because I adjusted his witholdings and not mine. But we haven't actually  lived on two salaries in a decade now. Still, though, it's worth talking through the ins and outs of a move from living on one to having one, I think.


All this is really more about logistics and emotions than real worry, that and a delay of FIRE. The delay is more than worth it to me. I think he'll feel bad because we're putting off "my" dream to benefit him, or that's how I think he's likely to feel. In reality, there's nothing, including FIRE, that could benefit me more than him being happier and healthier.

Rural

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Re: LONG Help me plan for going to a single income
« Reply #34 on: March 23, 2015, 04:15:16 PM »

One complication: he's almost vested in what is a pretty secure government pension, but he'll be two years short (of ten) at the end of the year. We can buy in anytime up to five years after he leaves by buying back military years for him - the two he needs to be vested would run around $10,000 if the estimate I have from the pension fund is correct (need to check that; it's more than I thought).

Is this US federal and buying military time under the FERS retirement system?  If so, you definitely need to read up on the regulation for how the buyback is calculated, and compare to the estimate you got.   I bought 4 years of Officer time after a 6 year wait (interest accumulating), and it was half of what you are quoting.


Thanks; this is state, though, we're fortunate that the military time is eligible, and we'll only need to use two years of it.

 

Wow, a phone plan for fifteen bucks!