Hello, wise mustachian community.
I'd like some advice about a semi-retirement idea I've been toying with lately. I'm considering saving like crazy for 2-4 years now, then putting that money aside to grow untouched til I hit 60ish (or whenever it reaches the amount necessary to provide a 4% SWR). In the meantime I can work minimally-making just enough to meet my financial needs without sacrificing my need to spend quality time with my family, travel extensively, and rock climb as much as possible while my body can still handle it. If it wasn't for my love of climbing and my daughter I'd be fully on board with the work like mad now strategy, but that would take 9-10 years and I just don't think I could handle that level of work intensity.
My specifics-
Married, both 35, and with a 3 year old. Live in rural remote sunny eastern California where the wages are great and the land prices are abysmal.
Current income- we both make around $40/hour as RNs and can pretty much work as much or as little as we want. We both lean toward the "little" side as we greatly enjoy our glorious mountains and eternal sunshine. We're presently shooting for 1200 hours apiece this year- did I mention we're lazy? Plus I did the math and once we gross over 100K we'll end up losing almost 50% to taxes and loss of ACA subsidy.
Expenses $3200/month of which $1500 is mortgage/property taxes/homeowners insurance. I can provide more details if desired, but having grown up on a farm with a family income of $15K, I consider myself pretty dang frugal.
Assets - $52K cash, $35K Vanguard (IRAs and taxable), $18K in IRAs at my old credit union which I think is treasury bonds or maybe just a money market- It's earning 1.5% (used to be 3-4%) and never loses value. We have so much cash right now cause my husband is fixing to go from a regular budgeted position to a per diem position like me and our income will potentially become much more irregular or maybe he won't be able to get enough hours. Per diem basically means he gets no benefits and no guaranteed hours, but we can take off time whenever we want. We give our bosses availability instead of requesting days off. We also have a lot of cash because we're anticipating buying another vehicle soon. We have a 98 Civic and a 98 tacoma presently. Civic for fuel economy and Tacoma to get into the mountains in the winter and to pull our 10ft camping trailer. Let the facepunching commence, but we have a long history of vehicle dwelling. We'll probably eventually sell both vehicles and the camper and drop $20K on a Sprinter van. When we live in the van it instantly goes from "extravagant luxury" to the ultimate in mustachianism. Or maybe just weird.
House is appraised at $270K (owe $173)- would expect to profit $75K if I sold now after paying a realtor.
House #2 is a tiny little cabin in the NC mountains that we built ourselves in 2006 for under $25K. It's on 6 acres I got from my parents, and is absolutely gorgeous. We might be able to sell the whole thing for $75K, but I have absolutely no desire to do so. I'd feel obligated to give my parents most of that since they gifted me the land. We don't rent it out because it sits in the middle of the woods and relies on wood heat so tenants would probably burn the place down. Or abuse the composting toilet and make a nasty mess. 2500 miles is too far to landlord and tops it would bring in would be $500/month- not worth it. Right now, we'd like to make it our "homebase."
Liabilities 15 year fixed mortgage at 2.5%-14 years to go. We presently owe $173K and appraisal is around $270K. This is for a well-maintained 820sqft 1948 house on a tiny well-groomed lot. Property values are insane here! And we got a "steal" buying at the bottom (I hope) a couple years ago.
The Plan Here's my tentative plan that would satisfy my need to travel and plan for retirement. Save like mad til we get to 200K (3 years I'm estimating- and not counting cash we have now), sell this house for a 100K profit. Put that $300K into a VTSAX IRA and let it sit til we're 60. By then, hopefully, compounding interest will bring it up to over 800K which should provide enough money for true retirement. In the meantime we would do travel nursing and each work 3 months a year and spend the other 6 months hanging out in our NC cabin in the perfect Appalachian summer or traveling the country/world rock climbing on the cheap.
Specific Questions How does this plan seem? Tear it apart please. I'm a bit worried about this bull market we're having, but my greatest asset is being a nurse (and my husband too) in an aging population- it's the ultimate job security - so I could always work a bit more. This plan assumes we'll save nothing from 38-60 and I find that highly unlikely. The plan also assumes no SS which I also find unlikely. The part I don't like is that I'd save by maxing out our 457B plan at work which has a fee of 1.16% on an S&P500 index (variable annuity), but at least I'd only pay that til we quit in 3 years. One last thing, we love spending time with our brilliant daughter and don't want to put her in preschool so we're limited in how much we can work and still trade off for childcare.
I'd love to hear what others think. Right now, it seems like a great idea.
Jill