Change Careers -- slower path to retirement

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justdreaming
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Joined: Fri Apr 27, 2018 10:19 am

Change Careers -- slower path to retirement

Post by justdreaming » Fri Apr 27, 2018 11:39 am

We currently save around 55% of our after tax income. We could probably comfortably retire within 7-8 years, at ages 50 and 46, if we stay on our current path. Our retirement savings/taxable investments are at around 45% of goal amount, and our college savings are at around 1/3 of goal amount assuming we will cover 100% of 4 year private college (college is 10 & 12 years away). But I’m questioning whether I can last that long in my current job and whether the stress is worth it.

I’ve been considering changing careers to one that would allow me to be home for my kids much more, but would likely bring in a little over 1/4 of my current income. I’d need to get Masters degree/certification in the field, which I estimate would cost around $20,000-25,000. Is it crazy to consider this option? I think I might really enjoy the new career and would last in it at least 10-15 years. It would allow me to be home with kids after school and summers. Assuming my spouse keeps his current job, we’d still be able to save in 401ks and for college, just not nearly as much. So we’d mostly be relying on market returns to get to our goal. However, if the new career enabled me to work longer, then our target amount for retirement would go down. Among other things, I’ve been budgeting $750,000 to cover health care for the early retirement years given that we’d have 19 years before we both were at Medicare eligibility age) (using the 4% rule, assuming $30,000 in annual health care expenditures), but if we maintained employer-sponsored health care for longer, we would need less.

My current thinking is to build up savings at least 2-3 more years for extra security (considering time off work needed to get new degree and risk of finding new job), then consider taking the plunge. If anyone has done something similar, and has any words of warning or encouragement, I’d love to hear it.

Beehave
Posts: 368
Joined: Mon Jun 19, 2017 12:46 pm

Re: Change Careers -- slower path to retirement

Post by Beehave » Sat Jun 30, 2018 11:50 pm

There is value in being around for your children. There is value in working in a lower stress environment. There is no need to fully fund four years of private college education. There is value to working longer engaged in employment you enjoy and is rewarding than shorter in soul-crushing stress.

Without knowing details, I'd say go for it. Get re-educated and change to a longer-lasting career. But look before you leap. Are your expectations about the cost of the new credential realistic? After obtaining the master's degree, will you need to do internships at no or low-pay before being able to pull a salary and get benefits? Is the job market (where you reside) steady such that it is very reasonable to expect to get work after graduation?
Will schoolwork be pleasurable and not equally or more stressful than your current employment?

Best wishes. For what it's worth, I was aged-out of my highly-stressful corporate field. I now am retired, but want to work (and also to do my best to contribute to society in the best way I am able), so I teach at adjunct-level in a community college. The pay is abysmal (and no benefits), but I enjoy my work and my engagement with the community. There are always frustrations in any job, but my situation is in some ways similar to OP's and can report that yes -- going from high-stress to much, much lower-stress work is very nice if you can afford it.

Beehave
Posts: 368
Joined: Mon Jun 19, 2017 12:46 pm

Re: Change Careers -- slower path to retirement

Post by Beehave » Sat Jun 30, 2018 11:54 pm

Dear OP - - I just saw, after posting, that your post was from April and it is now almost July. In case you see this, perhaps you'll send a quick follow up regarding what you chose to do. I'm curious and I hope things are working out well for you!

justdreaming
Posts: 2
Joined: Fri Apr 27, 2018 10:19 am

Re: Change Careers -- slower path to retirement

Post by justdreaming » Fri Sep 21, 2018 10:29 am

I searched for my old post today and just saw this response. It is encouraging to hear from someone who did something similar. I am still plugging away at my current job, and still weighing the risk/reward of taking the leap. We continue to save and invest. Over the course of the last year, we’ve taken steps to reduce expenses (reducing grocery spend, electricity usage, eating out,etc.), and I’m happy to see that these changes have had zero impact on quality of life. Depending on taxes, I’d guess that my husband’s salary would cover all but maybe $5-10,000 of our annual expenses while maxing 401k contributions.

Current savings: $1,750,000 in retirement and taxable accounts, plus $191,500 in 529 accounts for 2 kids, and about $200,000 in home equity.

No debt, except $400,000 mortgage.

So, I think we could pretty easily coast to an age 60 retirement if I take a couple years to get the certifications I need and then find work in my new chosen field. We’d trade a significant pay cut and a longer path to retirement for more meaningful, hopefully more enjoyable work with more time for family.

But, I still have all these doubts running through my head,such as:
—What if I can’t find work in my new field? (I understand that there is a current shortage of qualified applicants for these roles in my area, but that could change particularly since it is in the public sector and a possible target of budget cuts in lean times.)
—What if my spouse loses his job?
—what if one of us has a health scare?

It is scary to think about giving up a stable,well paying job that provides well for our family. I’m risk averse. I think I should save a little more before taking the leap. But then I think, my kids are young now, they need me the most now, and I could both be more present for them and set a good example for them by making the move to meaningful work I look forward to doing, rather than my current job which they see that I dread.

PlantingSeeds
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Joined: Sat Sep 22, 2018 12:21 am

Re: Change Careers -- slower path to retirement

Post by PlantingSeeds » Sat Sep 22, 2018 12:41 am

I've been lurking on the forum for months but your post inspired me to actually sign up and try to contribute something. So hurrah! :) Never done this before, so for what it's worth...

Having saved 1.75 mil at your age seems to put you in a very good position with flexibility to consider different career options. How much of this is in taxable accounts? What are your annual expenses?

"But, I still have all these doubts running through my head,such as:
—What if I can’t find work in my new field? (I understand that there is a current shortage of qualified applicants for these roles in my area, but that could change particularly since it is in the public sector and a possible target of budget cuts in lean times.)
—What if my spouse loses his job?
—what if one of us has a health scare?"

1. Doing some informational interviews will help you round out the picture on what you can expect from your new career, including supply/demand for workers. This might help you gain valuable insights and alleviate some of your fears.
2. Build up your emergency fund so that even if your spouse were to lose his job, you would be fine until he gets another one. Put more months' worth in there if you want extra security, particularly with kids.
3. Maybe look into what medical insurance would cost in the worse case scenario that your family were to be without coverage while you were in school (there's usually student medical coverage?) and your husband is out of work.

Valuethinker
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Joined: Fri May 11, 2007 11:07 am

Re: Change Careers -- slower path to retirement

Post by Valuethinker » Sat Sep 22, 2018 10:20 am

justdreaming wrote:
Fri Apr 27, 2018 11:39 am


My current thinking is to build up savings at least 2-3 more years for extra security (considering time off work needed to get new degree and risk of finding new job), then consider taking the plunge. If anyone has done something similar, and has any words of warning or encouragement, I’d love to hear it.
That would be my preference.

You have the last chance in your life to build up enough assets to have security in old age.

For your new career:

- you may not be able to find work in that chosen new career
- you might find work in that career, and discover that you don't like it-- the only real proof of a new career is actually doing it. For example, the life of a tenured professor at a prestigious institution may be a pretty good one (although I know a lot of unhappy profs, or at least ones who were pretty mucked up people) but the majority of academics now are on sessional teaching appointments at secondary or tertiary institutions of higher education. And those on the tenure track on the top tier 1). have no life outside of their work and teaching 2). have very poor odds of getting tenure (1 in 7 or 8 at top business schools for example)

- something else might come up in your life like a serious illness by spouse or child, etc, that will require a lot of financial strength on your part

If you read Herminia Ibarra's "Working Identity" which is one of the best books I know about career change, people seldom make a both boots jump into a new career.

I am on my 4th or 5th career, and looking back, I can see how each one had themes that I am now utilizing in this, which I assume to be my last career.

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Jazztonight
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Location: Lake Merritt

Re: Change Careers -- slower path to retirement

Post by Jazztonight » Sat Sep 22, 2018 11:58 am

Please allow me to interject another element to this discussion.

I recently took part in a workshop where the participants were asked to take 5 minutes to answer this question in writing:

If I knew I only had 1 year to live, I would... (Then you filled in the page with your answer.)

The next step was to do the same thing, but the time element changed to ...6 months to live.

This continued to ...1 month, ...1 week, and ...1 day.

We think we have "forever," but we don't. It's good to make plans, but life often gets in the way. If you want to live a better, happier, more fruitful life, spend more quality time with your family, and enjoy yourself along the way, think of what your decision might be taking into account that life is fleeting and nothing is guaranteed.

You're young; you don't want to burn out too early. Good luck!
"What does not destroy me, makes me stronger." Nietzsche

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