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.
Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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