Home Money Saving Reader Case Research: Two Nurses, One Child and One Cat on the Coast FIRE Path

Reader Case Research: Two Nurses, One Child and One Cat on the Coast FIRE Path

Reader Case Research: Two Nurses, One Child and One Cat on the Coast FIRE Path

Peter and his spouse, Kim, each work as registered nurses in a medium-sized metropolis within the Jap United States. They turned a household of three once they adopted their daughter, Rachel, in October 2020. Properly, household of 4 together with their cat, Pringles. Peter and Kim each take pleasure in their careers as nurses, however are at a degree the place they should step again to part-time work to be able to scale back burnout and fatigue and for the betterment of their psychological well being. The couple plans on pursuing Coast FIRE and would love our assist analyzing their monetary projections to make sure they’ll have the ability to each work part-time, care for his or her daughter, and revel in a sustainable work/life stability. 

Liz Frugalwoods popping in with a fast definition. In response to Enterprise Insider:

Reaching Coast FIRE [financial independence retire early] means you not have to save cash to succeed in retirement. The distinction between Coast FIRE and common FIRE is that with common FIRE, you not want revenue to retire. With Coast FIRE, you continue to want revenue to cowl bills, you simply don’t want to fret about saving cash for retirement.

And now again to our Case Research…

What’s a Reader Case Research?

Case Research handle monetary and life dilemmas that readers of Frugalwoods ship in requesting recommendation. Then, we (that’d be me and YOU, expensive reader) learn via their scenario and supply recommendation, encouragement, perception and suggestions within the feedback part.

For an instance, try the final case examine. Case Research are up to date by members (on the finish of the publish) a number of months after the Case is featured. Go to this web page for hyperlinks to all up to date Case Research.

The Objective Of Reader Case Research

Reader Case Research intend to focus on a various vary of economic conditions, ages, ethnicities, areas, objectives, careers, incomes, household compositions and extra!

The Case Research sequence started in 2016 and, thus far, there’ve been 75 Case Research. I’ve featured people with annual incomes starting from $17k to $200k+ and web worths starting from -$300k to $2.9M+.

I’ve featured single, married, partnered, divorced, child-filled and child-free households. I’ve featured homosexual, straight, queer, bisexual and polyamorous folks. I’ve featured girls, non-binary people and males. I’ve featured transgender and cisgender folks. I’ve had cat folks and canine folks. I’ve featured people from the US, Australia, Canada, England, South Africa, Spain, Finland, Germany and France. I’ve featured folks with PhDs and other people with highschool diplomas. I’ve featured folks of their early 20’s and other people of their late 60’s. I’ve featured people who stay on farms and folk who stay in New York Metropolis.

The aim is variety and solely YOU might help me obtain that by emailing me your story! If you happen to haven’t seen your circumstances mirrored in a Case Research, I encourage you to use to be a Case Research participant by emailing mrs@frugalwoods.com.

Come Hear Me Discuss on April eighth!

Temporary observe unrelated to right this moment’s Case Research… I’m thrilled to share that I’ll be talking on a panel on Friday, April eighth on the on-line Mamas Discuss Cash: The Legacy You Depart convention. I’m honored to be on this panel with:

  • Sandy Smith, the famend founding father of the Elevate Neighborhood and YesIAmCheap.com (finest web site identify ever). Sandy fashioned the Elevate Neighborhood to, “increase consciousness and shine better gentle on the monetary points that individuals of coloration face. The 400+ members of the Elevate Neighborhood group are monetary professionals, lecturers, writers, bloggers, and educators of coloration who’re dedicated to bettering the monetary lives of individuals of coloration.”
  • Jamila Souffrant, the founding father of the extremely profitable JourneytoLaunch.com. I used to be really on Jamila’s Journey to Launch podcast again in 2018 and met her in particular person after we had been each pregnant with our little ladies (who are actually FOUR!).

If you happen to’re keen on attending this three-day on-line convention, it can save you $5 off the $49 ticket worth by utilizing the coupon code FRUGALWOODS. Go right here to get your ticket and register to attend. I hope to see you there!

Reader Case Research Tips

I most likely don’t have to say the next since you people are the kindest, most well mannered commenters on the web, however please observe that Frugalwoods is a judgement-free zone the place we endeavor to assist each other, not condemn.

There’s no room for rudeness right here. The aim is to create a supportive surroundings the place all of us acknowledge we’re human, we’re flawed, however we select to be right here collectively, workshopping our cash and our lives with optimistic, proactive recommendations and concepts.

A disclaimer that I’m not a educated monetary skilled and I encourage folks to not make critical monetary choices based mostly solely on what one particular person on the web advises. 

I encourage everybody to do their very own analysis to find out the perfect plan of action for his or her funds. I’m not a monetary advisor and I’m not your monetary advisor.

With that I’ll let Peter, right this moment’s Case Research topic, take it from right here!

Peter’s Story

A park in Peter & Kim’s metropolis

Hello Frugalwoods :-)! I’m Peter, I’m 36 years previous, my spouse Kim is 35 and we’ve got one daughter and one cat. We stay in a medium-sized metropolis within the Jap United States the place we’re each Registered Nurses. Kim’s been a nurse since commencement, whereas nursing is a second profession for me. We received married in 2015 after I graduated from nursing college and our daughter, Rachel, is a 12 months and a half previous. We even have an alert, agreeable cat known as Pringles. 

Peter & Kim’s Careers as Nurses

I initially graduated with a bachelors in psychology in 2007, however as soon as I used to be in the actual world, discovered that my diploma didn’t match with what I needed to do for work. I finally determined to return to high school for nursing and ended up learning in the identical metropolis the place Kim was working. We met via mutual pals at our native church and began courting whereas I used to be attending courses.

Regardless that Kim had been a nurse for a few years, after we married she was gracious sufficient to “return to nights” to work the identical shift as my new nursing job. For a few years, we did the night time shift factor collectively: working and residing nocturnally. This double-income-night-shift-lifestyle helped us speed up paying off my scholar loans. That’s after I stumbled upon FIRE blogs. These blogs finally led me to the Frugalwoods, probably via the Mad Fientist’s weblog/podcast. 

A number of years after being married, we each had been lucky sufficient to realize some seniority on the hospital and transfer to working day-shifts in our respective models. After that, we determined to purchase a small three-bedroom, two-bathroom home. For a variety of years we tried unsuccessfully to have organic youngsters, together with infertility therapies. Finally, we determined to strive for home toddler adoption via a Christian company.

Peter & Kim’s Monetary Upbringing

We each grew up in households that felt very loving, however had been definitely tight financially, no less than in our childhood years. As each of us entered our teenage years, our households turned extra financially solvent. Between scholarships and household help, neither of us accrued extreme debt for our bachelor’s levels. In our younger grownup years, we each felt privileged to comply with our goals and callings fairly than what was most financially prudent. We really feel blessed to be in our present monetary place and notice that given totally different household conditions, this may not be the case. 

Peter & Kim’s Monetary Philosophy

Pre-Covid journey to Arches Nationwide Park

We every control totally different monetary features. Typically, Kim runs the day-to-day funds. This implies taking good care of the ins and outs within the checkbook, paying the month-to-month payments that aren’t automated, and maintaining monitor of receipts. We do that via YNAB, which makes it pretty easy to see the place our funds sits. I take care of our long-term funds together with monitoring our net-worth, mortgage amortization/prepayments, and funding accounts.

We’ve got a written monetary plan which I made, however was “ratified” by Kim. To date this association has labored fairly effectively, however actually it hasn’t actually been stress examined. Our funds was constructed on the “minimal hours” scheduled, which in our subject not often happens.

If we’re scheduled to work a 12 hour shift on the hospital, we’re normally working no less than 12 ½ hours if not 13 hours per working day. With our hourly wage, this provides up over the course of the 12 months. Typically we’ve got additional money every month, which Kim allots into varied sinking funds (healthcare, house/automobile upkeep, and subsequent bigger purchases).  If our money readily available will get too excessive, we begin dollar-cost-averaging the additional into our brokerage funding account or rising our prepayments on our mortgage. 

Peter & Kim’s Daughter, Rachel

This brings us to 2020 the place, in the course of the Covid-19 pandemic, we had been matched with a pair who had been on the lookout for somebody to undertake their (but unborn) child woman. In October of 2020, we had been in a position to undertake Rachel from delivery. She’s now a 12 months and a half previous and retains us on our toes for all of our waking moments! Her adoption was legally finalized in July 2021, and we had been in a position to apply and obtain her social safety card late in fall of 2021. We’ve already been reimbursed for a few of our adoption bills via the adoption tax credit score, nevertheless it doesn’t negate the monetary burden of adoption by a protracted shot. Now we’re ready for an additional refund from our 2020 tax return for the kid tax credit score (you want a social safety quantity) and anticipate to obtain the expanded youngster tax credit score on our 2021 taxes. 

Peter & Kim’s Hobbies

Peter & Kim on a close-by hike

In our spare time, we’re largely open air. We prefer to go for walks round our neighborhood, path hikes (for so far as Rachel will permit), and sustain our vegetable backyard. Whereas we each prefer to hike, Kim enjoys working and I take pleasure in biking for particular person day by day train.

Luckily, we’ve been in a position to incorporate Rachel into each of these actions with a child jogger and bike trailer! Within the subsequent few years, we look ahead to getting her into swim courses and, when age-appropriate, an out of doors pre-school. She is most assuredly the middle of our lives and we’re grateful for the chance to mum or dad her. 

What feels most urgent proper now? What brings you to submit a Case Research?

Since initially inquiring about submitting a Case Research, our questions have modified considerably. Principally because of the circumstances of our life and the way it has morphed and developed during the last 12 months and a half, some resulting from Rachel turning into a part of our lives, some because of the Covid-19 pandemic. With all of those modifications we really feel we’re coming to a crossroads of types.

A bit extra about the previous few years will assist clarify:

  • Previous to adopting Rachel our monetary life was pretty flush. We lived as a DINK family (twin revenue, no youngsters) and saved a considerable portion of our revenue into retirement. Our financial savings fee grew from 15% after we had been first married to round 40% of our gross revenue previous to adoption. Not included in these percentages: saving for the downpayment on our house, saving for infertility therapies, after which adoption bills.
  • By mid-2020, we had been maxing out our Roth IRAs, virtually maxing out our 403b’s, investing in our brokerage account, and making more and more giant funds to pay down our mortgage early. To at the present time, our largest short-term aim is having our home paid off within the subsequent 3-7 years. At present we’re paying about $500 additional per 30 days in precept with a few $1,000 additional principal funds within the months the place we’ve got a 3rd paycheck. 
  • If we proceed with this plan, our mortgage payoff date will probably be circa February 2028. We perceive prepaying on a mortgage isn’t essentially the “finest” funding, however it’s a assured return. We see our prepayments form of like including extra bonds to our portfolio. Since bonds aren’t producing very a lot return proper now, making funds on a mortgage seems like extra progress. 
  • Our want for having the mortgage paid off stems from: 1) Not desirous to be beholden to others (e.g. a financial institution) via debt.  2) If the US healthcare system collapses, we’ll undergo from a dramatic lower in revenue.  3) We wish to have the ability to volunteer sooner or later in our grownup lives and “needing” much less revenue would assist facilitate that aim. 

The Child Change

After adopting Rachel in October 2020, we shifted our work-life stability for childcare functions. Kim continued working full-time, and I went to working per-diem shifts round her schedule. This labored for some time, as Kim lined our healthcare insurance coverage and I used to be in a position to get sufficient shifts to take care of my competency as a nurse. All of the whereas, we continued to work towards our monetary objectives. Whereas this did imply we noticed our bills rise and our revenue lower, we had been nonetheless in a position to save substantial parts of our revenue into retirement accounts and proceed making funds towards our mortgage. Typically this has been about 30 to 35% towards retirement and 10% towards prepaying the mortgage.

The Pandemic Change

In January 2022 we downshifted once more, this time because of the Covid-19 pandemic. As nurses each engaged on high-acuity models, work has grow to be more and more difficult and burnout turned crushingly actual, particularly for Kim. That’s why, going ahead, Kim will probably be working part-time. Selecting to work fewer hours is useful to battle fatigue/damage/work dissatisfaction, however means one other giant discount to our family revenue. 

Pre-Covid journey to Fenway Park

I’ll proceed to work per-diem round Kim’s schedule, however will doubtless have much more shift-flexibility than I had beforehand. Financially this implies we’ve got taken a pause on investing additional to an after-tax brokerage account and considerably lowered my 403b contributions (I had been contributing 35% and can scale back this to twenty% or presumably 0%). 

Initially we had been submitting our case examine to ask if the thought of “Coast FIRE” was a chance, however now we’re basically doing a modified trial run out of necessity for Kim’s psychological well being. In true Coast FIRE vogue, we wouldn’t contribute something towards retirement accounts and would allow them to sit and develop till we attain conventional retirement age.

In the meanwhile, we’re merely reducing our financial savings fee. For our 2022 funds, if you happen to don’t embrace the tax refunds, we’ll be spending greater than we earn most months. Nonetheless, twice a 12 months when we’ve got a 3rd paycheck, we find yourself with more money making a little bit of a buffer in our accounts for the slight overspend. In the meanwhile we’re happy with this state of affairs since we’ve got loads of money. If it doesn’t appear to work financially we might save much less to our 403b’s or I might at all times return to working full-time with Kim working per-diem. Going again to working full-time feels the least doubtless provided that we extremely worth our break day collectively and life flexibility.

Long run we see ourselves volunteering in some capability. Whether or not that is throughout the States or internationally, we don’t have robust convictions but. We’ve got each hung out abroad via Christian Ministries (Peter as an grownup for 3 years as a volunteer and Kim as a baby along with her dad and mom who had been missionaries). Ideally we need to do volunteering work (esp. as it might contain frequent strikes) when Rachel is youthful, up till about age 11. We wouldn’t be transferring lots whereas Rachel is in center or highschool, as we hope to supply her some social stability by staying put.

What’s the perfect a part of your present life-style/routine?

The very best a part of our present life-style is the power for each of us to mum or dad Rachel. Working as nurses gives a residing wage and permits Kim to solely work two days every week (beginning in 2022) and nonetheless qualify for part-time advantages. This implies we share childcare obligations on days when the opposite works, but additionally spend a couple of days every week collectively as a household. Our days off collectively permit Kim vital “introvert time” and Peter the possibility to play technique board video games, both regionally (when Covid-19 isn’t a difficulty) or on-line. 

Having a couple of days off per week collectively as a household permits us to get out and expertise the world round us. We stay inside an hour of a nationwide park and a number of different mountain ranges, which gives ample alternatives to go mountaineering. We’re additionally a few hours’ drive from a couple of main cities, so we will expertise some bigger scale city life as effectively! That being stated, our personal metropolis has a big college and smaller schools within the neighboring cities, so it has a variety of points of interest and various eating places, which aren’t essentially current in all cities of our dimension. 

What’s the worst a part of your present life-style/routine?

Lakeside sundown with household

The worst a part of our present life-style is the stress from our jobs. Working through the pandemic has been sporting on us and our colleagues. We each need to proceed to take pleasure in taking good care of folks of their time of want, and we hate what the US healthcare system has accomplished to hospital care. We’ve got lowered our hours partly to take care of Rachel with out taking over important childcare bills and partly in order that we don’t burn out fully.

A further current issue is navigating the “stealth wealth” stability. With us each working for a similar employer, when Kim introduced she was going part-time, many assumed I might be transitioning again to full-time. Kim is uncomfortable attempting to navigate these discussions along with her colleagues, lots of whom are simply as burned and disillusioned with the work. It brings up destructive feelings related to having wealth and being privileged sufficient to take a step again financially, just because we need to. With neither of us working full-time, it’s a important sacrifice to our employer advantages and wages, which might be not misplaced on our colleagues. 

One other Adoption?

Kim and I will not be but certain if we’ll pursue adopting a second youngster. Adoption is a sophisticated nut to crack and will most likely be its personal case examine of professionals and cons!

The adoption course of felt elongated for us because it tagged onto our expertise with infertility, which was already over two years. The method for getting authorised and on a listing was about 6 months between preliminary software, house examine, and remaining adoption checklist approval. We then waited one other 2 years earlier than being chosen by our daughter’s delivery dad and mom. Ready time for us turned out to be lower than common. Most individuals adopting via our company (who had been profitable adopting, not together with individuals who voluntarily dropped off the checklist) waited about 3-4 years. Our good friend circle consists of two {couples} who waited round 10 years. Each three years, it’s essential “renew” your home-study, which is an extra monetary value we weren’t burdened with. If we solely needed to wait one other two years, we’d most likely be extra open to the thought of adopting a second youngster, however the considered having a second youngster in our late 40s is much less interesting.

Pre-Covid Mountaineering in Redwoods

Concerning the prices, we really feel fairly assured that if we develop robust convictions towards adopting once more, we’d have the ability to determine it out. The adoption tax credit score lessens the monetary blow by about $15k, which might be 35%-40% of complete adoption prices (although that cash wouldn’t come again initially, usually 2-3 years after adoption). To “get on the checklist” prices round half of the whole adoption bills. So we would wish round $15-17k in money. Nonetheless, our employer simply added a profit for full and part-time workers of $10k or $5k respectively towards adoption bills. This wouldn’t preserve us with our employer, but additionally isn’t one thing we’d flip down if we went down the adoption path once more sooner or later. 

Financially we really feel we might abdomen the short-term hit to our funds to save lots of the money for adoption. It might contain a mix of lowering Roth IRA contributions, lowering 403b contributions to six%, stopping pre-payments to our mortgage, and/or liquidating investments from our brokerage account. If we did all of this stuff, we’d have the money to right away “get on the checklist” and would have the ability to save the remainder of the bills over 8-12 months after which resume our former financial savings/investments.

A second adoption would delay our potential “transferring to be able to volunteer” plans if the adoption didn’t happen for some time as we wouldn’t have the ability to transfer out of state whereas on an adoption checklist. The potential ready recreation is the large unknown. All that to say, we’re contemplating it, however as of but are undecided.

The place Peter & Kim Wish to be in Ten Years:

1) Funds: 

  • Paid-off home; in a position to work solely to cowl day-to-day bills. 
  • Lengthy-term we all know it isn’t the perfect choice to repay low-interest debt, particularly in an inflationary surroundings, however we worth the good thing about having a paid-off house.
  • Would like to have sufficient in retirement accounts to “Coast FIRE” to age 59.5, basically not needing to contribute to our retirement accounts anymore, however nonetheless be advantageous for retirement. At present I’m utilizing 5% because the inflation-adjusted return for estimating our potential retirement financial savings sooner or later.
  • A few of our monetary assumptions embrace:
    • For net-worth functions we contemplate our house an asset, however not a part of our retirement financial savings. To be conservative, we’re nonetheless valuing it at buy worth till it’s really bought though the native housing market has gone up dramatically.
    • Social Safety pays out no less than 70% of its anticipated return (round $24-36k per 12 months relying on how lengthy we work or after we begin gathering).
    • Our office pensions are “sprinkles on the cake.” We intend to take the payout when eligible at age 55 and roll that quantity into IRAs so we’ll keep management and have entry to funds. Whereas our pensions are insured, we don’t belief that each one pensions throughout the US received’t fail concurrently and subsequently be lowered in worth.

2) Way of life: 

  • We want to be at house collectively no less than three days every week. Days off would come with time outdoors collectively as a household with presumably some type of crew recreation for Rachel, however who is aware of at this level. Path mountaineering no less than as soon as every week is fascinating. Visiting each units of grandparents no less than two instances a 12 months would even be perfect. Principally, spending our days with parenting and childcare. In some ways we’re already there, in order that’s a plus!
  • We need to give Rachel the chance to see a lot of the world sooner or later in her life. A few of this touring would hopefully occur as she grows up so it turns into widespread to see different cultures and experiences.
  • We might need to pursue a second adoption.

3) Profession:   

  • Each Kim and I wish to be working or volunteering away from house/parenting no less than two days every week for psychological stimulation, presumably in a unique nursing capability. Uncertain if this is able to be with a brand new group or some volunteer nursing gig.

Peter & Kim’s Funds


Peter estimated W2 revenue$2,400Estimated month-to-month web wage minus: 20% to 403b (no match accessible), taxes, well being and dental insurance coverage, 401k contributions, and taxes.
Kim estimated W2 revenue$2,040Estimated month-to-month web wage minus: 10% to 403b (receives 3% match), taxes, household medical health insurance/dental value of $888/month from January 2022
Tax refund 2021$277Anticipated minimal quantity of $3,600 from 2021 tax refund as a result of we didn’t have Rachel’s SS quantity till the tip of 2021, therefore couldn’t apply for any advance of the kid tax credit score, divided by 13 since we’re paid biweekly
Tax refund 2020 v2.$115Modification to 2020 tax return as soon as Rachel’s SS card arrived, $,1500 due, hasn’t arrived but (can take as much as 16 weeks to be accomplished in a standard 12 months), divided by 13 since we’re paid biweekly
Month-to-month subtotal:$4,832
Annual complete:$62,816Month-to-month x 13 resulting from being paid biweekly, with out refunds ~$57,708 or $4,440/month

Mortgage Particulars

Excellent mortgage stabilityCuriosity FeeMortgage Interval and PhrasesFairnessBuy worth and 12 months
$92,2374.25%30-year mounted fee, precept & curiosity is $812.68/month$114,263$206,500, bought in April 2017


MerchandiseQuantityNotesCuriosity/kind of securities held/Inventory tickerTitle of financial institution/brokerageExpense Ratio
Kim 403b$193,33710% pretax contributions (~$430/month), extra 3% match from employerFXIAX, VTWIX, FXNAXConstancy0.015, 0.08, 0.025
Peter 403b$160,14320% pretax contributions (~$680/month), no match from April 2021FXIAX, VTWIX, FXNAXConstancy0.015, 0.08, 0.025
Kim Roth IRA$89,656$500/month to max every calendar 12 monthsVTSAXVanguard0.04
Kim 529$85,772Don’t typically embrace in web price, at present held by Kim’s dad and mom. Initially for Kim, however now additionally could possibly be re-designated for Peter or Rachel’s use.UncertainUncertainUncertain
Peter Brokerage$54,373Sinking funds & long run spending, stopped contributing in Jan 2022VTSAXVanguard0.04
Financial savings account$23,500Emergency fund / sinking funds0.03%Credit score unionN/A
Peter Roth IRA$15,681$500/month to max every calendar 12 monthsVTSAXVanguard0.04
Kim 401a$15,664Prior employer, no extra contributionsFFFGXConstancy0.51
Checking account$14,000Month-to-month cashflowEarns basically 0%Credit score unionN/A
CD/various financial savings account$10,487Money for subsequent automobile2% on first 1k, 0.4% on the restTotally different Credit score unionTaxed at marginal revenue
Peter HSA$7,275Prior profit, no extra contributionsVTSAXHealthEquity0.04
Donor suggested fund$4,000Don’t typically embrace in web priceCash marketCredit score UnionN/A
Kim Pension$209/month @ age 55 to $349/month @ age 65Present worth, will improve.  Lump sum of $54,480 @ 55, $77,279 @ 65N/APresent employerN/A
Peter Pension$110/month @ age 55 to $217/month @ age 65Frozen worth, won’t improve.  Lump sum of $29,500 @ 55, $41,000 @ 65N/APresent employerN/A


Automobile make, mannequin, 12 monthsValued atMileagePaid off?
Honda Civic 2008$4,400115,000Sure, paid for money 11 yrs in the past
Honda Civic 2001Priceless203,000Sure, paid for money 7 yrs in the past


Additional to mortgage$667$500.56/month + $1k 2x/12 months with third paycheck months
Tithe$500Roughly 10% of take-home pay, will improve or lower relying on after tax revenue
Groceries$480Meals, alcohol, and components; could also be rather less going ahead since Rachel is now off components
Dwelling upkeep$354Sinking fund aim of 20k, at present has $5800
Property tax/insurance coverage$185By way of Erie
Trip$177Sinking fund, at present has $7,000
Medical$175Contains all bills and co-payments, elevated in 2021 resulting from Rachel having eye surgical procedure, sinking fund aim of 7k totally funded
Babysitting$1203hrs ~1x/week
Electrical$116Range and warmth pump/AC are electrical
Subsequent automobile$100Sinking fund aim of 20k, at present has $12,000
Family$88Contains bathroom paper, diapers, cleansing provides, cat meals, litter
Eating places$84Take out, admittedly greater resulting from Covid-19
Web$55Lowest value for high-speed web accessible from Comcast/some other suppliers
Automobile upkeep$55Sinking fund, at present has $1800
Auto insurance coverage$49By way of Erie
Life insurance coverage$4525-yr time period for each Peter and Kim via Erie, will doubtless ditch as soon as home paid off
Telephone$43Verizon for Kim, Ting for Peter
Peter “enjoyable cash”$30Sinking fund for Peter, common spend is definitely much less, however that is allotted for being spent
Kim “enjoyable cash”$30Sinking fund for Kim, common spend is definitely much less, however is allotted for being spent
Malpractice insurance coverage$18Along with computerized protection from our employer, mixed value for Peter and Kim, thought of a will need to have
Auto property tax$17
Nursing license renewal(s)$12Sinking fund for renewals each two years on even 12 months for Peter and odd 12 months for Kim
Subscriptions$11Costco, Disney+
YNAB$7YouNeedaBudget annual subscription
Subsequent pc$0Absolutely funded sinking fund aim of 1k
Subsequent cellphone$0Absolutely funded sinking fund aim of $500
Leisure$0Typically taken from “enjoyable” cash funds, consists of gadgets like redbox, wine/beer tastings, date nights
Month-to-month subtotal:$4,486
Annual complete:$53,828

*Sinking funds for trip, house, and subsequent automobile, and automobile upkeep could also be roughly relying on month-to-month spillover

Credit score Card Technique

Peter & Kim’s Questions for You:

  1. Is Coast FIRE actually one thing we will do? In different phrases, not saving in direction of retirement beginning at age 40/45/50 and solely incomes sufficient to stay on for these years?
    • Our estimated retirement funds, together with taxes, is round $60k/12 months or $1.5 million in retirement accounts by age 59.5, not together with Social Safety.
    • Our anticipated bills and not using a mortgage are ~$72k/12 months, however that also consists of $6k every to Roth IRAs and costly medical health insurance (see under). If we don’t contribute to our Roth IRAs, bills are round $60k/12 months.
    • Are the Roth financial savings too good to surrender? To date I really feel the reply is sure. The tax diversification offers extra monetary flexibility. We plan on persevering with to max out our Roth IRAs so long as we will as a result of these contributions might at all times be withdrawn if wanted, though that’s lower than perfect.
  2. Pre-Covid Mountaineering in Arizona

    Are my assumptions too conservative or too aggressive? (e.g. anticipated actual return of 5% with low value index funds):

    • If I’m being too conservative, we’ve already reached “Coast FIRE” with a 6% actual return.
    • Present asset allocation is 88% shares/12% bonds in our 403b accounts and 100% shares in Roth IRA/taxable.
    • I’m planning on rebalancing to 70/30 inventory/bond allocation throughout our 40s with the aim of reaching that allocation by age 50.
  3. What’s the perfect technique for our mortgage?
    • Regardless of the perfect rates of interest in historical past, we determined towards refinancing. We hated the thought of paying cash for a refinance if we would pay it off in a couple of years or transfer and promote anyway. The break even level would have been round 4 years with our present mortgage servicer. We determined to deploy extra of our money towards the mortgage due to the assured return we get paying down debt vs investing in an not sure market. 
    • Now the query turns into whether or not to deploy a part of our funding account (might use investments by early to mid 2024 with conservative return to repay the mortgage) or simply proceed our prepayment technique and be accomplished by early 2028. 
    • Eliminating our mortgage cost (required $813 plus additional month-to-month principal $500 and $1,000 biannual funds) would lower our bills by virtually $18k/12 months, which might free us as much as both construct up our investments once more shortly or work much less.
  4. What to do about medical health insurance?
    • Would each of us going per-diem after which getting insurance coverage via the ACA be a good suggestion? Or would it not be higher to pay via the nostril to maintain insurance coverage as a part-time worker (our household plan is at present $888 a month)? Benefiting from the ACA subsidy (we’re not eligible except we’re each per-diem) might lower our month-to-month healthcare premiums by an estimated $300-400/month.
  5. Any ideas on how to consider some medium-term life objectives?
    • At present each units of our dad and mom are of their mid-60s and comparatively wholesome. We all know this won’t doubtless at all times be the case. Suggestions for tips on how to stability the unknown of oldsters’ well being and needing to maneuver nearer to them with doing what works finest for our household?
    • It’s unlikely we’ll need to transfer as soon as the toddler is in center or highschool. So we’ve got a 12-13 12 months window till that occurs to presumably relocate nearer to oldsters or take volunteer gig(s). The uproot-and-volunteer possibility would imply we might promote the home and financial institution the fairness right into a taxable/cash market account or lease it out till we return. We’re not in favor of being landlords, however promoting and storing our stuff does appear more and more daunting. Domestically there are a couple of small healthcare organizations the place we would get our ft moist volunteering, however they most likely wouldn’t present a housing and meals stipend like some worldwide choices.
  6. Any recommendations on tips on how to cope with the uncomfortableness of the privilege of “stealth wealth” we’re at present experiencing? 

Liz Frugalwoods’ Suggestions

Pre-Covid journey to NYC

Peter and Kim are in improbable monetary form and I commend them for a way fastidiously they’ve mapped out their future. I believe a lot of what they’re on the lookout for right this moment is affirmation of their math and a double-check on their plans.

In some ways, I don’t have a complete lot to inform Peter and Kim as a result of they’ve already accomplished a lot of the monetary steps I counsel. They’ve clearly spent lots of time researching and studying tips on how to handle their cash and are on an amazing path!

Peter and Kim have already:

  1. Paid off their scholar loans and stayed out of debt.
  2. Saved up a strong emergency fund. 
  3. Invested for retirement.
  4. Began a taxable funding account to develop their wealth over the approaching many years.
  5. Opened a Donor Suggested Fund to plan for future philanthropy.
  6. Accelerated funds on their mortgage to be able to have a paid-off house.
  7. Stored their bills low by driving older vehicles, shopping for a house they’ll afford, embracing frugality, and focusing their spending on their highest and finest priorities.
  8. Executed a sensible bank card technique to boost their credit score and earn cash-back rewards.

Doing these 8 steps places Peter and Kim within the “superior” echelon of economic administration and I hope their story serves as an inspiration and information to others. Do what Peter and Kim are doing :)!

Okay, okay, I’ll really dive into their questions…

Peter’s Query #1: Is Coast FIRE one thing we will do?

This can be a query finest answered by a calculator! We’re going to make use of one in every of my all-time favorites from Partaking Knowledge, the aptly named “FIRE Calculator: When can I retire early?” calculator, a must-do for anybody contemplating any type of FIRE.

For Peter and Kim, I enter the next variables:

  • Investments: $528,854 (that is the sum of their retirement accounts + taxable investments. This excludes their money, Donor Suggested Fund, HSA, 529 and pensions)
  • Retirement age: 36 (Peter is 36)
  • Goal withdrawal fee: 4% (that is the % they’d withdraw from these accounts after age 60)
  • Asset allocation: 70% shares/30% bonds (that is what Peter famous he’ll do)
  • Spending per 12 months: $0 (they won’t be touching this cash till age 60, so their spending from these accounts ought to be $0)
  • Revenue: $0 (beneath the rules of Coast FIRE, they wouldn’t be contributing any extra cash to those accounts)

What this simulates is the state of affairs of Coast FIRE whereby Peter and Kim cease contributing to their retirement accounts right this moment, however proceed to cowl their bills (by incomes an revenue) till the age of 60. At age 60, they cease working to cowl their bills and start drawing 4% from their retirement (and taxable funding) accounts to be able to cowl their bills.

Right here’s the consequence:


This exhibits that Peter & Kim wouldn’t attain their FIRE quantity till age 66. Nonetheless, what I like about this calculator is that all the variables are adjustable. Peter and Kim ought to spend some high quality time with this calculator inputting totally different variables to see the place they’ll find yourself. On the finish of the day, that is all conjecture and simulation, nevertheless it gives a really helpful foundation for them to function from.

I encourage them to guage a few of their assumptions:

  1. Asset allocation: is 70% shares/30% bonds acceptable for his or her time horizon? 70/30 is fairly conservative and so they’d see a shift in the event that they had been extra closely weighted towards shares. Nonetheless, it is a query of their private danger tolerance (since shares are greater danger/greater reward) and there’s nobody proper reply.
  2. Common inventory returns: how dedicated are they to the 5% return projection? 5% returns may be very conservative and once more, they’d see a significant shift in the event that they went with a better return %.
  3. Financial savings: how dedicated are they to being 100% Coast FIRE proper now? Would they be keen to cut back their bills by a bit to be able to funnel a bit more cash into retirement financial savings yearly?

Peter and Kim ought to strive plugging in several financial savings charges, totally different asset allocations, and so on and see the place they land.

It’s additionally essential to notice that this calculation doesn’t embrace their pensions OR social safety. The numbers look way more favorable whenever you do embrace these two variables.

Peter’s Query #2: Are my assumptions too conservative or too aggressive? (e.g. anticipated actual return of 5% with low value index funds):

Chatting FIRE by the fireplace

As I famous above, Peter’s assumptions typically lean conservative, however that’s not essentially a nasty factor. Conservative vs. aggressive is all about your individual danger tolerance and what you’re feeling comfy with. Moreover, Peter famous they’re not planning on Social Safety being there for them, however I actually assume that’s extra of an existential query.

If Social Safety within the US fails, all of us have WAY larger issues and will’ve been stockpiling ammunition and antibiotics in our bunkers.

I fully agree with Peter’s “belt and suspenders” method to investing and saving, however at a sure level, all of us have to do not forget that the solar might explode tomorrow and all the pieces could be moot. In different phrases, generally we’ve got to proceed with the perfect and probably state of affairs (that Social Safety will probably be advantageous) versus all-out apocalypse. If you happen to want all-out apocalypse, start researching bunker availability now.

Peter’s Query #3: What’s the perfect technique for our mortgage?

For my part, if you wish to repay your mortgage early, the perfect technique is commonly to do it in a single fell swoop. This entails using a model of greenback value averaging whereby you make investments all the cash you WOULD use to pay it off early after which, after you have the whole quantity wanted to repay your mortgage in its entirety, liquidate shares and pay it off . The rationale behind this method is two-fold:

  1. It offers you extra liquidity and suppleness within the quick time period (as a result of your cash isn’t tied up in your mortgage; it’s technically extra accessible in a taxable funding account)
  2. It may be higher mathematically from a possibility value perspective since you’re not shedding out on the potential positive factors within the inventory market whereas placing the cash right into a lower-return automobile (your mortgage).

There may be, in fact, additionally hazard concerned on this method–as there may be with each single kind of funding:

  • The market might enter a downturn and you can quickly “lose” your mortgage pre-payment cash. If that occurred, you’d have to attend till the market rebounded earlier than you had been in a position to liquidate and pay it off.

All that being stated, there’s nothing “unsuitable” with Peter & Kim’s present technique of paying it off little by little every month. That is simply one other methodology for them to contemplate. 

Peter’s Query #4: What to do about medical health insurance?

I believe this is perhaps extra a query of “what to do about our jobs?” as a result of by way of medical health insurance, I believe the choices are fairly easy:

  1. Proceed paying for employer-sponsored medical health insurance when you’re working.
  2. Analysis the ACA in your state when/if you happen to not qualify for employer-sponsored medical health insurance (listed here are the small print on how I signed my household up for the ACA earlier this 12 months. TLDR: the ACA varies WILDLY by state and by your particular person/household circumstances, so the actual reply is that it’s important to do your individual analysis).

Peter & Kim’s Jobs:

Peter & Kim on a nationwide park journey

I’m questioning if Peter and Kim have thought of taking nursing jobs in a unique, non-acute context? Actually their present jobs are more likely to command the best RN salaries, however they’re reaching the purpose the place this work is not tenable from a psychological well being/life stability perspective.

This leads me to ask in the event that they’ve seemed into:

  • College nursing? Not nice pay; however, identical hours/holidays because the kiddo.
  • Major care workplace nursing? I’m certain it’s known as one thing totally different, however what I imply… 
  • Different varieties of much less disturbing nursing? Clearly I’m not a nurse and have restricted information right here, however I do know tons of Frugalwoods readers are nurses and can have the ability to supply wonderful concepts!

I do know Peter and Kim are primarily contemplating per diem work on the hospital, however I’m wondering if that wouldn’t nonetheless be very disturbing because it lacks predictability and nonetheless entails nursing within the acute care context?

The job market is on hearth proper now, so in the event that they’re , I’ve to think about Peter and Kim would have the ability to discover nursing positions in a lower-stress capability. A profession shift for much less stress and fewer cash isn’t going to tank their long-term monetary objectives and may dramatically improve their high quality of life.

Peter’s Query #5: Any ideas on how to consider medium-term life objectives?

In lots of methods, the reply right here is: too many variables and too far sooner or later to supply concrete recommendation. I believe Peter and Kim are sensible to assume long-term, however I additionally assume it’s okay to just accept that none of us can know our future. I believe researching doable future volunteer alternatives is nice, as is contemplating the place they could stay down the highway. However, I personally wouldn’t get too snarled in attempting to map out 20 years sooner or later as a result of Peter and Kim are already doing the 2 BEST issues doable for his or her future:

  1. They’re saving and investing their cash.
  2. They’re clear on their priorities and are placing their most prized assets (money and time) in direction of these priorities.

Past that? There’s not a complete lot we will management. Since Peter talked about each his dad and mom and in-laws, I counsel he and Kim learn the ebook, Mother and Dad, We Have to Discuss: Easy methods to Have Important Conversations with Your Dad and mom About Their Funds by Cameron Huddleston (affiliate hyperlink) after which have frank conversations with their dad and mom. Step one right here will probably be to know what their dad and mom envision for their very own future.

Peter’s Query #6: Any recommendations on tips on how to cope with the uncomfortableness of the privilege of “stealth wealth” we’re at present experiencing? 

I personally contemplate this query throughout the context of two totally different classes of individuals:

  1. These for whom it’s not their enterprise/they don’t care and I merely don’t deliver up cash.
  2. These to whom I’m very shut and I thoughtfully broach the subject as a result of it might be very bizarre in the event that they didn’t know my monetary scenario.

Pre-Covid journey to Canyonlands – Druid Arch

The primary class consists of acquaintances, neighbors, folks I volunteer with, not-super-close pals, prolonged household, and so on. I’m massive on “don’t ask, don’t inform” within the context of private finance. I don’t go round speaking about cash and, I discover it doesn’t come up within the regular course of acquaintance/neighbor chit-chat conversations. It simply doesn’t.

The second class are my shut pals, rapid members of the family and colleagues. I don’t, like, e mail them my web price breakdown from Private Capital (that might be bizarre), however I’m sincere about our FIRE journey as a result of it might stop intimacy if I wasn’t (affiliate hyperlink). It might be powerful for me to have shut pals who didn’t learn about this facet of my life; simply as it might be powerful to have shut pals who didn’t know different private particulars about me.

I too went via a panic of “WHAT IF PEOPLE FIND OUT?????” on the outset of our FIRE journey again in 2014, however over the previous 8 years I’ve realized the basic, life-long fact that:

No one cares what you’re doing along with your life.

They REALLY don’t. I used to be strolling round again in 2014 pondering everybody needed to be up in my monetary enterprise and, seems? They don’t. My shut pals? These bitches care as a result of they’re invested in me as an individual. However everybody else? Nope. It’s TMI. 

All that to say, Peter and Kim, you’re accountable for what you share with different folks. I counsel you:

  1. Give you a set of solutions you’re feeling comfy telling different folks IF THEY ASK YOU DIRECTLY, which I can virtually assure they won’t as a result of folks would fairly ask you the place you purchase your underwear than about your funds.
  2. Resolve how/when/if you wish to talk this to your loved ones. It actually might not be related to them and should solely engender resentment/jealousy to deliver it up within the first place. Once more, are they asking? Or are you simply feeling compelled to share?
  3. Decide how/when/if to broach the subject along with your shut pals WHEN/IF it feels such as you’re stopping a deeper relationship by NOT sharing this data. Make sense?

You don’t “owe” anybody an evidence about your cash or your life. It’s your life, it’s your cash, you’re adults, you do you. As Littlewoods says anytime anybody tries to assist her with something:

Fear about your individual self.

Different Notes

Donor Suggested Fund:

The opposite option to responsibly handle privilege and wealth is to acknowledge it to your self and to donate cash. Peter and Kim have already got a Donor Suggested Fund for this objective, which is similar method I exploit for my philanthropy. I’ve two articles detailing tips on how to use a DAF to make sure efficient, lifelong philanthropy:

Pre-Covid journey to Neuschwanstein Citadel

Kim’s 529:

Kim ought to have a dialog along with her dad and mom about this account. It would doubtless take advantage of sense for them to switch it over to Rachel’s identify, which is one thing they’ll need to iron out effectively earlier than Rachel reaches faculty age. That is a type of issues that’s most likely simpler to do sooner fairly than later.

Cell Telephone Invoice:

Peter and Kim ought to have the ability to reduce their $43 mobile phone invoice in half by placing Kim onto an MVNO (Peter famous she’s nonetheless on Verizon). I pay $28 a month for my each husband and myself. Not an enormous deal, however it’s a tremendous straightforward method for them to save lots of more cash each month.


  1. Spend time with the “When can I retire” calculator and take a look at a few of their assumptions, significantly round asset allocation, fee of return and financial savings fee.
  2. Discover/contemplate discovering nursing jobs in much less disturbing contexts and transferring away from acute hospital care.
  3. Take into account altering the mortgage payoff method per the above dialog.
  4. Have conversations with dad and mom about long-term planning, in addition to the particular observe of Kim’s 529.
  5. Brainstorm responses to “are you wealthy” questions from colleague/acquaintances and a timeline for when/in the event that they want/need to share their monetary plans with shut family and friends. 
  6. Really feel assured that they’ve mapped out a beautiful future and that the unknown unknowns are okay and that none of us can plan for each eventuality. 

Okay Frugalwoods nation, what recommendation do you’ve got for Peter? We’ll each reply to feedback, so please be happy to ask questions!

Would you want your individual case examine to look right here on Frugalwoods? E mail me (mrs@frugalwoods.com) your temporary story and we’ll speak.

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