55, 5-year plan to move from high-paying work to low-paying but beloved career

[52camellias]

So this isn't really an early retirement so much as a move to a poverty-level income in five years, with a $300,000 to (possibly) $600,000 emergency fund. No kids, no husband, no pets, no cable, no life insurance, no debt. I had the house ownership experience. I'm over it.

Pros: Nobody on either side of my family has ever lived past 85, so I'm 99% sure of when I'll die.
I currently work in a very profitable niche and my skills are in great demand.
Living a low-carb lifestyle means I have to cook and stockpile meals.
Clothes, shoes and purse shopping are insanely boring to me. Along with pretty much all other kinds of shopping.
Eating in restaurants and traveling are mostly irritating to me.
In general, I'm just cheap.

Cons: I need good health insurance. As a co-worker said when I described all my various genetic ailments, "Your body is not your friend!"
I don't want to take SS. Yes, it's my money, but I consider it part of Plan Z.
I love to shop for jewelry. Online, conventions, garage sales -- you name it, I've been there. I have one of pretty much everything and I wear all of it.
I hate to cook, clean, shop for groceries, fix running toilets, do crafts or DIY pretty much anything. So, sue me, but I need an in-unit dishwasher and laundry appliances.
In 2018 I'll make too much to invest in a 401(k).

Mitigating factors: Poverty level income means poverty level taxes.
The jewelry hunt is a lot more fun than the purchasing, and I don't buy duplicates of anything I already have.
I have a minor interest in gardening and a major interest in reading, which takes care of the hobbies. Although Kindle can get kind of expensive.
It is possible that what I consider to be low-paying yet fun could become reasonably profitable. I am not counting on that.

Plan A is to train in my enjoyable career(s) for five years while socking away the cash from the niche job, and then move from hideously expensive California to (mostly) less expensive Maryland and live on my salary, using the 4% as needed for any traveling I feel like doing, emergencies, supplemental health care and (improbable but possible) assisted living.
Plan B through Y: I stay in the well-paying niche when I move to Maryland.
Plan Z: I take SS.

Currently, I am researching what to do when I can't tax-protect a big chunk of my salary. Right now I have $75,000 in index funds and $25,000 in bonds in an IRA and 401(k). The bonds are going to stay as-is for smoothing; future IRA purchases will be index funds. I am thinking of tax-free municipals and real-estate private lending. So that's the plan, unless I become an investment guru by reading all the posts (AOT, K) and discover other interesting forms of passive income.

Feel free to laugh at my brutally low retirement account or offer suggestions on how else I can invest my (sadly) post-tax income.

 

[joeea]

So this isn't really an early retirement so much as a move to a poverty-level income in five years, with a $300,000 to (possibly) $600,000 emergency fund.

By "emergency fund" do you actually mean "retirement portfolio"?

Nobody on either side of my family has ever lived past 85, so I'm 99% sure of when I'll die.

No, you don't. Family is a factor, but not a 99% factor.

I don't want to take SS. Yes, it's my money, but I consider it part of Plan Z.

I have no idea what this really means. You don't "want" to take it? I have never heard anyone ever say that. Why don't you take it and give it to me?

In 2018 I'll make too much to invest in a 401(k).

Again, this makes no sense. Nobody makes too much to take advantage of a 401(k). There are no income limits on Roth 401(k)s.

The easiest route to success would seem to be for you to find a locale where you can live your chosen lifestyle on a poverty-level income. I doubt that would be Maryland, but I'm not familiar with the less-populous portions of the state.

 

[MBAustin]

Welcome 52camellias! If you haven't found them already, we have a helpful list of things to think about as you prepare for a major decrease in income:

Some Important Questions to Answer

Like the previous reply, I'm puzzled by your thoughts on SS and 401K.

In terms of Maryland, I'm from the western part of the state and can vouch for Allegany and Garrett counties as being low cost. I suspect some of the southeastern counties would also be reasonable in cost (away from the resort areas).

 

[gayl]

I have $75,000 in index funds and $25,000 in bonds in an IRA and 401(k). The bonds are going to stay as-is for smoothing; future IRA purchases will be index funds. I am thinking of tax-free municipals and real-estate private lending.

WOW you're aggressive!

 

[ER Eddie]

I like your spirit and sense of humor.

May I ask, what are you planning to do -- what is the "low-paying but beloved career" you are planning to move into? I'm just curious.

I'll let others deal with the financial issues, as they are better qualified than I am.

 

[JoeWras]

Living a low-carb lifestyle means I have to cook and stockpile meals.

So now you'll live past 85. Plan for it.

Not joking. Your family probably guzzled fructose nicotine. Do you?

 

[Mdlerth]

Location, location, location

Consider developing more clarity about your cost/revenue picture. It's a wonderful thing to follow your heart; let's make sure we do it successfully.

Start with geography. Where in MD are we talking? The I-95 corridor costs ten times what the eastern shore costs. If you need to live in Bethesda, you better plan to keep the $$$ job. If Salisbury is okay, the $ job might be plenty.

Low carb does not equal low cost. Carbs are the cheapest nutrient. You can buy many pounds of spuds and grains for what you drop on one pound of asparagus or sprouts.

And don't forget transportation, utilities and medical expenses. I don't sense that these are adequately addressed in your post-employment strategy.

The 2X difference between 300k and 600k in projected nest egg is huge, at even at the higher end doesn't leave a lot of room for error. Unpleasant surprise expenses tend to show up at the most inconvenient times. Suppose you punch out of the lucrative niche career, would you realistically be able to re-enter it in your mid 60s?

You have a few gaps in your plan before you're ready to FIRE. But props to you for working toward a career path that pays off in happiness rather than mere money. Good luck!

 

[Golden sunsets]

I'm confused as well. You have a high paying job, but only have $100,000 in investments at the age of 55? Or do you already have some of this $300,000 to $600,000 in emergency funds set aside in cash type instruments? What is your current salary?

 

[gayl]

Mdlerth, giving the benefit of doubt, perhaps because someone can grow veggies & fruit year around but have to buy grains & potatoes as they take up too much room?

Still investments don't make sense .... unless OP spent decades living it up and came to the realization that $$s buy security but not happiness

 

[joeea]

Although Kindle can get kind of expensive.

Not for me.

I get the vast majority of my Kindle reading through the Boston Public Library. If you live in Massachusetts you can get an online BPL account allowing free downloads of all the ebooks they carry. And if they don't have what you want, you can recommend that they purchase a book. Once the BPL purchases it, you can automatically borrow it.

You should check your nearest large city's library system.

 

[Milton]

I'm confused as well. You have a high paying job, but only have $100,000 in investments at the age of 55?

+1. You mentioned that you dislike shipping and eating out, and are generally cheap by nature. Where has it all gone?

Plan A is to train in my enjoyable career(s) for five years while socking away the cash from the niche job, and then move from hideously expensive California.

 

[Mdlerth]

...perhaps because someone can grow veggies & fruit year around...

This is true; CA is famous for year round agricultural productivity. Once the OP moves to MD, would this still apply? (I am not an expert on gardening, but I have observed that winter planting in the mid-Atlantic is far more limited than in the warmer months.)

 

[Milton]

The growing season in the mid-Atlantic is actually quite long. The average temperature in the Azores is cool rather than cold. It's quite a nice climate: well-suited to fruits, vegetables and flowers.

I'm not sure what this has to do with Maryland, but since you mentioned it ...

 

[gayl]

Point being that the more food you grow, the lower the food budget is. Frankly I don't see how OP can exist on a lower salary if only able to save 100k for retirement by 55. And the emergency fund (300k - 600k) to broad to be realistic

 

[brucethebroker]

Welcome.
You seem to have a bit of a chip on your shoulder, including receiving input from this forum. Why is that?

 

[FreeBear]

Great to move on to something you love. What are your expenses, current vs planned? I'd be very reluctant to spend more than 4 percent per year every year. How are you getting from 100k to over 300k in only 5 yrs? Suggest getting SS estimate online; probably substantial...

 

[Bigdawg]

one shot and then silence. Troll maybe?