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Early Retirement with School Age Children
Old 05-06-2016, 12:15 PM   #1
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Early Retirement with School Age Children

Hi! I'm new to this forum and was hoping to get some info / tips on early retirement with school age children.

I am a single mom with 11 year old triplets. I am hoping to retire in a year at age 51 and relocate from CA to FL where my money will go a little further. I will only have about $70k annually in retirement income. It looks like my biggest expense will be having to pay about $1000 a month for health insurance.

Is there anyone here who has retired with young kids on a relatively low income? Any tips or things I should consider before making this move?

Thanks so much!
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Old 05-06-2016, 01:18 PM   #2
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Welcome Kalvy! First, an early happy Mother's Day to you - raising triplets on your own is a tough job!

If you haven't seen them yet, there are two excellent resources here that might be helpful:

Some Important Questions to Answer Before Asking - Can I Retire?

and

Early Retirement FAQs - Early Retirement & Financial Independence Community

There are several ER parents of school-age kids who regularly post here, so I'm sure you'll get more comments as well.

Good luck!
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Old 05-06-2016, 01:28 PM   #3
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Hi!!!

I retired at 52 with an 11 and 13 year old... My income is in the same ballpark as yours... our total spending (including taxes, etc) is about $80k... It helps that we have a paid off house and prop taxes locked in with Prop 13.

For our family - it is good that I retired when I did - to deal with some angst/drama with the kids... I'm not balancing keeping my bosses happy while making sure the kids have the right support.... My stress levels are much more manageable with the only stresser being the kid drama... no work drama.

We could cut our budget to $70k without too much difficulty - basically travel and some of the splurges we indulge in...
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Old 05-10-2016, 06:35 AM   #4
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Welcome! I can't offer you any advice as I am not retired yet. I am planning to do the same- retire in 2-4 years with a young(ish) boys- they are currently 9 and 12. We are planning on retiring on 60K per year for a family of 4 in southern Alabama- that's plenty of money for us, especially since we don't have a mortgage. Florida is only a few miles from where I live, (we are going to the beach there for the weekend- yay!) and I can tell you that there are cheap places to live in Florida and some that probably rival the cost of living in many places in California. I don't think there are state income taxes in Florida but have heard that depending on where you live the property taxes can be brutal. Many moving to the area find the humidity difficult, but I have lived in the deep south all of my life and actually like it. I know its weird... With a family of 4 and an income of 70K you may get a subsidy on your health insurance if you do the aca thing. There are many posts on how that works on this board if you want to research it.
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Old 05-10-2016, 07:16 AM   #5
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Thank you all for your kind responses! I am happy to hear that it is possible. You've all given me hope!
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Old 05-10-2016, 12:56 PM   #6
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We have 4 kids at home and are an one-income household. We're hoping to retire in the next 5 years. My husband will leave the military next year and pursue another job. He's looking for something not too stressful to supplement his military pension. Our oldest two will be headed to college soon (15 and 16 years old now) and our youngest two will be home for another decade before college is on the horizon. We're a LBYM type of family. Our only expense is our mortgage and we will have one in retirement. We've been saving for a very long time, including saving for our kids education. We don't anticipate any major problems as long as we continue to keep to our budget of $60K. We're planning to move from NC to AZ which is comparable in cost-of-living. Our plan is fluid, but due to health issues (for both my husband and myself), we're anxious to make this happen as soon as possible. It's good to see other families with similar ambitions. Every time we tell people we plan to retire in our late 40's-early 50's they look at us sideways and assume it's impossible. Good luck!
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Old 05-10-2016, 03:11 PM   #7
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As others mentioned, you'll probably pay a lot less than $1000/mo for health insurance. With a $70,000 AGI and 3 kids you'll probably pay closer to $550-600 per month for a basic silver plan in Florida. And your AGI might be lower if you're selling stocks/mutual funds/ETFs (only the gain from the stock sale is included in your AGI).

We have 3 kids and optimize our income to snag some pretty steep ACA subsidies. Currently paying $125/mo for a $0 deductible plan with $909 in subsidies per month. The kids were just approved for NC Health Choice/Medicaid which will be even cheaper for mostly better coverage (though medicaid in Florida isn't that great I've read, however maybe that's for adults and not kids).

We live in North Carolina, so housing and other costs are pretty low. Our 4 BR house is worth well under $200k and property taxes are $1600 per year (in the city). We live in a good school district so public education is free and the middle and high schools our kids will be attending are better than most private schools.

We spent $24,000 last year (including 7.5 week vacation in Mexico) and $33000 in 2014 (higher costs due to $8500 major house renovation including siding, windows, and roof repair). This year we're trying to INCREASE spending to $40,000 but probably won't hit that number in spite of taking a month long road trip this summer and buying a 2009 Toyota minivan.

Obviously saving on housing and health insurance allows us to keep our spending very low. Florida is fairly moderate in housing prices unless you're in the core of a major metro area (at least it was this way a few years ago).
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Old 05-12-2016, 12:34 PM   #8
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I, OTOH, think that the OP provided insufficient information to provide any reasonable thoughts. Hopefully she's lurking and searching/reading more on this forum or elsewhere. I got a feeling that she doesn't really have a plan yet and should create a solid one before just packing and leaving to a new state.
However, if $70k income is guaranteed she should be fine for a long while.
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Old 05-12-2016, 10:47 PM   #9
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I very much appreciate everyone taking the time to respond. I am quite serious about wanting to make this move, and I am researching as much as possible to prepare myself.
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Old 05-13-2016, 06:56 AM   #10
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Given that many families live on 70K (and many require much more ) I don't see any reason you couldn't do it per se.

It's highly dependent on lifestyle, cost of living area, source of income (especially regarding health insurance) and many other factors.

The fact that you are a retiring single mom blows me away and makes me think you can probably do anything . I have two kids and a DW that stays home full time and there's days where I feel like THAT is hard. Looking at Fuego he's managed to raise a family on quite a bit less in NC.

I'm in socal and my budget with two kids and a pretty big mortgage is around 90-100K. It I had no mortgage or lived in a cheaper area it would cut that almost by 50%.

That's said if there's any specific advice you're looking for that might help .

People have vast experience with asset allocation, being a landlord, rolling over 401ks, healthcare purchases and so on.

Regarding personal/family issues there seems to be enough variety in readers that almost every lifestyle comes up

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Old 05-13-2016, 08:28 AM   #11
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Given that many families live on 70K (and many require much more ) I don't see any reason you couldn't do it per se.

It's highly dependent on lifestyle, cost of living area, source of income (especially regarding health insurance) and many other factors.

The fact that you are a retiring single mom blows me away and makes me think you can probably do anything . I have two kids and a DW that stays home full time and there's days where I feel like THAT is hard. Looking at Fuego he's managed to raise a family on quite a bit less in NC.

I'm in socal and my budget with two kids and a pretty big mortgage is around 90-100K. It I had no mortgage or lived in a cheaper area it would cut that almost by 50%.
I've often said that our $30-40k per year lifestyle is equivalent to a typical family's $60-70k lifestyle. Take out the mortgage and car payments, lower the income accordingly. Most of the tax you pay disappears closer to $40-50k AGI for a family with kids. When ER'd you also have the opportunity to economize more than a family with 1-2 full time working parents.
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Old 05-13-2016, 10:49 AM   #12
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All I'm saying that a person said she'll have 70K income. For all I know, there can be debt payments to make or some other services to pay for. Maybe she'll wish to pay for their college education. Mortgage/rent, property taxes depend on the area. Activities for the kids, travel can be expensive, and not many people want to do travel hacking like fuego. Do you think a fee paid FA also would say "yep, you're good to go" after hearing the OP's first post?

But as I also added, ASSUMING she's like most people on this forum with a healthy family and with $70k guaranteed income she'll be fine. Ideally the income should also not stay stagnant, so its value today will be much lower in the future.
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Old 05-13-2016, 10:52 AM   #13
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When ER'd you also have the opportunity to economize more than a family with 1-2 full time working parents.
Could you give a few examples re economics and how? I would love to learn strategies in case I can apply. Thanks
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Old 05-13-2016, 05:41 PM   #14
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Could you give a few examples re economics and how? I would love to learn strategies in case I can apply. Thanks
Fuego has quite a few articles on his blog about that. I'm in "practice" ER, but found this to be immediately true.

Mostly it's time arbitrage.

1) food: we have reduced how much we eat out a lot. When working I'm tired when I get home, my wife is tired from taking care of kids. Dinner = optimize for less time. When I'm home we have more time, cooking with kids can be fun/other person can watch. Picking up takeout is a pain... going to restaurant with 2 kids is a pain.

Same with grocery shopping. Can go ANY TIME so I go when no one else does. Have more time so can actually shop based on prices. It becomes "fun" to reduce the grocery bill. Also have time to walk (we're about half a mile from a store).

I went to lunch at work 2-3 times a week + coffee + random snacks. It adds up fast.

2) commuting/work: if you had a work car/non work (or more) you only need one and you use it less. We always had one car so this wasn't as big.

3) "chores": this is an odd one and depends on your current life. When I was working... especially a lot... I'd outsource lots of stuff. gardener, maid (once a week), etc. Don't really need that now.

Little things too like fixing a "broken" dishwasher or toaster oven and so on. I haven't seen a big impact yet... but feels like it could be measurable.

4) fear: this one is odd and unexpected. When you KNOW a paycheck isn't coming in, you are more thoughtful about what goes out. Generally we are less wasteful as a family. I suspect for some people this isn't very strong because they are disciplined and detailed planners. I'm not, so this has been a general increase across the board.

Example: when I see game I want I buy it. Now I add it to my steam wait list and buy when it goes on sale (usually a lot). Same with audible books, etc.

5) health: more time, less work, less stress, more exercise. DW and I are already in better shape and I'm much more relaxed... arguably TOO relaxed. I am shocked at how much that improves everything. I can't prove it yet... but I suspect that'll save a lot of money over the long term.

6) geographic flexibility. We live in a very HCOL area. Once I ER forever it's possible we will move... we don't have to, but if finances became a concern we could reduce mortgage/real estate taxes by 50% pretty easily. While many people are already in a low cost area, there are still ways that this can be true depending on your circumstances.

7) vacation: it turns out when you work you take vacations when everyone else does which is also when prices are highest. It turns out that when you take a quick trip on tues-thurs in the middle of May, you pay a lot less for hotel rooms, entertainment, etc. If you do some travel hacking (which you now have time for) it's easy to drop the price 30-50%. You also find all kinds of stuff you didn't know existed (LA area has a few big telescopes that are free to the public on certain days, for example). Also the place you go is less crowded so it's more fun as well!

So that's my experience so far. I'm actually surprised by how much I enjoy trying to reduce our expenses and how easy it is. Once we hit a certain level I think it'll get much harder but that hasn't been an issue. It hasn't been long enough to say, but I suspect it's about a 20% drop in non mortgage spending.

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Old 05-13-2016, 11:17 PM   #15
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Thank you petershk! This is a great list and most of it applies to me. This is very helpful
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Old 05-14-2016, 03:53 PM   #16
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Could you give a few examples re economics and how? I would love to learn strategies in case I can apply. Thanks
Quote:
Originally Posted by petershk View Post
Fuego has quite a few articles on his blog about that. I'm in "practice" ER, but found this to be immediately true.

Mostly it's time arbitrage.

1) food
2) commuting/work
3) "chores"/DIY
4) fear
5) health
6) geographic flexibility
7) vacation
What Peter said.

1) food - We cook at home almost all the time. Like Peter, take out or sit down restaurants aren't very convenient compared to cooking at home (we have 3 kids and sometimes busy after school schedules). Plenty of time to look at grocery store sales and time our shopping to benefit from those.

2) commuting/work - we got down to 1 car for a while and hopefully can get rid of our unneeded second car soon. We walk to many places and sometimes drive just 1-3x per week.

3) "chores"/DIY - we mostly took care of all chores around the house. When working, DIY was tough due to time constraints (I could get it done but it might take a loooong time to research/buy materials/fix). Now it's much easier to drop everything and tackle an emergency. I figure we have a half dozen issues per year that I DIY and therefore avoid a service call at $100-200+ each.

I also have more time to shop for contractors and focus on properly scoping the contract when I do hire one. We spent $8700 to replace all siding, install new windows, and complete a major roof repair. But I spent time researching construction methods and materials, getting quotes, reviewing them, buying some of my own materials, and discussing the scope. Otherwise I imagine we would have spent $15,000 for a similar outcome.

4) fear/comfort - I'm pretty comfortable with our spending but I know DW got more on board once she quit working full time. I was used to not having a paycheck but once she quit working, DW would mention "we can't afford it" and reference the lack of a paycheck. Nothing major, but the attitude to skip some frivolous spending certainly helps trim overall spending.

Coupled with that is no longer working and having the "I work hard and earn a paycheck so I need to treat myself". DW was never bad about it, but I think that mindset led to some stress-related spending that we haven't had since she quit working (meals/drinks out come to mind here).

5) health - obviously more time to exercise and less stress! I'm getting in 2 miles per day walking the kids to school compared to 0.5-1 mile max while working (sometimes walking to my bus stop, otherwise walking a couple blocks from parking lot to downtown office building). My BP dropped about 10 points soon after quitting work. Going in for another physical next month so I'll be curious to see any changes.

Good diet and nutrition is much easier when not working. I can eat when hungry instead of first thing in AM, around noon, and 5-5:30 after work. Also have more time to prep good food and snacks instead of whatever is convenient.

I've also noticed getting sick less often. Probably a combo of more ability to sleep in to recover when sick (better immune system) and not being around sick people at the office all the time (doorknobs and hand shakes will do you in).

6) geographic flexibility - already in LCOL area but we have the flexibility to relocate to an even lower area. House prices in our neighborhood are up 50% or so over the past 4-5 years so it's starting to get tempting to think about selling up and moving somewhere else (but then there are the kids and the good schools they just got into).

7) vacation - This is huge. We have the time to travel off season (kids school be damned!). Cruises are our big thing in the winter. Rates are like $1500 for a week for the five of us during off season. Probably $3000-4000+ during the summer or Christmas or spring break.

We also have multiple months to travel during the summer so we can stay in one place much longer. We rented for 2 weeks at a time in 3 different cities in Mexico and paid between $21 and $65 per night for what were basically villas (a 2-3 BR house plus a 1-2 BR guest house in our same walled in compound with gardens, fountains, patios, etc). That tripped ended in a more typical week in the Yucatan peninsula. Though we still did it on the cheap (villa rental was under $100/nt and Cancun hotel free w/ points), it was more expensive per night because we were on the go and more reliant on eating out all the time and on taking taxis.

===================

Other ways that not working allows us to economize: going out to eat during lunch specials. Chinese buffet is $7 or $8 during the week and $13 at night and on the weekend. DW loves the sushi there (amazing for $8).

If we see a neighbor giving something away on our neighborhood facebook page, we can snap it up first. Recently we got a free little tykes style play castle, two nearly brand new tennis rackets for kids/friends to use plus tennis balls, a stroller for the in-laws. Other neighbors commented "crap, didn't see this until we got home from work. Otherwise I would have claimed those!".

We also managed to buy our minivan a few hours after the price was lowered so got a great deal (well below blue book). It was a Monday morning, so most people would be at work but instead we were able to head over first thing, check it out, get it inspected and buy it immediately. It would have been gone soon given the price so we got lucky.

I'm also around the house a lot more so selling on Craigslist is much easier. I can list a bunch of stuff and I'm almost always available. Hard to make a sale if you're traveling late or overnight for work or have to tell the buyer you won't be free till 7 pm that evening.
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Old 05-14-2016, 06:27 PM   #17
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Fuego and Peter,

The list is not bad at all, but I'd need to comment that it depends how frugally minded a person is before ER.
As we go to the restaurants on special occasions only (BD's mostly, maybe some festival or religious celebration), we average 1 or less times per month. Not sure I'd know how order a take-out . Sure when traveling we eat out more especially if we're travelling in a foreign country.
So, food choices totally depends on how busy a family is and how inclined they're to make sacrifices. This strongly applies to #5.

Commuting...yes, it works if your house is in a district with sidewalks that a paved to shopping, schools, and activities. Whenever I see a bike, I always think that s/he is really looking for bad luck. That's the major reason I love European countries.

Chores and DIY, it really depends. This is dependent on how a person is inclined/interested in researching stuff, plus physical conditions may prevent taking charge of fixing something. However, I've had a though that I'd like to learn some skills with regards to improving or fixing in/around the house after reading an article how a woman quit her administrative work and somehow without planning ended up taking home improvement classes at a community college a year later. Now she's a contractor of small jobs for fun. I was very impressed. I've always liked cars and dreamed that I'd like to learn how to fix them, but now I'm thinking home improvement skills would be much better.

Fear/comfort...debatable or I didn't understand exactly. Or it doesn't apply to a frugal family.

Health...FUEGO, you should make a few trips to school. There're 10k steps in 5.3 miles (or whereabouts). 2 miles don't cut it. And isn't 10k of walking just a minimum of exercise? Yep, this would apply to a person who's overworked with long hours, hating his/her job, etc. Anyway you look at it, this item on the list would work for many people. There're exclusions though like I've seen some people on this forum saying that after quitting work they either wanted or went back to work.

Yeah, geography is restricted by kids though some parents choose to home school while traveling the world...I bet there're not a lot of such families but I've seen a blog or two.

Vacation is the biggest one and I agree 100% except as a person following the rules almost 99% I consider school very important starting in late middle school and up in particular.
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Old 05-15-2016, 10:44 PM   #18
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Aida,

I guess it's a YMMV. Obviously if you're already frugal to the bone then I guess removing work from the equation won't change a lot of your expenses. I'm pretty frugal (see, for example, our family of five living well on $24k last year) but still acknowledge that I was able to save even more money after I quit working.
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Old 05-16-2016, 02:01 AM   #19
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Aida. I tried to caveat a bit in that light but you did it much more succinctly.

You're absolutely correct! Some people go the other way... before ER they are hyper nervous, frugal, etc and then relax a bit after.

The general sentiment for me is... much greater flexibility across the board and that has resulted in lower spending with no perceived quality of life change... at least not in the negative direction.

My experiment being 0 pay for a comparatively short time has shown that I was much less that way than I thought but also "cutting back" just sorta happened... and it hasn't required any pain, belt tightening or perception of loss... if anything the opposite.

I didn't fully realize what the world looked like while I am at work and it's like a new realm of possibility =.

Example: Previously doing some quick credit card arbitrage to score 50K points that can help pay for a vacation wouldn't have been on my radar... too damn busy... but now it's exciting because it doesn't cut into extremely limited freetime being it's not really limited beyond kids filling as much space as you let them... although my 4 year old has asked me for "alone time" because I guess sometimes I'm "annoying."

Haha... who knew .

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