I’m 50 And Ready To Quit – A Reader Case Study

I received a write-in from a reader who wonders if she is on the right track to retire early. She is 50-years-old, wants to retire early, and has some questions about what comes next. I love her story for a few reasons. First off, I think it’s relatable to everybody: she wonders about the impact of healthcare on her retirement plans and what her timeline could be. These are common questions when considering whether it’s possible to leave the workforce.

Secondly, this reader is asking the same questions my own mom has wondered, which means maybe I can kill two birds with one stone: retirement advice for two moms in one post.

Weigh in with your advice, encouragement, and thoughts in the comments.

Note: some links in this article are affiliate links, meaning if you click through I may earn a small commission at no extra cost to you.

Dear Financial Mechanic Community,

Thank you to Financial Mechanic for the opportunity to present my case study for her skillful analytical scrutiny and your collective wisdom. I welcome advice and suggestions about my situation, because I really want to retire…soon.

I’m MamaMinou, a 50-year-old nurse living in the Pacific Northwest (US). I’ve been a nurse for around 12 years (before that, doula and teacher). My lovely partner and I have been married for 26 years and we have two amazing adult kids. I love to travel, knit, read, write, walk, do yoga, hike, nap, visit libraries and the great outdoors, and make things. I want to do much more of all of these fill-my-cup activities, plus spend more time with my family and friends.

Fill-my-cup activities:

Bread made by MamaMinou

Financial Independence Goals

Just like for everyone, these last couple of Covid years have been difficult for me, especially working in Public Health. Although I’m no longer directly involved in Covid response, it was a long season of overwork along with heaping amounts of change, uncertainty, frustration, and shifting responsibilities. Several of my favorite colleagues moved on, I gained 20 lbs, and I am tired to the point of near burnout. I have an ongoing dream of moving…somewhere else, ideally with a different culture and language. Not sure where but I’m leaning towards France  (though The Netherlands sound so nice!) 

Beautiful Collioures, France

My lovely partner and I have very different approaches to financial planning, so we have opted to each do our own thing for saving and retirement. We contribute somewhat equally (I realized through this tally that he pays more) to shared expenses by dividing costs. 

He pays for the mortgage, our single car (which he uses more frequently), and utilities. 

I pay for health expenses, food, and household supplies. 

Right now we all have good health insurance (HSA/HDHP) through my work (adult kids will age off this in the next few years). I’m not sure if our situation looks better individually or combined, but I feel it’s important to plan so that I could meet all our expenses solo if I had to.

MamaMinou's Family Expenses

  Expenses

Who pays

Monthly

Yearly

   Mortgage

Partner

850

10200

   Property taxes

Partner

400

4800

   Electricity and Water

Partner

125

1500

   Car maintenance

Partner

100

1200

   Fuel for Car

Partner

100

1200

   Internet

Partner

75

900

   Streaming services

   & online news subscriptions

Partner

100

1200

   Home & auto insurance

Partner

100

1200

   Term life insurance

Partner

150

1800

   Subtotal

Partner

2,000

24,000

   Phone (self only)

Mama

40

480

   Groceries (3 adults)

Mama

500

6000

   Household supplies

Mama

50

600

   Safe deposit box

Mama

15

180

   Healthcare

Mama

600

7200

   Glasses for family

Mama

125

1500

   Clothing and shoes

Mama

50

600

   Gifts

Mama

150

1800

   Pets

Mama

40

480

 Subtotal

Mama

1,570

18,840

 Family Total

 

$3,570

$42,840

$ 0
Yearly Family Expenses
It's important to be able to paddle one's own boat

We are aiming for a yearly budget of about $40k in retirement, though I think that could be smaller if we lived car-free in an urban center (which I would enjoy), and possibly health costs could be less outside the US. One adult kid is currently back home, which makes our grocery and utility bills a bit higher than they otherwise would be. My expensive phone is to keep two other family members on a shared group plan.

Some of our expenses are clearly discretionary and could be lowered, such as streaming and gifts. It’s difficult to assess unlisted others because they aren’t regular, like home repair (inevitable) and travel (highly variable and enjoyable). Also, I have no idea how much the health insurance costs would be if not covered through work and while here in the US (likely a lot more than now).

Investments

I use my HSA as an investment account, so pay up to our deductible out of pocket each year. I front-load my 457 and Roth IRA accounts and max both out by July, then begin contributing to the taxable account. 

At the age of 65 I will have a small defined benefit pension (about $1k per month if I stop working now), though I prefer not to count on that or social security. I haven’t kept a large emergency fund because my job has been secure, and I’m aware that I’ll need a bigger cash cushion. I’m very good at living frugally and doing without, but I’d like to not have to worry or scrimp as I age…while still living lightly.

I hope for enough space in the budget for lots of this
I sometimes think that if I could take a year’s sabbatical (at home…or somewhere else), I could come back to work refreshed, but that isn’t feasible with my current organization. Thanks to a combination of seniority and working in an in-demand field in a union environment, I am well-compensated (around $90k per year). I worked a lot of overtime the last two years and just don’t have the energy to do so now. Due to various factors, there is still quite a bit of stress at work, but I will have a bump in my pension if I continue at least through 2022. For that, for wiggle room, and for health insurance, I’m trying to hang on.

MamaMinou's Investments

Taxable Account

$121,000

403b

$63,000

Roth IRA

$151,000

Trad IRA

$53,000

457 (b)

$311,000

Public Employee Plan

$65,000

HSA (as investment)

$27,000

Cash Emergency Fund

$1,000

Total

$792,000

Our House in the Pacific Northwest

We also paid off our own house, but had to take out a mortgage to buy the rental, so now we have two mortgage loans. Real estate prices here in the PNW are crazy! Zillow says our current home is valued at $467k. For a fairly funky 1000sq ft home. Insane!

I don’t consider equity in our current home as part of net worth, but the debt is $178k.

Investment allocations

Most of my accounts are with Vanguard and are index funds. A few from an old job are with Fidelity and the employer 457 is Vanguard funds held in a different company. 

I use Personal Capital as a way to see everything aggregated, which tells me that my current investment asset allocation is about 12% bonds, 16% international equity index funds (VTIAX), and 70% US equity index funds (mostly VTSAX). I’m currently adding more bonds and think it might be time to save more cash.

My goal has been to save and invest $50k or more per year. I am starting to feel anxious about having such a small cash emergency fund though, and am planning to increase that this year.

PapaMinou's Financial Picture

Trad IRA$73,000
Roth IRA$12,000
SEP IRA$17,000
Cash Emergency Fund$15,000

Total

$117,000

PapaMinou Rental Property Project

Rental Property Equity$182,000
Rental Property Mortgage Debt$368,000

Rental Monthly Income and Expenses

Rental Income+ $3,200
Mortgage Payment *– $1,800
Property Tax & Insurance– $500
Property Management Fee– $225
Water bill– $175
Savings for repairs and upkeep– $500

Total net income

$0

*FM Note: important to mention that the mortgage payment builds equity, so it is different than other ‘expenses’

We technically both own the equity on the rental house but it belongs to PapaMinou, he has made all the payments and it’s his investment project. In case of a financial split he would get the rental property. It was purchased in Spring of 2021 (I think. Covid time is all a blur. But recently). Redfin says rental property value is now $593k. 

MamaMinou's garden

So, Financial Mechanic and readers, please share your thoughts. What are my options? Am I CoastFIRE? What about the health insurance conundrum? What do I need to do to prepare, and when could I reasonably stop working, and/or move to the Netherlands or France? 

Am I CoastFIRE?

What do you think about the health insurance conundrum?

What do I need to do to prepare, and when could I reasonably stop working, or move to The Netherlands or France?

Sincerely, 

MamaMinou

Mechanic's Musings

There are so many things I love about MamaMinou’s write in. Here are some things I notice right away: 

1. MamaMinou has something to retire to, she has already cultivated hobbies like knitting, hiking, baking, crafting, travel, and many other things.

2. She has a maintainable lifestyle, and has done a great job saving for it. I also really dig her investment approach: simple index investing.

3. Whether you and your partner have different approaches to financial planning or not, it is always prudent to take a look at your numbers individually. If your financial wellbeing is dependent on your partner, it is harder to say whether or not you are financially independent. (While doing the calculations, I did want to eat my words on this point, because Mama and PapaMinou’s expenses are quite entwined which makes it trickier. I still think it’s important, so I did my best!)

Already on solid footing, I’m going to tackle MamaMinou’s questions one-by-one.

Is MamaMinou CoastFIRE?

I’ll start with a quick definition of CoastFIRE.

Luckily, this question is relatively simple to answer for MamaMinou. It just takes some math. There is an equation to figure out your CoastFI number.

Assuming:

  • A 5% expected growth rate (7% projected returns, with 2% subtracted to account for inflation)
  • A safe withdrawal rate of 4% (recommended by the Trinity Study).

Coast FI # = Annual spending / SWR * (1+0.05)^Years Until Retirement

There are enough variables that could change that makes this a back-of-the-napkin type calculation. To try out different variations, check out this handy calculator by Walletburst! It also includes more information about how the equation is determined.

Let’s do a few different calculations, for each person in the couple, as a family, and in a worst case scenario (MamaMinou has to cover all family expenses). For the worst case scenario, I subtracted $150 per month for groceries but left the rest of the spending the same. MamaMinou has 15 years until traditional retirement, PapaMinou has 6.

 Yearly expensesAssets to be CoastFI
  Papa$24,000$378,100
  Mama$18,840$148,500
  Family$42,840$337,600
  Worst Case$41,040$323,400
So, given the Minou family’s assets, are they CoastFI?

MamaMinou mentioned that she does not count the hypothetical value of her home in her net worth calculations, so I used two columns to show a comparison.

 AssetsAssets Including HouseCoastFI?
  Papa$342,000$575,500
(Unless house is included)
  Mama$792,000$1,025,500
  Family$1,091,000$1,601,000
  Worst Case$792,000$1,025,500

The Minou family is ready to “coast” to retirement. PapaMinou would not be able to do so on his own, so in the case of a split, he would benefit from continuing to work for a few years before retirement. I am also curious about whether the rental property could bring in more passive income, but that is up to them as landlords in their specific market.

MamaMinou could “coast” on a lower paying, lower-stress job if she wanted to!

However, the CoastFI calculation is based on traditional retirement age and MamaMinou wants to retire as soon as possible. So, the more pertinent question is: are they financially independent now?

Can MamaMinou Afford To Retire?

The calculation for financial independence is a bit simpler than the CoastFI equation.

Financial Independence # = Annual spending / SWR 

 Yearly expensesAssets to be FI
  Papa$24,000$600,000
  Mama$18,840$471,000
  Family$42,840$1,071,000
  Worst Case$41,040$1,026,000

So, given the Minou family’s assets, are they financially independent?

AssetsAssets Including House
FI?
  Papa$342,000$575,500
  Mama$792,000$1,025,500
  Family$1,091,000$1,601,000
  Worst Case$792,000$1,025,500

So, it looks like PapaMinou is on the edge of financial independence, but he’s not quite there yet. However, as a family, the Minous have reached financial independence. Comfortingly, the Minous are financially independent as a family even without considering their home in the asset calculations. 

Even in the worst case scenario, if MamaMinou would be willing to make some adjustments to spending, she is just on the edge of financial independence (assuming she and PapaMinou split the proceeds of their home 50/50). It sounds like MamaMinou will be eligible for social security and a pension, so that provides some extra safeguards.

MamaMinou asks, ‘when can I reasonably stop working’ and the answer is: now. She is 50 years-old and can retire by the age of 51 as planned.

I would recommend MamaMinou meet with a financial planner to go through the calculations as mine don’t include the difference in returns between equity, bonds, and cash. However, with these back-of-the-napkin type numbers, plus considering that she plans on working through the end of 2022, she is in a good place to consider retiring early. 

However, early retirement comes with its own risks. In the case of a divorce or split, PapaMinou would likely need to continue working, and MamaMinou would need to cut back on expenses anywhere possible. And, as MamaMinou pointed out, she still needs to factor in an estimate of her health insurance costs.  

What Should MamaMinou Do About Health Insurance?

Healthcare is the smudge on the glasses of every hopeful early retiree. The process tends to be opaque and changes by state. I am far from a healthcare insurance expert, so my advice is to go shopping for insurance as if you had to switch at the end of the year, and use those numbers to budget for early retirement calculations. Early retirees take several different approaches to medical insurance in retirement:

If Mama and PapaMinou decide to stay in the U.S. and both retire, they will need to plan to buy health insurance from the market. To get a glimpse into what to expect in retirement for coverage under the Affordable Care Act, head over to Healthcare.gov.

It asks you for a zipcode, estimated income, household size, and other details, then provides example plans. 

This will help you plan in the future for what healthcare costs might be. Luckily it sounds like MamaMinou’s children will be able to get their own insurance plans relatively soon.

Tanja Hester from OurNextLife wrote about her experience signing up for health insurance in California here: Signing Up For ACA/Obamacare Health Insurance for Early Retirement. She talks about the process for estimating income, and to be aware that since income will likely be lower in retirement than on previous tax returns, most early retirements might get flagged and have to explain that they aren’t Medicaid-eligible.

The best thing to do is to estimate the subsidies you will be eligible for and get an idea of the plans that you would likely sign up for when you retire. 

More reading on healthcare in early retirement...

MamaMinou's Kitty

What Does MamaMinou Need To Do To Prepare For Leaving Her Job?

The good news is that MamaMinou is doing stellar financially, so the next step is mapping out her exit plan. It doesn’t sound like her job is tenable for much longer, so I would encourage her to start planning for when she leaves.

One of MamaMinou’s questions is: when can she reasonably stop working? Based on just the numbers: now!

Well, at least, as soon as she has her other ducks in order. Like, can her adult children get on their own healthcare plans? 

There are some practical steps to prepare before leaving a job:

  • Make sure to get those dental cleanings, eye exams, and other medical visits in. 
  • Look into contributing to a donor advised fund before retiring. 
  • Adjust allocations of investments to something that feels comfortable for retirement, consider consulting a financial advisor to double check all the numbers!
  • Make a withdrawal strategy for accessing money.
  • Work on bolstering the emergency fund before retiring.

Then there are the emotional steps to prepare for retirement. It sounds like MamaMinou already has hobbies she can spend more time doing, but I also recommend making some plans to transition into early retirement. That might look like scaling back hours at work, or planning a long vacation to demarcate time between work and retiring. It helps to have something to help with the transition emotionally (I hear, I haven’t retired yet).

I also read that MamaMinou is unhappy at her job, but I don’t know about PapaMinou. Some couples make the transition into early retirement one at a time. This gives some financial stability to the family, while one person has more time to do logistical planning for when the second person retires. Just a thought!

What Does MamaMinou Need To Do To Prepare For Living Abroad?

If Mama and PapaMinou plan to move long-term to Europe, I would encourage them into looking into different visas that are available for Americans who would like to stay longer term. They can also plan a trip to visit different spots they might like to live longer term, then make plans from there!

It can be fun to dream of living abroad, but starts to get overwhelming in practice. It is best to visit online expat forums and research visas, taxes, and other laws to consider while living abroad. 

MamaMiou's snap of the beautiful Olympic Peninsula

I will note that in my experience it has been easier to move abroad while working. Most countries prefer expats who will be paying taxes into their economies, and there are rules that restrict long-term stays without a proper visa. For example, if I lose my job in The Netherlands, I have 90 days to find a new one that will sponsor me, apply for a different type of visa, or I have to leave the country. Each country has different rules, so it’s worth doing some research. 

Mama and PapaMinou could also consider a split between the US and living in France and/or The Netherlands. They could look into Nomad health insurance. Some plans require that you live outside of the U.S. for at least 6 months out of the year, so you could try living in the U.S. for part of the year, and then doing 3 month stints in other countries. This would be quite the adventure to retire to, if that’s what they want! The best part about early retirement: lots of options. 

Conclusion

In conclusion, MamaMinou is doing fabulously with her finances. Now is the time she can start dreaming about what her early retirement might look like, and then create a step-by-step plan of how to get there.

MamaMinou and her husband have put in the work to set themselves up for early retirement. Now, with an empty nest, they can start to put dreams into actions. MamaMinou can leave a stressful job with the peace of knowing she has the investments to support her financially and hobbies to support her emotionally. She would benefit from doing some more research into healthcare options and what it would look like to retire abroad in order to minimize risk. I second her plan to bolster her emergency fund, and I recommend meeting with a financial planner before turning in her resignation.

That said, I see so many opportunities for the Minou family to thrive in early retirement!

Readers Weigh In

MamaMinou wants your advice. 

What should she consider before leaving her job?

What should she think about before moving abroad?

What are your thoughts on healthcare in early retirement?

Share your take below!

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17 Comments

  1. Thank you for running my case study FM, and I look forward to hearing from readers! One clarification: what I labeled as HSA in monthly expenses is actually my out of pocket health spending up to the limit where my high deductible plan kicks in.

  2. Ah I see. I fixed the label and removed the comment about HSA contributions, since that is indeed a valid expense. I changed the calculations accordingly as well.

  3. I really like this post and I feel like it could have been written for me! I too dream of retiring early (as soon as I get brave enough to hand in my letter of resignation) and plan to travel and maybe live abroad etc. I envy the fact that you have hobbies and know how you wish to spend your time when not working. You raise a good question about healthcare. I found that getting a quote from the ACA exchange is not easy as one might think as the cost depends on income and that would be hard to predict. I found that joint in some groups in Facebook helped educate me on on how to potentially live abroad. I wish you well and hope everything works out well for you.

  4. I really like this post and I feel like it could have been written for me! I too dream of retiring early (as soon as I get brave enough to hand in my letter of resignation) and plan to travel and maybe live abroad etc. I envy the fact that you have hobbies and know how you wish to spend your time when not working. You raise a good question about healthcare. I found that getting a quote from the ACA exchange is not easy as one might think as the cost depends on income and that would be hard to predict. I found that joint in some groups in Facebook helped educate me on on how to potentially live abroad. I wish you well and hope everything works out well for you.

    1. Thank you Claire!! I agree, I have looked at the ACA exchange in my state and found it less straightforward than I had hoped. I wish you well as well, with all your future projects. I have always loved to travel and dreamed about living abroad long term. My partner has close relatives in a European country so I hope that can help guide us. Hobbies are the spice of life!

  5. Gonna throw some ideas at the wall. Maybe a piece or two will stick and spark more ideas.

    Without subsidies, ACA plans have crushing costs. Income cutoff for subsidies is appox. $69K for 2 people. https://www.ehealthinsurance.com/resources/affordable-care-act/aca-obamacare-subsidies

    Can you get on PapaMinou’s insurance if he’s not ready to retire?

    Is PapaMinou even ready to retire?

    You mentioned you’re a nurse. As a transition, could it make sense to do some number of postings a year as a traveling nurse and go on some extended travel lengthy travel the rest of the time? Looks like some agencies make insurance available but I can’t see any work requirements. This may give you a chance to simultaneously get income down to subsidy level, check out some possible retirement destinations and make a test run toward retirement, all while keeping your skills sharp.

    https://www.ehealthinsurance.com/resources/individual-and-family/travel-nurse-health-insurance-options#:~:text=Many%20travel%20nurse%20agencies%20offer,about%20finding%20your%20health%20insurance.

    I went FIBER at 59 (financial independent, barely retired early) but got bored and went back to work part time 2 years later. It sounds like you have more outside interests than I do, which is good. But maybe consider keeping your CE requirements current just in case.

    Bottom line-you’ve done well and are in a good position. Enjoy having options.

    1. Oops—forgot to answer your question about PapaMinou! He said for years that he would never retire (might be connected to his later start at saving), but I think he may have caught the retirement bug at last. He doesn’t have as many hobbies as I do but he does really love to volunteer for various community groups. I can see him being happy working less and volunteering more.

  6. Hi Russell, thank you for your response! I appreciate all your ideas and love your acronym of FIBER. 😊 PapaMinou is self-solo-employed with an S corporation. He has looked into buying insurance through his business and found it very confusing. This is definitely an area that I need to spend more time exploring! I completely agree about keeping my nursing license active and plan to do so. I have not worked in acute/critical care during my nursing career and I think those skills are more in demand for travel nurses, but it is also worth investigating.

    1. Thanks so much for sharing your story!

      My husband and I are retired from corporate life but have an LLC for an online business. It pays for our health insurance premiums (currently just under $900/mo for a HDHP for the two of us which allows us to contribute to an HSA). I bought it directly from the health insurer (we live in Ohio) because we were making too much to get any ACA subsidies, but it’s essentially an ACA plan because it’s very location-specific (boo – I was hoping it would be more portable if we decided to relocate domestically). If PapaMinou continues to work, I recommend funneling the health insurance costs through his company so they can be business deductions.

  7. Hi Sarah, thank you for your reply! $900 for two people seems shockingly high to me, but I have been spoiled for a long time now with employer-sponsored coverage. Is that just for your premiums, and then you have the out of pocket expenses up to the high deductible in addition?

    1. Yep, that’s just our premium cost. We are paying any medical expenses (minimal) out of pocket and keeping receipts for future reimbursement from our HSA. It’s likely if you’re not working, you’ll be able to get ACA subsidies. Definitely worth looking into.

  8. Financial Mechanic and community, thank you so much for your advice and suggestions, and please keep them coming! I am delighted to think that I’m much closer than I realized. I do have a question: I had been subtracting our entire mortgage debt (a rather scary 178+368=546k) from our combined assets to calculate our family net worth, which made it much smaller. I see that FM did not subtract that debt. Can you help me to understand why that isn’t necessary? PS-FM, I hope this post was also helpful for your mom! 😊

    1. Regarding the mortgage debt, I did have a little trouble tracking that as you mentioned that you used equity in your home to purchase the rental which to me would mean that both mortgages should be covered by your rental income as part of the “project” but it doesn’t look like this is the case. You’re actually losing $350/month on the rental if the $850 mortgage on your home was used to purchase it.

      However as debt, the mortgage isn’t counted against your assets because you are using it to purchase an asset, and you have accounted for the monthly expense of your mortgage payment. Mortgages are tricky that way. I also don’t count the equity of my of my home as part of my net worth for retirement but I still track it for an overall net worth picture because as you pay off more of the loan, your equity builds and eventually your debt will be zero and all the equity is yours. Your money each month going to pay that debt isn’t disappearing, it is moving to your home equity.

      If you want to include your mortgage debt as part of your net worth, you should also include your home/rental equity for a full picture.

      For your FI calculations, FM used your investments/cash total and your monthly expenses to see if your investments can cover your expenses. Your mortgage payments are part of those expenses, but you don’t have to pay it off in a lump sum so you investment just need to be able to sustain the payments over (it looks like) the next ~30 years.

      Does this make sense? I’m sure FM and others will chime in with their reasoning.

      One thing that I didn’t see addressed was that if you choose to move abroad you will be able to release the equity in your home (or have rental income) that could allow you to pay more than your current $1250/month. Just something to keep in mind if you’re looking at that option.

      1. Hi Thomas,
        Thank you for that explanation, and it does make sense to me. I actually would prefer to think of all the mortgage debt as part of the rental property project, it seems more logical! I think conceptually Papa Minou prefers to think of it as separate (maybe seeing the negative was painful?) If we move overseas, the plan is to rent out our current home (after a little fixing up). One of our adult kids is attached to it and PapaMinou has always had a dream of leaving a home in the US and a home in France to the kids. I was surprised to find that housing prices are lower in many parts of France (besides big cities) than here in the PNW, both for renting and buying. That is not the case in the Netherlands however, I think I will have to let go of my daydream of moving to Delft!

      2. Thomas—I just realized that if our main house mortgage gets added to PapaMinou’s rental property project, then that means I’m contributing more to shared expenses than he is. I kind of like this, b/c if we readjust I might have a little more to save and invest. 😉

  9. Hey MamaMinou – congrats on all the progress you’ve made towards FIRE! Getting real numbers from the ACA in WA State is a process but I promise it gets easier once you get started. I filled out the ACA application as we prepared for FIRE and then updated it each year as we learned how to accurately estimate our post retirement income until we were finally ready to get on the ACA last year. Maybe you’ll want to fill out the ACA application this summer so you can start to get comfortable with the process and circle in on what your real ACA premiums might be. You can do this!

    1. Hi Ali, thank you for your suggestion! I hopped on to our state healthcare site. It looks like we would qualify for subsidies based on PapaMinou’s income alone (I think Adult Kid 1 will qualify for Medicaid and Adult Kid 2 will have a plan through work). The premiums are very reasonable but oh my goodness, the max out of pocket expenses are steep and they are per person! We would definitely need a large cash cushion just for healthcare if we go that route. Is that what you have done?

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