Reader Case: Future Empty Nesters

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Hello all!

Well, it’s been a while since we took a look at our inbox, so let’s dive in there and see what interesting reader cases have been waiting for us! As busy, sleep-deprived parents of a newborn, today’s reader case deals with an issue near and dear to our hearts: What to do when the kids are out of the nest and you have all the time in the world again? Aah, such luxury. Such distant, distant luxury.


I read your book and thanks so much for potentially looking at our case and providing your advice! I remember reading your book religiously for months reading some chapters over and over. 

My fiancée and I both have full time jobs currently we’d love to leave and we are wondering if we are ready or when we can be. 
We are both immigrants and have been saving up, and are close to retirement – we are 52 and 57.  And while the salaries below seem high, we have not always had them as high so just saved what we could. Still, it’s not bad hopefully. 

While we think we have enough, we’d love to get your take on our numbers and just confirm we are not crazy – maybe we are! Maybe it’s the fear talking too. 

Me and my fiancée both have kids – the youngest one will be out to college in 6 years. So our expenses for the next 6 years will be higher than after the last offspring goes to college in 6 years. Right now we are paying for the kids place plus expenses plus our house we bought (30 year mortgage with HOAs). That’s where the current expenses  come from. 

We have a dream of traveling the world and living simply and volunteering a lot once the kids are off to college. Maybe also living overseas where expense are lower than in the good ol’ US! We think our expenses once the kids leave will be reduced by 5k. It will just be mortgage and living costs or food, travel and 2 cars. That’s in 6 years. 

We’d like to know if we can ditch our jobs already and if we have enough in savings. If so, what would be the best next steps – besides setting up the investment account according to your method? Would it be paying off student loans? Paying off the house? Selling company stock so there is less exposure to one stock? How much should we set aside in cash as cash cushion now and later? 

We’d like to keep our house as the mortgage is cheap and it would be our safe place, and rent it out when we travel. But we are open to other options: if financially it makes more sense! 

Thank you for considering our case – and in any case will always be grateful for the book you wrote. An inspiration! 

Thanks Kristy!! 

So here are our financial snapshot: 

Gross income: 425k plus 175k  
Net income: 19k a month plus yearly bonus of 60k (in the current Jobs we’d like to ditch); 

Investments: 631k in a brokerage account; with monthly broker fees (yes! 1 percent), plus employer stock vested – 460k (we started to sell this year gradually to reduce exposure) plus 47k (self-invested in ETFs)

Savings:  20k in a savings account plus 50k in a certificate
401k : 60k plus 325k  
Pension money locked in a pension account in Europe available in 15 years- 300k euros 

House mortgage : outstanding principal 283k, at 2.85 interest rate; 
Student loans: 90k
Car loans: 25k plus 25k (5.85 interest rate)

Spending monthly 
Kids support : 5k a month
Food, utilities, travel, purchases: 3k (plus house mortgage payment 1600 usd and 340 HOA) monthly 

Thank you for considering our case. Is it possible to do the analysis based on the above or is it too complicated? Would welcome any feedback you can provide! And thank you in advance !!!!! Very much. 


With kids leaving the nest in 6 years, our couple is looking at a vast (hopefully) time horizon with all the freedom in the world. Can they afford their dream of world travel and volunteering? I dunno, let’s MATH SHIT UP to find out!

First of all, they wanted to know where they stand right now. To do that, let’s create a snapshot of their current financial situation and see where the numbers land, shall we?

Income$19k per month, $228k per year (net)
Expenses$5000 (kids) + $3000 (theirs) + $1600 (mortgage) + $340 (HOA) = $9,940 per month, $119,280 per year
Investible Assets$631k (brokerage) + $460k (company stock) + $47k (ETFs) + $70k (savings) + $385k (401k) = $1,593,000
Non-mortgage Debt$90k (student) + $50k (car) = $140k

Our couple has done an amazing job in the savings department, which is great. However, their expenses are sky-high!

At a total monthly spend of $9,940, or $119,280 per year, this would require an FI target of $119,280 x 25 = $2,982,000! That’s almost 3 million!

The biggest proportion of their spending is, interestingly, their kids. At $5000 a month, they’re spending more on their kids than they’re spending on everything else combined. That includes their house, their food, and their car. How much do these friggin’ kids eat?!?

But OK, fine. “Slash your kids’ food budget” is not exactly advice that goes down smoothly, so let’s take it at face value and see what we can do. The fact that their kids is such a huge portion of their spending is a bit of a double edged sword. Yes, it means that it’s super expensive now, but when they leave, this spending should drop off, which will have a huge effect on their financial picture.

Once the kids leave the nest, their living expenses should drop to $9,940 – $5000 = $4,940 per month, or just $59,280 per year. At that spend rate, they would need $1,482,000 to retire, which they appear to already have. Plus, the earliest this could happen is in 6 years when the last kid gets their freeloadin’ butt cut off goes to college. Each of those 6 years, they’d be able to save $19k (net monthly earnings) – $9,940 = $9,060 per month, or $108,720 per year. What does that do to their nest egg?


Yeah, they’re going to be just fine. Interestingly, by the time the kids leave the nest, they’ll have amassed enough money to retire even with the kids expenses still ongoing, only by then the kids expenses will be gone, so they’ll have roughy twice as much as they need to retire.

This suggests they could retire somewhere between now and then. If we take into account that the total they will need to finance their kids’ spending for the next 6 years is $5000 x 12 x 6 = $360k, and we add that to their post-kids FI target, we get $1,482,000 + $360,000 =$1,842,000. If we look at the above take, we can see they’ll hit that after just 2 years!

So if we want to retire a little earlier than 6 years, they should be able to keep working for just 2 more years until they hit the $2M, and from there they’d be able to spend down their portfolio a bit (4% for them, $5k a month for the kids), then glide into full retirement once the kids are off to college.

That ain’t too shabby, if I do say so myself.

Low Hanging Fruit

That being said, there are a few changes I would recommend. First, the brokerage account. A 1% monthly brokerage fee is nuts. The ETFs that we use charge less than a tenth of that, and they actually provide value by creating the investment vehicle. All a brokerage does is just hold your money, and they’re charging you 10x that amount for the privilege?

That’s a BS fee if I ever saw one. There are way better alternatives out there, including Vanguard which charges a mere *checks notes* $0 for holding your money! Even an outfit like Fidelity has no monthly account fees, and they all do basically the same thing, so there really is not excuse to pay monthly account fees for your investments ever, especially one as high as 1%. Transfer your money out starting today, you’ll thank me later.

And second, yes please sell off your company stock. At $460k, this is way too much exposure to one individual stock. One of the skills every good investor has to have is to know how to control your downside, and if your CEO gets pulled over with a hooker and bag of blow (hey don’t laugh, it’s happened before), that’s going to leave a smoking half-a-million-dollar hole in your retirement plan.

You don’t have to do it right away, and you don’t have to get rid of all of it, but over the next two years, start selling off this holding and diversify into your index funds. Keep no more than 10% of your net worth in any one stock is a good rule of thumb.

Paying Off Loans

Our readers’ next questions are about their loans. Should they pay off their mortgage or the kids student loans?

I’d leave the mortgage as is. At 2.85%, that interest rate is lower than the rate of inflation, so it makes sense to keep the loan around so you can pay it off over a longer period of time with cheaper future dollars.

The student loans, you can also leave it as is. A few months ago, I would have advised to pay it off as quickly as possible since student loans can turn into runaway debt monsters and are non-dischargeable in bankruptcy. However, President Biden recently revamped the student loan program, creating an income-driven payment program called SAVE. The new system has a lot of changes that reduce the minimum required payment based on your child’s income, but the single most significant change is that interest no longer accrues if the minimum amount is paid.

This brings the US student loan system much closer to other developed countries, and is actually a major deal to American students. I’m not sure why he’s not getting more accolades for this, but regardless, it’s now much safer and for your kids to carry the student loans themselves without potentially destroying their financial future.

Just make sure the student loans are the right type that are eligible for the SAVE program, namely Federal Direct Subsidized or Unsubsidized Loans. If you have one of the other types, you may need to convert it to the “correct” one. Check the Federal government’s website for more details.

However, one loan I would pay off is the car loans. $50k at 5.85% isn’t the worst thing in the world, but it is money leaving your pocket every month for no good reason, especially since you have the cash on hand already. With the click of a button, this loan could be gone from your life, and I suggest you do it.


FutureEmptyNesters have an admirable raising a family saving for their future travel plans. While there are a few tweaks here and there to make, all in all I’d say they are on track for the retirement of their dreams.

What do you think? Are there any other changes you’d make, or are they good to go?

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6 thoughts on “Reader Case: Future Empty Nesters”

  1. The new student loan program would not benefit anyone with this much income, unfortunately. It only benefits low income borrowers. Some people have better deals with private student loans when income is this high. Changing to a new loan type also restarts the clock.

  2. Considering the very high income. The isn’t a lot of planning to do and tough decisions to make. Just keep saving and retirement should be golden and easily in reach.

  3. They’re good to go in 2 years, IF they stay in their current house AND the mortgage lasts indefinitely.
    In reality, the mortgage will be paid off in, what? 10 years? That will lower your expenses from that point on. And if they start travelling and rent out their place, their net costs might drop dramatically.

    Putting some numbers on these hypotheses and mathing shit up all over again might result in them being ready for the big jump… maybe today, who knows?
    And once they are happily retired, their income would be super low and they might actually be eligible for the SAVE program… just sayin’.

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