TL;DR: This case study looks at a teacher married to a non-PERA-covered employee and lays out several paths for retiring (or achieving work-optional status) by age 45.
Part 1 in this series describes the “what” and the “why” of Financial Independence. Part 2 discusses the process of “how.” Part 3 looked at the possible “what its” and “yeah, buts” objections to accomplishing FI. Part 4 discusses how knowing the rules around taxes can allow you to optimize your finances and help you achieve Financial Independence. Part 5 was a detailed case study of how a teacher married to another teacher could achieve financial independence by age 45. This post is very similar to part 5, but will look at three scenarios for a teacher married to a non-PERA-covered employee, and lay out some possible paths to achieving Financial Independence and retiring early (or achieving “work optional” status).
You might want to go back and read paragraphs two through seven of part 5 for the background and context for these scenarios (decided not to copy and paste here). Go ahead, the rest of this post will still be here when you come back. Just like in part 5, you really have to look at the spreadsheet and the associated google doc for each scenario to see how the plans unfold.
Scenario 1
Teacher married to a non-PERA-covered employee, in their third year of work in 2020, with a one-year-old child. They were hired before July 1, 2019 (which affects what’s included in PERA-includable salary), and assumes the teacher is eligible to purchase 5 years of PERA service credit.
- Scenario 1: Info, Assumptions, Spreadsheet Key, and Year-By-Year Description
- Scenario 1: Spreadsheet (first tab)
Please note that while I’ve gone over all the spreadsheets many, many times, there is still a possibility that there is a mistake (or more than one). It could be a mistake in a formula, or it could be a mistake in overlooking some aspect. Please, please, please, if you find something that you think might be incorrect, let me know so that I can take a look and adjust it.
Scenario 2
This is similar to Scenario 1, except assumes the teacher is not eligible (or just choose not to) purchase five years of PERA service credit. This lays out a path to retiring at age 43.
- Scenario 2: Info, Assumptions, Spreadsheet Key, and Year-By-Year Description
- Scenario 2: Spreadsheet (second tab)
Scenario 3
This scenario looks at two twenty-three year olds just starting their employment, and assumes the teacher was hired after July 1, 2019 (which affects how their PERA-includable salary is calculated as well as when they are eligible to retire). This lays out a path to retire at age 45.
- Scenario 3: Info, Assumptions, Spreadsheet Key, and Year-By-Year Description
- Scenario 3: Spreadsheet (third tab)
Reminder
After looking at some or all of the scenarios in-depth (the links to the doc and the spreadsheet for each), remember to look back at Part 3, the “What Ifs?” and the “Yeah, Buts” to recall that this is a choice. You should align your goals with your values, and you may choose to do some things differently than I’ve schemed out, or not to do this at all. That’s perfectly fine, of course, but be intentional about it.
For example, some folks will look at the “net to live on” columns in these different scenarios and say that’s just not possible. Well, first, realize that is the actual amount you can spend, not your total “income”, which is different than the way a lot of folks think about their spending. And, second, realize that it is possible to live comfortably but not extravagantly on that amount of money, you just have to decide if it fits with your values and goals. I encourage you to actually think it through and then make some decisions that do align with your values and goals, don’t just let your financial life “happen” to you.
Fisch Financial 
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