Reader Case Study: Veterinarian and Physician Seek Their Next Home

Johanna is a veterinarian, her husband Matt is a physician, and they live with their two young children on a small island off the coast of the Northeastern United States. The couple previously lived on the Navajo Nation Reservation and greatly enjoyed the close-knit community they had there. While the East Coast is where their families live, they’re not sure that this island is the place for them for the longterm. Johanna is also concerned that they might not be on track for retirement and would like our advice. Let’s dive in!

What’s a Reader Case Study?

Case Studies address financial and life dilemmas that readers of Frugalwoods send in requesting advice. Then, we (that’d be me and YOU, dear reader) read through their situation and provide advice, encouragement, insight and feedback in the comments section.

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The Goal Of Reader Case Studies

Reader Case Studies highlight a diverse range of financial situations, ages, ethnicities, locations, goals, careers, incomes, family compositions and more!

The Case Study series began in 2016 and, to date, there’ve been 97 Case Studies. I’ve featured folks with annual incomes ranging from $17k to $200k+ and net worths ranging from -$300k to $2.9M+.

I’ve featured single, married, partnered, divorced, child-filled and child-free households. I’ve featured gay, straight, queer, bisexual and polyamorous people. I’ve featured women, non-binary folks and men. I’ve featured transgender and cisgender people. I’ve had cat people and dog people. I’ve featured folks from the US, Australia, Canada, England, South Africa, Spain, Finland, the Netherlands, Germany and France. I’ve featured people with PhDs and people with high school diplomas. I’ve featured people in their early 20’s and people in their late 60’s. I’ve featured folks who live on farms and folks who live in New York City.

Reader Case Study Guidelines

I probably don’t need to say the following because you all are the kindest, most polite commenters on the internet, but please note that Frugalwoods is a judgement-free zone where we endeavor to help one another, not condemn.

There’s no room for rudeness here. The goal is to create a supportive environment where we all acknowledge we’re human, we’re flawed, but we choose to be here together, workshopping our money and our lives with positive, proactive suggestions and ideas.

And a disclaimer that I am not a trained financial professional and I encourage people not to make serious financial decisions based solely on what one person on the internet advises. 

I encourage everyone to do their own research to determine the best course of action for their finances. I am not a financial advisor and I am not your financial advisor.

With that I’ll let Johanna, today’s Case Study subject, take it from here!

Johanna’s Story

Hello Frugalwoods! I’m Johanna, I’m 36 and my husband Matt is 37. We live on a small island off the coast of the Northeastern United States with our two children, ages 3 and 5, and our small, loveable mutt. I’m a veterinarian and Matt is a primary care physician. After Matt finished residency in 2019 in a mid-sized city, we packed up and moved to the Navajo Nation (the Rez–yes you can call it that) and lived in a border town there for almost 3 years.

We had very cheap hospital housing and Matt was able to bike down the street to the hospital. I was commuting to the nearest town 45-50 minutes away 3 times a week. There were many things we loved about our Rez life. We had a close-knit community with lots of kids that lived in the same housing compound. We had many southwest adventures! Matt had a stable 4 day work week and often had 3-4 day weekends. The pay was great and Matt had lots of time off. My job was exciting and I learned a ton and developed many new skills. Matt and I both had colleagues of the same age, which made for fun work environments.

The Move Back East

However, the commute was wearing on me and I felt a longing to be back amongst trees and the ocean. We decided to move back to the East Coast about a year ago and settled on this little island, which we felt would be less “rat-racey” but close enough to family for us to build a community.

We’ve been here about a year and, while there are many perks, it doesn’t feel right.

Our job satisfaction has decreased. Matt and I both work with older folks and there are no opportunities for professional growth. The cost of living is astronomical. While we are somewhat protected, I still feel the creep of the fast-paced East Coast mindset here that we were able to shed while living on the Rez. We don’t feel as fun and adventurous as we did on the Rez. It’s hard to get off-island with a car and we often have to rely on family to pick us up.

Johanna’s Career

I recently left my full-time job as a veterinarian and started doing per diem shifts at the nearby animal ER. The hours have been sparse though and I’m not sure if I’m going to pick up more shifts or pull the kids from daycare and homeschool them instead. I make about $1,300 per shift pre-tax.

Where to Move Next?

Matt and I are searching for a lifestyle that’s slow-paced and meaningful. We’d both like to work less but aren’t sure if we’re able to with our current retirement savings. Matt recently had an opportunity to do a 2-year fellowship that would have taken us to East Africa and back to the Rez for 2 years. We decided not to take it this time, but could envision doing something like this in the future. Matt is currently taking a global health course and wants to work in Rwanda for several months at some point.

What’s the best part of your current lifestyle/routine?

• Our current lifestyle affords us the ability to bike most places! I take the kids to preschool on my e-cargo bike. They love it. Then I zip down a bike path to work. Matt bikes a few miles into work. We are close enough to town that we can walk or bike to the library, grocery store, pharmacy.
• I love that I can walk out my door and be in the woods or walk down to a beach.
• There are a wealth of kid activities that involve them in the community and history of the island. The land preserve and trail systems have kid friendly meet ups to hike together or explore a new area outside. There’s a grand old barn that you meet in during the winter to ride bikes and play with toys they put out. A block away from us is a center just for families that has a swap shop and many play groups.

What’s the worst part of your current lifestyle/routine?

Where Johanna and Matt Want To Be in Ten Years:

• Finances:
• Lifestyle: 
  • I’d like to live in a small community and have friends.
  • I want ducks!
  • I want to own a house that I can work on with a yard to garden!
  • I want to be able to bike most places and be able to access nature.
  • I’d like Matt to be home more and not drained from work.
• Career:
  • Matt would like to continue working but have meaning in his work and be financially secure enough to work part time at some point.
  • I would like to work per diem at an emergency hospital. This would give me the work stimulation I like, it pays well, and I could control how often I work and when.

Johanna & Matt’s Finances

Income

Item	Gross Monthly Income (total BEFORE all deductions)	Deductions & Amount	Net Income (total AFTER all deductions are taken out, such as healthcare, taxes, employee parking, 401k, etc.)
Matt’s Income	$24,844	1. Taxes $1485 ($5940 monthly) 2. Before tax deductions (dental/vision/healthcare/ 457, 403b) $1061 ($4244 monthly) 3. After tax deductions $900 for housing benefit ($3600 monthly) 4. Basic life insurance $4 ($16 monthly) Total deductions monthly: $13,800	$11,044
Johanna’s Income	$1,300 per shift. Since I’ve just started doing these per diem shifts, I have no idea how many hours I’ll be working a month. Nor do I know what my taxes will be!	Taxes: unknown	TBD
		Monthly subtotal:	$11,044
		Annual total:	$132,528

Debts

Item	Outstanding loan balance (total amount you still owe)	Interest Rate	Loan Period/Payoff Terms/Your monthly required payment
Matt’s medical school loans	$108,000	0%	In deferment until May 2023 pending supreme court decision

Assets

Item	Amount	Notes	Interest/type of securities held/Stock ticker	Name of bank/brokerage	Expense Ratio
Savings Account	$140,000	Emergency Fund plus possible house downpayment fund??	Earns 0.25% interest at this amount	USAA	N/A
Matt’s TSP	$64,000	Federal Retirement account with 2050 target		TSP
Johanna’s Vanguard Roth IRA	$61,400		VBTLX, VTIAX, VTSAX	Vanguard	0.05%, 0.11%, 0.04%
Vanguard Targeted Retirement	$50,000		VFORX	Vanguard	0.08%
Matt’s Roth IRA	$46,000		FXNAX, FSKAX, FSPSX
Vanguard total Stock	$34,000		VTSAX	Vanguard	0.04%
Matt’s 403b	$18,000
Matt’s 457b	$18,000
Joint Checking Account	$10,000	Checking account used to pay bills		USAA	N/A
Kid 1 account	$6,777	Cash gifts we receive for the kids go here; not sure if we should do something else with these?	0.01% interest	USAA
Kid 2 account	$6,777	Cash gifts we receive for the kids go here; not sure if we should do something else with these?	0.01% interest	USAA
Total:	$454,954

Vehicles

Vehicle make, model, year	Valued at	Mileage	Paid off?
Subaru Outback 2010	$2,000-$3,000	160,000	Yes

Expenses

Item	Amount	Notes
Daycare	$2,838	Both kids, 5 days a week. Wow that’s a lot!
Groceries	$1,200	Some of this is a bulk purchase of coffee/rice/beans but still, wow, food costs are $$$ here!!!
Travel/ferry tickets/vacations	$400	Ferry tickets, ferry car tickets, vacations (usually camping or staying put in a cabin).
Storage Unit	$171	Rental house is furnished. This was the cheapest option until the company got bought and they jacked the price up to this amount.
Life Insurance for Matt	$164	Term life insurance
Disability insurance for Matt	$150	Work disability
Farm CSA	$143	Summer/winter CSA (veggies and eggs)
Life and disability insurance for Johanna	$110	Term life insurance and disability for work
YMCA membership	$94	I use this 4-5x a week
Car Insurance USAA	$78	1 car
Gifts: kids and family for holidays	$65	I get most of our kids gifts from the thrift shop. Sent gift cards to all my nephews for birthday/Christmas.
Cell Phone (Visible Wireless)	$50	For 2 plans
Diapers	$50	For nighttime diapers for both kids and daytime diapers sometimes for younger kid
Gas for car	$50	We fill up maybe once every 4-6 weeks
Household goods	$50	Soap, dishwasher stuff, thrift store scores
Renter’s/Valuable Insurance USAA	$48	Renters insurance covers house and storage
Clothes/Misc	$40	Mostly from thrift store, sometimes new if we need something specific for kids
Restaurants/take out/convenience food	$40	Occasional breakfast sandwich/coffee out or lunch out if I forget mine at home or if caught out with hangry kids. Trying to cut back.
Entertainment	$25	Maybe a rented movie, maybe a museum, a new book we can’t find in library
Dog food/treats/meds	$20	Perks of being a vet is that you don’t take your dog to a vet?
Haircuts for Johanna	$16	Two cuts per year including tip (everyone else is cut at home)
Bike maintenance/bike gear	$15	Averaged expense to maintain bike/new gear
Food Co-Op membership	$9	Paid annually (will likely stop this in April)
Matt medication	$7
Apple iCloud Storage	$3	For photo storage
Monthly subtotal:	$5,836
Annual total:	$70,032

Credit Card Strategy

Card Name	Rewards Type	Bank/card company
Signature Visa	cash back	USAA

Johanna’s Questions for You:

1. 

   Cargobike life

   How much do we need for retirement given our circumstances?

   • Should I open different retirement accounts for myself since I’ve never had employee matched options?
   • Are we doing enough? Are we doing it right?
2. We have a tremendous amount in our “emergency fund,” which I was thinking we’d use for a down payment at some point. Every tax season we also get hit with a huge payment ($20K last year!) and that will come from this account. Is there something else I should be doing with this money?
3. To what degree does Matt need to just put his head down to maximize earning potential so that he can back off later but still be financially secure? In other words, how much do we need to have banked in retirement so that Matt can work part time?

Liz Frugalwoods’ Recommendations

I’m thrilled to have Johanna and Matt as our Case Study today! They’ve made some fabulous financial choices over the years and it’s exciting to work with them at this juncture of life. They’ve saved and invested an impressive amount and should feel very proud!

I hear in Johanna’s write up that she and Matt share a desire for more freedom and flexibility in their lives. I also hear pretty clearly that the island they live on is not the right fit. While Johanna is clear-eyed about the benefits of island life, it seems that the negatives outweigh the positives at this point.

I think their biggest challenge right now is that they’ve outlined competing priorities/goals:

1. A desire to live and work internationally for a period of time
2. A desire to work fewer hours
3. A desire to move away from the island
4. A desire to buy a house
5. A potential desire for Johanna to change her work/childcare schedule

I think all of these goals are possible for Johanna and Matt, but probably not simultaneously and not immediately.

The question for them to answer is: which of these goals do they want to do first?

From a financial perspective, it seems like pursuing living-and-working-abroad now might be most viable because:

• They don’t own a home
• Their kids aren’t in school yet
• Johanna’s job is per diem, so quitting wouldn’t create too much upheaval for the hospital or the family’s finances
• If they’re able to sever their lease and thus not pay for a US house while abroad, that’d be ideal
• They already live well below their means, so a potentially reduced international salary for Matt shouldn’t be an impediment

It seems like a more challenging proposition to delay international living to a time in the future when both kids are in school, Johanna is working full-time AND they own a home. That’s not to say it can’t be done in the future; but, the more tethers you have, the harder it is to leave the country for a period of time.

Furthermore, if they’re able to swing international life in the near future, that could provide them with the space and time to consider where in the US they want to make their longterm home. I sense that they’re really trying to make it work on the island because they’re already there, but in many ways that’s a sunk cost fallacy. If they know–deep down–that life on the island is not the right fit, staying longer probably isn’t going to change their minds.

Where To Live and Work In The US?

Matt and Johanna both work in an in-demand field, which provides them with a wealth of different work options–as they’ve already experienced through their life on the Navajo Nation Reservation. I encourage them to think expansively about what configuration of work appeals to them.

Johanna outlined a clear vision of the type of place she’d like to live:

• I’d like to live in a small community and have friends.
• I want ducks!
• I want to own a house that I can work on with a yard to garden!
• I want to be able to bike most places and be able to access nature.
• I’d like Matt to be home more and not drained from work.

I think that sort of small town life is available in many parts of the Northeast–assuming they want to remain near their families. The downside of the Northeast, of course, is the cost of living. While the island sounds especially pricey, most of the Northeast is expensive. Even my teensy tiny town in Vermont experienced astronomical housing prices over the past few years. But, there’s no imperative for Johanna and Matt to buy a home right now–or ever, really.

Owning a home is not a prerequisite for financial stability and success. It can be one element of a sound financial portfolio, but it is not mandatory. I sense that Johanna and Matt feel like they “should” buy a house, but from a financial perspective, that’s not strictly true. I am a great lover of The New York Times’ Is It Better To Rent or Buy? Calculator and I encourage anyone grappling with this question to check it out.

Johanna asked, “How much do we need to have banked in retirement so that Matt can work part time?”

This question is calibrated largely upon how much they need to spend every month–both now and in retirement. If you spend very little, you can afford to earn very little. If you spend a lot, you’ll need to earn a lot. That’s an oversimplification to be sure, but the premise holds up.

This quickly becomes a lifestyle question:

• What are you willing to sacrifice in order to work fewer hours?
• What is most valuable to you?
• Would you be willing to buy/rent a small, older home in order to work less?
• Would you be willing to move to a lower cost of living area in order to work less?

There’s no right or wrong, but when we have the mindset that we don’t need to continually inflate our lifestyles, buy new cars, eat out every night, etc, we have the room to potentially work less and consequently, earn less. It’s all about trade-offs.

Many of Matt and Johanna’s questions will be answered based upon where they decide to live, whether or not they buy a home, whether or not Johanna wants to work more hours, etc.

They’re in a great financial position, so there’s not a hair-on-fire mandate for them to change anything drastically at this point. The question for them to grapple with is really: how do you want to spend your time? What do you want your life to look like? They don’t have the assets to fully retire early, but they have enough to consider non-traditional modes of life and work.

Johanna also asked “To what degree does Matt need to just put his head down to maximize earning potential so that he can back off later but still be financially secure?”

It depends. One route would be for both of them to buckle down now, earn as much as possible, save every penny and then fully retire early. Another route is to work part-time for the rest of their lives. Another option is somewhere in between those extremes. Let’s take a look at their numbers.

Asset Overview

Cash: $150,000

Between their two accounts, Matt and Johanna have $150k in cash. Your cash equals your emergency fund and your emergency fund is your buffer from debt.

• An emergency fund should cover 3 to 6 months’ worth of your spending.
• At Johanna and Matt’s current monthly spend rate of $5,836, they should target an emergency fund of $17,508 to $35,016

What this means is that they are overbalanced on cash (in other words, they have too much of it). While this is a good problem to have, there are downsides to keeping so much money in cash.

Having this much cash only makes sense if:

1. You intend to quit your jobs and not immediately find others;
2. You have major expenses planned for the near-term, such as: buying a house, buying a car, a significant HOA assessment, etc.

Outside of those two scenarios, it becomes a massive opportunity cost linked with the fact that your cash is losing value every day since it is not keeping up with inflation.

→When you’re overbalanced on cash, you’re missing out on the potential investment returns you’d enjoy if your money was instead invested in, for example, the stock market.

If Johanna and Matt do want to buy a home in the near term, then it absolutely makes sense to keep this money in cash. On the other hand, if they don’t think they want to buy a home, they should explore more profitable ways of leveraging this money.

At the very, very least, they should move this cash into a high-yield savings account that’ll earn them interest. Their current savings account earns an abysmal 0.25% in interest. There are many accounts out there offering far better interest rates right now.

For example, as of this writing, the American Express Personal Savings account earns a whopping 3.75% in interest. This means that in one year, their $150,000 would earn $5,625 in interest!

Short to Medium Term Investment Options To Consider for Their Cash

Another class of products for Johanna and Matt to consider for their cash are short to medium term investment options, such as CDs, Money Market Accounts, and Government Bonds. With all types of investments, you’re looking to maximize your return, but ensure that the time horizon works for your plans. It’s kind of like a ladder or hierarchy of options:

1. At the most accessible end are high-yield savings accounts because you can withdraw your money at any time, in any amount and with no penalty.
2. At the least accessible end are retirement investments because you have to be age 59.5 before you can withdraw your money without penalty.
3. In the middle are short and medium-term investment options, which can make a lot of sense if you anticipate needing this money in, say, three years in order to buy a new car.

Here’s how a few of the most common short and medium-term options work:

1) Certificates of Deposit (CDs) lock up your money for a specified time period and return a pre-determined interest rate.

• Pros:
  • CDs are very straightforward because you know in advance how long your money will be inaccessible and exactly how much you’ll receive in return (assuming you select a fixed rate CD).
  • They are available for different periods of time—anywhere from a few months to several years—and offer different rates based on the length of time you select.
  • Make sure to purchase a CD from an institution that is FDIC insured.
• Cons:
  • The rate of return is sometimes not much (or any) more than a high-yield savings account. If you want to purchase CDs, shop carefully and keep in mind current savings account interest rates.
  • Some CDs offer fixed interest rates and others offer variable rates. Know in advance which you’re most comfortable with.

Similar to high-yield savings accounts, CDs are offering some very high (and great!) interest rates right now.

2) Money Market Accounts (MMAs) typically provide the same features as traditional checking and savings accounts, but with a higher interest rate.

• Pros:
  • Can have a higher interest rate than a high-yield savings account.
  • May offer check-writing and/or debit card capabilities straight from the MMA.
  • They are FDIC insured, up to $250k per bank, at FDIC insured institutions.
• Cons:
  • They can be less flexible than a regular old savings/checking accounts.
  • Their interest rate is typically variable (meaning it changes as the market fluctuates).
  • MMAs usually require a minimum account balance as well as a minimum initial deposit to open. There can be a monthly fee if your account total drops below the required minimum balance.
  • Depending on the account, they may allow only a limited number of transactions

3) Government Bonds (including US Savings Bonds and Treasury Bonds) are another very low-risk short-term investment option. Similar to CDs, Government Bonds offer a specified interest rate in exchange for “locking up” your money for a specified period of time.

• Pros:
  • Considered very low-risk
  • There’s often both a fixed and a variable interest rate within each bond
• Cons:
  • The interest rate can be lower than a high-yield savings account (especially in our current interest rate environment).
  • Unlike with a high-yield savings account or MMA, you can’t access your money until the predetermined date at which you’re allowed to cash out your bond.
  • The term is often very long (like ~30 years), though you can typically cash them out earlier—you just need to read the fine print on any penalties that might apply.
  • There’s often a limit to how much you can buy in bonds per year. For example, you can only put a max of $15k per year into a Series I Savings Bond.

Note that Government Bonds, CDs and Money Market Accounts aren’t a viable or lucrative long-term investment strategy in light of how low their returns are. For long-term investments (i.e. five years or longer), the standard advice is to instead invest in the stock market.

Bottom Line: Do Something To Leverage Your Cash

With all of these options, Johanna and Matt should retain a fully cash emergency fund (in a high-yield savings account) of three to six month’s worth of their expenses. Regardless of what they decide to do in terms of moving and/or purchasing a home, Matt and Johanna should investigate moving their $150k into one of the above vehicles in order to earn interest on it. What you don’t want is for your money to be sitting around not earning any interest.

Retirement: $257,400

Between all of their retirement account, Matt and Johanna have $257,400.

Let’s see how this stacks up against Fidelity’s Retirement Rule of Thumb:

“Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67.”

Since they’re in their late 30s, let’s go with 2x, which means they should target having at least $596,256 (2 x $298,128). Johanna articulated that she doesn’t find this retirement metric very useful, and so, another way to think about retirement is thus:

What you want to be able to do in retirement is drawdown a sustainable percentage of your overall investment portfolio to live on each year.

You want to have enough invested to allow you to do this for the duration of your retirement. I highly recommend using the “Rich, Broke or Dead” calculator to game out whether or not you’re likely to run out of money in retirement.

Many experts consider 4% to be a sustainable rate of withdrawal and so, if Matt and Johanna were to withdraw 4% of their current retirement investments, they’d have $10,296 (4% of $257,400) per year to live on (plus Social Security).

Since Matt and Johanna aren’t planning on retiring now, this isn’t an issue for them. The point is that Matt and Johanna can utilize the 4% withdrawal rate calculation to check in on their retirement investments over time. This gives a slightly more precise idea than the above Fidelity metric since it shows you, in real dollars, how much you’d be able to withdraw to live on.

The reason to invest for retirement—as opposed to saving cash for it—is threefold:

1. There are tax advantages to utilizing retirement accounts
2. There are grave disadvantages to cash (as outlined above: the opportunity cost and not keeping up with inflation)
3. There are advantages to investments (namely, anticipated rate of return)

Taxable Investments: $34,000

Matt and Johanna also have taxable investments (in other words, non-retirement investments) of $34k, which they can add into their overall 4% withdrawal rate calculation.

Increase Retirement Contributions

Since they have room in their budget, I suggest Matt and Johanna increase their annual retirement contributions. The max allowable contribution into a 403b (or 401k) is $22,500 in 2023 as a pre-tax contribution (if you’re under age 50). Matt could increase his withholdings to reach this annual maximum.

Since Johanna doesn’t have an employer-sponsored account at present, she can put a max of $6,500 in 2023 into an IRA. She likely is not eligible to max out a Roth IRA as I believe their MAGI (modified adjusted gross income) is above the $218k cap outlined by the IRS in this chat. Regardless, she wouldn’t want to do Roth anyway since they’re in a high tax bracket.

• Johanna might also be able to open a solo 401k depending upon how her per diem work arrangement is structured. She’d need to ask her HR department about this.

Maxing out Matt’s 403b and Johanna’s IRA will bring their total investment for retirement this year to a combined $29,000, which according to their listed expenses, they can do! The difference between their annual expenses ($70,032) and Matt’s take-home pay ($132,528) is $62,496. And this doesn’t even account for Johanna’s salary since she recently changed jobs and isn’t sure what her take-home pay will be each month. In light of that, it’s well within reach for them to begin maxing out their contributions now in order to hit the max allowed contribution limit for 2023.

Other Retirement Accounts?

I wasn’t clear which of Matt’s listed retirement accounts are current and which are former; but, it’s possible he’s eligible to contribute to other employer-sponsored accounts as well.

If he doesn’t have access to any other employer-sponsored accounts, Matt can also open and max out an IRA (at $6,500 for 2023), which would bring their combined max contribution to $35,500. This would still leave them with $26,996 of leftover money each year to put either towards a downpayment on a house OR into their taxable investments account. The math on that is: $62,496 (difference between income and expenses) – $35,500 (max allowable retirement contributions) = $26,996.

Kid Accounts: $6,777 each ($13,554 total)

My advice on these two accounts mirrors my advice on Matt and Johanna’s cash: do something with this money to earn some amount of interest. Based on when they envision giving this money to their kids (age 18? age 21? for college expenses?), they can select the investment vehicle that makes the most sense for their time horizon and risk tolerance.

In addition to all of the above mid-term options I outlined (CDs, etc) and plain old taxable investments, this money could go into 529 College Savings Plans. 529s vary state by state in their effectiveness/utility, but it’s something for them to look into and consider. Additionally, the primary advantage to a 529 is often the tax advantage, which could be very worthwhile for them given their high income.

Another Option: Save A TON and Retire Early

Another option I see for Matt and Johanna is to further reduce their already very reasonable budget. The only reason to do this would be to shore up their savings and potentially retire early or move to part-time work in the near future. I don’t think it would be easy or particularly fun to slash their budget to the bone; however, most of their spending is discretionary or reduceable and so, they have a lot of room to save more (if they chose to go this route).

Another factor here is that they’d need to make the determination of whether Johanna wanted to go back to full-time work OR pull the kids out of daycare. Since daycare is so astronomically expensive, in this option, they’d need to either increase their salaries or eliminate daycare.

Just throwing this idea out there in case it resonates with Johanna and Matt.

Summary:

1. 

   Pre-clamming dances

   Discuss and determine which of your stated goals you want to reach first:

   • Would it make sense to prioritize international living now before you own a home and before the kids are in school?
   • What are you willing to sacrifice in order to make less work a possibility?
   • Do you want to maximize earnings and savings for the near term in order to fully retire early?
2. Put your cash into something that’ll earn interest; either a high-yield savings account, a CD, a Money Market account, or similar.
3. If you determine you don’t want to buy a house in the next ~5 or so years, consider putting your cash (above your emergency fund) into your taxable investment accounts.
4. Explore putting the kids’ money into something that’ll earn interest, such as taxable investments, 529s, or one of the other medium-term vehicles listed above.
5. Max out your three retirement vehicles starting this calendar year:
   • $22,500 into Matt’s 403b
   • $6,500 into Matt’s IRA
   • $6,500 into Johanna’s IRA
6. Look into the possibility of Johanna opening a solo 401k.
7. Don’t be afraid to move away from the island if it isn’t the right fit for your family. Don’t get trapped by the sunk-cost fallacy!

Ok Frugalwoods nation, what advice do you have for Johanna? We’ll both reply to comments, so please feel free to ask questions!

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