Weekly “Help Me FIRE!” thread. Post your detailed information for highly specific advice. - July 22, 2019

I’m posting this on a throwaway. I don’t have anyone in my life that really understands FIRE. I’m hoping to get a sanity check on my line of thinking, and see if there’s anything I’m not considering, and get some thoughtful advice.

I work in a government position doing software dev. I’ve been at my job for about 2 1/2 years now. It’s cushy, low pressure, low stress, few deadlines. I live in a relatively low cost of living area. I bought my house in 2012, and I pay $900/month for mortgage, insurance, and property tax.

I make $80k annually, and my job also contributes 12% of my salary into a 403b. I’m 41 years old. I didn’t really learn about FIRE until 2015, and before that I wasn’t saving much money (also wasn’t making as much back then). Between HSA, 403b, 457b, old 401k, and pretax IRA I have about $200k right now. I’d estimate roughly another $100k in equity as home values have increased and my mortgage has gone down. 3.25% fixed interest rate, and another 23 years to pay it off.

I max my 457b and my HSA every year. The HSA can also be invested, and I keep enough in the savings portion to cover my high deductible. Everything else goes into investments in the account, and I pay my medical out of pocket and keep the records. We get small raises, typically around 2%. People that have been there for ten years or more say they will eventually adjust when the local market outstrips salaries by too much, but who knows when that might be. Inflation is a minor concern, at least right now. Could be worse later.

Our current structure is flat. People stay in their jobs until they retire. I could keep doing what I’m doing now, and presumably have a few million at 65, or maybe retire early. I like working so I haven’t decided, and I can’t retire today, but I’m not going up most likely. Not really sure how much I care.

That’s the setup I guess. A friend of mine works for a large national company in another state, and has been trying to get me to come out there for more than a year. I finally decided I would explore the opportunities and applied for a few that I found interesting. The pay is higher. I think it would be safe to assume that I could get $120k at this company, and work with more modern tech that could potentially lead to more money in the future. He says people get recruited by FAANG companies regularly from there, and it’s a big problem for personnel. Just from looking at cost of living calculators the area is close to identical to where I’m at now, so I think the raise would be substantial. I had a call early last week with a recruiter, and didn’t hear back for more than a week.

Tuesday I got a phone call from a relative. She’s 70, and she told me she’s leaving me one of her pre-tax IRAs, worth about $225k. Health is declining but not drastically, and she says she already considers it my money. When she hits mandatory disbursements she’s going to gift me the max allowable under gift tax, $15k I think. I don’t count money until I have it, but I do want to think about this. I was surprised to get this information, and am still kind of processing it. Obviously I don’t know what the future holds. She could change her mind. She could end up needing it. She could remarry.

I realized that in my current job, I can max both my 403b and my 457b, in addition to my HSA and also an IRA. I only max the 457b and HSA right now, but I also get the 12%. Single income, married, family of four, so the money always gets spent. We live within our means, but we try to vacation every year so the kids can see more of the world (we like it too). If she starts giving me money from that IRA now, I’d like to contribute that amount to the 403b. Eventually if it gets left to me I would continue to take the mandatory distribution, and could potentially max both accounts and the IRA between the salary from the job and the drawdown of the inherited IRA. Wife works part time at a day care so I could potentially make her IRA as well I believe. I think this way I could fully transfer those assets into my own accounts, tax free by contributing an equal amount that I have to withdraw. Not sure if this is right though.

The day after I got the call about the IRA, the recruiter called me back and said they wanted to do a phone interview for the next step. Don’t know where this is going to lead, but I can foresee potentially getting an offer for the higher salary. If I did, I would be giving up the ability to max a 403b and a 457b as the company would have a 401k. I’d also have to buy a new house with home prices higher than 2012, but some of that would be offset with the sale of my current home.

So in short, I didn’t know about the IRA when I applied, which changed the situation a little. There are other factors such as good schools, finding a nice place to live, etc that I will have to consider as well, but from a purely financial perspective I’m not sure what the better choice is, so I’m hoping my situation isn’t too long winded and I can get some advice from this community. Thanks for taking the time to read.

/r/financialindependence Thread