FI and Alaska

How close am I to financial independence?

I am pretty close to financial independence for someone who stumbled onto the FIRE movement within the past year.  My estimate is that I'm 1.5-2 years (thanks stock market downturn!) to reaching my minimum viable goal.  My husband has a job that essentially functions how I would like mine to once I reach my goal; he is self-employed, so can take days off without a hassle, travel and work as it suits his client needs.  That makes achieving FI a little simpler, because it makes my goal to complete our second retirement savings and cover living expenses excluding our mortgage.  This would put us in a position of having excess income and the option of not depending completely on savings until we feel more comfortable with a FI lifestyle.  Since we live in a higher cost of living community, that amount of savings would let us move many places in the world or US if we decided to cash out of our primary residence.

So other than a high cost of living, how else is FI in Alaska different from the lower 48?

I'm a veteran, and due to some unfortunate problems with my lungs will have my healthcare covered by the VA for the foreseeable future.  The cost of healthcare in Alaska is the highest in the world, so saving enough to provide healthcare coverage for my husband and daughter (soon to be daughters!) is not minor, particularly if he continues to make too much money to make us eligible for subsidized insurance on the marketplace.  This would unfortunately put us in a position of paying over a thousand dollars a month for the lowest coverage, highest deductible plan on the exchange.  I very much hope for significant healthcare reform in the next few years because I see the current system as unsustainable for consumers and increasingly the same for healthcare providers.  The transition to value-based care will help in the long term, but websites like GoFundMe.com are compelling evidence for how many Americans are getting very little value for a large expenditure.

Alaska also has the PFD (permanent fund dividend), which ranges from a few hundred to a few thousand dollars in dividend income per Alaskan resident.  This is variable enough to not make it a reliable income source for FI planning, but does add a reassuring factor of safety or source of charitable giving.  Because children get the dividend as well, many families here save their child's PFD to pay for their college.  That helps to ease college financial planning.

Childcare in Alaska ranges from very expensive ($1,000/month is on the lower end for places we have looked at for my first daughter) to completely unavailable, depending on where you live.  That is an ongoing barrier to workforce participation within the state.  I am torn about whether we will continue with childcare once I reach FI.  A big drive for me to pursue FI is to be able to spend more time with my children, and be available for them as they grow.  But I also want a balance, so that I have time for passion projects and for myself.  My thought right now is to pay for half day care until they both reach school age.  This would meet my daughter's needs to socialize with humans near their own age while decreasing our total monthly expense.  This is one of the reasons I am considering a "soft transition" once I reach FI, by first moving from full time to part time work.  I could transition to part time sooner than FI, but that would delay when I reach FI.  What do you think?

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