Submitted by TitansDaughter t3_11dtwxj in personalfinance

I've been working after graduating college for a little over a year and am certain my current career path is not for me. Unfortunately, for a variety of reasons, I can't quit and move back in with my parents until next year. At which point, I've decided to go back to school for another degree which will cost ~$30,000 in tuition over a period of 2 years. Currently have no other debt and have been putting 6% of my pre-tax salary into my 401k (only 20% match rate up to 6% of salary). I've also maxed out my Roth IRA account for last year. Does it even make sense to continue saving into retirement if I expect to take on significant debt in the future? Would I better off just saving for the tuition costs?

If it helps, I would be switching from an engineering role in the semiconductor industry to software engineering. My goal would be to find a remote job after graduating and to save for a few years living with my parents which I am currently unable to do as they live in a rural town several hours away from the closest major city.

Thanks in advance.



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ShanimalTheAnimal t1_jaavjad wrote

This is life advice with a touch of financial advice from someone who did a major career change without an additional degree:

First figure out what is working for you (giving you energy) or what has worked in the past. Then figure out what does not work for you (drains your energy) and note that too.

Write down every idea you have for a different career even if it sounds stupid.

Before paying for more education take stock of your ideas for your next career and figure out how you can “try” them in the most low cost way possible. Interview? Internship?

(This is all the short version of the book “designing your life” which you should buy and read!) good luck!


BouncyEgg t1_jaas5e0 wrote

The data you'd need to figure out is the interest rate on your anticipated loans.

> only 20% match rate up to 6% of salary

Worded a bit confusingly.

But anyways, at minimum, this likely means an equivalent of a ROI of at least 20%.

Unless your loan interest is near that, I wouldn't pass up on getting at least the employer match.


TitansDaughter OP t1_jaat18m wrote

In that case would it make more sense to keep contributing to the 401K and to put any additional savings into a high yield savings account instead of a Roth IRA?


Hambarker t1_jaazt4h wrote

This is an incorrect answer.

20% of 6% of OPs pay is nothing compared to $30k, regardless of interest rate.


Im2bored17 t1_jab0nt4 wrote

Consider the cost and benefit of each option.

If you continue to put the money in retirement accounts, you get the employer match, and the long term value of the compound interest, which is pretty high considering how many years it'll be there. You can calculate both of these values (use a retirement calculator for the latter).

The cost of this option is how much interest you'll need to pay on student loans for the tuition money that you would have had if you hadn't put that money into retirement savings. You can calculate this value as well.

Now you can compare the dollar cost of each option, and weigh how much you care about the long term benefit of a few extra thousand dollars vs the loans you'll have to take. You can also weigh how much loan you'll need to take either way.

Without any of those numbers, I'd lean towards saving the cash and not putting so much in retirement. You can wait a couple years to save there and spend the money investing in yourself up front. The few extra thousand in retirement will not make a big difference in the long run.

Also, good luck with software engineering, it's worked out quite well for me.


Hambarker t1_jaazz6n wrote

Are you going back to school to earn more money? If not, you're making a mistake.


TitansDaughter OP t1_jab5g39 wrote

I’ll probably make more money over time since software tends to be more lucrative than other engineering disciplines. Wouldn’t be a huge gap though. Don’t like my job at all and don’t feel like I have much natural aptitude for it. Think it would be a bigger mistake to keep at it while I still have the freedom to change careers


Hambarker t1_jab6hir wrote

What happens if you don't like software?

It's work. The novelty of every job wears off.


TitansDaughter OP t1_jab6sdj wrote

There was never any novelty with my current one. I don’t need to feel passionate about my job but I do ask that it doesn’t make me miserable. Even if I don’t like software (programming has been fun for me so far), the prospect of remote work is enough to make it worth it for me.


magnificentbystander t1_jabx600 wrote

You sure you need to go back to school? If you can code, apply for an entry level position. If you can’t code start learning on your own time. If you don’t want to write code, look into product management, program management and sales engineering. There are lots of ways to use your existing degree to get a different job in tech.


Hambarker t1_jab8h4q wrote

People in sulfer mines are miserable. Share croppers were miserable. You just don't like your job.

Reverting to living with your parents and going into debt to start your life over is a bad play.


cuse_juice1 t1_jacuwr4 wrote

Personally - having a job you hate sucks, even if it keeps you materially comfortable and on track with retirement savings. There might be other steps you can take to put you on a new career path before getting a degree.

Have you considered taking classes part time? Why do you think computer science is the way you want to go? Do you have friends, colleagues, acquaintances in CS or other fields you can take to coffee for an informational interview to learn what their jobs are like? Do you hate the job, or doing that job in a H/M/LCOL town? Only you can answer these.

Similarly what are your goals for the next 3, 5 and 10 years? Are you trying to buy a house or something else you need large liquid savings? Are you trying to simply avoid as much debt as possible? Will living with your parents again after being independent for a few years drive you crazy? Again, this is all the personal side of things.

As someone who fantasizes about going back to school and rebooting a different career, I get the temptation. Can you find other places outside of work to bring you happiness? Picking up new hobbies, or friends, or relationships - something that helps define who you are outside of work? Maybe this isn’t about general life satisfaction rather than this specific job? Similarly have you talked with possible mentors/colleagues/supervisors about how to improve? We’re often our harsher critics when thinking about how good or talented we are at our jobs.

Financially - depending on how old you are, getting those years in your twenties and early 30s maxed out is gonna do more for you than maxing them out in your later in life. The market is a bit unsettled and who knows what the next five years look like, but come 2040 and these early years have been compounding for a decade and a half you’ll likely thank yourself for continuing to invest.

30k isn’t a ton of debt to take on, especially when you have non currently. you’ll need to surmise what your additional costs of living are during school - is that just tuition? Fees? Books? Will you need transportation insurance and gas? Can you take 40k in loans to cover any gaps, etc.

You answer to the person in the mirror and you gotta do what you gotta do to make that person happy. Balancing financial goals with broader life satisfaction is probably more important than being miserable with a well funded IRA.

Lastly, Syracuse NY is getting a new Micron megafab with jobs paying 100k+ in a part of NY with low cost of living, good schools, lots of nature, decent mid-size city food/bar scene. If you stick with the semiconductor field, it might be a place worth considering to maximize what you salary:I hate work ratio can get ya.

Anyway, that’s my sermon and those are the questions I’d want to have answers I feel confident about before making a big life decision. Good Luck!


Glennsgarage t1_jabaqhy wrote

Always fully invest in your retirement account especially if the employer matches.


dirty_cuban t1_jacge75 wrote

Can you borrow money for your career change? Can you borrow money for your retirement?

There’s your answer.


Who_GNU t1_jae7uwq wrote

What doesn't make sense is getting into debt, if you already have experience in an engineering role. It also doesn't make financial sense to switch from a field that is under saturated with employees to one that is over-saturated, but if that would make you happier, then it trumps the financial incentive.

Do you have experience programming? Even Verilog and VHDL experience would carry over software development, as would scripting, such as using shell scripts or TCL. Your best bet to make the transition is to spend a few years working for a small semiconductor company, in your current line of work, that would also let you take on programming projects. If you haven't asked yet, see if your current company will let you.

Experience is far more valuable than earning a degree in a different field, so if you can transition your experience from electrical engineering to programming, it'll be a much better use of your time, and you won't have to go into debt.


TitansDaughter OP t1_jaen8ct wrote

If the semiconductor industry is undersaturated its not reflected in our salaries. My CS friends with lower grades and fewer ECs are doing quite well compared to me. My coworkers are fairly open about their salaries and even mid and high level salaries are pretty meh. At worst it would be a lateral career move, the recent tech layoffs seem exaggerated to me as long as you don’t work for a major tech company. I have a few software engineer friends working at F500 companies and they’ve been completely unaffected.

As far as getting experience on the job, I’m a ChemE working as a process engineer. When I’m using software it’s Excel 95% of the time. I’ve made some useful macros for my team but other than that my role is so far removed from anything programming related that I don’t see a reasonable path for learning on the job. My role is pretty hands on, I’m not even using a computer half the time.

I get that this might seem like a stupid decision but I’ve thought about it and it’s right for me. Personally I feel like I need the structure and goal of a degree to ground me as I learn new skills, even if self teaching would be cheaper