Preamble about where I am right now:
- Late 40s
- In the USA
- Modest car loan, no mortgage, no credit card debt
- No spouse or children
- About $200,000 in a traditional IRA, another $50,000 in a Roth
Although I already have a bachelor’s degree, I want to change careers, starting with a bachelor’s degree in a mostly unrelated field. I’ve carefully selected a single state school where I reside to apply to and I have a good chance of being accepted, so I estimate I will pay in-state tuition of about $12,000 per year.
Reviewing the degree requirements, I have calculated I can earn my degree in three years as a full time student. Tuition combined with three years of living expenses plus books and other costs, my estimate for the total I will spend in those three years is $100,000.
When the term I have applied for starts, I expect to have $40,000 - $50,000 saved in non-retirement accounts.
I’m very confident I will be able to work part time while taking classes, but I don’t expect to be able to work more than ten hours a week, if that. Being conservative, I’m estimating earning around $20,000 (after taxes) over those three years, and even if I’m generous I very much doubt I can earn $50,000 - $60,000 and still keep up with degree requirements.
So I’m facing a deficit of $30,000 - $40,000.
Taking for granted (please) that I’ve thought a lot about all of my options and have firmly decided that waiting or studying part time will not get me where I want to be, my question is:
To cover the deficit, is it better to borrow against my IRA or take out student loans? Or some combination?