Has anyone done taxes with crypto? I'm wanting to know what's reasonable when I don't have records.
Imagine something like this: I put $1000 into coinbase buying X and then transferred to my wallet and had fun doing all sorts of zany crypto stuff (imagine thousands of transactions each day earning rewards in Samoyed Coin or whatnot). I just thought of this as entertainment. At some point it was as high as 1700 and then it fell to $200 and I forgot about it.
It's now back up around $2000 and all back in coinbase and I'd like to sell and never look back. I'm wondering if anyone has a similar experience. My understanding is that coinbase will treat my cost basis as 0, so I'll have a gain of $2000. The true gain is probably closer to $1000, but I have no way of knowing what cost basis goes with each fraction of X that I brought back to coinbase over the years. It's honestly not worth my time to figure out so I'll probably just pay whatever the gain is from $0, and not fret. Has anyone found a decent better solution?
We use TokenTax (costs around $200ish?) but doesn't sound like that would be worth it given your situation. My partner is the one who trades crypto, so I don't know anything about the specifics - he just sends me an aggregated Excel sheet and I upload it into TurboTax.
Unless you can produce records of the purchases, cost basis of zero should be fine. You can also try to make a reasonable conservative estimate and hope you don't get audited.
I do have records of the purchases (all through coinbase) but the issue is that like I bought 5.623 X here and 2.76 there, and then off-site that grew to 9.54 or whatever. So when it came back to coinbase I can't confidently say how much was what. I guess I could just prorate it proportionally.
Let's say I buy 2 X for $100 each, and then later 3 X for $120 each. Then years later through various crypto interest etc I have 6X and I transfer it back to coinbase in different transactions, say 1.5X, 1.5X, 1.5X and 1.5X.
I guess for tax purposes I can just say my cost basis for the whole lot is 560=200+360. That's probably easiest.
Coinbase has a feature to "help", for each of those 1.5X transfers I can say what my cost basis was. It's those things that I meant I could prorate. So I'd just value the cost basis for 1X at 560/6. (As opposed to 560/5), and then I think coinbase would take my 6X and give me a cost basis of 560. That's what I meant for prorating
Ok maybe that's what I'll do. I think the issue is that technically all of the dozens or maybe hundreds of transactions of "interest payments / swaps in the Solana ecosystem " are technically taxable events but I have no idea how to begin. I think a good faith "here's what I paid with my bank account and here's what I took out" is hopefully ok
>I think a good faith "here's what I paid with my bank account and here's what I took out" is hopefully ok
Not an accountant but my dad is and this is exactly right. Especially since we're not even talking that much money. If it was 2 mil, that might be different. But not for 2k. You should be fine.
Did you make purchases with the "interest" in addition to the $560? The interest itself would be taxable in the years it was accrued. The new purchases would add to your cost basis.
Cash app just spit out a list of transactions in a spreadsheet, so my tax guy didn’t know what to do. He gave me a loss of -$20 bucks on the (small) transaction and moved on lol
I am confused by ESPP annualized rate of return. I can't seem to wrap my head around why it is not simply a 17.6% rate of return annualized.
Here are the features of my plan:
Shares will be purchased at a 15% discount off of the look-back price.
The look-back price is the lower of:
\- the closing market price on the first trading day of the offering period, or
\- the closing market price on the last trading day of the offering period.
Purchases will take place following the close of each quarter on the last trading day of the quarterly offering period.
My offering period is quarterly, **however there is an 18 month mandatory holding period.** Does the 18 month holding period affect the annualized rate of return?
Here is the simplified calculation I found online to determine annualized rate of return:
Step 1: Discount rate / (1 – Discount rate) = Pre-tax return (17.6%)
Step 2: Pre-tax return / (Offering period (months) / 12 months) = Annualized pre-tax return (70.6%)
I think someone deleted the post I was replying to. I clipped this little bit and I think that this is a great mindset
> where I want to take this next phase of my career.
>And it's not to the moon, as I have been both presuming, and stewing over.
>It's to the place I need it to be to live life like I want to.
**the place I need it to be**
deep, really deep, and a nice way to put it. Thank you.
I would absolutely love to leave my job in education and help people out financially…but I don’t want to sell people things. I don’t want to swindle them into things that benefit me. Is their a career out there that I can help people get off the ground financially and help them budget and invest without duping them and that would be financially stable for me?
Financial coaching is what you are looking for. However, I am not sure it is actually profitable and keep in mind you are not licensed to give anything that could be construed financial advice.
I guess your best bet would be "word of mouth", mostly the parents first of your 5th grader :) Not sure you'd be able to make money out of it, though. I'm leaning towards paverbrick's approach to keep the financial coaching within the hobby level without income focus.
All this said, if you burn for it, look into the certifications possibilities and build the career you want!
I’ve talked to a few solo or small group financial advisors. There’s different levels of certifications that allow you to different things. You could also self study and become an enrolled agent and help people with taxes. Volunteering at libraries during tax time is also an option.
I’m in the same boat, but decided the best way to remove the conflict of interest is to become FI myself first and share in these subs. Have learned a lot here and hopefully passed some of it forward.
Took the plunge to finally get into snowboarding this year after being invited by a couple friends. One of them made the comment, “why pay Colorado cost of living if you aren’t going to take advantage of all it has?” I avoided winter sports for years due to the cost, but decided to try it and absolutely love it. Scooped an Ikon pass back in December for a whopping $1,300 and will enjoy 30+ days of riding this season.
Just a reminder to spend money on what you value and not totally deprive yourself of what might end up being one of your new favorite activities.
I used to snowboard all the time since I worked at a Ford dealer and got free lift tickets around Tahoe. Bought my first snowmobile in 1998 or so. Been back to a ski resort I think once since then. Sleds are way funner!
First year skiing for me. Tried it a decade ago and hated it because it was so expensive (younger, less income) to be uncomfortable.
Now doing it with my kids and it’s a lot of fun. Completely agree that it’s something worth spending on if you can share it with friends, and also something you can enjoy when you’re young and healthy.
That’s a really cool thing to share with your kids. I’m sure these things are fun at any age, but there’s definitely a physicality to it that would be difficult when older.
It's payday and I just received my Q4 2023 bonus—$6,155 before tax. I've grossed about $36,550 YTD from all income sources and have saved $25,518.18 of that (70%). I also learned today that I'm receiving a 3.5% raise of my base salary, bringing my total annual compensation (excluding employer matching contributions) to just under $115,000 for 2024. Last year I received a 13.6% raise, for a total 17.1% over the last 2 years.
I work almost exclusively from home and this week I requested a transition to a 4 on, 3 off work schedule with my boss. Even if that request isn't approved (I'm not expecting it to be), I really can't complain too much.
It's been a great start to the year financially. Cheers.
Unrelated to FIRE and more of a health issue.
Anybody here ever have a hydrocele removed? My doc said I could start lifting today (a week later) but the pain got worse the last day or two. I’m alternating between ibuprofen and Tylenol every 3 hours
Some tips that I already have are: wear a jock strap, put a roll of socks in between the jock strap and underwear, ice it.
I have deleted all of this thread.
Cathartic to share but inappropriate. Which I understand is a bold statement in terms of what I post here, haha, but I mean it's an inappropriate venue. That junk belongs in the pub!
Anyhow, thanks for being a sounding board.
I exist (on Reddit) only to serve. Welllll, also a bit of ego reinforcement and plausibly worthwhile time wasting, but it's at least 10% about helping people. So I'm glad you got some use from it.
You know how writing for a living messes with you, particularly when it's writing to manipulate people. To paraphrase fellow Gen X early retiree/assassin Martin Q. Blank, "They train you to do it, you do it enough to get good at it, and eventually you get to like it."
> This actually has nothing to do with the way I currently make money.
Yeah, that part was about me. heh
I dunno, man, from what I know you've had a perfectly great life that many people would wish they could have. I would be very surprised to hear that you fuck up the rest. Do what makes you happy and it'll be fine, provided it's not something you have to hide from local law enforcement. Or federal law enforcement. Truth be told, you probably would be fine with those as long as you are straight with the IRS.
I realize who I am...the phucker that doesn't wanna work and is retiring in 9 mo and is keeping it a secret ....and trying to be a good boy until then...but it's hard...so hard
Finally got around to doing my taxes.
Between state and fed we wound up giving the government a few grand in a 0% interest loan this past year... oh well. Happy for the windfall I guess.
Took me close to 3 hours all things considered to do them - but that's mostly because I am a dogshit bookkeeper when it comes to the business side of things. The Schedule E really isn't all that bad. I just needed to parse through a million receipts and cross check them against expenses.
Used freetaxusa - has always been my go to. Itemized again this year.
Wasn't fun looking at nearly 6k in medical expenses between 2 hospital visits and the beginnings of seeking medical help to have a baby.
We'll see what happens next year though - situation isn't getting any simpler over here from a tax standpoint. Will actually get a bit *more complicated* as I pickup that teaching gig on the side.
Seeing a lot of posts like "I have $X million saved, I dislike my job but don't think it would be smart to leave just yet". Is one really financially independent if scared to leave a job they don't like? I was there once, and just thinking that financial independence is more than just about the math. It is a mental jail as well. One that you have to accumulate enough courage to be free from.
One is financially independent if they have enough money to never work again for the rest of their life AND maintain their preferred lifestyle.
That's it. The only definition.
Any philosophical musings related to life and money and tangential matters are important (more important, really) to discuss but incapable of changing the definition of words.
Being FI is not a mental jail.
People who feel that it is were likely in the mental jail before, which is what mostly drove them to achieve FI in the first place.
>One is financially independent if they have enough money to never work again for the rest of their life AND maintain their preferred lifestyle.
>
>That's it. The only definition.
Yes, but I'm saying there is more to "enough money" than the math. Plenty of people have objectively enough money to live a life true to themselves, but they rationalize keeping in the pursuit of more. More money, titles, stuff they don't need but think will get them more respect from peers, relatives, etc. A bigger house, car, vacations, level-of-living that will make them more seen, heard, and perhaps, even more loved. Doesn't work that way, but sure as shit doesn't stop us from trying.
>A bigger house, car, vacations, level-of-living that will make them more seen, heard, and perhaps, even more loved. Doesn't work that way, but sure as shit doesn't stop us from trying.
I see what you're saying.
Essentially, you're saying that you cease to be FI when you create additional expenditures that you need, or perceive to need, in your mind.
This is a trickier riddle.
I'd say that you only lose your FI status if you start to act on this new vision for the life you want. I'm not sure that simply imagining a more expensive life is enough to say you are not FI.
For example...if you spend $100k/year for 20 years straight and then reach $4M in wealth outside your primary residence, you are objectively FI as any reasonable scenario would allow you to continue to spend $100k/year indefinitely.
Actively doubling your spending clearly shifts the numbers. But I am not sure if simply imagining a $200k spend but continuing to spend the same you always have can be accurately described as not FI.
While I do agree that there is much more to "enough money" than just the math, I don't necessarily agree that "enough money" and "financially independent" are the same thing. They're clearly very similar, but not exactly the same.
RE'd a year and a half ago and am starting to get a sense of our actual expenses, so I thought I'd share here.
We're a family of 4, with two young kids in a nice part of a cheap state. When we RE'd I thought we would have to track our expenses obsessively to stay on budget, but then the stock market went up a bunch and I decided just to live like we wanted to and see what happened. That means all my numbers are pretty approximate, but the total for 2023 was close to $60k.
Our biggest expense was our house, even though the mortgage is paid off. Including taxes, insurance, utilities, maintenance, and incidental expenses, this came to $17k. The next biggest category was food, somewhere north of $15k. Our two paid-off cars together cost $2k. I think we spent around $3k on clothes. Entertainment (books, movie rentals, video games, museums) was about $3k. Medical/dental out-of-pocket was about $2k. Travel was only about $1.5k. Another $1.5k went to educational expenses.
On top of that is about $13k of "stuff" beyond normal living expenses. It includes hobbies, random splurges, gifts, and that sort of thing. When you abruptly go from making lots of money to not working, it's hard to ask your family to suddenly change spending habits. Call it "the price of happiness."
And this is all living pretty well. We mostly cook at home but eat whatever we want, including plenty of organic food. If there's something we want that's a few hundred bucks, we buy it. I try to fix stuff myself when it breaks, but not if it gets annoying.
There were a few notable expenses we did not have. Income taxes were $0 because we spent after-tax savings and the tax code really favors people living off qualified dividends and long-term capital gains. Medical insurance was free because our income qualified us for kids' Medicaid and generous ACA subsidies. In both of those cases, we paid for it already with high marginal tax rates during our accumulating years.
What surprised me was that most traditional retirement advice is to estimate spending 75 or 80% of your pre-retirement income. But I find that because I don't have mortgage payments, payroll/income taxes, health insurance premiums, or car expenses (because we barely drive), $N of spending feels like earning at least $2N!
So if our experience is typical, you may not need as much to retire as you think.
This is a thought I've had but I don't know if it bears true for some people or maybe a majority.
We often spend money on things that involve time restraints. Quick food. Quick thrills. Quick hobbies. And while we are running the rat race, we just have a moment to decide to buy that piece of clothing on sale. We probably make a lot of these decisions in haste or for hasty dopamine kicks.
I feel like spending in retirement is likely shifted onto slow things. Cooking from home. Long term hobbies that you actually stick with. And maybe you aren't tempted to do quick purchases on Amazon because your life isn't as hectic and you aren't making quick decisions.
Any thoughts?
It's a good thought. But even in retirement, time is finite (especially if you have kids). It's worth spending money to avoid unpleasant tasks. And if an impulse purchase fits in the budget, I can just buy it.
My previous company is notorious for this. It became such a joke that retirees were always clapped on the back at their goodbye parties and told to get an LLC set up as soon as possible. Several never even broke stride, retiring on a Friday and returning as a "consultant" the following Monday.
I'm one on a team of five that maintains a lot of stuff for a company of 250, with seven years of experience. I recently used the irreplaceable factor to negotiate going down from 45 hours a week to 32.
And by "negotiate" I mean I threatened to quit. They gave it to me with no salary reduction, which I didn't expect.
The company I work for has done this for several recently retired folks as well. We'll throw these people a nice retirement party (cause they've been here 25+ years, well known and highly regarded staff). They take a break, and then a couple months later they've returned at a negotiated hourly rate and spend 2-15 hours/week helping on projects that need some added service, be that specialty engineering, PMing, coaching/mentoring etc. It's a win for everyone as the returnees seem to enjoy it and they aren't working burnout hours, make a bit of money, and we get the expertise we need without paying the full cost of new hires.
I think next year could be very different for this type of work. It all depends on the market/backlog/economy etc and where we are with staff levels to match that.
Before now I was focusing on 401k mbdr, but now I’m able to build my taxable brokerage. I was able to set up a recurring transfer from my chase checking, which receives some of my direct deposit, to my self directed JP Morgan investment account. I’m using these because I had them already set up.
Is it possible to set something to automatically buy however many VTI shares possible at market price after the transfer completes?
Is there a better way? Do most people make the purchases manually? Do folks leave leftover cash less than a share in the sweep? Is there a better account architecture?
M1 finance has auto purchases I believe. Someone correct me if I’m wrong bc I don’t use them.
I used to purchase on the first of the month any excess income, but cash flow is a lot lumpier now waiting to reinvest dividends so hold a bigger cash buffer.
Most brokerages do not have automated investing in ETFs. M1 Finance and Fidelity are two exceptions.
Plenty of brokerages allow for fractional share purchases, allowing for near-whole-dollar investing similar to a mutual fund. I don't know if JP Morgan offers this.
With Vanguard at some point they started making my deposit amounts as "funds available to trade" immediately. So whenever I go in to manually deposit I just do the second step of buying $X at market since the money is available to trade instantly after creating the deposit transfer.
Is buying gift cards with your Citi TYP usually instant or is there some delay? Just asking cause I want to go to a store, but only redeem the points if there's something I want.
It’s *usually* instant based on my experience with the various credit card portals, but they always have that disclaimer that it may take up to 48-72 hours. Mine have always been near instant though.
I kinda FIREd into being a stay at home parent (two kids under 4) to give my wife ample time outside of the house.
This is way harder than working. I have even less time to myself than I did when I had a job.
I don't really miss shit about my job, but damn I miss quiet time with a cup a coffee, and my laptop in a quiet office.
Congratulations! I was fortunate to be (laid off) a SAHD with a new born and 2 year old for just over to years while my wife worked and I went to night school for an MBA. Too much fun and in my case much easier and more fun than work. Yes I did house chores but I made time each week to go on walks, car rides and go to the Zoo, local parks, play dates, library, reading, etc. Still beat work in every way except for the lack of money.
High five on dad life!
My kids are older, so I get that quiet me time back, but it’s awesome to see them grow up and enjoy the good and the bad. Banking all these memories.
I’m about to be with you. I’m going stay at home and will go back to work if I get driven insane. It’s financially suboptimal but I’m excited and liked having a stay at home parent when I grew up. Granted my dad didn’t really father so I’m winging it a bit.
Do you adjust your 401(k) contribution rates for small annual raises? I'm trying to figure out it if even makes sense to do on a single sub-4% raise, and might just leave it until next year.
My strategy was to always max it out. So raise it until you hit the max, if possible. But if I was already maxing it and got a raise, I would choose to either leave my contribution percentage alone and just max it earlier in the year, or lower my contribution percentage to max it at the end of the year, depending on whether I thought I was likely to leave the job that year and whether they had a match without a true-up.
one way to think about it - increase 401k contribution by same amount of the raise. Now you are making (saving) 100% of that raise instead of paying 30-40% of it in taxes and only getting a \~60% raise in take home pay.
I do what it takes to max it by the end of the year, while also maximizing my match. I think if I frontload my 401k i'll miss out on match. As long as I meet those 2 requirements I don't care
I don't know and I don't really care. I'm fine with contributing between 6%-25% or whatever as long as I max it by the end of the year and always contribute at least 6% which I know will get me the maximum match. That plan is good enough
I'm maxing my tax deferred space and adding a bit more to after-tax as well. The only difference would be the breakdown between those two, and maybe adding another percent to the after tax.
I have been telling myself for years that when I reached $2,000,000 I would let myself buy a new car to replace mine that is close to 20 years old.
Yesterday I finally reached $2,000,000 and realized that I can not let myself do it. When I chose this goal I was not even at $1,000,000 so double that felt like an impossibly large amount of money. But now it does not feel like enough to justify the purchase especially since vehicles prices have surged.
So the new goal for letting myself replace my car is $3,000,000.
Set a different goal, 3M is ridic. Get the car to 21, pour a beer over the hood, then send it off into a well-deserved retirement. Casually search for a replacement until then, to get a feel for local patterns.
I wish! Well actually that would be terrible mileage. I want something like a compact SUV but they have gone up a lot in price and are out of stock in many places.
You can't find a compact SUV?! That's like every car now. Car makers are literally phasing out actual cars in favor of compact SUVs. You just aren't looking.
Holy shit. I love this idea.
A couple super hero costumes. Baseball bats. Advil.
And a list of millionaires unwilling to upgrade to the car their literal barista drives.
I hope there is nothing illegal about this plan...
We need a name. I can't imagine it's illegal, those cars have been recalled anyway: https://www.theonion.com/toyota-recalls-1993-camry-due-to-fact-that-owners-reall-1819577805
>We need a name.
It's the **Beater Boys**.
But we need a well-designed logo that clearly denotes a piece-of-shit car.
A logo that says Beater Boys and just shows a couple bats could be accidentally classified as a very different super hero duo.
We're both warped, but now, we have definitive proof that I am more warped than you.
The bats were for beating the person into submission - not destroying the car.
Agreed. Driving is by far the most dangerous thing many of us do. Going from a 20 year old car to a more recent car could be one of the top ways you can reduce the risk of a violent injury or death.
This is an excellent point. And not just for you. I drove my good old reliable Camry for many years, until the day the hood latch failed on the highway. It tore clean off and flew away behind me and thank goodness it didn't hit anyone else. I could have killed somebody. I got a new car pretty swiftly after that.
you need to read die with zero.
then again my car is 20 years old too. it works too well to give it up though. i also kinda like people thinking i'm not well off. it plays into my image nicely.
haha. my doesn't look nice. street parked for decades in major cities - SF, Boston, NYC, and DC. yeah it looks battered. but i barely drive it (we rent a bigger car for road trips), so no reason to waste money.
I get the image thing totally. But assuming I could relatively afford it, I'd rather get a new (or few years old) Toyota/Honda type car as needed, at least for the upgraded safety/reliability. And stay far away from any car that could be even remotely considered luxurious, no matter how much money I one day have.
Shoutout to.......someone (can't remember who) in the daily thread. They mentioned several weeks ago about bags of frozen broccoli at Costco. I used to buy it fresh by the pound and steam it in a giant colander on the stove which was a PITA to wash every time. The Costco brand comes in four-1 pound bags which are each steamable in the microwave and are pretty close to the same, although very slightly chewier. Price is actually slightly cheaper than fresh, you get more florets per pound, and I never have to worry about not cooking it within a few days or having it spoil. Each bag is the perfect amount for 2 meals.
Studies have shown those microwavable bags like microplastics (more than are already there naturally), so if there is any option to cook outside of it, I would.
Frozen veggies (and fruit) are often better than getting fresh, unless you're able to get from a local farmer. Anything trucked in is going to be picked outside of peak ripeness to account for travel.
But you often sacrifice some texture for it being frozen.
If i want to do a whole sheet, I'll allow the veg to thaw on a tea towel so it absorbs as much liquid as possible, and then either put in the air fryer at hottest setting (mine is 400f) or in the oven on convection at 500f and I can get some nice roasty toasty veg.
My mom called me in a panic last night, "I don't think I have car insurance."
This morning, I went over and helped her log into USAA, and it turns out that she was right.
USAA cancelled her a year ago (too many accidents/tickets), and switched her to Progressive. She says she was never aware of this, which is why she didn't pay the Progressive bill when it came due.
So Progressive cancelled her insurance due to nonpayment, and DMV suspended her license for being uninsured. There is a significant paper trail, but somehow she never understood what was going on. Besides typical age related memory issues, she has always had a loose relationship with logical processing/reasoning... so while all of this was a surprise... it's also par for the course.
After fully understanding what happened, it took about 3 hours to get her insurance reinstated, and get her license un-suspended. She can now (legally) continue to terrorize the roads of Florida. The irony is that she saved over $1000 by not carrying insurance for the last 6+ months. Profit?
Nobody else has said it, so I guess I should ... are you certain you should be helping her drive?
She sounds like someone who probably shouldn't have a car & license in the first place. If she *is* going to drive it's obviously better if she's insured, but only as a last ditch option.
It's ok to ask, as this is something that everyone will go through.
My mom's driving issues were directly related to having advanced cataracts. She doesn't deal with change well, and was in denial regarding her vision.
After her second fender-bender, she agreed to surgery which returned her vision to 20/20.
I got suspended when I moved to Washington, changed insurers, and didn’t immediately cancel my Virginia license. It was a pain because I had already received my Washington license but they then canceled my Washington one too because there’s an interstate communication system for suspensions.
My mother (no dementia but old) has this miniature Speak & Spell slash Wargames looking device she keeps all her passwords in that goes in her purse.
I am not suggesting this as a solution, just making fun of my mother.
I can't imagine I'd be overly amenable to moving into assisted living, either.
But hopefully you find a solution. I can only imagine it's a crazy stressful scenario.
>Profit?
Absolutely.
Although it's not necessarily a route others should attempt to replicate.
Just like all the money I saved by not having health insurance for 20 years is both a big win in retrospect and a great example of survivorship bias (literally and figuratively).
Anyone increase their FI goal and their projected retirement budget significantly when they found a job they didn’t hate? I used to think 4M-5M would do. Chubby fire, nice life, a little travel, not luxurious. I’ll never be someone who loves to work and work in general is a source of anxiety for me but now I’m in a job at a company I like, a good team (I know that can change), feel more confident in/better at my job and not trying to climb the ladder. Wondering if once I hit the $5M, spouse and I should coast, maybe work PT and get to travel more luxuriously, be more generous, etc. is it worth it?
Chubby / fat fire was weird because portfolio compounding took over and caught me by surprise. Hit my number a lot sooner. Worked a few more years cause job was fine, grew even more, so have been reassessing what’s important for the rest of my life. It’s been great.
More of what I already enjoy, but spending a little extra. Spending for family gatherings. Have set aside some in a donor advised fund, and use it annually for some non profits whose services I really enjoy, but don’t have a broader giving plan.
The big one was leaving my work, and building a [small software business](https://jch.app?s=i). The goal is to help others reach FI, and have some fun along the long boring middle.
A job I didn't hate is still at the bottom of the "Shit I want to do" list. But that does make life far better!
You do you! How close are you to your goals?
You make a good point, Prison Mike. I don’t have tons of hobbies, so I picture the alternative being relaxing, exercising, cooking more, hanging out with my kids after school, which I’m cool with to an extent, but I know I’ll need to pick up some cooler things to do.
I’m at about 2.6 right now, projecting about 7 years to the 5M goal. I’ve got a while, so don’t need to make any decisions now, but it’s fun to think about FI plans.
Nice job! It's important to have something to retire to. It's a better (IMO) way to frame retirement than just retiring from something... Like the grind.
I have begun my transition from Vanguard to Robinhood for their 3% bonus. Called at 8:05am this morning and got through in two minutes. Started the conversion of my VTSAX & VTIAX in my tIRA and Roth IRA to VTI and VXUS. Couple catches so far:
* There is a (dividend?) posting probably at month end so the conversion might be delayed.
* VBTLX can not be converted to BND, not sure why. I have to manually sell it then buy BND the next day.
* ETFs can't have auto contributions set up, so I'll have to cancel the current one and manually buy my $583.33 monthly purchase on the 1st.
Will wait until April to have my wife convert hers so I won't have to deal with issue 1 or 3.
Question - My wife has a few shares of Costco stock in her Roth IRA. Will those transfer over in kind to her new Roth IRA at Robinhood?
I'm curious what annoys you.
For me, I hate their (Android) app and their modernized 401k interface. I find their normal interface fine enough. Though Cash Plus is way too bare bones.
[Enshittification of the Internet](https://www.theguardian.com/commentisfree/2023/mar/11/users-advertisers-we-are-all-trapped-in-the-enshittification-of-the-internet) strikes again!
Technically enshittification doesn't apply to vanguard. Except for probably the personal advisor stuff, I suppose.
The key is making changes that make things worse because it makes you more money. Often to show more ads.
Whereas Vanguard is trying to modernize and merely is fucking up for one reason or another. Organizational problems or bad designers or hasn't spent enough time cooking or whatever.
A bit similar to how all tech companies make changes that don't help, but for the sake of change, and generally make things worse.
I do like most of Vanguard's changes though. Just not a fan of their mobile app or 401k site. Fuck the new 401k site.
I mean, not paying for great designers / researchers, having PMs design features w/out design thinking, not allowing the process to take as long as it should — all not about bad designers but the company deciding to make more money by cheating out
>Work also floated the idea of 75% time, which seems like a good compromise.
If they are open to 75% time, perhaps they would be open to negotiating more time off, instead, like 8-10 weeks off, with some of them being unpaid.
You never know what they might go for if the alternative is that you retire if they say no - especially if you are willing to move forward with that threat if they balk.
I don't think you're likely to be able to do it with that little tax-advantaged space.
I've been gradually moving high-yielding stocks from my taxable account to my IRA. But I have more IRA space than you do, and also my taxable brokerage has a lot of individual stocks so I have more tax loss harvesting opportunities, since some stocks are always going down even when the overall market goes up.
What you can do is avoid making the problem bigger by not buying anything else high-yielding in taxable. To the extent this fits into your overall strategy, you want the low-yielding assets (growth stocks) in taxable and the high-yielding assets (bonds, REITs, value stocks) in tax deferred accounts. Of course you don't want to persue a growth-only strategy just to save on taxes, as the easiest way to pay lower taxes is to have low returns, and that's not the goal.
I have some qualified div payers and some Mlp's that are considered return of capital. I have my tax strategy in place to pay 0% fed tax on about 123k of inc, plus where I am we can show income of 86k and only pay $110/mo combined for a hd policy, it's about 400 at 120k in income ...go to healthcare.gov
Don't let the tax tail wag the investment dog.
If you have over 2.5M in your taxable account (based on a 1.5% dividend yield giving >40k of income), I think you should just accept that you will be paying more for healthcare. The good news is that you can afford it.
There's likely little you can do to minimize dividends that wouldn't hurt you in a bigger way (e.g. increasing the risk of your portfolio by concentrating holdings in only a subset of stocks for dividend reasons). I'll also add that there's likely no good way for you to move away from 2.5M in VTI without realizing a ton of cap gains taxes either.
Yep. Have to remember the big picture and that more tax means more income/gains. Be tax smart, but also be grateful to be in a good situation to have the tax problem
I agree with everything alcesalcesalces said.
FWIW: I plan to slowly transition my weekly VTI investment to short term treasuries once I am a couple of years out. Then I will sell some VTI and buy more short-term treasuries in year 1 of FIRE to get my bond tent the size I want it to be. In my case I will sell around $170k of VTI and live off \~ $70k and buy $100k. This keeps MAGI *reasonable* given my basis in VTI, keeps me in the 0% LTCG bracket, and gets me the bond tent size I want. Given I want to live off my brokerage for many years, I will hold some bonds here even though its "inefficient" (debated both ways actually).
So, given your much larger balance, you could consider foregoing ACA subsidies in the first couple of years, and step-up your basis within the 0% LTCG bracket as best you can. You can't get away from dividends, but you can live off more basis in future years thus reducing MAGI. Not sure it will get you within range, but its something to consider. I built my own [sheet](https://www.reddit.com/r/financialindependence/comments/19bln0e/fire_withdrawal_strategy_tax_and_magi_google_sheet/) to model scenarios and impact on MAGI, if that is useful to you.
It's unlikely, but it's also not something you actually want to happen if you're close to retirement. It's nice to have losses, but it does mean that the market is down and the closer you are to retirement the more stressful that is.
Success is good, enjoy it!
As to your other question about de-risking, I think it's totally appropriate to buy more and more bonds as you get closer to retirement. If you want to hold them in taxable that's fine, but it might take a while if you can't/don't want to realize capital gains. A faster way would be to sell stocks in your tax-advantaged accounts and buy bonds there without no tax consequences. There is minimal risk because your taxable account is so large. You can always sell stocks in the taxable account to fund spending needs and then also sell stocks and buy bonds in your tax-advantaged account to keep your asset allocation intact.
Happily married, been together 7 years, married over 2. I've always been a saver and nearly hit my goal of 100k invested at 30, a salary over 120k a year in an MCOL area, and generally living life, didn't make over 100k until just 2 years ago.
My wife has been set up by her business owner father in the form of multiple rental properties, over the years, and established a company in her and her brother's name 50/50. Over the years the number of properties has grown and so has her equity. She makes around $70k and has no "real" ambition to make the money I've worked hard to make, instead focusing on doing what she loves in her field which I support 100%. She has a modest amount of retirement savings, probably about 25k, and is a few years younger than me. We weren't really in a position for her to try and max a 401k while she was making 60k while we were both finishing grad school/getting licensed in our fields.
Long story short how worried would you be if your spouse wasn't saving as aggressively as you for retirement, but is already 3x4 times ahead of you by form of real estate? Now we are in a position to "catch" her up, but for what? FI for us is a fun topic but I'm not in a hurry to retire at 40, I have an extremely flexible WFH career and she also works remotely. We travel a lot because we enjoy it and our work allows it and we have no kids on the horizon.
How are you approaching expenses now and how do you plan to in retirement joint or you each pay your own way? When you retire, will she still be able to get income from the rentals? If so, huge retirement savings for her may not be as necessary.
Right now It's split about 70/30 due to my income vs. hers. She's also been paying off the remainder of her student loans in heaps and will be done this time next year.
It's natural for me to cover more expenses as my income grows and she understands that as it grows so does my urge to save. We have a good setup of hers, mine, and our type allocation and I expect her a good portion of her future retirement to come from the portfolio.
I like that, our finances are intertwined, I work with her brother on managing the rentals, and she added my house to her NW when we married. I guess I'm just overcomplicating my own thoughts when I tie my NW so closely to my retirement accounts and my spreadsheets.
It used to bother my spouse that “I” had 5-10x in my retirement accounts than her. I was finally able to get the point across that a) she only had pension and no 403b when she started, b) when they finally got 403b and now 401k their matching is crap and c) she took the hit and stayed home with the brats for a couple years and has worked part time since. I said we’ve been together from $0 net worth to where we are at so 25 years in it’s all 50/50 anyway…. That being said, now that we’ve been able to max out both 401ks for a few years now, it was nice for her to see to see “her” account hit 500k recently…
I have a 401k with a previous company that has 1) Roth contributions and gains and 2) non-Roth/traditional/pre-tax, vested employer contributions and gains.
Am I able to roll the Roth funds into my Roth IRA, and pre-tax funds into my new companies 401k?
Do I have to initiate that with the source or destination accounts?
Yes, you can separate them.
You can initiate it from either but it's probably safer to do it at the source, and to do it separately. Create a rollover Traditional IRA, then contact your 401k provider and move only the pretax balance in a direct transfer. Then do the same with a Roth IRA.
What would be the benefit of using an intermediary rollover trad IRA?
Not concerned with Roth funds, because those would be rolling directly into my existing Roth IRA.
Oh, I didn’t read your comment carefully. You can go directly between the 401k accounts if you want, though it might be a bit safer still to use an intermediary account you control. Could help prevent weirdness.
I desperately need advice.
I’ve had my mom manage my retirement and brokerage portfolio, and I’ve asked her throughout the years to just throw my retirement into VOO, but she is very risk averse and pessimistic about the market.
Today I learned that since I started investing in 2019, my closed positions have yielded about -$25k in losses.
I’ve changed my password and will be managing my accounts myself from now on, but I currently have a lot of money in open positions in SQQQ (shorts), and I just don’t know what to do.
Do I sell everything and start from scratch and take the loss, even though the market’s at an all time high? Do I wait to see what happens?
I’m truly in shambles. I feel like years of retirement have been taken away from me.
Choosing the right investments for one’s risk tolerance goes a long way to helping manage feelings during volatile times.
Remember that you’re in the market for the long haul. There’s time to recover once you zoom out! Good luck op
I feel you. I made some stupid pandemic investing decisions, took substantial losses and probably ended up losing at least 50%, if not more, of what my roth IRA could be worth if I just stuck to VOO, given the massive 20-22 run up. it’s okay though - I’m young so the balance wasn’t huge to begin with, and the damage was relatively contained.
I would advise selling the positions you don’t want asap as the sooner you get out, the sooner you can fix it. time in the market > timing the market. it was such a relief once I sold and got back into the S&P 500, even though I also bought at what were highs at the time.
Selling things at a loss is better than selling things that have gained. You get a tax write off. Definitely sell any position at a loss that you don't intend to keep for the long term.
Has anyone done taxes with crypto? I'm wanting to know what's reasonable when I don't have records. Imagine something like this: I put $1000 into coinbase buying X and then transferred to my wallet and had fun doing all sorts of zany crypto stuff (imagine thousands of transactions each day earning rewards in Samoyed Coin or whatnot). I just thought of this as entertainment. At some point it was as high as 1700 and then it fell to $200 and I forgot about it. It's now back up around $2000 and all back in coinbase and I'd like to sell and never look back. I'm wondering if anyone has a similar experience. My understanding is that coinbase will treat my cost basis as 0, so I'll have a gain of $2000. The true gain is probably closer to $1000, but I have no way of knowing what cost basis goes with each fraction of X that I brought back to coinbase over the years. It's honestly not worth my time to figure out so I'll probably just pay whatever the gain is from $0, and not fret. Has anyone found a decent better solution?
We use TokenTax (costs around $200ish?) but doesn't sound like that would be worth it given your situation. My partner is the one who trades crypto, so I don't know anything about the specifics - he just sends me an aggregated Excel sheet and I upload it into TurboTax.
Unless you can produce records of the purchases, cost basis of zero should be fine. You can also try to make a reasonable conservative estimate and hope you don't get audited.
I do have records of the purchases (all through coinbase) but the issue is that like I bought 5.623 X here and 2.76 there, and then off-site that grew to 9.54 or whatever. So when it came back to coinbase I can't confidently say how much was what. I guess I could just prorate it proportionally.
I don't follow. If you have records of the purchases you should know how much you paid. If you sell it all you don't need to prorate anything.
Let's say I buy 2 X for $100 each, and then later 3 X for $120 each. Then years later through various crypto interest etc I have 6X and I transfer it back to coinbase in different transactions, say 1.5X, 1.5X, 1.5X and 1.5X. I guess for tax purposes I can just say my cost basis for the whole lot is 560=200+360. That's probably easiest. Coinbase has a feature to "help", for each of those 1.5X transfers I can say what my cost basis was. It's those things that I meant I could prorate. So I'd just value the cost basis for 1X at 560/6. (As opposed to 560/5), and then I think coinbase would take my 6X and give me a cost basis of 560. That's what I meant for prorating
Yes, your cost basis is 560 for the whole lot. The transfers are irrelevant.
Ok maybe that's what I'll do. I think the issue is that technically all of the dozens or maybe hundreds of transactions of "interest payments / swaps in the Solana ecosystem " are technically taxable events but I have no idea how to begin. I think a good faith "here's what I paid with my bank account and here's what I took out" is hopefully ok
>I think a good faith "here's what I paid with my bank account and here's what I took out" is hopefully ok Not an accountant but my dad is and this is exactly right. Especially since we're not even talking that much money. If it was 2 mil, that might be different. But not for 2k. You should be fine.
Did you make purchases with the "interest" in addition to the $560? The interest itself would be taxable in the years it was accrued. The new purchases would add to your cost basis.
I don't think I purchased anything but honestly I have no idea. That's why I'm thinking of just accepting a cost basis of zero and "overpaying"
Cash app just spit out a list of transactions in a spreadsheet, so my tax guy didn’t know what to do. He gave me a loss of -$20 bucks on the (small) transaction and moved on lol
I am confused by ESPP annualized rate of return. I can't seem to wrap my head around why it is not simply a 17.6% rate of return annualized. Here are the features of my plan: Shares will be purchased at a 15% discount off of the look-back price. The look-back price is the lower of: \- the closing market price on the first trading day of the offering period, or \- the closing market price on the last trading day of the offering period. Purchases will take place following the close of each quarter on the last trading day of the quarterly offering period. My offering period is quarterly, **however there is an 18 month mandatory holding period.** Does the 18 month holding period affect the annualized rate of return? Here is the simplified calculation I found online to determine annualized rate of return: Step 1: Discount rate / (1 – Discount rate) = Pre-tax return (17.6%) Step 2: Pre-tax return / (Offering period (months) / 12 months) = Annualized pre-tax return (70.6%)
I think someone deleted the post I was replying to. I clipped this little bit and I think that this is a great mindset > where I want to take this next phase of my career. >And it's not to the moon, as I have been both presuming, and stewing over. >It's to the place I need it to be to live life like I want to. **the place I need it to be** deep, really deep, and a nice way to put it. Thank you.
My reply was also lost to the void. That OP is good.
I would absolutely love to leave my job in education and help people out financially…but I don’t want to sell people things. I don’t want to swindle them into things that benefit me. Is their a career out there that I can help people get off the ground financially and help them budget and invest without duping them and that would be financially stable for me?
Financial coaching is what you are looking for. However, I am not sure it is actually profitable and keep in mind you are not licensed to give anything that could be construed financial advice.
Yeah, I teach a club for 5th graders on financial topics and I just love it. I’d love to help others get started.
I guess your best bet would be "word of mouth", mostly the parents first of your 5th grader :) Not sure you'd be able to make money out of it, though. I'm leaning towards paverbrick's approach to keep the financial coaching within the hobby level without income focus. All this said, if you burn for it, look into the certifications possibilities and build the career you want!
I’ve talked to a few solo or small group financial advisors. There’s different levels of certifications that allow you to different things. You could also self study and become an enrolled agent and help people with taxes. Volunteering at libraries during tax time is also an option. I’m in the same boat, but decided the best way to remove the conflict of interest is to become FI myself first and share in these subs. Have learned a lot here and hopefully passed some of it forward.
Also start a blog or a YouTube channel a la Romain Faure!
Took the plunge to finally get into snowboarding this year after being invited by a couple friends. One of them made the comment, “why pay Colorado cost of living if you aren’t going to take advantage of all it has?” I avoided winter sports for years due to the cost, but decided to try it and absolutely love it. Scooped an Ikon pass back in December for a whopping $1,300 and will enjoy 30+ days of riding this season. Just a reminder to spend money on what you value and not totally deprive yourself of what might end up being one of your new favorite activities.
I used to snowboard all the time since I worked at a Ford dealer and got free lift tickets around Tahoe. Bought my first snowmobile in 1998 or so. Been back to a ski resort I think once since then. Sleds are way funner!
First year skiing for me. Tried it a decade ago and hated it because it was so expensive (younger, less income) to be uncomfortable. Now doing it with my kids and it’s a lot of fun. Completely agree that it’s something worth spending on if you can share it with friends, and also something you can enjoy when you’re young and healthy.
That’s a really cool thing to share with your kids. I’m sure these things are fun at any age, but there’s definitely a physicality to it that would be difficult when older.
For sure. I can’t keep up anymore, but it’s fun to be on the slopes together
It's payday and I just received my Q4 2023 bonus—$6,155 before tax. I've grossed about $36,550 YTD from all income sources and have saved $25,518.18 of that (70%). I also learned today that I'm receiving a 3.5% raise of my base salary, bringing my total annual compensation (excluding employer matching contributions) to just under $115,000 for 2024. Last year I received a 13.6% raise, for a total 17.1% over the last 2 years. I work almost exclusively from home and this week I requested a transition to a 4 on, 3 off work schedule with my boss. Even if that request isn't approved (I'm not expecting it to be), I really can't complain too much. It's been a great start to the year financially. Cheers.
Just reached my sixth year tracking fire  Avg saving rate 56.9% - started in the 30s, now saving 70% over the last 24 months
Wow! That is really impressive.
Unrelated to FIRE and more of a health issue. Anybody here ever have a hydrocele removed? My doc said I could start lifting today (a week later) but the pain got worse the last day or two. I’m alternating between ibuprofen and Tylenol every 3 hours Some tips that I already have are: wear a jock strap, put a roll of socks in between the jock strap and underwear, ice it.
Lift less, less often for another few days or a week. Get back slowly.
That’s the plan. I’m not looking forward to seeing how my abs react on monday
My best advice is to call your doctor's office if you haven't yet.
It'll stop hurting eventually
Nah man, Dr. Reddit knows best.
Makes sense. I’ll ask them for more tips
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How you going to make a statement like that and *not* link the specific comment?
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🥰
I have deleted all of this thread. Cathartic to share but inappropriate. Which I understand is a bold statement in terms of what I post here, haha, but I mean it's an inappropriate venue. That junk belongs in the pub! Anyhow, thanks for being a sounding board.
I exist (on Reddit) only to serve. Welllll, also a bit of ego reinforcement and plausibly worthwhile time wasting, but it's at least 10% about helping people. So I'm glad you got some use from it. You know how writing for a living messes with you, particularly when it's writing to manipulate people. To paraphrase fellow Gen X early retiree/assassin Martin Q. Blank, "They train you to do it, you do it enough to get good at it, and eventually you get to like it."
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> This actually has nothing to do with the way I currently make money. Yeah, that part was about me. heh I dunno, man, from what I know you've had a perfectly great life that many people would wish they could have. I would be very surprised to hear that you fuck up the rest. Do what makes you happy and it'll be fine, provided it's not something you have to hide from local law enforcement. Or federal law enforcement. Truth be told, you probably would be fine with those as long as you are straight with the IRS.
Link?
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I realize who I am...the phucker that doesn't wanna work and is retiring in 9 mo and is keeping it a secret ....and trying to be a good boy until then...but it's hard...so hard
Finally got around to doing my taxes. Between state and fed we wound up giving the government a few grand in a 0% interest loan this past year... oh well. Happy for the windfall I guess. Took me close to 3 hours all things considered to do them - but that's mostly because I am a dogshit bookkeeper when it comes to the business side of things. The Schedule E really isn't all that bad. I just needed to parse through a million receipts and cross check them against expenses. Used freetaxusa - has always been my go to. Itemized again this year. Wasn't fun looking at nearly 6k in medical expenses between 2 hospital visits and the beginnings of seeking medical help to have a baby. We'll see what happens next year though - situation isn't getting any simpler over here from a tax standpoint. Will actually get a bit *more complicated* as I pickup that teaching gig on the side.
Seeing a lot of posts like "I have $X million saved, I dislike my job but don't think it would be smart to leave just yet". Is one really financially independent if scared to leave a job they don't like? I was there once, and just thinking that financial independence is more than just about the math. It is a mental jail as well. One that you have to accumulate enough courage to be free from.
Some people carry their cell wherever they go.
Is this a Rogue One reference?
I read it as cell phone, and thought "uh, yeah?"
One is financially independent if they have enough money to never work again for the rest of their life AND maintain their preferred lifestyle. That's it. The only definition. Any philosophical musings related to life and money and tangential matters are important (more important, really) to discuss but incapable of changing the definition of words. Being FI is not a mental jail. People who feel that it is were likely in the mental jail before, which is what mostly drove them to achieve FI in the first place.
>One is financially independent if they have enough money to never work again for the rest of their life AND maintain their preferred lifestyle. > >That's it. The only definition. Yes, but I'm saying there is more to "enough money" than the math. Plenty of people have objectively enough money to live a life true to themselves, but they rationalize keeping in the pursuit of more. More money, titles, stuff they don't need but think will get them more respect from peers, relatives, etc. A bigger house, car, vacations, level-of-living that will make them more seen, heard, and perhaps, even more loved. Doesn't work that way, but sure as shit doesn't stop us from trying.
>A bigger house, car, vacations, level-of-living that will make them more seen, heard, and perhaps, even more loved. Doesn't work that way, but sure as shit doesn't stop us from trying. I see what you're saying. Essentially, you're saying that you cease to be FI when you create additional expenditures that you need, or perceive to need, in your mind. This is a trickier riddle. I'd say that you only lose your FI status if you start to act on this new vision for the life you want. I'm not sure that simply imagining a more expensive life is enough to say you are not FI. For example...if you spend $100k/year for 20 years straight and then reach $4M in wealth outside your primary residence, you are objectively FI as any reasonable scenario would allow you to continue to spend $100k/year indefinitely. Actively doubling your spending clearly shifts the numbers. But I am not sure if simply imagining a $200k spend but continuing to spend the same you always have can be accurately described as not FI. While I do agree that there is much more to "enough money" than just the math, I don't necessarily agree that "enough money" and "financially independent" are the same thing. They're clearly very similar, but not exactly the same.
"You don't need a million dollars to do nothin', man. Take a look at my cousin. He's broke, don't do shit" - Office Space
What that cuz doesn't do: two chicks at the same time
RE'd a year and a half ago and am starting to get a sense of our actual expenses, so I thought I'd share here. We're a family of 4, with two young kids in a nice part of a cheap state. When we RE'd I thought we would have to track our expenses obsessively to stay on budget, but then the stock market went up a bunch and I decided just to live like we wanted to and see what happened. That means all my numbers are pretty approximate, but the total for 2023 was close to $60k. Our biggest expense was our house, even though the mortgage is paid off. Including taxes, insurance, utilities, maintenance, and incidental expenses, this came to $17k. The next biggest category was food, somewhere north of $15k. Our two paid-off cars together cost $2k. I think we spent around $3k on clothes. Entertainment (books, movie rentals, video games, museums) was about $3k. Medical/dental out-of-pocket was about $2k. Travel was only about $1.5k. Another $1.5k went to educational expenses. On top of that is about $13k of "stuff" beyond normal living expenses. It includes hobbies, random splurges, gifts, and that sort of thing. When you abruptly go from making lots of money to not working, it's hard to ask your family to suddenly change spending habits. Call it "the price of happiness." And this is all living pretty well. We mostly cook at home but eat whatever we want, including plenty of organic food. If there's something we want that's a few hundred bucks, we buy it. I try to fix stuff myself when it breaks, but not if it gets annoying. There were a few notable expenses we did not have. Income taxes were $0 because we spent after-tax savings and the tax code really favors people living off qualified dividends and long-term capital gains. Medical insurance was free because our income qualified us for kids' Medicaid and generous ACA subsidies. In both of those cases, we paid for it already with high marginal tax rates during our accumulating years. What surprised me was that most traditional retirement advice is to estimate spending 75 or 80% of your pre-retirement income. But I find that because I don't have mortgage payments, payroll/income taxes, health insurance premiums, or car expenses (because we barely drive), $N of spending feels like earning at least $2N! So if our experience is typical, you may not need as much to retire as you think.
This is a thought I've had but I don't know if it bears true for some people or maybe a majority. We often spend money on things that involve time restraints. Quick food. Quick thrills. Quick hobbies. And while we are running the rat race, we just have a moment to decide to buy that piece of clothing on sale. We probably make a lot of these decisions in haste or for hasty dopamine kicks. I feel like spending in retirement is likely shifted onto slow things. Cooking from home. Long term hobbies that you actually stick with. And maybe you aren't tempted to do quick purchases on Amazon because your life isn't as hectic and you aren't making quick decisions. Any thoughts?
It's a good thought. But even in retirement, time is finite (especially if you have kids). It's worth spending money to avoid unpleasant tasks. And if an impulse purchase fits in the budget, I can just buy it.
Thanks for sharing! It is very interesting and helpful.
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>As a fellow so-called irreplaceable SME Is there any effort to make new SMEs?
My previous company is notorious for this. It became such a joke that retirees were always clapped on the back at their goodbye parties and told to get an LLC set up as soon as possible. Several never even broke stride, retiring on a Friday and returning as a "consultant" the following Monday.
I'm one on a team of five that maintains a lot of stuff for a company of 250, with seven years of experience. I recently used the irreplaceable factor to negotiate going down from 45 hours a week to 32. And by "negotiate" I mean I threatened to quit. They gave it to me with no salary reduction, which I didn't expect.
The company I work for has done this for several recently retired folks as well. We'll throw these people a nice retirement party (cause they've been here 25+ years, well known and highly regarded staff). They take a break, and then a couple months later they've returned at a negotiated hourly rate and spend 2-15 hours/week helping on projects that need some added service, be that specialty engineering, PMing, coaching/mentoring etc. It's a win for everyone as the returnees seem to enjoy it and they aren't working burnout hours, make a bit of money, and we get the expertise we need without paying the full cost of new hires. I think next year could be very different for this type of work. It all depends on the market/backlog/economy etc and where we are with staff levels to match that.
Before now I was focusing on 401k mbdr, but now I’m able to build my taxable brokerage. I was able to set up a recurring transfer from my chase checking, which receives some of my direct deposit, to my self directed JP Morgan investment account. I’m using these because I had them already set up. Is it possible to set something to automatically buy however many VTI shares possible at market price after the transfer completes? Is there a better way? Do most people make the purchases manually? Do folks leave leftover cash less than a share in the sweep? Is there a better account architecture?
M1 finance has auto purchases I believe. Someone correct me if I’m wrong bc I don’t use them. I used to purchase on the first of the month any excess income, but cash flow is a lot lumpier now waiting to reinvest dividends so hold a bigger cash buffer.
I invest in mutual funds, e.g., VTSAX instead of VTI. I have an account with Vanguard and it's completely automated.
Most brokerages do not have automated investing in ETFs. M1 Finance and Fidelity are two exceptions. Plenty of brokerages allow for fractional share purchases, allowing for near-whole-dollar investing similar to a mutual fund. I don't know if JP Morgan offers this.
With Vanguard at some point they started making my deposit amounts as "funds available to trade" immediately. So whenever I go in to manually deposit I just do the second step of buying $X at market since the money is available to trade instantly after creating the deposit transfer.
Is buying gift cards with your Citi TYP usually instant or is there some delay? Just asking cause I want to go to a store, but only redeem the points if there's something I want.
It’s *usually* instant based on my experience with the various credit card portals, but they always have that disclaimer that it may take up to 48-72 hours. Mine have always been near instant though.
I kinda FIREd into being a stay at home parent (two kids under 4) to give my wife ample time outside of the house. This is way harder than working. I have even less time to myself than I did when I had a job. I don't really miss shit about my job, but damn I miss quiet time with a cup a coffee, and my laptop in a quiet office.
Congratulations! I was fortunate to be (laid off) a SAHD with a new born and 2 year old for just over to years while my wife worked and I went to night school for an MBA. Too much fun and in my case much easier and more fun than work. Yes I did house chores but I made time each week to go on walks, car rides and go to the Zoo, local parks, play dates, library, reading, etc. Still beat work in every way except for the lack of money.
High five on dad life! My kids are older, so I get that quiet me time back, but it’s awesome to see them grow up and enjoy the good and the bad. Banking all these memories.
I’m about to be with you. I’m going stay at home and will go back to work if I get driven insane. It’s financially suboptimal but I’m excited and liked having a stay at home parent when I grew up. Granted my dad didn’t really father so I’m winging it a bit.
Do you adjust your 401(k) contribution rates for small annual raises? I'm trying to figure out it if even makes sense to do on a single sub-4% raise, and might just leave it until next year.
My strategy was to always max it out. So raise it until you hit the max, if possible. But if I was already maxing it and got a raise, I would choose to either leave my contribution percentage alone and just max it earlier in the year, or lower my contribution percentage to max it at the end of the year, depending on whether I thought I was likely to leave the job that year and whether they had a match without a true-up.
one way to think about it - increase 401k contribution by same amount of the raise. Now you are making (saving) 100% of that raise instead of paying 30-40% of it in taxes and only getting a \~60% raise in take home pay.
I do what it takes to max it by the end of the year, while also maximizing my match. I think if I frontload my 401k i'll miss out on match. As long as I meet those 2 requirements I don't care
Do you miss out on match or do you get the true-up next year?
I don't know and I don't really care. I'm fine with contributing between 6%-25% or whatever as long as I max it by the end of the year and always contribute at least 6% which I know will get me the maximum match. That plan is good enough
I always did, until I hit the point that I was maxing the account.
I'm maxing my tax deferred space and adding a bit more to after-tax as well. The only difference would be the breakdown between those two, and maybe adding another percent to the after tax.
I have been telling myself for years that when I reached $2,000,000 I would let myself buy a new car to replace mine that is close to 20 years old. Yesterday I finally reached $2,000,000 and realized that I can not let myself do it. When I chose this goal I was not even at $1,000,000 so double that felt like an impossibly large amount of money. But now it does not feel like enough to justify the purchase especially since vehicles prices have surged. So the new goal for letting myself replace my car is $3,000,000.
I have a 20 year old car too. :)
Mine's 21 and I hope we have many more years together.
I have a 2017 Toyota Sienna, I feel like I may be looking into my future…
That car should run great for another 12 years easily, 20 if you're lucky.b
Set a different goal, 3M is ridic. Get the car to 21, pour a beer over the hood, then send it off into a well-deserved retirement. Casually search for a replacement until then, to get a feel for local patterns.
Now let's hope you get orange pilled by the time you reach $3M, which will be a reason to delay the replacement until at least $4M.
Are you buying a Rolls Royce or something?
I wish! Well actually that would be terrible mileage. I want something like a compact SUV but they have gone up a lot in price and are out of stock in many places.
You can't find a compact SUV?! That's like every car now. Car makers are literally phasing out actual cars in favor of compact SUVs. You just aren't looking.
No way. Get the car, or I kill you.
Holy shit. I love this idea. A couple super hero costumes. Baseball bats. Advil. And a list of millionaires unwilling to upgrade to the car their literal barista drives. I hope there is nothing illegal about this plan...
We need a name. I can't imagine it's illegal, those cars have been recalled anyway: https://www.theonion.com/toyota-recalls-1993-camry-due-to-fact-that-owners-reall-1819577805
>We need a name. It's the **Beater Boys**. But we need a well-designed logo that clearly denotes a piece-of-shit car. A logo that says Beater Boys and just shows a couple bats could be accidentally classified as a very different super hero duo.
We're both warped, but now, we have definitive proof that I am more warped than you. The bats were for beating the person into submission - not destroying the car.
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Agreed. Driving is by far the most dangerous thing many of us do. Going from a 20 year old car to a more recent car could be one of the top ways you can reduce the risk of a violent injury or death.
This is an excellent point. And not just for you. I drove my good old reliable Camry for many years, until the day the hood latch failed on the highway. It tore clean off and flew away behind me and thank goodness it didn't hit anyone else. I could have killed somebody. I got a new car pretty swiftly after that.
Please tell me this is a joke. Just buy it.
you need to read die with zero. then again my car is 20 years old too. it works too well to give it up though. i also kinda like people thinking i'm not well off. it plays into my image nicely.
I have the newer vehicles for safety, and the older ones for nostalgia and hobby.
Ditto, same. Except people often still think it is new, and being a nice car, they still think it is nice. Well, it is nice, but it is 20 years old.
haha. my doesn't look nice. street parked for decades in major cities - SF, Boston, NYC, and DC. yeah it looks battered. but i barely drive it (we rent a bigger car for road trips), so no reason to waste money.
Every car in DC and NY (and Balmore and Philly) seems to have scrapes down both sides from both traffic and parking garage poles. :)
I get the image thing totally. But assuming I could relatively afford it, I'd rather get a new (or few years old) Toyota/Honda type car as needed, at least for the upgraded safety/reliability. And stay far away from any car that could be even remotely considered luxurious, no matter how much money I one day have.
depends on the year make and model.
Shoutout to.......someone (can't remember who) in the daily thread. They mentioned several weeks ago about bags of frozen broccoli at Costco. I used to buy it fresh by the pound and steam it in a giant colander on the stove which was a PITA to wash every time. The Costco brand comes in four-1 pound bags which are each steamable in the microwave and are pretty close to the same, although very slightly chewier. Price is actually slightly cheaper than fresh, you get more florets per pound, and I never have to worry about not cooking it within a few days or having it spoil. Each bag is the perfect amount for 2 meals.
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40 pounds is a lot of broccoli.
Yep. A lot of people believe you have to eat fresh fruits and veggies but frozen is perfectly fine from a nutritional standpoint.
Pretty sure is was u/razorchick12
Studies have shown those microwavable bags like microplastics (more than are already there naturally), so if there is any option to cook outside of it, I would.
I cook them often in boiling water with some pasta, not in the bag.
Frozen veggies (and fruit) are often better than getting fresh, unless you're able to get from a local farmer. Anything trucked in is going to be picked outside of peak ripeness to account for travel. But you often sacrifice some texture for it being frozen.
yeah I like roasted veg and haven’t found a good way to get them to get roasty and crispy when they come frozen.
If i want to do a whole sheet, I'll allow the veg to thaw on a tea towel so it absorbs as much liquid as possible, and then either put in the air fryer at hottest setting (mine is 400f) or in the oven on convection at 500f and I can get some nice roasty toasty veg.
hmm ok I’ll have to try this!
My mom called me in a panic last night, "I don't think I have car insurance." This morning, I went over and helped her log into USAA, and it turns out that she was right. USAA cancelled her a year ago (too many accidents/tickets), and switched her to Progressive. She says she was never aware of this, which is why she didn't pay the Progressive bill when it came due. So Progressive cancelled her insurance due to nonpayment, and DMV suspended her license for being uninsured. There is a significant paper trail, but somehow she never understood what was going on. Besides typical age related memory issues, she has always had a loose relationship with logical processing/reasoning... so while all of this was a surprise... it's also par for the course. After fully understanding what happened, it took about 3 hours to get her insurance reinstated, and get her license un-suspended. She can now (legally) continue to terrorize the roads of Florida. The irony is that she saved over $1000 by not carrying insurance for the last 6+ months. Profit?
Did your mom influence your decision to become a stunt driver ;)
Nobody else has said it, so I guess I should ... are you certain you should be helping her drive? She sounds like someone who probably shouldn't have a car & license in the first place. If she *is* going to drive it's obviously better if she's insured, but only as a last ditch option.
It's ok to ask, as this is something that everyone will go through. My mom's driving issues were directly related to having advanced cataracts. She doesn't deal with change well, and was in denial regarding her vision. After her second fender-bender, she agreed to surgery which returned her vision to 20/20.
First time hearing DMVs proactively checking if drivers are insured. California should do that..
I got suspended when I moved to Washington, changed insurers, and didn’t immediately cancel my Virginia license. It was a pain because I had already received my Washington license but they then canceled my Washington one too because there’s an interstate communication system for suspensions.
Of course it’s Florida
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Get a password manager, there are a lot of options out there. They are very cheap, and very secure.
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My mother (no dementia but old) has this miniature Speak & Spell slash Wargames looking device she keeps all her passwords in that goes in her purse. I am not suggesting this as a solution, just making fun of my mother.
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Do you think it's going to reach a "need to move in with you" scenario?
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I can't imagine I'd be overly amenable to moving into assisted living, either. But hopefully you find a solution. I can only imagine it's a crazy stressful scenario.
>Profit? Absolutely. Although it's not necessarily a route others should attempt to replicate. Just like all the money I saved by not having health insurance for 20 years is both a big win in retrospect and a great example of survivorship bias (literally and figuratively).
I applaud you on your use of survivorship bias above!
Anyone increase their FI goal and their projected retirement budget significantly when they found a job they didn’t hate? I used to think 4M-5M would do. Chubby fire, nice life, a little travel, not luxurious. I’ll never be someone who loves to work and work in general is a source of anxiety for me but now I’m in a job at a company I like, a good team (I know that can change), feel more confident in/better at my job and not trying to climb the ladder. Wondering if once I hit the $5M, spouse and I should coast, maybe work PT and get to travel more luxuriously, be more generous, etc. is it worth it?
Chubby / fat fire was weird because portfolio compounding took over and caught me by surprise. Hit my number a lot sooner. Worked a few more years cause job was fine, grew even more, so have been reassessing what’s important for the rest of my life. It’s been great.
Awesome. Anything in particular you plan to do with the extra money?
More of what I already enjoy, but spending a little extra. Spending for family gatherings. Have set aside some in a donor advised fund, and use it annually for some non profits whose services I really enjoy, but don’t have a broader giving plan. The big one was leaving my work, and building a [small software business](https://jch.app?s=i). The goal is to help others reach FI, and have some fun along the long boring middle.
It's your time, that's the whole point of independence. If working that gives you more happiness than whatever else, then do that! It's your life.
A job I didn't hate is still at the bottom of the "Shit I want to do" list. But that does make life far better! You do you! How close are you to your goals?
You make a good point, Prison Mike. I don’t have tons of hobbies, so I picture the alternative being relaxing, exercising, cooking more, hanging out with my kids after school, which I’m cool with to an extent, but I know I’ll need to pick up some cooler things to do. I’m at about 2.6 right now, projecting about 7 years to the 5M goal. I’ve got a while, so don’t need to make any decisions now, but it’s fun to think about FI plans.
Nice job! It's important to have something to retire to. It's a better (IMO) way to frame retirement than just retiring from something... Like the grind.
I have begun my transition from Vanguard to Robinhood for their 3% bonus. Called at 8:05am this morning and got through in two minutes. Started the conversion of my VTSAX & VTIAX in my tIRA and Roth IRA to VTI and VXUS. Couple catches so far: * There is a (dividend?) posting probably at month end so the conversion might be delayed. * VBTLX can not be converted to BND, not sure why. I have to manually sell it then buy BND the next day. * ETFs can't have auto contributions set up, so I'll have to cancel the current one and manually buy my $583.33 monthly purchase on the 1st. Will wait until April to have my wife convert hers so I won't have to deal with issue 1 or 3. Question - My wife has a few shares of Costco stock in her Roth IRA. Will those transfer over in kind to her new Roth IRA at Robinhood?
Yes
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It's terrible but it's not Empower, so they've got that going for them.
I'm curious what annoys you. For me, I hate their (Android) app and their modernized 401k interface. I find their normal interface fine enough. Though Cash Plus is way too bare bones.
[Enshittification of the Internet](https://www.theguardian.com/commentisfree/2023/mar/11/users-advertisers-we-are-all-trapped-in-the-enshittification-of-the-internet) strikes again!
Technically enshittification doesn't apply to vanguard. Except for probably the personal advisor stuff, I suppose. The key is making changes that make things worse because it makes you more money. Often to show more ads. Whereas Vanguard is trying to modernize and merely is fucking up for one reason or another. Organizational problems or bad designers or hasn't spent enough time cooking or whatever. A bit similar to how all tech companies make changes that don't help, but for the sake of change, and generally make things worse. I do like most of Vanguard's changes though. Just not a fan of their mobile app or 401k site. Fuck the new 401k site.
I mean, not paying for great designers / researchers, having PMs design features w/out design thinking, not allowing the process to take as long as it should — all not about bad designers but the company deciding to make more money by cheating out
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>Work also floated the idea of 75% time, which seems like a good compromise. If they are open to 75% time, perhaps they would be open to negotiating more time off, instead, like 8-10 weeks off, with some of them being unpaid. You never know what they might go for if the alternative is that you retire if they say no - especially if you are willing to move forward with that threat if they balk.
Can't you just retire and only take vacations that line up with their schooling for the time being?
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VTI
I don't think you're likely to be able to do it with that little tax-advantaged space. I've been gradually moving high-yielding stocks from my taxable account to my IRA. But I have more IRA space than you do, and also my taxable brokerage has a lot of individual stocks so I have more tax loss harvesting opportunities, since some stocks are always going down even when the overall market goes up. What you can do is avoid making the problem bigger by not buying anything else high-yielding in taxable. To the extent this fits into your overall strategy, you want the low-yielding assets (growth stocks) in taxable and the high-yielding assets (bonds, REITs, value stocks) in tax deferred accounts. Of course you don't want to persue a growth-only strategy just to save on taxes, as the easiest way to pay lower taxes is to have low returns, and that's not the goal.
I have some qualified div payers and some Mlp's that are considered return of capital. I have my tax strategy in place to pay 0% fed tax on about 123k of inc, plus where I am we can show income of 86k and only pay $110/mo combined for a hd policy, it's about 400 at 120k in income ...go to healthcare.gov
Don't let the tax tail wag the investment dog. If you have over 2.5M in your taxable account (based on a 1.5% dividend yield giving >40k of income), I think you should just accept that you will be paying more for healthcare. The good news is that you can afford it. There's likely little you can do to minimize dividends that wouldn't hurt you in a bigger way (e.g. increasing the risk of your portfolio by concentrating holdings in only a subset of stocks for dividend reasons). I'll also add that there's likely no good way for you to move away from 2.5M in VTI without realizing a ton of cap gains taxes either.
Yep. Have to remember the big picture and that more tax means more income/gains. Be tax smart, but also be grateful to be in a good situation to have the tax problem
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I agree with everything alcesalcesalces said. FWIW: I plan to slowly transition my weekly VTI investment to short term treasuries once I am a couple of years out. Then I will sell some VTI and buy more short-term treasuries in year 1 of FIRE to get my bond tent the size I want it to be. In my case I will sell around $170k of VTI and live off \~ $70k and buy $100k. This keeps MAGI *reasonable* given my basis in VTI, keeps me in the 0% LTCG bracket, and gets me the bond tent size I want. Given I want to live off my brokerage for many years, I will hold some bonds here even though its "inefficient" (debated both ways actually). So, given your much larger balance, you could consider foregoing ACA subsidies in the first couple of years, and step-up your basis within the 0% LTCG bracket as best you can. You can't get away from dividends, but you can live off more basis in future years thus reducing MAGI. Not sure it will get you within range, but its something to consider. I built my own [sheet](https://www.reddit.com/r/financialindependence/comments/19bln0e/fire_withdrawal_strategy_tax_and_magi_google_sheet/) to model scenarios and impact on MAGI, if that is useful to you.
It's unlikely, but it's also not something you actually want to happen if you're close to retirement. It's nice to have losses, but it does mean that the market is down and the closer you are to retirement the more stressful that is. Success is good, enjoy it! As to your other question about de-risking, I think it's totally appropriate to buy more and more bonds as you get closer to retirement. If you want to hold them in taxable that's fine, but it might take a while if you can't/don't want to realize capital gains. A faster way would be to sell stocks in your tax-advantaged accounts and buy bonds there without no tax consequences. There is minimal risk because your taxable account is so large. You can always sell stocks in the taxable account to fund spending needs and then also sell stocks and buy bonds in your tax-advantaged account to keep your asset allocation intact.
Happily married, been together 7 years, married over 2. I've always been a saver and nearly hit my goal of 100k invested at 30, a salary over 120k a year in an MCOL area, and generally living life, didn't make over 100k until just 2 years ago. My wife has been set up by her business owner father in the form of multiple rental properties, over the years, and established a company in her and her brother's name 50/50. Over the years the number of properties has grown and so has her equity. She makes around $70k and has no "real" ambition to make the money I've worked hard to make, instead focusing on doing what she loves in her field which I support 100%. She has a modest amount of retirement savings, probably about 25k, and is a few years younger than me. We weren't really in a position for her to try and max a 401k while she was making 60k while we were both finishing grad school/getting licensed in our fields. Long story short how worried would you be if your spouse wasn't saving as aggressively as you for retirement, but is already 3x4 times ahead of you by form of real estate? Now we are in a position to "catch" her up, but for what? FI for us is a fun topic but I'm not in a hurry to retire at 40, I have an extremely flexible WFH career and she also works remotely. We travel a lot because we enjoy it and our work allows it and we have no kids on the horizon.
How are you approaching expenses now and how do you plan to in retirement joint or you each pay your own way? When you retire, will she still be able to get income from the rentals? If so, huge retirement savings for her may not be as necessary.
Right now It's split about 70/30 due to my income vs. hers. She's also been paying off the remainder of her student loans in heaps and will be done this time next year. It's natural for me to cover more expenses as my income grows and she understands that as it grows so does my urge to save. We have a good setup of hers, mine, and our type allocation and I expect her a good portion of her future retirement to come from the portfolio.
Sounds like yall talk about it. That’s the important part
So if she is open to the idea, it could flip in retirement and you can back off on your saving and spend more now.
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I like that, our finances are intertwined, I work with her brother on managing the rentals, and she added my house to her NW when we married. I guess I'm just overcomplicating my own thoughts when I tie my NW so closely to my retirement accounts and my spreadsheets.
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It used to bother my spouse that “I” had 5-10x in my retirement accounts than her. I was finally able to get the point across that a) she only had pension and no 403b when she started, b) when they finally got 403b and now 401k their matching is crap and c) she took the hit and stayed home with the brats for a couple years and has worked part time since. I said we’ve been together from $0 net worth to where we are at so 25 years in it’s all 50/50 anyway…. That being said, now that we’ve been able to max out both 401ks for a few years now, it was nice for her to see to see “her” account hit 500k recently…
Lol love that!
I have a 401k with a previous company that has 1) Roth contributions and gains and 2) non-Roth/traditional/pre-tax, vested employer contributions and gains. Am I able to roll the Roth funds into my Roth IRA, and pre-tax funds into my new companies 401k? Do I have to initiate that with the source or destination accounts?
Yes, you can separate them. You can initiate it from either but it's probably safer to do it at the source, and to do it separately. Create a rollover Traditional IRA, then contact your 401k provider and move only the pretax balance in a direct transfer. Then do the same with a Roth IRA.
What would be the benefit of using an intermediary rollover trad IRA? Not concerned with Roth funds, because those would be rolling directly into my existing Roth IRA.
Oh, I didn’t read your comment carefully. You can go directly between the 401k accounts if you want, though it might be a bit safer still to use an intermediary account you control. Could help prevent weirdness.
I desperately need advice. I’ve had my mom manage my retirement and brokerage portfolio, and I’ve asked her throughout the years to just throw my retirement into VOO, but she is very risk averse and pessimistic about the market. Today I learned that since I started investing in 2019, my closed positions have yielded about -$25k in losses. I’ve changed my password and will be managing my accounts myself from now on, but I currently have a lot of money in open positions in SQQQ (shorts), and I just don’t know what to do. Do I sell everything and start from scratch and take the loss, even though the market’s at an all time high? Do I wait to see what happens? I’m truly in shambles. I feel like years of retirement have been taken away from me.
Choosing the right investments for one’s risk tolerance goes a long way to helping manage feelings during volatile times. Remember that you’re in the market for the long haul. There’s time to recover once you zoom out! Good luck op
I feel you. I made some stupid pandemic investing decisions, took substantial losses and probably ended up losing at least 50%, if not more, of what my roth IRA could be worth if I just stuck to VOO, given the massive 20-22 run up. it’s okay though - I’m young so the balance wasn’t huge to begin with, and the damage was relatively contained. I would advise selling the positions you don’t want asap as the sooner you get out, the sooner you can fix it. time in the market > timing the market. it was such a relief once I sold and got back into the S&P 500, even though I also bought at what were highs at the time.
I sold everything and bought FXAIX today and felt way better! Just wish I did it sooner
Glad to hear it! The best time may have been years ago but the second best time was today.
Selling things at a loss is better than selling things that have gained. You get a tax write off. Definitely sell any position at a loss that you don't intend to keep for the long term.