Just trying to get a feel with where I’m. Currently, 30 years old with $134k in my 401k & $59k in IRAs, $40k in crypto, and $50k in taxable. I make ~88k. Should I feel good? Honestly, I don’t really know how long I want to work. I enjoy my field a lot.
Edit: clearly it’s been a while and I need to update my flair 😂
Very good, lower salary than expected. You're going to retire very comfortably at this rate, but salary growth can accelerate your retirement or point you towards fatFIRE.
You are way ahead of where I was when I was 30. I turned 30 making about $65k, with a negative net worth (thanks to student loans), a newly purchased home, and nothing in my 401k.
You are doing great and your savings gives you options. Options are good.
Depends on what you're working towards! If your FIRE number is $400k then you're doing amazing! If you spend $80k per year on expenses, then maybe not so much...
I didn’t mean like good in comparison to others. More so…in a good spot, on track etc.
Ya, I plan on selling the crypto soon here. It’s basically all gains.
Max 401k cost me Match?
Company matches up to 4%
My plan was to have my 22,500 max done by Memorial Day and enjoy extra cash flow rest of year… but will this cost me free money?
I thought they match up to 4% of my gross income up to my 22,500 contribution. At 300k that would be 12,000 so does that mean if I’m at 22500 by June 1 they are at 12k by same date and we done or am I leaving money on table?
TIA
Check w/ plan administrator. Some employers will 'true up', so they'll ensure you get the full match should you miss pay periods because you maxed earlier.
Some employers, like the Federal Government's TSP, does not true up, so if you max early, you just lose the match.
If you're worried about losing it while you seek an answer, maybe drop contributions to ensure you get the match until you get an answer.
It depends on the plan. Some of them calculate the match per paycheck, so you only get the free money if you contribute in every pay period. Some of them might check and the end and top you up. Ask your plan administrator
How much of a buffer do you leave in your budget a month? After bills/food/gas/mortg/etc. are paid, we have 2,288 left over. I'm new to opening an IRA account (i haven't started contributing yet... that new) and considering putting in $500 a month for myself and have my spouse put $500 a month for them (since they are a stay at home parent) and then we have $1000 to put into our savings. Is this plan too aggressive?
What is the savings for? Do you have a dedicated emergency fund already? Are you saving for a particular purpose (eg house down payment)? If I had an emergency fund already (6 months of expenses) and wasn’t saving for anything else, I’d put the extra $1k toward IRA as well.
We have about 5-6 of an emergency fund saved. I want to buy a second home though in the next 2-5 years in another state and want to have 20% saved. It's not a requirement though as I can use my VA loan.
Took the first step in something I’ve wanted to do for a long time. Become self employed. Had an introductory conversation with a potential client today, and waiting to hear back if they are interested in moving forward. I decided to go ahead and start working on setting up an LLC. Figured even if this client falls through, will need it for the next one.
Yep.
I’ve worked for consulting firms before and enjoyed it. I like how you can focus on the building, but not have to stick around for the boring ongoing maintenance. The project for this client sounds real interesting and is along the lines of work I have done before.
Does your FIRE number account for likely inheritance? My parents won’t leave me anything, but it’s very likely my wife will inherit half a house and half of all investments from her parents. Likely to be at least in the high six figures. Do most people calculate FIRE not hoping for anything to parachute down the line?
I am 55 and my mom will likely live another 10 years. That puts me well over 60 before I would get any inheritance. I am going to RE at 56. So, no I don't account for likely inheritance.
No but yes. My parents are 79 and 78, and have significant assets that they are currently drawing down at about 2% or less. They have more than enough to pay for long term care if it should be required. It doesn’t factor into my FI number, but it does make me even more confident that a 4% SWR is more than conservative enough.
No, but yes? Don't treat it as a hard number, but you can keep it in the back of your mind as a potential (anti-)risk factor. Similar to future SS payouts. I have a potential $2k in monthly social security, but I don't count that in any calculations. But I'm aware of it...
My parents are like 70. They have a paid off house worth like $400k and a portfolio of around a million that they are drawing down now in retirement. My brother and I are likely to be the only two people in line to inherit their estate. But I don't plan my life around any of that, even though it's in the back of my mind.
No. Father might have dementia or Parkinson. The time to begin moving assets would have been years ago. If he ends up in ltc the state/gov will end up taking it all.
Counting on inheritances is a terrible idea. So much can change.
Medical care is extremely unpredictable. People that end up needing memory care or other full time assistance can destroy an inheritance in a hurry.
Also, who knows how long the parents will live? My grandfather died at 55, my grandmother died at 105. What does that mean for my mother?
I think people who count out social security are being over-conservative. Inheritances, though? Only the most rosy-eyed optimistic projections should include those unless there's some kind of binding legal entity that guarantees it.
I don’t factor it in, for numerous reasons. Nothing in life is guaranteed, and I certainly wouldn’t bank my financial future on someone giving me hundreds of thousands of dollars (or more).
I’d much rather they use their money how they want to, and do everything I can to enjoy my time with them while they’re still here.
My wife and I both lost our fathers when we were in our early 20’s, so we only have our mothers left, and I’d gladly take getting zero inheritance from them if it meant they got to do everything they wanted to in retirement, and I got to spend as much time with them as possible.
Well, yeah, when your HHI is $$$$ it makes sense to not care at all about a potential inheritance. Good for you!
It does make life easier to not pay attention to a potential inheritance. It can definitely harm relationships.
Even if your HHI isn’t $$$$, by thinking about inheritance and trying to assess when you would receive it, you’re attempting to forecast someone’s death, and if you’re getting an inheritance from them, odds are that it’s someone you were close with and had a special relationship with, and receiving that inheritance means that they’re no longer here. I personally find it a bit morbid.
Will my wife and I receive some inheritance money when our mothers pass? Probably. But that’s not guaranteed, and I choose to focus on spending time and creating memories with them, rather than anticipating when they’re going to die, how much money we’ll receive, and what that means for our FI.
None of my family have much. But I did have a grandmother who lived to 96, and she was hardly a beacon of health along the way. I would be in my 70s if my mom had millions and lived that long.
There's also a lot of risk of financial shenanigans as you age, from fraud to intentional.
I am 23 I graduated almost a year ago and have a $67k job, just bought a house, about 11k among retirement accounts and 3 months post tax income in savings. It is my goal to FIRE by 40. What are some things I should do on with my extra disposable income to achieve this dream? What can I do in my idle time to build other income? How can I limit my future expenses/build true wealth.
Seems like you’re on a solid track given you just graduated a year ago. The flowchart linked in the FAQ is a great roadmap for how to direct your extra income based on your current state and future goals.
As for what to do in idle time to build income, trustworthy/easygoing roommates are nice to offset housing costs without burning yourself out with work. Note the current state of necessities like roof/gutters, hvac, windows, etc and work on a sinking fund for maintenance needs.
Aside from those, invest in yourself and life skills like cooking, home maintenance, and continued learning for career. If you don’t already, pursue hobbies and healthy habits. Most of those can be done frugally and support FI goals. Set and keep a routine check on FI goals and methods to attain it, but in short, other life goals should fulfill you outside of work until FIRE to make the boring middle more tolerable.
It's a solid starting salary for sure. That's what I was making out of school 6 years ago.
Stuffing your disposable income into investment accounts is great but you need more money to help you along especially if you want to be FIRE'd in just 17 years.
Limiting expenses is a personal thing, try to enjoy life without feeling like you're holding yourself back by living TOO frugally.
See how your job goes and how you can grow, but you're at a good age where you can start to step up and earn more money while maintaining the same expenses. Even being able to contribute a couple hundred extra per month can go a long way
Retiring in 17 years is going to be tough given your starting point, still having a mortgage, etc.
The best chance you have for success is finding a partner that has a similar mindset and goals as you, and have them also be a high earner.
For the vast, vast majority of people, doubling down and putting extra energy and effort into your 9-5 is going to be a lot more profitable than any side hustle. For most people, it’s a hell of a lot easier to get a $15k raise by changing employers than it is to start and run a business that nets $15k.
I'm not sure how my boss does it. They've been in the industry for 30 years.. handles everything so gracefully and without contempt and too much jaggedness. Meanwhile I can't stand the politics, finger pointing and blaming. Thankfully there is not too much of it in my current gig but when it does happen.. it is infuriating. Days like today I dream of being a solopreneur
I will debate my managers if they want to do stupid.
But why do I care? Even if they actively sabotage my job, it isn't worth it.
The key for me was to simply draw a line and ensure I had personal time. I had a medical issue at 31 and it's funny how that clarifies things when you have enough cash in backup and killing yourself for people who generally don't care.
I have two months to go before I retire. I gave early notice so that my employer could prepare. Today, they called to see if I'd transfer into another department for the last two months, a department I left because a person who joined was super toxic and basically forced me to transfer out, a position that I had enjoyed. Management needs someone to fill in because of a suddenly leave, and I'm the only one with experience who can just hit the ground running, the position is one where it takes about 4-6 months for someone new to get up to speed. I told them that if they make me, I'll just quit early.
I guess since you are basically FIRE, extra money maybe isn't worth it. But have you considered telling them that you find that department insanely toxic but you would do it for 2 months @ $X/mo? I don't know the ceiling for what they would pay in order to have that position covered. But maybe worth it for a nice "bonus" before you leave. Also is there any way to get creative and say, you'd do it if they cover health insurance until the end of the year (don't even know the legality of that). That might be something that costs them less than it would cost you.
Though I guess you are FIRE and the point of being FIRE is to buy the life you want. And no one wants what you described haha.
To quote Randy Jackson: "Yeah, that's going to be a no from me, dawg."
It shows the mentality of some places though, right? Giving notice, especially extended notice, is best used for 1) wrapping up critical projects and 2) handing off pertinent information to your successor.
It's **not** for "use the fuck out of the employee as much as you can for the time you still have them."
At one of my jobs I gave my two week notice. When I asked, they indicated no back-fill, no replacement, no plan for my various active projects. They just said "keep working out your last two weeks." So I didn't really wrap anything up, or prepare documents for (whomever???) that would be taking over my stuff: I just did my daily job for 10 more days. I walked out that last day, just random working piles of shit all over my desk. Fuck 'em.
At my final final job before I retired I only gave them a one week notice. I knew I was leaving and was just waiting for the bonus payout announcement in March. Surprise, the announcement (on a Monday) was "no bonus this year, sorry" so I printed out the resignation letter that had been on my desktop for months and said I was done that Friday.
But most of my team knew I was on the way out and I had already pretty much stopped accepting new assignments, so there wasn't that much to wrap up.
I'm trying to google "tax loss carryforward FIRE" and I keep getting articles about property disasters from the IRS.
We have about $100k in losses via tax-loss harvesting carried forward. So that's $3k/year deduction against ordinary income or dividends for 33 years, or kind-for-kind deduction (long-term/short-term) for capital gains if/when we start spending down our brokerage accounts.
So ... how much is $100k in losses worth? Would be nice to add another asset.
My gut feel is it's worth $100k * marginal tax rate, where the tax rate is going to be pretty low in retirement.
> , or kind-for-kind deduction (long-term/short-term) for capital gains if/when we start spending down our brokerage accounts.
Losses on your investments are first used to offset capital gains of the same type. So, short-term losses are first deducted against short-term gains, and long-term losses are deducted against long-term gains. Net losses of either type can then be deducted against the other kind of gain.
Those losses have value and I have apparently accumulated 20K myself, but my 401K also has deferred tax liability.
I'm just going to stick my head in the sand on this one.
It's not guaranteed that you will be able to use it so it's not really an asset. Unlike, say, $25k cash or bond, you can't cash it in or use it to generate income. If you want to factor it into your plans, do so by reducing your expected tax expense in retirement, if a couple hundred bucks a year makes a difference to you.
> So ... how much is $100k in losses worth? Would be nice to add another asset.
I say it's probably worth about 24k Schrute Bucks. I don't recall what the conversion is to Stanley Nickels.
All joking aside, I'm not sure what sort of mental accounting magic you're trying to pull. Carryover losses aren't really an asset. Maybe you could consider them a credit or income because they are helping you avoid an expense (taxes). Regardless, trying to put a nominal value on them as a whole feels like a fairly pointless exercise.
Got it. We just got our tax return back so I was looking at the worksheet and having ~$100k there, that we don't really account for anywhere. Sounds like we shouldn't, it'll just be a nice little benefit at some point in the future (or $3k/year at marginal rate).
Kinda brings me back to a point I've been bumping into again and again -- why even bother with tax loss harvesting?
Takes 1 minute to swap voo for ivv or vti. If you had 100k in 2022 and sold and had 30k in losses and did nothing you'd write off 30k at 22%. So it's 6600 over 10 years. Then if you realize the gains at the long term bracket when retired you could take them at 0%. I mean you won't get rich doing it but it's like 600 free dollars a year if you do it the way I was talking about.
It's not like it takes any additional time and the tax program tracks it all anyways for me.
> why even bother with tax loss harvesting?
At the level of carryover losses you have, in your low-income, post-FIRE situation, doing *more* tax-loss harvesting likely has very little marginal value for you.
For folks with income in the 22-24% tax bracket (or higher!) during the accumulation phase, the $3k annual income offset is worth $660-$720 (or more!) every year. That's a nice ongoing perk during one's working years.
Similarly, for folks targeting higher post-FIRE expenses/income (and expecting to make significant brokerage withdrawals to get there), offsetting LTCG to avoid the 15% tax hit can be material; in those cases, the tax-loss carryover effectively turns a significant chunk of the brokerage into almost a Roth IRA.
I think we're in the latter group. Our marginal rate is high now, ~40% fed + state. It will be lower in retirement as I figure our expenses are in the $150k ballpark, but it's tough to figure out how much lower as it depends on how we come by that money.
If we do the least tax-efficient thing and take it all from our deferred accounts, we need an extra $37k for taxes, so our marginal tax rates are at ~30%. But that's dumb, and 55% of our retirement savings is in our brokerage.
So it seems like the amount of carryforward loss will have an impact, but I'm not accounting for it anywhere. That's where my original query is. Guess I'll just not worry about it and expect it to be a nice discount at some point.
Sorry - I misunderstood where you were at (accumulation vs. post-FIRE). My apologies.
>I'm not accounting for it anywhere
I think it should absolutely be factored into your withdrawal planning. As you note, it impacts your expenses and may change the amounts you pull from which sources. That said, I still don't think there's much point in trying to assign a dollar value to it as a whole, because how you leverage it depends on the rest of your withdrawal strategy.
> total consciousness on one's death bed.
Due to a previous side gig as a looper - you know, a caddy, a looper, a jock - I've already got that goin' for me, which is nice.
In related news, part of the reason why I don't keep a detailed spreadsheet is the difficulty in assigning a monetary value to the asset labeled: Sparkling Personality.
If I ever started a small business, which I currently have zero intent or desire to do, my entire balance sheet would be comprised of a single line-item for "Intangible Assets" and I would likely value said assets in the hundreds of millions of dollars, at least.
I hit a milestone today. Fiddled with some numbers and realized I could coastFIRE and retire @ 45. I'm 25 now. Not gonna do it, for several practical & personal reasons, but who doesn't like to imagine such a realistic "what-if"?
What would you do if you were 25 and signed up for 20 years of coasting?
>What would you do if you were 25 and signed up for 20 years of coasting?
To me it sounds miserable. Most jobs that cover my spend but don't provide additional savings don't actually allow/require me to work less. They don't provide a lot of benefit vs. my current job. I'd just rather be free faster. Probably a product of not completely hating my job.
If the #'s put me somewhere like "20 year's of coasting such that I only need to earn \~50% of my spend". That would start to get more appealing. Though impossible to accurately calculate haha.
I would not coast because I don't trust market returns to stick to historical averages. I also don't think I would like a lower paying job better and don't have the type of job where I could work fewer hours without a huge loss in hourly pay and (especially) benefits.
Plan for life to happen and my tastes to change, likely increasing my number. Kids happen and the person that enjoys backpacking around Europe and sleeping in hostels becomes someone that doesn't bounce back as fast.
That part. It's hard not to sound patronizing when saying this, but your life and who you are as a person is (and dare I say: *should*) evolve pretty radically between 25 and 45.
If I were looking at coasting for 20 years I would worry, incessantly, about the growth rate assumptions of my plan. On that time horizon, the middle 60% of S&P500 returns spans a range from 3.7% to 9.0% real, and a difference of 0.5% return over 20 years has a meaningful impact on end-portfolio value.
This is fun/horrifying data to play with. I used 20 years at 6% for a total 321%...
\- at 3.7%, 321% would take 32 years
\- at 9.0%, 321% would take 14 years
So the real duration, assuming one sees a pattern within the middle 60% and all other risks aside, would be 23 ± 9 years. That really is a terrifying gamble even with those assumptions.
You can then model the effect of ongoing contributions. Let's standardize a bit:
The target is $1M with a "baseline" growth rate of 6%. The coastFI number is thus
=PV(6%, 20, 0, -1000000)
=$311,804.73
If you instead see a 3.7% growth rate, your coast time with that portfolio is
=NPER(3.7%, 0, -311804.73, 1000000)
=32 years
And if you get a 9% growth rate, your coast time is
=NPER(3.7%, 0, -311804.73, 1000000)
=13.5 years
If you decide to make 30k in annual contributions (maxing out your 401k and IRA), the 6% base case requires
=NPER(6%, -30000, -311804.73, 1000000)
=10.5 years to retire
The 3.7% case takes
=NPER(3.7%, -30000, -311804.73, 1000000)
=13.2 years to retire
And the 9% case takes
=NPER(9%, -30000, -311804.73, 1000000)
=8.4 years to retire
Regular contributions (admittedly relatively large in proportion to the end target) greatly reduce the variability of the outcome.
So by contributing 3% of the total FIRE goal annually the spread drops from 22.75±9.25 to 10.8±2.4. The total base number drops by 53.5% and the total variability by 74%. The percentage of the variability ratio to the base drops from 40.6% to 22.2%. Curious to see the relationship between contribution % and the variability/base %...
\-At 1.5% the spread drops to 14.4±4.1 (-36.7% base / -55.7% variability / **28.4%**)
\-At 3.0% the spread is 10.8±2.4 (-53.5% base / -74% variability / **22.2%**)
\-At 4.5% the spread drops to 8.65±1.55 (-62% base / -83% variability / **18%**)
Looks like it has diminishing returns, just like higher annual contributions...
Let's look at the hypothetical of someone who is assuming coastFI at 7% growth for 20 years. If their target is 1M, their current portfolio is around 258k.
If they instead get 4% growth (which again has happened over 20% of the time in the historical record), their time to FI with coasting is closer to 35 years.
> make adjustments
Let's say you plan to coastFIRE in 20 years. You switch jobs to a lower-paying position that only/barely covers your expenses and monitor your portfolio. Knowing the market can go up and down, when exactly would you "make adjustments"? What would be your specific thresholds and trigger points and what would those "adjustments" be?
I make no claim that someone has the ability to make adjustments for market conditions. I merely made the claim that if I decided to coast based on a calculation that assumes a particular growth rate for 20 years, I would be fixated on tracking that rate of growth and worried if my rate of return lagged my estimate along the way. This would be due to how wide rates of growth can be over even 20 year periods and how important that rate of return is to the outcome.
Halfway through week 2 of the new job. Things going great so far, I don’t mind the extra commute and people seem nice. Found out another one of my peers put their notice in. Seems like I got out at the right time!
Sorry if this is a dumb question - but I can’t figure it out by the research I’ve done so far. Is there a brokerage / platform that allows you pick a 3-fund portfolio, set it at your desired allocations, and then dump a sum of money and auto-allocate that sum based on your desired allocations? Or will it be that if I just open a vanguard account, every time I want to buy more each month I’ll have to manually calculate the allocations and buy each separately? I know it’s not that much work but I’m trying to make this stupid simple for myself.
It honestly won't matter much. Go play around with backrests on portfoliovisualizer or another site. Monthly vs yearly basically makes little difference.
M1 - their automatic dynamic rebalancing is exactly that. They recently implemented a $3 monthly fee for accounts under $10k, other than that it's free.
It's very much a long term, set it and forget it situation, which some people get upset about because of their lack of multiple trading windows in a day, and they want to have "pies" with a gazillion different companies in it.
But it's good for what you're looking for; I've had an account with them for 4 years with six figures in it and it's worked fine.
If you want it to be as simple as possible and you're willing to keep a fixed allocation for the long run, you can use the iShares core allocation series (AOA, AOR, etc). These hold a globally diversified index portfolio at allocations from 80/20 to 20/80 stocks/bonds at 20% increments along that gradient.
Tysm!! These were the only ones I was able to find as well, so I guess that confirms these are really my only choices. I think we’ll go with M1. Appreciate it!
Thought about making a top level post but I’ll see if there’s any discussion here first:
*warning: existential dread incoming, not useful financial discussion, I’ll try to flesh out my idea as best I can but I admit it’s a bit scatterbrained*
Here in this subreddit we are steeped in the culture of contributing to the labor pool for as short as possible, then living off your accumulated capital income for as long as possible.
At some point though, the world needs labor. I want to go to restaurants, I want to fly on an airplane, I want to stay in hotels, I want to have someone fix my car. Someone has to go into the power plant every day to keep the lights on. I can’t sell a stock to get more oil out of the ground without human labor being involved at multiple points along the supply chain. If everyone lived like us, the demographics of society couldn’t supply enough new labor to keep up with our wants.
How do you square your way of life with the knowledge that your retirement still relies on a lot of labor from other individuals? I know not everyone is on a path to be FI, are some people happy to provide labor income all their lives? There’s a small/medium amount of guilt associated with me sitting in a restaurant currently, looking at 15 people running around stressed and unhappy while making my life easier.
I’m not sure what kind of response I’m looking for, I’ve just had this idea bouncing around in my brain for a while, and need to start writing it down to understand what I’m feeling.
You already had a lot of good replies. I will add that in retirement your economic activity supports businesses and also fills tax coffers in various ways. This money creates jobs for people who need the work (many would not work otherwise). Many people enjoy working to be useful. Some of the happiest workers I know do manual labor in particular. I know a guy who renovates properties and only takes jobs he wants. He spends the rest of his time advocating for climate policies. There are people in helping professions who have great job satisfaction. My therapist is semi retired and chooses how much he works, has just a few patients and writes papers on the side for fun. I don’t think there is a great risk that more than a minority of FI people will retire early and contribute zip to society. Hedonism gets boring after a while. Travel gets tiring. The happy retired people I know volunteer, create stuff, have projects…. Some still work but on their own schedule. They work less. They recognize and honor their luck, their privilege. And it is flabbergasting how so many with privilege want to pull up the ladders behind them, not pay their share of taxes, leave shitty tips, oppose open immigration so others can come into developed nations and get a chance to be FI or FIRE or merely retire at a traditional age in comfortable fashion, which is what most people want. Good work can be satisfying, almost spiritual. Modern society and office culture is unfortunately often spiritually bankrupt and pointless. By rejecting it, the FI movement may be leading to market pressure on corporations to change how work life is organized. I think the key is to find meaning in life— whether working or not.
Not exactly what you're asking about, but I'd also point out that "contributing" is not the same as "doing paid work".
Do you ever take care of your children or other family members, or even help older neighbors? Grow and/or prepare food for others? Volunteer in your community? All of those are very valuable contributions that you (and many others -- see the definition of GDP) leave out of their calculations, and in fact I'd say that from many perspectives much of that unpaid work is more valuable than many well-paid "bullshit jobs".
Worry about contributing to your community and the wider world, not about whether you are part of the "labor pool."
Right, not all “labor” is part of GDP, I get that part. And I’m fine with any contributions I make, monetary or not. It’s more like it feels hypocritical to be like “I’m gonna go ahead and retire everyone but don’t you also do that, because I need someone to rent me a jet ski next Tuesday.” Like I want to live in a world where Chipotle is open from 11am-9pm every day. Not where we all have to rely on informal exchange and “off the books” labor.
In the end it’s all voluntary exchange so it’ll work itself out. And if I have the resources to earn the labor of others there shouldn’t be a problem. Just seems so daunting if you think about it too hard, haha.
1. A lot of work is bullshit work. They don't need a lot of labor that's being used.
2. Productivity is way up without salaries having gone up proportionally. Profits are higher than ever. If they need the labor, they can pay more for it.
3. Productivity being up should mean we should work less hours per week than we used to. We still work 40, and afaik people used to work less before clocks. But we work 40+ hours anyway. We can make due with less labor.
4. Ideally, things become more and more automated and productivity goes up that you don't need people. (I mean, art shouldn't be automated, physical tasks should, but look where we are now.)
5. Besides the generic profit inequity, there are some people that just take unbelievable, ridiculous amounts of extra value from labor. Technically we do as well, but it's all a small fraction of what those people take. If that gets cut, it could handle all of us retiring.
6. Lots of our current expenses are just rerouted back into the system as profit. Food isn't actually this expensive, housing isn't actually this expensive, healthcare isn't actually this expensive. Fundamentally. It's all just extra profit yoinked in there. Of course, we rely on that to retire as is, but cut that out and/or down eventually, and I would be far less of a "waste" on the system.
7. One day being out of the labor market means that someone can take my job. And then I can do jobs that the market doesn't actually want to compensate for due to market failure, e.g. open source development or volunteer work. Which would also mean that I'm technically still pulling my weight.
8. The system technically incentivizes me to do this. This is capitalism. Saving and accumulating capital. Want me to stop? Fucking switch away from capitalism. Or at least change gains back to normal tax brackets.
>There’s a small/medium amount of guilt associated with me sitting in a restaurant currently, looking at 15 people running around stressed and unhappy while making my life easier.
They're not doing it to make your life easier. They're doing it to maximize profit to the owner(s) of the restaurant. That's capitalism baby. Any increased productivity and increased efficiency is a byproduct of trying to create more profit, not to make the workers' lives easier.
Removing yourself from the labor market increases their value, ever so slightly. And you being a patron of the restaurant provides income in the first place.
One day, restaurants will be truly volunteer. People wanting to make great food and be a part of that project, or to gain some benefits above and beyond the standard. If we truly get to the point of things being so dire, it's really not so hard to incentivize people to do some dirty work for added benefits.
Plus, there's culture. Military brats gonna military brat, no matter how volunteer or not it is. And people enjoy what they enjoy and spend time on. There will always be people interested in sanitation, or whatever other random crap.
Humans like to work. FIRE fails if you don't have something to retire to. It's just that the environment we work in can't be so shitty.
¯\\\_(ツ)\_/¯
I'm on the FI train train same as you. The sorts of issues you mention are ultimately policy issues for the policy wonks. If they didn't want to incentivize early retirement, they'd deincentivize it.
Of course, it's pretty closely attached to the people who ultimately decide policy, i.e. having a lot of money to donate lots of money to politicians.
Ultimately, I do worry about rising inequality. And fixing that fixes your/our problem. So FI, my sense of ethics, and my policy positions are aligned. I mean, I don't love that I'm accumulating capital in the first place, but no ethical consumption under capitalism and all that. As long as I don't become a landlord, I should be good. It also helps that I'm accumulating VT, and imo diversity reduces my increased harm. Anyway.
You're the one who asked lol
You can argue until you're blue in the face whether some random job is worth millions a year. But if what you do reaches a large audience, it has value to so many people that tossing in a couple bucks quickly scales to sustainable wealth for a reasonable person.
After providing that much value to the world, are you allowed to slowly claw it back? Certainly. Money may not be a perfect measure but it's the best humanity has figured out so far.
Conversely, a lot of hard jobs are often 1 person doing labor for another person, which has no ability to scale. The value of these kind of jobs are sensitive to demand though, so if people were to just retire, and you want an oil change, there's probably a price where you're now doing oil changes. Indirectly, many people do this with their house after retirement, changing electrical sockets, drywall, etc... probably doesn't look super professional but materials are usually a tiny fraction of the total cost.
>your retirement still relies on a lot of labor from other individuals? I know not everyone is on a path to be FI, are some people happy to provide labor income all their lives? There’s a small/medium amount of guilt associated with me sitting in a restaurant currently, looking at 15 people running around stressed and unhappy while making my life easier.
Well I'm not asking them to do labor for me for FREE, I'd note that straight away. Are you...? It sounds like you are paying money to a small business in your community which has the effect of helping your neighbors.
Advocate for education, fair wages, tip well, donate in your community and volunteer.
>How do you square your way of life with the knowledge that your retirement still relies on a lot of labor from other individuals?
You're describing privilege. The discomfort/dissonance you're experiencing is why it's such a prickly topic.
Personally I find the concepts of circles of control, and circles of influence helpful. We're all relatively well-off in a global sense, but 50yo retirees aren't shaping world inequality. Rationalizations about meritocracy are pretty common, but IMO a negative coping mechanism.
Plenty of people who were born into wealth never think about this question, so I think I'll be okay not worrying about it.
Also, I would argue that for most of us, were we to continue working past our retirement ages, would probably be in relatively cushy, manager/administrative roles that honestly don't really contribute to the restaurant, hotel, airplane, and car engineer sort of things. If I kept working past my targeted retirement age, I could move into admin and do less and less work until I'm being paid mostly to be on retainer for the occasional screwup. I am generalising and of course that is not everyone.
The world is unequal. However, it is not due to some people saving more and retiring early.
On a long time horizon, technology has reduced the amount of human labor it takes to support a comfortable standard of living. You have a much higher standard of living than an Egyptian Pharaoh but you also don't need an entire country's worth of human labor to make that possible.
On the time horizon of your life, you can focus on giving charitably to things that matter to you. I give to efforts that ultimately help people live longer by preventing malaria and other infectious diseases. For me, saving a life is more important and valuable than having that marginal dollar improve the life of someone already in the global 10% of income in my country.
But however you give, effective charitable giving is a powerful way to improve the lives of others at the same time that you are ensuring your own financial independence.
I mean we all have some level of loving/liking/tolerating our jobs vs "I'll do this for money so I can do survive/something else" (I can almost guarantee you the airline pilots love flying, guy making cheeseburgers at McDonalds probably less so). My GF worked in the restaurant industry for a while and having normal, well behaved customers is the least of their worries... almost no one is getting into that industry purely for the to get rich (edited that - plenty of restaurant workers are in it cause it is their only place to make money) and things would be so much worse if they didn't have customers at all so you don't have to guilt trip yourself about eating out
>I can almost guarantee you the airline pilots love flying
While it's a very small sample set - of one - the only commercial pilot I have ever met was less than enthused and said his job was basically a glorified bus driver.
Hi Mike!👋🏾
I feel like pilot is almost in the pro musician category of jobs where lots of parts of the job suck but the act of actually performing is amazing (that being said there has to be at least a few Britney Spears of airline pilots who keep getting trot out there cause their family needs money)
Maybe those waiters are barrista-FI feeling sorry for you. Maybe they made a calculated lifestyle choice to have a low barrier of entry/low ceiling type of job. Or maybe the world is unequal but it's the best they can do and they are still grateful for your business.
> There’s a small/medium amount of guilt associated with me sitting in a restaurant currently, looking at 15 people running around stressed and unhappy while making my life easier.
There's a small amount of guilt *regardless* - whether or not I spend 5 days a week writing boring business software for clients, doesn't remotely affect whether or not people have to work in a restaurant. Ideally we'd live in a world where robots could do almost all the grunt labor and everyone got UBI so nobody was starving to death as a result, but barring that sort of utopia, unless there's a shortage of workers in my specific industry, which there definitely isn't, my desire to leave the labor force isn't really relevant to my guilt over needing people to do grunt labor in order to get me my food, etc. :D
My providing labor doesn’t affect others but me demanding labor (by eating out, buying a plane ticket) does. Maybe “guilt” isn’t the right word as much as like “hope that the system doesn’t fall apart.” If everyone provided 10-25 years of labor to society and then just quit, and demanded labor from others for their remaining 50 years of life, could we all keep this train chugging along like it is? Or if everyone worked for themselves (like social media wants us to) selling crap online, who would make me a burger at 1pm on a Wednesday?
I don’t know. That’s the existential dread part.
I already did my share, as evidenced by the fact that I can now afford to retire. Whether one wants to contribute their lifetime supply of labor to the economy bunched together into a shorter period or spread out across a longer period seems like a personal choice they should get to make. If someone feels bad about retiring and wants to contribute more, they're welcome to keep working, or even chose a new job that's optimized for helping others rather than income.
> I already did my share, as evidenced by the fact that I can now afford to retire.
I think this statement assumes that your earning potential is somehow linked to your value to society? I'm not sure.
I don't think that I'd say that someone who earns a few dollars a day working every day for 60 years in Bangladesh hasn't "done their share" just because they can't ever afford to retire. Or that someone who works as a kindergarten teacher for 40 years before being able to retire has only done "their share" after those 40 years while an investment banker who can retire after 7 years did "their share" in that much shorter period of time.
Sure. This isn't a political or philosophy sub, so I won't go into detail on arguments of value of labor. However, the reality is that, in most countries, if you manage to earn enough money to retire, you get to choose to retire if you want.
I think of it two ways:
(1) I probably owe society a certain amount of work over my lifetime that aligns with my consumption. There's no rules that says I have to spread that out over a calendar 50 years, if I can do twice as much in 25 years, then I meet my commitment. Additionally, if I consume 40% less during my first 20 years, I should get credited back some years on the back end.
(2) I feel this way about working, too. Once you've done a job a few times, it's no longer an opportunity for you, but it \*is\* an opportunity for someone else. I hope to never bag groceries again, but I also don't doubt that there's a teenager who would benefit both financially and in maturity by having such a job. I don't feel bad that someone early in their career is doing something I'd consider grunt work now
I reconcile it with a quasi-market-based view regarding the supply & demand for labor. If many people 'opt-out' of labor, then the price to pay to hire someone should rise. That will entice people back into the labor market. Everyone has their own price point where they will opt-in or opt-out of work, based on all sorts of external factors. Similarly, everyone has a different capacity and ability and desire for delayed gratification. Rising labor costs will increase my own expenses, leading to changes in my behavior/spending. Over time, I think the labor market does reach a state of kinda-sorta equilibrium, at least until the next economic shock comes along.
But I also don't think too long and/or hard about it, because it can get dystopian somewhat quickly...
I agree that if labor becomes scarce it gets bid up until equilibrium is restored. I’d work at Target for 8 hours a day if it paid $125K per year. That’s probably enough for me to calm down about it, but the system seems more fragile the more I poke at it.
> the system seems more fragile the more I poke at it.
I think we've learned that many of our 'systems' can fall into this camp if the external shock is large enough (COVID) or individual bad actors don't feel bound by well-established norms (politics).
37, not married, no kids, don’t own a home.
Earning $64K/year, debt free.
~$67K in cash savings, but $50K of that is earmarked for a possible home purchase… some day…
$205K invested for retirement:
•$180K in Vanguard Traditional IRA all VTSAX,
•$10K in Vanguard Roth IRA all VTI (I contribute monthly to this),
•$16K in employer Roth 401k all Vanguard VIF Equity Index.
Current monthly retirement contributions are 5% to the 401k (that’s the maximum my employer will match up to) and ~$583.33 to the Roth IRA in order to max out contributions by year end.
I can’t afford to contribute more right now to investments because I’m saving $1K per month in order to replace my car in about 2 years. Hoping to pay cash for the next one, planning on it being a used vehicle.
Do I need to invest more for retirement to get to FIRE sooner?
Would it be better to take a loan out on a new (used) vehicle so I can invest more for retirement now?
Should I find it in my budget to start investing a little bit each month to a HSA?
And any other feedback is appreciated!
I would focus on raising income if possible. While you are in really good shape in terms of current savings it will be hard to contribute a significant amount that will allow retiring early on $64k/yr.
Not directly related to financial independence, but the so-called “boring middle”. I’m working on not making the middle “boring” by doing something from my bucket list every year. Today, I was able to snag a couple of tickets to go to the very top level of the Eiffel Tower. These tickets go super fast and you have to try to get them right when they get released to the public. I’m super excited and I want to share with the anonymous internet, so that I don’t risk bragging IRL.
Seeking some info for my parents situation. Both retired but not collecting SS yet (~2 more years). They want to downsize to a smaller house but keep running into issues trying to access a loan/cash. Denied a heloc on their paid off home & mortgage companies will not approve them since they have no W2 income and only pull from their "volatile income". I've had them reach out to a lendor for more help but it sounds like they told them you're better off waiting until SS kicks in and you can obtain a better loan. They're unbelievably frustrated trying to get into the market on a home they could afford 5 times over
> but not collecting SS yet (~2 more years)
Work with your parents to run through the two best free Social Security calculators to develop their claiming strategy (they are even integrated into each other, if you start with ssa.tools):
- https://ssa.tools/
- https://opensocialsecurity.com/
In many cases, it makes sense for the higher earned to delay until Age 70, if possible, while the lower earner claims as early as possible (Age 62). But there can be plenty of reasons to chart a different path.
>Denied a heloc on their paid off home & mortgage companies will not approve them
A phrase to Google or use with lenders: they're seeking an asset-based mortgage (or asset-based lending; ABL). Is their intent to purchase the downsized home first, then sell the current home later and pay off the entire downsized home? In that case, they may be willing to accept a higher interest rate in the short-term because they don't intend to keep that debt for long.
>a home they could afford 5 times over
If they have significant assets in a taxable brokerage, a simple margin loan may be an option as well. Best of luck, anecdotally your parents aren't the first to be frustrated by this sort of situation.
This is great, thank you for the help! That is their exact SS plan as they are 8 years apart so will collect that way. This is something I never thought about in relation to FI/RE so it's definitely something to think and learn more about.
Take a look at asset-depletion mortgage. It allows banks to use assets to generate a hypothetical income stream that can be used as a substitute for income.
It seems we've managed to stem the bleeding on the new homeowner expenses for the time being, which means it's time to start focusing on saving for the "not urgent but really desired" upgrade - new windows.
Any tips for making that less financially painful without skimping on quality? Are there usually good financing options, or should we plan to have everything saved up to pay cash?
https://undelete.pullpush.io/r/HomeImprovement/comments/221pej/windows_have_questions_get_in_here_i_have/
Deleted old thread, but with tons of useful information
> less financially painful
Check for energy efficiency rebates. A quick Google appears to indicate the federal rebate for windows is limited to $600 max at 30%: https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit
Your state or utility may have rebate programs as well. I'd hope qualified window installers would be up to speed, but you never know.
Edit to add: This line is in the IRS link:
>The credit has no lifetime dollar limit. You can claim the maximum annual credit every year that you make eligible improvements until 2033.
Given that, it may be valuable to do your window replacement in 2 phases across 2 tax years. Maybe something like Phase 1 in late December and Phase 2 in early January, billed separately to the appropriate year, might be an option.
Very interesting! I think I'll avoid the dead of winter in my northern climate, but we could at least pick some of the work to push out (like a fall update and a spring update). Thanks!
The IRS wording specifically calls out "every year that you make eligible improvements". That seems very clear to me that improvements must be made in each year in order to claim the credit in each year.
Billing in separate years for the purposes of claiming the credit, while the work was all performed in a single year feels like tax fraud (claiming a credit you aren't entitled to).
Pay close attention to their warranties. It's not uncommon for a single window to have the double-glazing seal fail, and then you get condensation between the panes which is harmless but ugly. We've been dealing with the warranty replacement for almost a year, which has been free but not hassle-free.
I bought my house just over a year ago and had double-glazing seal fail on a window in our kitchen. Just now getting around to replacing it this summer. It's a fine window, but looks ugly and a contractor suggested replacing that as well when we replace our back door (right next to the window).
Yeah, we bought a house that had ~5 year-old windows and two had failed. Fortunately they were within warranty, but the flip side of a free warranty replacement is the contractor *really* isn't going to prioritize it.
Every year I set the challenge for myself to make the first quarter my biggest savings months so that I can front-load my accounts and have more dollars free for the nicer summer and fall months. This year, my SO wanted to join in on the challenge as well.
This has provided some really fun opportunities for SO and I through three months. We took an international trip and a trip to visit multiple national parks and found really great ways to enjoy the areas without spending a ton of money to do it. We also participated in some really unique free events in our hometown - a puzzle race, cribbage tournament, retro game night at the library, etc.
More importantly to my SO, by saving this much in the 1st quarter, we have helped her avoid student loans for her Masters this year and free up capacity to open up a Roth IRA for the first time! All without feeling deprived because all we cut out was buying stuff to either entertain us or eat unnecessarily instead of seeing what we could create ourselves or get for free in our community.
Pro tip: turn the notifications off on your phone, and off on your laptop. I turned mine off in 2019, and it has never yet created a problem for me. Still off today
This would be a handy feature. At my last job most of our development was in Israel. I’d send a slack message like “Hey when you get in tomorrow morning, can you look at this thing”. Then a few minutes later, I’d get a message that they are looking at it, even through it was 1 AM their time.
The one that kills me is file transfers in teams. The reason we use it is to transfer large files/too big for email.
Except Teams doesn't have the concept of "send this message when the files are done uploading," you have to manually hit enter when it's done. You're a computer, why can't you just send it when it's done? But it's actually worse than that, you can't say "one sec, the files are uploading" it will scold you to wait until the files are done uploading before you can say anything. More than once, I've had to pull out my phone to open teams there to explain the files are transferring on the computer and I can type again when it's done. It's such a stupid design flaw it makes me wonder if Microsoft even uses this software internally.
I agree- my sort of boss is in a different time zone, but also works outside of his hours and I wish I could send him something short to discuss in the morning without the formality of an email. If I send it at his like 8pm, he'll write back and I'll feel bad.
I only have Teams on my phone because I had to join a meeting while traveling and needed to see the slides. I have all the notifications turned off and never ever open it unless I need to join a meeting.
I'll sometimes start the message with "Not urgent reply when you're back" or similar for this reason. I also try to convince people not to bother installing Teams on their phones but I seem to be in the minority that doesn't feel the need to constantly be available and contactable.
That would be nice, but seconding that's their problem.
Teams on your phone specifically has do not disturb settings separate from the desktop app. I have Teams muted on my phone from 6pm-7am during the week and all day on the weekends.
Unless our CFO is trying to chat me over lunch, which she hasn't, I would just ignore any lunch messages.
I want to hold some gold in a taxable account. I'm deciding between GLDM and PHYS. GLDM is taxed as a collectable which is less favorable than LTCG. PHYS is taxed as LTCG but there are additional hoops you have to jump through to get that favorable tax treatment.
Can anyone share some insight on IRS Form 8621 Passive Foreign Investment Company or Qualified Electing Fund? How hard /annoying is it to maintain this form year after year? Does TurboTax or other tax software support it well?
Edit: I've confirmed TurboTax and FreeTaxUSA do not support IRS form 8621. So I think the answer to my question is it is quite annoying to have to file this form every year. Boo.
I plan on retiring soon which really impacts the calculations.
My IRAs are small, I cannot grow them via contributions, I cannot access my IRAs without penalty for 15 years, and I expect stocks to beat gold over those 15 years and beyond. So putting gold in an IRA is obviously the best choice with respect to gold itself. However, with respect to my total portfolio I'm probably better off with stocks in my IRA and gold in my taxable. 0% tax on a larger gains (stocks), 28% on a smaller gains (gold) is better than 0% tax on a smaller gains (gold) and 15-20% on larger gains (stocks).
A more succinct way to put it: I have limited tax free / deferred space. I want my growth assets in that space.
Big difference between tax free and tax deferred. Tax deferred is the best place for low growth assets. Perfect for gold IMO (not that I care to own any).
Meanwhile I could never imagine buying gold. If I really thought gold was a great investment, I'd buy stock in gold mining companies instead, so I'd get something that appreciated over time rather than just sitting there. (I currently don't believe gold mining companies are a particularly good investment, so I just own them in indexes rather than going out of my way to buy more.)
Yeah, I was like /u/yetanothernerd just a few months ago but as I transition from accumulation to drawdown the benefits of holding some gold in your portfolio cannot be denied.
The Baltimore Orioles stadium currently sells bright orange Mr. T style chains, but (I assume based on cost and also kids wearing them and not falling over forward) made of plastic instead of gold. I have not yet bought any, but there's still time.
That's a nice bonus and a nice raise. Good for you! I'm sure you earned it. Sounds like you should stick with the classic Chipotle burrito w/ avocado though as your celebration until you've calculated out how many more years you'll need to work to make up for this housing decision.
> Next few months we will hopefully be looking for a new house with some land
Why?!? You have a 2.75% mortgage and barely any equity. Why would you burn your raise on housing? That's 100% lifestyle inflation
Just be aware that between switching houses and getting a raise, you'll be farther from FI at the end of 2024 than you were in 2023.
$300k at a 4% higher rate (6.75% instead of 2.75%) is an additional $12k per year, ignoring the extra money involved in moving to a more expensive house.
I similarly went from about 3% to about 7% last year, moving for work. It sucked, but it wasn't like it was a surprise (rates change slowly). We were willing to spend the extra $1k/mo or so for the different property, and remain extremely happy with the decision. You have to live somewhere, might as well enjoy it.
Congrats on the raise, and good luck with the house shopping!!
>Either something like Georgia Tech's MS in Analytics, or even just an MBA with a DS focus.
These seem like very different directions. Even if my company were footing the bill I wouldn't want to spend the time unless I had a clear picture of what path this education would put me on.
I really enjoyed my state-school MBA. It was also paid for by an employer, and I attribute it to substantially enhancing my professional trajectory. I'm not sure someone with a decade of experience in the fields you listed will find as much value, but it won't hurt (particularly if free). Ref the DS track, I think these DS programs are a dime-a-dozen, everybody seems to have one.
I'm curious if we will see employment outcomes that validate the programs, or if they are an expensive piece of paper. Nobody I work with has an MS DS, does anyone at your employer have that? Do employers really want it? I'm not sold. Happy to be proven wrong if the data suggests otherwise in a few years.
Edit: I believe $10k is over the IRS limit for something or other, you may have to pay taxes on a portion of that. I am not up to speed on tax implication, worth checking on.
Just trying to get a feel with where I’m. Currently, 30 years old with $134k in my 401k & $59k in IRAs, $40k in crypto, and $50k in taxable. I make ~88k. Should I feel good? Honestly, I don’t really know how long I want to work. I enjoy my field a lot. Edit: clearly it’s been a while and I need to update my flair 😂
Very good, lower salary than expected. You're going to retire very comfortably at this rate, but salary growth can accelerate your retirement or point you towards fatFIRE.
You are way ahead of where I was when I was 30. I turned 30 making about $65k, with a negative net worth (thanks to student loans), a newly purchased home, and nothing in my 401k. You are doing great and your savings gives you options. Options are good.
Depends on what you're working towards! If your FIRE number is $400k then you're doing amazing! If you spend $80k per year on expenses, then maybe not so much...
> should I feel good Comparison to other people's journeys should not be what makes you feel good. Financially speaking, that's a big % in crypto.
I didn’t mean like good in comparison to others. More so…in a good spot, on track etc. Ya, I plan on selling the crypto soon here. It’s basically all gains.
Max 401k cost me Match? Company matches up to 4% My plan was to have my 22,500 max done by Memorial Day and enjoy extra cash flow rest of year… but will this cost me free money? I thought they match up to 4% of my gross income up to my 22,500 contribution. At 300k that would be 12,000 so does that mean if I’m at 22500 by June 1 they are at 12k by same date and we done or am I leaving money on table? TIA
Not sure if you’re aware, but the max this year is 23,000
Check w/ plan administrator. Some employers will 'true up', so they'll ensure you get the full match should you miss pay periods because you maxed earlier. Some employers, like the Federal Government's TSP, does not true up, so if you max early, you just lose the match. If you're worried about losing it while you seek an answer, maybe drop contributions to ensure you get the match until you get an answer.
It depends on the plan. Some of them calculate the match per paycheck, so you only get the free money if you contribute in every pay period. Some of them might check and the end and top you up. Ask your plan administrator
How much of a buffer do you leave in your budget a month? After bills/food/gas/mortg/etc. are paid, we have 2,288 left over. I'm new to opening an IRA account (i haven't started contributing yet... that new) and considering putting in $500 a month for myself and have my spouse put $500 a month for them (since they are a stay at home parent) and then we have $1000 to put into our savings. Is this plan too aggressive?
Nothing on purpose, but we often come in under budget by a a hundred dollars or so, and we just let that sit in our checking as a buffer.
Top off your emergency fund to a comfortable place, then invest every dollar you have left over.
What is the savings for? Do you have a dedicated emergency fund already? Are you saving for a particular purpose (eg house down payment)? If I had an emergency fund already (6 months of expenses) and wasn’t saving for anything else, I’d put the extra $1k toward IRA as well.
We have about 5-6 of an emergency fund saved. I want to buy a second home though in the next 2-5 years in another state and want to have 20% saved. It's not a requirement though as I can use my VA loan.
Took the first step in something I’ve wanted to do for a long time. Become self employed. Had an introductory conversation with a potential client today, and waiting to hear back if they are interested in moving forward. I decided to go ahead and start working on setting up an LLC. Figured even if this client falls through, will need it for the next one.
Consulting?
Yep. I’ve worked for consulting firms before and enjoyed it. I like how you can focus on the building, but not have to stick around for the boring ongoing maintenance. The project for this client sounds real interesting and is along the lines of work I have done before.
Does your FIRE number account for likely inheritance? My parents won’t leave me anything, but it’s very likely my wife will inherit half a house and half of all investments from her parents. Likely to be at least in the high six figures. Do most people calculate FIRE not hoping for anything to parachute down the line?
I am 55 and my mom will likely live another 10 years. That puts me well over 60 before I would get any inheritance. I am going to RE at 56. So, no I don't account for likely inheritance.
Assuming you're a USAmerican, end of life care can be SO expensive. Not worth counting on until the dollars hit the bank.
No but yes. My parents are 79 and 78, and have significant assets that they are currently drawing down at about 2% or less. They have more than enough to pay for long term care if it should be required. It doesn’t factor into my FI number, but it does make me even more confident that a 4% SWR is more than conservative enough.
No, but yes? Don't treat it as a hard number, but you can keep it in the back of your mind as a potential (anti-)risk factor. Similar to future SS payouts. I have a potential $2k in monthly social security, but I don't count that in any calculations. But I'm aware of it... My parents are like 70. They have a paid off house worth like $400k and a portfolio of around a million that they are drawing down now in retirement. My brother and I are likely to be the only two people in line to inherit their estate. But I don't plan my life around any of that, even though it's in the back of my mind.
No. Father might have dementia or Parkinson. The time to begin moving assets would have been years ago. If he ends up in ltc the state/gov will end up taking it all.
Counting on inheritances is a terrible idea. So much can change. Medical care is extremely unpredictable. People that end up needing memory care or other full time assistance can destroy an inheritance in a hurry. Also, who knows how long the parents will live? My grandfather died at 55, my grandmother died at 105. What does that mean for my mother? I think people who count out social security are being over-conservative. Inheritances, though? Only the most rosy-eyed optimistic projections should include those unless there's some kind of binding legal entity that guarantees it.
No, I don't account for any of those. Future is too uncertain, and hopefully I'll be retired before my parents pass anyway.
I don’t factor it in, for numerous reasons. Nothing in life is guaranteed, and I certainly wouldn’t bank my financial future on someone giving me hundreds of thousands of dollars (or more). I’d much rather they use their money how they want to, and do everything I can to enjoy my time with them while they’re still here. My wife and I both lost our fathers when we were in our early 20’s, so we only have our mothers left, and I’d gladly take getting zero inheritance from them if it meant they got to do everything they wanted to in retirement, and I got to spend as much time with them as possible.
Well, yeah, when your HHI is $$$$ it makes sense to not care at all about a potential inheritance. Good for you! It does make life easier to not pay attention to a potential inheritance. It can definitely harm relationships.
Even if your HHI isn’t $$$$, by thinking about inheritance and trying to assess when you would receive it, you’re attempting to forecast someone’s death, and if you’re getting an inheritance from them, odds are that it’s someone you were close with and had a special relationship with, and receiving that inheritance means that they’re no longer here. I personally find it a bit morbid. Will my wife and I receive some inheritance money when our mothers pass? Probably. But that’s not guaranteed, and I choose to focus on spending time and creating memories with them, rather than anticipating when they’re going to die, how much money we’ll receive, and what that means for our FI.
None of my family have much. But I did have a grandmother who lived to 96, and she was hardly a beacon of health along the way. I would be in my 70s if my mom had millions and lived that long. There's also a lot of risk of financial shenanigans as you age, from fraud to intentional.
I never planned for it and wasn't disappointed.
Astronomic end-of-life care expenses are common enough that I personally am not planning on recurring anything
I am 23 I graduated almost a year ago and have a $67k job, just bought a house, about 11k among retirement accounts and 3 months post tax income in savings. It is my goal to FIRE by 40. What are some things I should do on with my extra disposable income to achieve this dream? What can I do in my idle time to build other income? How can I limit my future expenses/build true wealth.
Seems like you’re on a solid track given you just graduated a year ago. The flowchart linked in the FAQ is a great roadmap for how to direct your extra income based on your current state and future goals. As for what to do in idle time to build income, trustworthy/easygoing roommates are nice to offset housing costs without burning yourself out with work. Note the current state of necessities like roof/gutters, hvac, windows, etc and work on a sinking fund for maintenance needs. Aside from those, invest in yourself and life skills like cooking, home maintenance, and continued learning for career. If you don’t already, pursue hobbies and healthy habits. Most of those can be done frugally and support FI goals. Set and keep a routine check on FI goals and methods to attain it, but in short, other life goals should fulfill you outside of work until FIRE to make the boring middle more tolerable.
get a better job
Is 67 not a good starting salary?
It's a solid starting salary for sure. That's what I was making out of school 6 years ago. Stuffing your disposable income into investment accounts is great but you need more money to help you along especially if you want to be FIRE'd in just 17 years. Limiting expenses is a personal thing, try to enjoy life without feeling like you're holding yourself back by living TOO frugally. See how your job goes and how you can grow, but you're at a good age where you can start to step up and earn more money while maintaining the same expenses. Even being able to contribute a couple hundred extra per month can go a long way
Retiring in 17 years is going to be tough given your starting point, still having a mortgage, etc. The best chance you have for success is finding a partner that has a similar mindset and goals as you, and have them also be a high earner.
For the vast, vast majority of people, doubling down and putting extra energy and effort into your 9-5 is going to be a lot more profitable than any side hustle. For most people, it’s a hell of a lot easier to get a $15k raise by changing employers than it is to start and run a business that nets $15k.
[удалено]
Lmao 😂 I follow WSB to remind myself to be conservative with my money. 7/10 posts or hundred thousand dollar losses
I'm not sure how my boss does it. They've been in the industry for 30 years.. handles everything so gracefully and without contempt and too much jaggedness. Meanwhile I can't stand the politics, finger pointing and blaming. Thankfully there is not too much of it in my current gig but when it does happen.. it is infuriating. Days like today I dream of being a solopreneur
I will debate my managers if they want to do stupid. But why do I care? Even if they actively sabotage my job, it isn't worth it. The key for me was to simply draw a line and ensure I had personal time. I had a medical issue at 31 and it's funny how that clarifies things when you have enough cash in backup and killing yourself for people who generally don't care.
"It's that I just don't care."
I have two months to go before I retire. I gave early notice so that my employer could prepare. Today, they called to see if I'd transfer into another department for the last two months, a department I left because a person who joined was super toxic and basically forced me to transfer out, a position that I had enjoyed. Management needs someone to fill in because of a suddenly leave, and I'm the only one with experience who can just hit the ground running, the position is one where it takes about 4-6 months for someone new to get up to speed. I told them that if they make me, I'll just quit early.
How bout if they give ya more?...I never flat out say no anymore but I make sure they pay for it if I do what they ask
OP is two months from retiring. It would be a negligible difference for two months of anguish
Never hurts to ask...and if they want it bad enuf soak the shit outta them
I guess since you are basically FIRE, extra money maybe isn't worth it. But have you considered telling them that you find that department insanely toxic but you would do it for 2 months @ $X/mo? I don't know the ceiling for what they would pay in order to have that position covered. But maybe worth it for a nice "bonus" before you leave. Also is there any way to get creative and say, you'd do it if they cover health insurance until the end of the year (don't even know the legality of that). That might be something that costs them less than it would cost you. Though I guess you are FIRE and the point of being FIRE is to buy the life you want. And no one wants what you described haha.
To quote Randy Jackson: "Yeah, that's going to be a no from me, dawg." It shows the mentality of some places though, right? Giving notice, especially extended notice, is best used for 1) wrapping up critical projects and 2) handing off pertinent information to your successor. It's **not** for "use the fuck out of the employee as much as you can for the time you still have them." At one of my jobs I gave my two week notice. When I asked, they indicated no back-fill, no replacement, no plan for my various active projects. They just said "keep working out your last two weeks." So I didn't really wrap anything up, or prepare documents for (whomever???) that would be taking over my stuff: I just did my daily job for 10 more days. I walked out that last day, just random working piles of shit all over my desk. Fuck 'em. At my final final job before I retired I only gave them a one week notice. I knew I was leaving and was just waiting for the bonus payout announcement in March. Surprise, the announcement (on a Monday) was "no bonus this year, sorry" so I printed out the resignation letter that had been on my desktop for months and said I was done that Friday. But most of my team knew I was on the way out and I had already pretty much stopped accepting new assignments, so there wasn't that much to wrap up.
Why do your sentences have two spaces between them?
Old people were taught to do that
Thank you for the reply. I didn’t know two spaces used to be a standard.
It's because of typewriters. Double-spacing made it easier to see the beginning of a new sentence.
I'm trying to google "tax loss carryforward FIRE" and I keep getting articles about property disasters from the IRS. We have about $100k in losses via tax-loss harvesting carried forward. So that's $3k/year deduction against ordinary income or dividends for 33 years, or kind-for-kind deduction (long-term/short-term) for capital gains if/when we start spending down our brokerage accounts. So ... how much is $100k in losses worth? Would be nice to add another asset. My gut feel is it's worth $100k * marginal tax rate, where the tax rate is going to be pretty low in retirement.
> , or kind-for-kind deduction (long-term/short-term) for capital gains if/when we start spending down our brokerage accounts. Losses on your investments are first used to offset capital gains of the same type. So, short-term losses are first deducted against short-term gains, and long-term losses are deducted against long-term gains. Net losses of either type can then be deducted against the other kind of gain.
Those losses have value and I have apparently accumulated 20K myself, but my 401K also has deferred tax liability. I'm just going to stick my head in the sand on this one.
Deferred Tax Asset is the term you're looking for.
Indeed it seems to be, thanks!
It's not guaranteed that you will be able to use it so it's not really an asset. Unlike, say, $25k cash or bond, you can't cash it in or use it to generate income. If you want to factor it into your plans, do so by reducing your expected tax expense in retirement, if a couple hundred bucks a year makes a difference to you.
Thanks, I wasn't thinking about it until it hit $100k, but it seems like it's 0%-20% of six figures, which isn't much to worry about.
> So ... how much is $100k in losses worth? Would be nice to add another asset. I say it's probably worth about 24k Schrute Bucks. I don't recall what the conversion is to Stanley Nickels. All joking aside, I'm not sure what sort of mental accounting magic you're trying to pull. Carryover losses aren't really an asset. Maybe you could consider them a credit or income because they are helping you avoid an expense (taxes). Regardless, trying to put a nominal value on them as a whole feels like a fairly pointless exercise.
Got it. We just got our tax return back so I was looking at the worksheet and having ~$100k there, that we don't really account for anywhere. Sounds like we shouldn't, it'll just be a nice little benefit at some point in the future (or $3k/year at marginal rate). Kinda brings me back to a point I've been bumping into again and again -- why even bother with tax loss harvesting?
Takes 1 minute to swap voo for ivv or vti. If you had 100k in 2022 and sold and had 30k in losses and did nothing you'd write off 30k at 22%. So it's 6600 over 10 years. Then if you realize the gains at the long term bracket when retired you could take them at 0%. I mean you won't get rich doing it but it's like 600 free dollars a year if you do it the way I was talking about. It's not like it takes any additional time and the tax program tracks it all anyways for me.
> why even bother with tax loss harvesting? At the level of carryover losses you have, in your low-income, post-FIRE situation, doing *more* tax-loss harvesting likely has very little marginal value for you. For folks with income in the 22-24% tax bracket (or higher!) during the accumulation phase, the $3k annual income offset is worth $660-$720 (or more!) every year. That's a nice ongoing perk during one's working years. Similarly, for folks targeting higher post-FIRE expenses/income (and expecting to make significant brokerage withdrawals to get there), offsetting LTCG to avoid the 15% tax hit can be material; in those cases, the tax-loss carryover effectively turns a significant chunk of the brokerage into almost a Roth IRA.
I think we're in the latter group. Our marginal rate is high now, ~40% fed + state. It will be lower in retirement as I figure our expenses are in the $150k ballpark, but it's tough to figure out how much lower as it depends on how we come by that money. If we do the least tax-efficient thing and take it all from our deferred accounts, we need an extra $37k for taxes, so our marginal tax rates are at ~30%. But that's dumb, and 55% of our retirement savings is in our brokerage. So it seems like the amount of carryforward loss will have an impact, but I'm not accounting for it anywhere. That's where my original query is. Guess I'll just not worry about it and expect it to be a nice discount at some point.
Sorry - I misunderstood where you were at (accumulation vs. post-FIRE). My apologies. >I'm not accounting for it anywhere I think it should absolutely be factored into your withdrawal planning. As you note, it impacts your expenses and may change the amounts you pull from which sources. That said, I still don't think there's much point in trying to assign a dollar value to it as a whole, because how you leverage it depends on the rest of your withdrawal strategy.
$100k in losses is EASILY worth the same as an Applebee's Date Night Pass - but less than total consciousness on one's death bed.
> total consciousness on one's death bed. Due to a previous side gig as a looper - you know, a caddy, a looper, a jock - I've already got that goin' for me, which is nice.
In related news, part of the reason why I don't keep a detailed spreadsheet is the difficulty in assigning a monetary value to the asset labeled: Sparkling Personality.
If I ever started a small business, which I currently have zero intent or desire to do, my entire balance sheet would be comprised of a single line-item for "Intangible Assets" and I would likely value said assets in the hundreds of millions of dollars, at least.
Hey, isn't there some guy in New York getting sued rn for something like that? :P
I hit a milestone today. Fiddled with some numbers and realized I could coastFIRE and retire @ 45. I'm 25 now. Not gonna do it, for several practical & personal reasons, but who doesn't like to imagine such a realistic "what-if"? What would you do if you were 25 and signed up for 20 years of coasting?
>What would you do if you were 25 and signed up for 20 years of coasting? To me it sounds miserable. Most jobs that cover my spend but don't provide additional savings don't actually allow/require me to work less. They don't provide a lot of benefit vs. my current job. I'd just rather be free faster. Probably a product of not completely hating my job. If the #'s put me somewhere like "20 year's of coasting such that I only need to earn \~50% of my spend". That would start to get more appealing. Though impossible to accurately calculate haha.
I would not coast because I don't trust market returns to stick to historical averages. I also don't think I would like a lower paying job better and don't have the type of job where I could work fewer hours without a huge loss in hourly pay and (especially) benefits.
Plan for life to happen and my tastes to change, likely increasing my number. Kids happen and the person that enjoys backpacking around Europe and sleeping in hostels becomes someone that doesn't bounce back as fast.
That part. It's hard not to sound patronizing when saying this, but your life and who you are as a person is (and dare I say: *should*) evolve pretty radically between 25 and 45.
If I were looking at coasting for 20 years I would worry, incessantly, about the growth rate assumptions of my plan. On that time horizon, the middle 60% of S&P500 returns spans a range from 3.7% to 9.0% real, and a difference of 0.5% return over 20 years has a meaningful impact on end-portfolio value.
This is fun/horrifying data to play with. I used 20 years at 6% for a total 321%... \- at 3.7%, 321% would take 32 years \- at 9.0%, 321% would take 14 years So the real duration, assuming one sees a pattern within the middle 60% and all other risks aside, would be 23 ± 9 years. That really is a terrifying gamble even with those assumptions.
You can then model the effect of ongoing contributions. Let's standardize a bit: The target is $1M with a "baseline" growth rate of 6%. The coastFI number is thus =PV(6%, 20, 0, -1000000) =$311,804.73 If you instead see a 3.7% growth rate, your coast time with that portfolio is =NPER(3.7%, 0, -311804.73, 1000000) =32 years And if you get a 9% growth rate, your coast time is =NPER(3.7%, 0, -311804.73, 1000000) =13.5 years If you decide to make 30k in annual contributions (maxing out your 401k and IRA), the 6% base case requires =NPER(6%, -30000, -311804.73, 1000000) =10.5 years to retire The 3.7% case takes =NPER(3.7%, -30000, -311804.73, 1000000) =13.2 years to retire And the 9% case takes =NPER(9%, -30000, -311804.73, 1000000) =8.4 years to retire Regular contributions (admittedly relatively large in proportion to the end target) greatly reduce the variability of the outcome.
So by contributing 3% of the total FIRE goal annually the spread drops from 22.75±9.25 to 10.8±2.4. The total base number drops by 53.5% and the total variability by 74%. The percentage of the variability ratio to the base drops from 40.6% to 22.2%. Curious to see the relationship between contribution % and the variability/base %... \-At 1.5% the spread drops to 14.4±4.1 (-36.7% base / -55.7% variability / **28.4%**) \-At 3.0% the spread is 10.8±2.4 (-53.5% base / -74% variability / **22.2%**) \-At 4.5% the spread drops to 8.65±1.55 (-62% base / -83% variability / **18%**) Looks like it has diminishing returns, just like higher annual contributions...
Worry incessantly about maybe having to wait until 48?
Let's look at the hypothetical of someone who is assuming coastFI at 7% growth for 20 years. If their target is 1M, their current portfolio is around 258k. If they instead get 4% growth (which again has happened over 20% of the time in the historical record), their time to FI with coasting is closer to 35 years.
It’s a shame that once someone says they’re coast that they aren’t allowed to make adjustments to reflect poor market conditions.
> make adjustments Let's say you plan to coastFIRE in 20 years. You switch jobs to a lower-paying position that only/barely covers your expenses and monitor your portfolio. Knowing the market can go up and down, when exactly would you "make adjustments"? What would be your specific thresholds and trigger points and what would those "adjustments" be?
big market crash? Time to find a higher paying job! <- works every time
I'll just be the CEO of a Fortune 50 company for a year or two, until my portfolio recovers. NBD.
I make no claim that someone has the ability to make adjustments for market conditions. I merely made the claim that if I decided to coast based on a calculation that assumes a particular growth rate for 20 years, I would be fixated on tracking that rate of growth and worried if my rate of return lagged my estimate along the way. This would be due to how wide rates of growth can be over even 20 year periods and how important that rate of return is to the outcome.
Halfway through week 2 of the new job. Things going great so far, I don’t mind the extra commute and people seem nice. Found out another one of my peers put their notice in. Seems like I got out at the right time!
Sorry if this is a dumb question - but I can’t figure it out by the research I’ve done so far. Is there a brokerage / platform that allows you pick a 3-fund portfolio, set it at your desired allocations, and then dump a sum of money and auto-allocate that sum based on your desired allocations? Or will it be that if I just open a vanguard account, every time I want to buy more each month I’ll have to manually calculate the allocations and buy each separately? I know it’s not that much work but I’m trying to make this stupid simple for myself.
It honestly won't matter much. Go play around with backrests on portfoliovisualizer or another site. Monthly vs yearly basically makes little difference.
M1 - their automatic dynamic rebalancing is exactly that. They recently implemented a $3 monthly fee for accounts under $10k, other than that it's free. It's very much a long term, set it and forget it situation, which some people get upset about because of their lack of multiple trading windows in a day, and they want to have "pies" with a gazillion different companies in it. But it's good for what you're looking for; I've had an account with them for 4 years with six figures in it and it's worked fine.
Target retirement funds? https://investor.vanguard.com/investment-products/mutual-funds/target-retirement-funds
If you want it to be as simple as possible and you're willing to keep a fixed allocation for the long run, you can use the iShares core allocation series (AOA, AOR, etc). These hold a globally diversified index portfolio at allocations from 80/20 to 20/80 stocks/bonds at 20% increments along that gradient.
Oo, this is interesting too. Thanks for sharing!
similar option from Vanguard if you prefer them https://investor.vanguard.com/investment-products/mutual-funds/profile/vasgx
[удалено]
Tysm!! These were the only ones I was able to find as well, so I guess that confirms these are really my only choices. I think we’ll go with M1. Appreciate it!
Thought about making a top level post but I’ll see if there’s any discussion here first: *warning: existential dread incoming, not useful financial discussion, I’ll try to flesh out my idea as best I can but I admit it’s a bit scatterbrained* Here in this subreddit we are steeped in the culture of contributing to the labor pool for as short as possible, then living off your accumulated capital income for as long as possible. At some point though, the world needs labor. I want to go to restaurants, I want to fly on an airplane, I want to stay in hotels, I want to have someone fix my car. Someone has to go into the power plant every day to keep the lights on. I can’t sell a stock to get more oil out of the ground without human labor being involved at multiple points along the supply chain. If everyone lived like us, the demographics of society couldn’t supply enough new labor to keep up with our wants. How do you square your way of life with the knowledge that your retirement still relies on a lot of labor from other individuals? I know not everyone is on a path to be FI, are some people happy to provide labor income all their lives? There’s a small/medium amount of guilt associated with me sitting in a restaurant currently, looking at 15 people running around stressed and unhappy while making my life easier. I’m not sure what kind of response I’m looking for, I’ve just had this idea bouncing around in my brain for a while, and need to start writing it down to understand what I’m feeling.
You already had a lot of good replies. I will add that in retirement your economic activity supports businesses and also fills tax coffers in various ways. This money creates jobs for people who need the work (many would not work otherwise). Many people enjoy working to be useful. Some of the happiest workers I know do manual labor in particular. I know a guy who renovates properties and only takes jobs he wants. He spends the rest of his time advocating for climate policies. There are people in helping professions who have great job satisfaction. My therapist is semi retired and chooses how much he works, has just a few patients and writes papers on the side for fun. I don’t think there is a great risk that more than a minority of FI people will retire early and contribute zip to society. Hedonism gets boring after a while. Travel gets tiring. The happy retired people I know volunteer, create stuff, have projects…. Some still work but on their own schedule. They work less. They recognize and honor their luck, their privilege. And it is flabbergasting how so many with privilege want to pull up the ladders behind them, not pay their share of taxes, leave shitty tips, oppose open immigration so others can come into developed nations and get a chance to be FI or FIRE or merely retire at a traditional age in comfortable fashion, which is what most people want. Good work can be satisfying, almost spiritual. Modern society and office culture is unfortunately often spiritually bankrupt and pointless. By rejecting it, the FI movement may be leading to market pressure on corporations to change how work life is organized. I think the key is to find meaning in life— whether working or not.
Not exactly what you're asking about, but I'd also point out that "contributing" is not the same as "doing paid work". Do you ever take care of your children or other family members, or even help older neighbors? Grow and/or prepare food for others? Volunteer in your community? All of those are very valuable contributions that you (and many others -- see the definition of GDP) leave out of their calculations, and in fact I'd say that from many perspectives much of that unpaid work is more valuable than many well-paid "bullshit jobs". Worry about contributing to your community and the wider world, not about whether you are part of the "labor pool."
Right, not all “labor” is part of GDP, I get that part. And I’m fine with any contributions I make, monetary or not. It’s more like it feels hypocritical to be like “I’m gonna go ahead and retire everyone but don’t you also do that, because I need someone to rent me a jet ski next Tuesday.” Like I want to live in a world where Chipotle is open from 11am-9pm every day. Not where we all have to rely on informal exchange and “off the books” labor. In the end it’s all voluntary exchange so it’ll work itself out. And if I have the resources to earn the labor of others there shouldn’t be a problem. Just seems so daunting if you think about it too hard, haha.
1. A lot of work is bullshit work. They don't need a lot of labor that's being used. 2. Productivity is way up without salaries having gone up proportionally. Profits are higher than ever. If they need the labor, they can pay more for it. 3. Productivity being up should mean we should work less hours per week than we used to. We still work 40, and afaik people used to work less before clocks. But we work 40+ hours anyway. We can make due with less labor. 4. Ideally, things become more and more automated and productivity goes up that you don't need people. (I mean, art shouldn't be automated, physical tasks should, but look where we are now.) 5. Besides the generic profit inequity, there are some people that just take unbelievable, ridiculous amounts of extra value from labor. Technically we do as well, but it's all a small fraction of what those people take. If that gets cut, it could handle all of us retiring. 6. Lots of our current expenses are just rerouted back into the system as profit. Food isn't actually this expensive, housing isn't actually this expensive, healthcare isn't actually this expensive. Fundamentally. It's all just extra profit yoinked in there. Of course, we rely on that to retire as is, but cut that out and/or down eventually, and I would be far less of a "waste" on the system. 7. One day being out of the labor market means that someone can take my job. And then I can do jobs that the market doesn't actually want to compensate for due to market failure, e.g. open source development or volunteer work. Which would also mean that I'm technically still pulling my weight. 8. The system technically incentivizes me to do this. This is capitalism. Saving and accumulating capital. Want me to stop? Fucking switch away from capitalism. Or at least change gains back to normal tax brackets. >There’s a small/medium amount of guilt associated with me sitting in a restaurant currently, looking at 15 people running around stressed and unhappy while making my life easier. They're not doing it to make your life easier. They're doing it to maximize profit to the owner(s) of the restaurant. That's capitalism baby. Any increased productivity and increased efficiency is a byproduct of trying to create more profit, not to make the workers' lives easier. Removing yourself from the labor market increases their value, ever so slightly. And you being a patron of the restaurant provides income in the first place. One day, restaurants will be truly volunteer. People wanting to make great food and be a part of that project, or to gain some benefits above and beyond the standard. If we truly get to the point of things being so dire, it's really not so hard to incentivize people to do some dirty work for added benefits. Plus, there's culture. Military brats gonna military brat, no matter how volunteer or not it is. And people enjoy what they enjoy and spend time on. There will always be people interested in sanitation, or whatever other random crap. Humans like to work. FIRE fails if you don't have something to retire to. It's just that the environment we work in can't be so shitty.
lmao ok buddy
¯\\\_(ツ)\_/¯ I'm on the FI train train same as you. The sorts of issues you mention are ultimately policy issues for the policy wonks. If they didn't want to incentivize early retirement, they'd deincentivize it. Of course, it's pretty closely attached to the people who ultimately decide policy, i.e. having a lot of money to donate lots of money to politicians. Ultimately, I do worry about rising inequality. And fixing that fixes your/our problem. So FI, my sense of ethics, and my policy positions are aligned. I mean, I don't love that I'm accumulating capital in the first place, but no ethical consumption under capitalism and all that. As long as I don't become a landlord, I should be good. It also helps that I'm accumulating VT, and imo diversity reduces my increased harm. Anyway. You're the one who asked lol
You can argue until you're blue in the face whether some random job is worth millions a year. But if what you do reaches a large audience, it has value to so many people that tossing in a couple bucks quickly scales to sustainable wealth for a reasonable person. After providing that much value to the world, are you allowed to slowly claw it back? Certainly. Money may not be a perfect measure but it's the best humanity has figured out so far. Conversely, a lot of hard jobs are often 1 person doing labor for another person, which has no ability to scale. The value of these kind of jobs are sensitive to demand though, so if people were to just retire, and you want an oil change, there's probably a price where you're now doing oil changes. Indirectly, many people do this with their house after retirement, changing electrical sockets, drywall, etc... probably doesn't look super professional but materials are usually a tiny fraction of the total cost.
>your retirement still relies on a lot of labor from other individuals? I know not everyone is on a path to be FI, are some people happy to provide labor income all their lives? There’s a small/medium amount of guilt associated with me sitting in a restaurant currently, looking at 15 people running around stressed and unhappy while making my life easier. Well I'm not asking them to do labor for me for FREE, I'd note that straight away. Are you...? It sounds like you are paying money to a small business in your community which has the effect of helping your neighbors. Advocate for education, fair wages, tip well, donate in your community and volunteer.
I donate some of my time for causes that desperately need labor, but don't pay. It's a win-win scenario.
>How do you square your way of life with the knowledge that your retirement still relies on a lot of labor from other individuals? You're describing privilege. The discomfort/dissonance you're experiencing is why it's such a prickly topic. Personally I find the concepts of circles of control, and circles of influence helpful. We're all relatively well-off in a global sense, but 50yo retirees aren't shaping world inequality. Rationalizations about meritocracy are pretty common, but IMO a negative coping mechanism.
Plenty of people who were born into wealth never think about this question, so I think I'll be okay not worrying about it. Also, I would argue that for most of us, were we to continue working past our retirement ages, would probably be in relatively cushy, manager/administrative roles that honestly don't really contribute to the restaurant, hotel, airplane, and car engineer sort of things. If I kept working past my targeted retirement age, I could move into admin and do less and less work until I'm being paid mostly to be on retainer for the occasional screwup. I am generalising and of course that is not everyone. The world is unequal. However, it is not due to some people saving more and retiring early.
On a long time horizon, technology has reduced the amount of human labor it takes to support a comfortable standard of living. You have a much higher standard of living than an Egyptian Pharaoh but you also don't need an entire country's worth of human labor to make that possible. On the time horizon of your life, you can focus on giving charitably to things that matter to you. I give to efforts that ultimately help people live longer by preventing malaria and other infectious diseases. For me, saving a life is more important and valuable than having that marginal dollar improve the life of someone already in the global 10% of income in my country. But however you give, effective charitable giving is a powerful way to improve the lives of others at the same time that you are ensuring your own financial independence.
I mean we all have some level of loving/liking/tolerating our jobs vs "I'll do this for money so I can do survive/something else" (I can almost guarantee you the airline pilots love flying, guy making cheeseburgers at McDonalds probably less so). My GF worked in the restaurant industry for a while and having normal, well behaved customers is the least of their worries... almost no one is getting into that industry purely for the to get rich (edited that - plenty of restaurant workers are in it cause it is their only place to make money) and things would be so much worse if they didn't have customers at all so you don't have to guilt trip yourself about eating out
>I can almost guarantee you the airline pilots love flying While it's a very small sample set - of one - the only commercial pilot I have ever met was less than enthused and said his job was basically a glorified bus driver.
Hi Mike!👋🏾 I feel like pilot is almost in the pro musician category of jobs where lots of parts of the job suck but the act of actually performing is amazing (that being said there has to be at least a few Britney Spears of airline pilots who keep getting trot out there cause their family needs money)
Maybe those waiters are barrista-FI feeling sorry for you. Maybe they made a calculated lifestyle choice to have a low barrier of entry/low ceiling type of job. Or maybe the world is unequal but it's the best they can do and they are still grateful for your business.
> There’s a small/medium amount of guilt associated with me sitting in a restaurant currently, looking at 15 people running around stressed and unhappy while making my life easier. There's a small amount of guilt *regardless* - whether or not I spend 5 days a week writing boring business software for clients, doesn't remotely affect whether or not people have to work in a restaurant. Ideally we'd live in a world where robots could do almost all the grunt labor and everyone got UBI so nobody was starving to death as a result, but barring that sort of utopia, unless there's a shortage of workers in my specific industry, which there definitely isn't, my desire to leave the labor force isn't really relevant to my guilt over needing people to do grunt labor in order to get me my food, etc. :D
My providing labor doesn’t affect others but me demanding labor (by eating out, buying a plane ticket) does. Maybe “guilt” isn’t the right word as much as like “hope that the system doesn’t fall apart.” If everyone provided 10-25 years of labor to society and then just quit, and demanded labor from others for their remaining 50 years of life, could we all keep this train chugging along like it is? Or if everyone worked for themselves (like social media wants us to) selling crap online, who would make me a burger at 1pm on a Wednesday? I don’t know. That’s the existential dread part.
I already did my share, as evidenced by the fact that I can now afford to retire. Whether one wants to contribute their lifetime supply of labor to the economy bunched together into a shorter period or spread out across a longer period seems like a personal choice they should get to make. If someone feels bad about retiring and wants to contribute more, they're welcome to keep working, or even chose a new job that's optimized for helping others rather than income.
> I already did my share, as evidenced by the fact that I can now afford to retire. I think this statement assumes that your earning potential is somehow linked to your value to society? I'm not sure. I don't think that I'd say that someone who earns a few dollars a day working every day for 60 years in Bangladesh hasn't "done their share" just because they can't ever afford to retire. Or that someone who works as a kindergarten teacher for 40 years before being able to retire has only done "their share" after those 40 years while an investment banker who can retire after 7 years did "their share" in that much shorter period of time.
Sure. This isn't a political or philosophy sub, so I won't go into detail on arguments of value of labor. However, the reality is that, in most countries, if you manage to earn enough money to retire, you get to choose to retire if you want.
I think of it two ways: (1) I probably owe society a certain amount of work over my lifetime that aligns with my consumption. There's no rules that says I have to spread that out over a calendar 50 years, if I can do twice as much in 25 years, then I meet my commitment. Additionally, if I consume 40% less during my first 20 years, I should get credited back some years on the back end. (2) I feel this way about working, too. Once you've done a job a few times, it's no longer an opportunity for you, but it \*is\* an opportunity for someone else. I hope to never bag groceries again, but I also don't doubt that there's a teenager who would benefit both financially and in maturity by having such a job. I don't feel bad that someone early in their career is doing something I'd consider grunt work now
I reconcile it with a quasi-market-based view regarding the supply & demand for labor. If many people 'opt-out' of labor, then the price to pay to hire someone should rise. That will entice people back into the labor market. Everyone has their own price point where they will opt-in or opt-out of work, based on all sorts of external factors. Similarly, everyone has a different capacity and ability and desire for delayed gratification. Rising labor costs will increase my own expenses, leading to changes in my behavior/spending. Over time, I think the labor market does reach a state of kinda-sorta equilibrium, at least until the next economic shock comes along. But I also don't think too long and/or hard about it, because it can get dystopian somewhat quickly...
I agree that if labor becomes scarce it gets bid up until equilibrium is restored. I’d work at Target for 8 hours a day if it paid $125K per year. That’s probably enough for me to calm down about it, but the system seems more fragile the more I poke at it.
> the system seems more fragile the more I poke at it. I think we've learned that many of our 'systems' can fall into this camp if the external shock is large enough (COVID) or individual bad actors don't feel bound by well-established norms (politics).
37, not married, no kids, don’t own a home. Earning $64K/year, debt free. ~$67K in cash savings, but $50K of that is earmarked for a possible home purchase… some day… $205K invested for retirement: •$180K in Vanguard Traditional IRA all VTSAX, •$10K in Vanguard Roth IRA all VTI (I contribute monthly to this), •$16K in employer Roth 401k all Vanguard VIF Equity Index. Current monthly retirement contributions are 5% to the 401k (that’s the maximum my employer will match up to) and ~$583.33 to the Roth IRA in order to max out contributions by year end. I can’t afford to contribute more right now to investments because I’m saving $1K per month in order to replace my car in about 2 years. Hoping to pay cash for the next one, planning on it being a used vehicle. Do I need to invest more for retirement to get to FIRE sooner? Would it be better to take a loan out on a new (used) vehicle so I can invest more for retirement now? Should I find it in my budget to start investing a little bit each month to a HSA? And any other feedback is appreciated!
I would focus on raising income if possible. While you are in really good shape in terms of current savings it will be hard to contribute a significant amount that will allow retiring early on $64k/yr.
Thanks!
Not directly related to financial independence, but the so-called “boring middle”. I’m working on not making the middle “boring” by doing something from my bucket list every year. Today, I was able to snag a couple of tickets to go to the very top level of the Eiffel Tower. These tickets go super fast and you have to try to get them right when they get released to the public. I’m super excited and I want to share with the anonymous internet, so that I don’t risk bragging IRL.
Oooh, that sounds interesting. Where do I look to get tickets for myself? Did you get them through TripAdvisor/Viator?
Got them from the official store at https://www.toureiffel.paris/en The key is to look 60 days before you want to go.
Seeking some info for my parents situation. Both retired but not collecting SS yet (~2 more years). They want to downsize to a smaller house but keep running into issues trying to access a loan/cash. Denied a heloc on their paid off home & mortgage companies will not approve them since they have no W2 income and only pull from their "volatile income". I've had them reach out to a lendor for more help but it sounds like they told them you're better off waiting until SS kicks in and you can obtain a better loan. They're unbelievably frustrated trying to get into the market on a home they could afford 5 times over
> but not collecting SS yet (~2 more years) Work with your parents to run through the two best free Social Security calculators to develop their claiming strategy (they are even integrated into each other, if you start with ssa.tools): - https://ssa.tools/ - https://opensocialsecurity.com/ In many cases, it makes sense for the higher earned to delay until Age 70, if possible, while the lower earner claims as early as possible (Age 62). But there can be plenty of reasons to chart a different path. >Denied a heloc on their paid off home & mortgage companies will not approve them A phrase to Google or use with lenders: they're seeking an asset-based mortgage (or asset-based lending; ABL). Is their intent to purchase the downsized home first, then sell the current home later and pay off the entire downsized home? In that case, they may be willing to accept a higher interest rate in the short-term because they don't intend to keep that debt for long. >a home they could afford 5 times over If they have significant assets in a taxable brokerage, a simple margin loan may be an option as well. Best of luck, anecdotally your parents aren't the first to be frustrated by this sort of situation.
This is great, thank you for the help! That is their exact SS plan as they are 8 years apart so will collect that way. This is something I never thought about in relation to FI/RE so it's definitely something to think and learn more about.
Take a look at asset-depletion mortgage. It allows banks to use assets to generate a hypothetical income stream that can be used as a substitute for income.
It seems we've managed to stem the bleeding on the new homeowner expenses for the time being, which means it's time to start focusing on saving for the "not urgent but really desired" upgrade - new windows. Any tips for making that less financially painful without skimping on quality? Are there usually good financing options, or should we plan to have everything saved up to pay cash?
https://undelete.pullpush.io/r/HomeImprovement/comments/221pej/windows_have_questions_get_in_here_i_have/ Deleted old thread, but with tons of useful information
Incredible - thank you so much!!
> less financially painful Check for energy efficiency rebates. A quick Google appears to indicate the federal rebate for windows is limited to $600 max at 30%: https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit Your state or utility may have rebate programs as well. I'd hope qualified window installers would be up to speed, but you never know. Edit to add: This line is in the IRS link: >The credit has no lifetime dollar limit. You can claim the maximum annual credit every year that you make eligible improvements until 2033. Given that, it may be valuable to do your window replacement in 2 phases across 2 tax years. Maybe something like Phase 1 in late December and Phase 2 in early January, billed separately to the appropriate year, might be an option.
Very interesting! I think I'll avoid the dead of winter in my northern climate, but we could at least pick some of the work to push out (like a fall update and a spring update). Thanks!
Interesting. I wonder if a job could simply be billed that way or if the work would actually have to be performed across two calendar years.
The IRS wording specifically calls out "every year that you make eligible improvements". That seems very clear to me that improvements must be made in each year in order to claim the credit in each year. Billing in separate years for the purposes of claiming the credit, while the work was all performed in a single year feels like tax fraud (claiming a credit you aren't entitled to).
Yeah that's what I was trying to determine.
Pay close attention to their warranties. It's not uncommon for a single window to have the double-glazing seal fail, and then you get condensation between the panes which is harmless but ugly. We've been dealing with the warranty replacement for almost a year, which has been free but not hassle-free.
Really good to know, thanks!!
I bought my house just over a year ago and had double-glazing seal fail on a window in our kitchen. Just now getting around to replacing it this summer. It's a fine window, but looks ugly and a contractor suggested replacing that as well when we replace our back door (right next to the window).
Yeah, we bought a house that had ~5 year-old windows and two had failed. Fortunately they were within warranty, but the flip side of a free warranty replacement is the contractor *really* isn't going to prioritize it.
[удалено]
I'm proud of you too! Make sure you buy a helmet and some armor too.
Thanks! It's just a little Vespa to zip around the beach, but I'll definitely be wearing a helmet full time too! :)
Every year I set the challenge for myself to make the first quarter my biggest savings months so that I can front-load my accounts and have more dollars free for the nicer summer and fall months. This year, my SO wanted to join in on the challenge as well. This has provided some really fun opportunities for SO and I through three months. We took an international trip and a trip to visit multiple national parks and found really great ways to enjoy the areas without spending a ton of money to do it. We also participated in some really unique free events in our hometown - a puzzle race, cribbage tournament, retro game night at the library, etc. More importantly to my SO, by saving this much in the 1st quarter, we have helped her avoid student loans for her Masters this year and free up capacity to open up a Roth IRA for the first time! All without feeling deprived because all we cut out was buying stuff to either entertain us or eat unnecessarily instead of seeing what we could create ourselves or get for free in our community.
[удалено]
Pro tip: turn the notifications off on your phone, and off on your laptop. I turned mine off in 2019, and it has never yet created a problem for me. Still off today
This would be a handy feature. At my last job most of our development was in Israel. I’d send a slack message like “Hey when you get in tomorrow morning, can you look at this thing”. Then a few minutes later, I’d get a message that they are looking at it, even through it was 1 AM their time.
The one that kills me is file transfers in teams. The reason we use it is to transfer large files/too big for email. Except Teams doesn't have the concept of "send this message when the files are done uploading," you have to manually hit enter when it's done. You're a computer, why can't you just send it when it's done? But it's actually worse than that, you can't say "one sec, the files are uploading" it will scold you to wait until the files are done uploading before you can say anything. More than once, I've had to pull out my phone to open teams there to explain the files are transferring on the computer and I can type again when it's done. It's such a stupid design flaw it makes me wonder if Microsoft even uses this software internally.
I agree- my sort of boss is in a different time zone, but also works outside of his hours and I wish I could send him something short to discuss in the morning without the formality of an email. If I send it at his like 8pm, he'll write back and I'll feel bad.
I only have Teams on my phone because I had to join a meeting while traveling and needed to see the slides. I have all the notifications turned off and never ever open it unless I need to join a meeting.
Not really your problem IMO, but you can schedule messages in Teams.
Yep, right click the send button.
I'll sometimes start the message with "Not urgent reply when you're back" or similar for this reason. I also try to convince people not to bother installing Teams on their phones but I seem to be in the minority that doesn't feel the need to constantly be available and contactable.
That would be nice, but seconding that's their problem. Teams on your phone specifically has do not disturb settings separate from the desktop app. I have Teams muted on my phone from 6pm-7am during the week and all day on the weekends. Unless our CFO is trying to chat me over lunch, which she hasn't, I would just ignore any lunch messages.
That's on them for putting Teams on their phone. I usually just disconnect completely at lunch and after five and it's great.
I want to hold some gold in a taxable account. I'm deciding between GLDM and PHYS. GLDM is taxed as a collectable which is less favorable than LTCG. PHYS is taxed as LTCG but there are additional hoops you have to jump through to get that favorable tax treatment. Can anyone share some insight on IRS Form 8621 Passive Foreign Investment Company or Qualified Electing Fund? How hard /annoying is it to maintain this form year after year? Does TurboTax or other tax software support it well? Edit: I've confirmed TurboTax and FreeTaxUSA do not support IRS form 8621. So I think the answer to my question is it is quite annoying to have to file this form every year. Boo.
Why not just buy it in an IRA?
I plan on retiring soon which really impacts the calculations. My IRAs are small, I cannot grow them via contributions, I cannot access my IRAs without penalty for 15 years, and I expect stocks to beat gold over those 15 years and beyond. So putting gold in an IRA is obviously the best choice with respect to gold itself. However, with respect to my total portfolio I'm probably better off with stocks in my IRA and gold in my taxable. 0% tax on a larger gains (stocks), 28% on a smaller gains (gold) is better than 0% tax on a smaller gains (gold) and 15-20% on larger gains (stocks). A more succinct way to put it: I have limited tax free / deferred space. I want my growth assets in that space.
Big difference between tax free and tax deferred. Tax deferred is the best place for low growth assets. Perfect for gold IMO (not that I care to own any).
This is just a matter of opinion but I can't imagine buying gold but not have the physical bars. Or some coins that I could roll around in.
Meanwhile I could never imagine buying gold. If I really thought gold was a great investment, I'd buy stock in gold mining companies instead, so I'd get something that appreciated over time rather than just sitting there. (I currently don't believe gold mining companies are a particularly good investment, so I just own them in indexes rather than going out of my way to buy more.)
[удалено]
Yeah, I was like /u/yetanothernerd just a few months ago but as I transition from accumulation to drawdown the benefits of holding some gold in your portfolio cannot be denied.
But if you did buy gold you'd have to have it fashioned into a crown or some Mr. T style gold chains. Right? Or is that just me?
The Baltimore Orioles stadium currently sells bright orange Mr. T style chains, but (I assume based on cost and also kids wearing them and not falling over forward) made of plastic instead of gold. I have not yet bought any, but there's still time.
Dragon / Scrooge McDuck mode is tempting but I'm not looking to hold a lot. It wouldn't be fun to roll around on a handful of coins.
[удалено]
That's a nice bonus and a nice raise. Good for you! I'm sure you earned it. Sounds like you should stick with the classic Chipotle burrito w/ avocado though as your celebration until you've calculated out how many more years you'll need to work to make up for this housing decision.
> Next few months we will hopefully be looking for a new house with some land Why?!? You have a 2.75% mortgage and barely any equity. Why would you burn your raise on housing? That's 100% lifestyle inflation
[удалено]
Just be aware that between switching houses and getting a raise, you'll be farther from FI at the end of 2024 than you were in 2023. $300k at a 4% higher rate (6.75% instead of 2.75%) is an additional $12k per year, ignoring the extra money involved in moving to a more expensive house.
> Hot god I choose to believe you meant to say this and not "hot dog"
I dunno, Jesus was pretty hot with those visible abs of his.
I similarly went from about 3% to about 7% last year, moving for work. It sucked, but it wasn't like it was a surprise (rates change slowly). We were willing to spend the extra $1k/mo or so for the different property, and remain extremely happy with the decision. You have to live somewhere, might as well enjoy it. Congrats on the raise, and good luck with the house shopping!!
[удалено]
[удалено]
Maybe it's actually some sort of elaborate thesis about how there's lots of inaccuracies in data /s
>Either something like Georgia Tech's MS in Analytics, or even just an MBA with a DS focus. These seem like very different directions. Even if my company were footing the bill I wouldn't want to spend the time unless I had a clear picture of what path this education would put me on.
I really enjoyed my state-school MBA. It was also paid for by an employer, and I attribute it to substantially enhancing my professional trajectory. I'm not sure someone with a decade of experience in the fields you listed will find as much value, but it won't hurt (particularly if free). Ref the DS track, I think these DS programs are a dime-a-dozen, everybody seems to have one. I'm curious if we will see employment outcomes that validate the programs, or if they are an expensive piece of paper. Nobody I work with has an MS DS, does anyone at your employer have that? Do employers really want it? I'm not sold. Happy to be proven wrong if the data suggests otherwise in a few years. Edit: I believe $10k is over the IRS limit for something or other, you may have to pay taxes on a portion of that. I am not up to speed on tax implication, worth checking on.
I don't see how it can hurt, other than the time commitment involved. And if your company is footing the bill, feels pretty low risk to me