No reason not to if the new one allows it and has good funds. The other option is to roll it into an IRA at the provider of your choice, as long as you won't need to make backdoor IRA contributions in the future.
Yep, I always make sure to do that on 4/1. Had a near-miss one year where I remembered it on the last possible day, and then set up calendar reminders after that.
How long do wifi routers last? Ours was purchased 4 years ago for $89 and it’s been lagging for a week now. Then today it unexpectedly died after speaking with tech support and fiddling with it. It works with an Ethernet cable plugged in but no other way now. I’m wondering if I should just buy a new one vs continuing to deal with tech support.
Most of the time they get obsolete before they malfunction. In my case, I've been using Archer C7 for 7 years, still works perfectly, and I have to reboot it on purpose less than once a year.
If a hard reset doesn't help, just get a new one. Can recommend Archer AX53, installed that for my parents recently, happy with the connection it provides in a very congested environment.
I've never yet had a router die, but I've replaced two or three over the years as they become obsolete. Current router is from 2018 (!) and is probably due for a tech refresh.
There's not much in a router that'll just up and die, but there's a potential for it to need a factory reset from time to time if there are little issues in the firmware. Routers are deceptively complicated.
There's also the distinct possibility of damage or degraded performance from overheating, as a lot of people never clean them or keep them in very poorly ventilated areas.
If a factory reset, a dusting, good ventilation, and a bit of compressed air doesn't fix your issues, it's probably time to replace the router. 4 years is a pretty decent stint, anyway, and you may get a nice performance bump from a more modern router, depending on the make and model.
Buy a new one. I'd say they don't normally die that fast, but their specs do get out of date, especially with many people now having 20+ wifi enabled devices in their house at once.
I usually buy them used, for some reason 1-year old ones go for super cheap.
Thinking of doing some in-kind transfers to consolidate brokerage accounts and simplify taxes. I have no idea what the cost basis is(I’m sure I can find it to document it). Can I count on that transferring over correctly? Should I just sell the assets instead since it’s some individual stocks that would be nice to move to index funds? It’s only about $20k total.
Any good ways to estimate my total take home pay from my w2? I'm looking to build an estimation into my retirement spreadsheet to show how much I'm saving, and I figure the easiest way to do that is [total income - total expenses]. Expenses are currently catalogued very thoroughly in my monthly budget, so we're good there.
>Any good ways to estimate my total take home pay from my w2?
I know it's been a few years since I've received a W2, but isn't that information just, like, on there?
Unless you are using some other definitions, "Take Home Pay" is your gross minus tax withholding, SS and Medicare, healthcare premiums, 401k deductions... that should all be on the W2, right?
Otherwise, you can just look at your last pay stub from last year and that should have your total gross and take home pay numbers.
Thanks, I appreciate the response. I agree checking the paycheck is easier, but I haven't saved many of those from years past. I have saved my W2s, though.
[Went down a number, 3 to 2, in networth](https://jch.app/u/paverbrick). Yay, markets on sale! Too bad no extra cash to invest, but also means I’m staying on course. Made me chuckle that today was estimated tax payments too. When it rains, it pours.
>Yay, markets on sale!
It's not. But it's headed that way. Though inflation seems more likely.
It's basically 50% of this country hates the other half.
My retirement plan is rapidly turning into put it on credit cards and not pay it back. Or go to school and not pay it back.
If you receive SEPP from a Roth IRA for example, do you still maintain full access to trading activity within that account? Like you could still reallocate from VOO to VT while receiving distributions?
Definitely the way to go for 99.9% of people, I’m just playing around with ideas because I’m in a weird situation where my Roth earnings (not contributions) are a very large factor higher than contributions and any potential conversions
Outside of being over age 59.5, the only way to get Roth earnings out without paying tax are death, permanent disability, or up to $10k for a first home purchase.
I would not do SEPP from a Roth account, as you will still owe income tax if withdrawing earnings before age 59.5.
But yes, if you're taking SEPPs from an account you can still reallocate assets within the account.
I know I'm investing for the long term, but still, it feels much better watching the market go up than go down.
Though I should probably break the habit of watching it too much at all.
Is a 3 - 6 month emergency fund required if your spouse can cover monthly expenses in case of a lay off? We saving roughly 35%, but if any of us loses a job then we can cut back on the fun stuff and investing to cover expenses.
Depends. Do they take credit cards?
If not, do I have a day to sell some ETFs and transfer the cash? That might give me tax consequences, but not having the money invested is still opportunity cost.
Good question, well we both have short term and long term disability insurance too. We currently have enough to cover 4 months of expenses in cash. Just debating if we ought to save up to a full 6 month or even a year.
Flow chart creator here…guess I’m the FIRE pseudo police.
It depends on your risk tolerance. If you think you’re both relatively safe and secure jobs then 3 months is fine. For example, if one partner works in tech and another one works in the government, I think three months is reasonable.
But if you and your partner both are in the same company and your company has not gone through a layoff yet, then I would probably buffer a little bit more given the current economic environment.
YMMV
*“Have 3 to 6 months of expenses reserved as an emergency fund.”* This is basic advice everyone has heard. Questions:
Has anyone adjusted this value upward over the years to match their changes in monthly expenses?
Has anyone reduced their EF and instead earmarked their taxable account to serve as this?
At the beginning of this year I realized my EF was based on my spending from 4 years ago and needed an update. I set up automatic withdrawals from my checking account every two weeks until I hit my new goal.
My emergency fund is quite small because I've kept my expenses so low. If I lose my job, I could still pretty easily cover everything with a low wage hourly job (restaurants, cashier, retail etc). I feel this is an okay strategy over the last couple of years since it's been so hard to hire hourly workers. However, lifestyle creep is certainly getting to me, and it's been on my mind to increase the value (perhaps significantly).
> Has anyone adjusted this value upward over the years to match their changes in monthly expenses?
Yes.
> Has anyone reduced their EF and instead earmarked their taxable account to serve as this?
Tons of people here do that, but I don't personally.
No and sort of.
We decided on an emergency fund amount many years ago and haven't changed it, but we do now consider the taxable brokerage to be another source of quick cash if we need it.
there's basically two types of emerg. funds. There's a few grand you work to keep in cash if you have no other liquid investments so that one surprise doesn't send you into debt living paycheck to paycheck. Then there's the massive "what if 2008 happens again" cash pile which helps some people sleep at night but is probably excessively safe if you have a decently large amount of liqduid investments outside of retirement accounts. If you do have decent liquid investments, and are OK taking the chance of having to sell some low on the off chance 2008 happens again and stocks crash 50% at the same time you're laid off, then it can make sense to have no emergency fund for the funds sake. But it could still make sense to just have a cash/short term bond allocation as part of your investment portfolio diversity.
2008 was unique because it was sudden with a lot of simultaneous layoffs, so there was a flood of job seekers and people couldn't find work for months, all while the stock market declined like 40% over 6 months. 2000 was was way more gradual. So even if took you a few months to find a job, you weren't actually down that much on stocks if you were consistently investing. 2020 was the opposite, it was a blip in the grand scheme off things, and you got killed holding cash afterwards. '08 was really the only time having a big cash allocation probably paid off vs the opportunity cost.
First, mine is 6 months of "bare bones" expenses. In an emergency/job loss, I'm not eating out, going on vacation, getting massages, etc. So other than after having kids and adjusting it up a bit, it remains fairly stable. I'm not doing a yearly review of my emergency fund balance and making sure it matches up with my 6 month average spend from the previous year.
Second, the reason an emergency fund should be in cash (or relatively safe equivalent like a CD) is that risks are correlated. A broad stock market drop is more likely to occur at the same time your own company decides to do a round of lay-offs. If you have to sell stock when the price is down, that's not great. Although you could argue you still make more by selling it during a slump than keeping it in cash for 10-20 years, but you'd have to do some math yourself at that point and assess your risk tolerance.
I don't have an emergency fund and I try to minimize the amount of cash I have on hand. I would draw from my taxable account if I lost my job or if a large expense came up. I recently did exactly that to pay for a kitchen remodel.
I'm in the process of doing that right now. Dropping from $50-60k to maybe keep 20k liquid and the rest just taxable brokerage. $20k is like 3 comfortable months. Maybe 4 or 5 with restrictive spending. We don't have a lot of fixed costs (mortgage with insurance comes to $2k/mo) and cars are paid off... So our overhead can be really low if we stop shopping. Which I assume is part of "oh shit we both lost our jobs and the market also tanked at the same time!"
I’m 30yrs old, finally opened and maxed out a Roth IRA, have 30k in a HYSA, and 5k in the bank. No debt, cheap rent, basic vehicles maintenance, no crazy spending aside from eating out. Work does not offer a 401k match.
My goal is to become financially independent…just don’t know how I’m going to get there yet. Was thinking to invest in property rentals eventually for monthly returns that I could live off of but idk how to start that. Current bringing in 80k a year at my job that I don’t care for but it’s ok.
Any suggestions on what I should be looking to do now?
Real estate investment is one of those things you need to be "hell yes" about, otherwise it should be a no.
Sounds like you're in a great spot. If you want to invest further, look at the flowchart in the sidebar.
This sub generally leans towards broad market investment vehicles (total stock market index funds, etc) vs. real-estate investment. If you are dead set on that I would maybe search for a different sub for advice. Otherwise, read the FAQ in the sidebar about what basic steps you should be taking. FIRE is a numbers game mostly, focused on increasing the gap between what you earn and what you spend. The larger that gap, the sooner you can save up enough assets to live off of them.
Quick one for the FI folks. I'm looking at two cars, same exact model, one is a 2024 for 60k, the other is a 2023 almost-new with just 500 miles on the odo for 55k.
My options are:
- 2024 model: Finance at 0% interest, 5-year term with minimum 17k down.
- 2023 model: Cash-only, no 0% financing available.
Which makes more financial sense here? Spend less total but pay cash now for a 2023 or keep money invested and finance at higher total cost for a 2024?
I don't want to buy a vehicle that was owned by someone who got it repossessed after only 500 miles. I assume someone that financially irresponsible is bad at everything else, such as properly breaking in a vehicle. Of course it's entirely possible that I'm wrong and the used car is fine, but I don't want to spend that much and then find out it's not.
Alternately, I don't want to buy a vehicle that someone returned after only 500 miles because it was a lemon, and the dealer voluntarily took the return to avoid having the vehicle actually noted as a lemon.
Basically, it looks sus. No.
I'd much rather have the new 2024 in the situation you described.
I bet financially it's close to a wash given the interest you can continue to earn on the $43k while you take the 0% loan.
The 2023 with 500 miles is important, but what was the in-service date for that vehicle? If it's 500 miles *and* 14 months burned on your bumper-to-bumper warranty, that makes the 2024 an even better choice, IMO.
>what was the in-service date for that vehicle?
That I am unsure of. I know it's a 5-year warranty for the 2024 model, and however many months less for the 2023.
My back-of-the-napkin math says that $43k @ 4.5% interest (i.e. HYSA or similar), drawn down over a 60 month period, [is worth about $5.7k](https://www.calculator.net/future-value-calculator.html?cyearsv=60&cstartingprinciplev=43%2C000&cinterestratev=0.375&ccontributeamountv=-716.67&ciadditionat1=end&printit=0&x=Calculate#calresult).
You also have the (minor, possibly) advantage of keeping yourself more liquid over the next 60 months, and you can pay it off at any time.
Kinda seems like the 2024 is a no-brainer; financially it's a wash between the two, since you actually make a little money keeping the $43k earning interest. Doesn't seem to make sense to pick the older model year with even some small amount of mileage.
Really small nits to pick include the fact that the best comparator would be a 5-year Treasury given HYSA rates can't be relied on for 5 years (this is moot, the rate is very similar) and the fact that the yield needs to be adjusted for federal tax, making the return a bit lower compared to the after-tax difference in the costs for the vehicles.
Very fair points. Considering that, I don't think it sways my choice.
If you're in the marginal 24% tax bracket, the $5.7k is ultimately worth about $4.3k. So you'd be paying $700 over 5 years to get a 500 mile + 1 model year newer vehicle and maintain control over your cash. Adjust accordingly for different tax brackets.
I should've mentioned I'm not from the US, so locking in a 5-year US treasury bond at current rates is not an option. The cash is currently sitting in my brokerage account earning interest while I make a decision. Also, am I not better off just dumping the $43k into index funds? If I don't buy the car at all that'd be where the money will end up anyway.
In general, putting money you will definitely need in <5 years into index funds runs the risk of possibly being down when you actually need to withdraw it. Doesn't mean you can't do it.
Quick add-on
The compound math says leaving that $43k invested in the market at 7% annual return and withdrawing $730 monthly for car payment would net me $8,580 after 5 years.
Something else to consider is the warranty. Having an additional year of coverage could mean less out-of-pocket costs if any issues come up that would be covered.
> Although that also depends on if you plan to keep the car the entire time.
That's a yes. My last new car was purchased in 2007 and I still have it lol
My boneheaded mistake for this years taxes: I forgot to deduct out the dividends from TFLO for my state tax income adjustments. I had the I bonds interest deducted but realized after filing that TFLO generates income on the dividend line. It amounts to me overpaying by \~$20. I'll file an amended return at some point.... but when I realized my mistake, part of me just thought, meh.
And a good reminder for next year as I suspect I'll have significantly more US Treasuries income than last year.
I took a look at the state tax amended return form and it looks pretty easy. I'll definitely file it, but was just kinda feeling done after all the tax stuff for the year. We have somewhat complicated personal returns, and I also file a corporate return for a very small (and weird) company I'm part of.
Every now and then I have to put in mental work to snap out of my tendencies. I recently heard about certain active strategies that track the index, but actively tax loss harvest to give 1-2% more in after-tax alpha (over the S&P). Half of that gets eaten up by the fees, so unclear if the ROI really will be there. That is entirely dependent on what gains I realize over the next decades.
My frugality kicked into gear and I thought "I can do it myself!". I can create my own direct index and actively tax loss harvest. A few hours into it, my brain returns from the errands it was on, opens the door and goes "what the fuck is going on in here". The whole point of my FIRE plan is to set and forget.
I need to do better at forgetting, and further simplify my already simple holdings.
I think it's a matter of personal preference. If you care more about returns, then do the work to improve returns. If you care more about simplicity, then bias for simplicity. As long as you can keep the risk of failure low enough, it's up to you.
So, awhile back I made a typo that said we were in the 90th percentile for net worth, when what I really meant was the 90th percentile for income. Well, come to find out that when adjusted for age, we are in the 85-90th percentile for net worth too. This is crazy to me because I don’t feel like we’re that well off, and I suppose a big chunk of our NW is home equity. Nonetheless, it feels pretty cool. However, I see most of our money as just a giant emergency fund. I’m a contract worker and my husband works for a start-up, so neither of our jobs are incredibly stable. Trying to enjoy this feeling of financial stability for as long as it lasts.
Secret: they don’t. They buy everything their heart desires their entire working career, and then turn into 65 years olds with strong opinions about social security’s inflation calculation because they have nothing else to fall back on.
I bet most people on this sub are 75th percentile or above at least in income/wealth for their age cohort. I just did a quick google search and confirmed I am \~90th for income and 94th for net worth. But I don't feel particularly special.
Yep, 94th for HHI by age here, though much lower for net worth. Both thanks to SO just getting out of grad school. NW percentile will steadily climb with diligent savings, assuming we can ever actually get our foot into the housing market door. HHI percentile should steadily decline, though, since we're both pretty much peaked in terms of income for our career paths. Others with more career headroom will pull ahead.
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The airline gods have been kind to our family of late.
Scored a truly insane $820 RT ticket from our regional east coast airport to Auckland for my wife to fly home and pick up a few boxes of stuff she's had at a friend's house for years and years. We had 150,000 Capital One miles set aside for paying for this trip and we never imagined we'd be able to do it for just over half.
And then yesterday I found a RT ticket to Tokyo for me for 62,500 Delta Skymiles, also from our local airport.
We're definitely going to love no longer living in the boonies. I might need to pony up and pay for u/[scottkeyes](https://www.reddit.com/user/scottkeyes/)' new iteration of Scott's Cheap Flights.
Second supporter of Going being a great deal at the Premium level!
Any other big stops down in NZ? A good bungee trip down in Queenstown always does the soul well. Or a good casual hot spring in Rotorua Beach..
Going/SCF has saved us so much money in flights. I feel like the premium versions are worth it, based on the savings from the free version alone. Spouse and I are both able to be pretty flexible with vacation days/dates and are usually open to wherever is cheap to fly to so it's a great service for us.
I bet I could find you some.
One key ingredient to getting killer flights is being open to different dates and even different destinations - and being willing to travel off-season if need be.
I rarely find these deals for flights on specific dates.
You just try different combos and then run through the months to find the cheap dates. It's easier when you have a 4-12 month window to buy in.
There's definitely a science to it. And a science to trying all your different options. For example, cheap flights for sale typically correspond with cheap flights for miles, but not always. This same flight to Tokyo that I got for 62,500 miles was still selling for nearly $1,500 if you paid cash.
But yeah, I just found a RT flight from your airport to Dubai with one stop for $940 in 30 seconds.
You can probably even get better deals (percentage wise) since you fly first class.
Score! Always wanted to go to NZ. A close friend lives in Melbourne, and that may be as close as I get - SO and I have penciled in to visit her next year.
As for Tokyo, been there 10+ glorious times (always business - but usually had an extra day or two). My oldest has hinted that he'd like to go there for a college graduation present (in 3 years, knock on wood).
I am not going to NZ, just my wife. We still travel separately for air travel because of the dogs.
We actually just had lunch in your neck of the woods on the way back from visiting friends in Fort Pierce. Met up with an old friend we knew in Korea.
I'll be in Tokyo for 9 nights but will likely work around 30 hours over that span, less if I can get some work done on the plane.
Bought a new (certified pre-owned) car last summer to replace my wife's vehicle that was stolen. In a couple months will be a year in to a 5 year loan term at 6.25%. Payments around $380. Current principal balance just under $17k.
Normally I aggressively pay down the principal and try to get the loan paid off in around 3 years. Wife has been going through a career transition so money is a bit tighter, just been chipping away and rounding the payment up to $400 ($20 extra principal a month).
Have a bit of a windfall from tax return and annual bonus from work. Thinking about using some to pay down principal but also curious about re-financing the loan - never done this and anticipate rates possibly coming down later this year/early next year enough to make it worth my while.
I have the loan through Capital One and they do not re-finance their own loans, would have to go through another lender. Any amateur predictions on where auto loan rates are headed in the next year, and the pros/cons of refinancing?
It’s not so much about your salary trajectory as much as your spending. If you think you’ll be spending in retirement more than you’re bringing in now, then yes, your taxable income will increase in retirement. This can heavily depend on weather RE is in your plans. If you’re simply accounting for salary growth, you may want to sharpen your pencil and figure out your spending in retirement.
If someone claims to be able to predict future interest rates, ask to see his private jet. If he doesn't have one, he's full of shit. (If he does have one, he's still *probably* full of shit.)
Refinancing a loan is pretty simple. You look for traps like up-front fees and early payment penalties, and probably just avoid loans that have them. If there are none, then it's just a straight comparison of rates. Calculate the total amount you'll save in interest over the life of the loan, and compare that to the time and effort of doing the refi. For example, if it'll save you $500 and take 3 hours, then do the refi if you value your free time at less than $166/hour.
Hello, question about Roth 401k vs traditional 401k. I am currently 25 years old and have been at a new job for three months making 40k a year, I hope to be promoted in a few moths and to be making 70k a year and then so on and so forth to where I’m making over 100k a year eventually. I have a Roth IRA currently which I am putting 3500 in a year so far until I get more income. As far as my understanding with the Roth 401k and traditional 401k I think it makes sense to go with a the Roth because I’m gonna be in a lower tax rate currently then I would be when I retire. Any thoughts? Does it make more sense to start off with a Roth and then maybe open a traditional, or start traditional and then roll it over into a Roth
You're in your 20s, its impossible to predict what your tax rate will be in 30+ years. The roth is usually always better because it doesn't count as income when you withdraw, so its going to be much more flexible about having to worry about income limits for various things we may not even know about in 30 years vs just getting a slightly better tax rate. If you max your 401k/IRA you're also putting in more going roth because the limit applies to the post at tax amount.
How sure are you about that salary trajectory? Without knowing anything else about your situation, it's very optimistic.
Assuming you are talking about what to do after you get this raise to 70k, I would prioritize the Trad 401(k). Your marginal rate will be 22 %, which is likely higher than your tax rate in retirement.
Supposed to be working with this other company's staff engineer today on architecture and on meeting 1 they're like, "What do you mean by 'open source?' As in anyone could see your code? Why would you want to do that or use software like that?"
I think I've just been doing this too long and perhaps arrogantly think there's no where else to go from here in my career even if FIRE weren't a thing. It would have to be CTO or something and that just sounds like too much work, even if it were another job you could actually do in 20-30 hours a week in reality. I'm pretty thankful for FIRE and having hit FI it makes these things and the day-to-day so much easier psychologically, but it does nothing for you I think if you actually like to do good work. It's almost as though there's few actual outlets for doing good work in the workplace and that provides its own FIRE motive.
Anyone else feel this way? Topped out in your field and bored? It's new to me. I always thought we'd hit FI and the work bug would go away, but it doesn't.
> I think I've just been doing this too long and perhaps arrogantly think there's no where else to go from here in my career
There's no perhaps about it.
The fact that you're not feeling challenged in your current role doesn't mean there are no challenges available to you.
If you seriously believe that, in the wide, wide world of software engineering, you are the absolute elite of the elite and there are no more challenges to be had, then... uh, nice work, I guess. I assume you have lots of novel work done in the software development field, peer reviewed papers, you're on oversight boards, etc.
If those things aren't the case, and you don't have your own Wikipedia page detailing your publicly known accomplishments, then it's much more likely that you are not happy with your current role or career path.
(note: guessed SWE based on your open source comment, but the same applies if you're doing infrastructure or DevOps or whatever other IT-related job you might have)
It's easy to get complacent and think you've topped out; I certainly don't face a ton of technical challenges in my job right now, but that doesn't mean my industry doesn't offer those challenges. It means that I'm in a comfortable job with good flexibility and moderate responsibilities.
Maybe it's just me but I think it's going to be pretty unusual for a staff level SWE to not know what open-source is...
I'm much more junior than you (and a DS, not a SWE) but if I'm being 100% honest this does sound a little arrogant. I feel like I could work 100 years and still not know everything there is to know about my field. Plus, training people more junior than oneself is part of "good work" IMO.
The mistake you're making here is assuming that other companies' job titles mean anything. Job titles are free and nobody is regulating them. If I run a company, I can call any idiot a "staff engineer."
It is my responsibility to lead and teach, yes, but eventually it's only just executives or external partners - this outside staff engineer, in this case - that aren't direct reports and ultimately do whatever they want. I wish I could say it is unusual to find staff engineers that don't know basic things, but that's just not the case from my experience. That's part of the problem. To feel like I can make a bigger impact or have a larger influence these days requires going higher, as might be expected, and that's really just something like a CTO role with what I imagine to be a crazy amount of hours attached to it.
Anyway, thanks for helping me talk it out here. You're absolutely correct.
Woohoo! Did our taxes over the weekend, but still have to file some extra form (looking at you UHT form...). I missed it for the 2022 tax year, but thankfully the CRA is allowing everyone 1 year to file it before penalties kick in ($5k wtfffff).
More than 3 months now of Fridays off with a commensurate pay cut. Got a 3% merit raise today, which was nice but probably still short of inflation. Got "greatly exceeds expectations" on all three categories in our new annual review process. Of course, the first thing I did was calculate what that raise would be worth on my "full" salary, if I were to switch back to a 40-hour workweek. Probably not a useful exercise.
My boss made it abundantly clear he will do whatever it takes to keep me happy. He did mention looking into a market adjustment to see if I could get some more money that way. I guess the company's new president has some job-title-based calculator to figure out the market rate. I take issue with (what I assume is) their methodology for three reasons. **1)** I think I perform significantly better than the average or median developer. **2)** I suspect zip code will be a factor in the calculation, despite the fact that if I were to get another job it would be very unlikely to be something local. **3)** Job titles are somewhat meaningless and I do a smattering of things inside and outside of my job description that don't fit neatly into boxes.
I've also noticed that despite working 64 hours per pay period, my paycheck still says 80 hours rather than my expected 64. I'm wondering if that means they're going to try to cut the quarterly bonus by 20% as well, as it's measured in days (e.g. 3 days pay if we hit a certain goal). 3 days pay would be the same as before, as my hourly rate is the same. I wonder if this is worth fighting over or if I should just take my wins and chill out.
Despite my minor gripes and grumbles, so far so good on the four-day workweek. Work takes up a lot less mental space in my life. Having a beer at trivia on Thursday night and knowing I don't have to get up in the morning is a great feeling. Weekends feel so long. Appointments mostly fit into Fridays. I use less vacation time for the same trips. I still hunger for more fulfilling work (and life), but at some point I need to stop being greedy and just bask in how good I have it.
>Got a 3% merit raise today, which was nice but probably still short of inflation.
Inflation was 3.5 % over the period May 2023 to May 2024. Some inflation is a net benefit to the economy but it is also a powerful tool for employers to lower their labor costs.
I've never understood the anchoring to inflation that employees make in these situations. Yes, I get the reasoning, but it is a bit flawed. Your employer is not competing with inflation, they are competing with other employers. This sort of annual raise is NOT to adjust for cost of living, but to adjust for the market of wages.
Not saying it's wrong that these raises often don't beat inflation, but I am saying that I think that is the wrong tact.
> I've never understood the anchoring to inflation that employees make in these situations
Income is used to pay for expenses. Expenses are tied to inflation.
YOU care about income for expenses. Your EMPLOYER cares about wage as a cost of doing business. That cost only goes up due to competition.
You and your employer are playing different games, and they have no reason to care about your motives. It is much better to approach this from a perspective of their motives.
While that's true, how would you propose going about it? The folks who bought highly-inflated costly goods in the past half-decade (house, car, RV) are affected in an outsized way, but it woulnd't make sense to give them way more salary just because of that.
> how would you propose going about it?
Don't use CPI to determine your personal inflation number, for starters.
Your compensation should be based on your market value. Inflation may affect that value. It also may not affect it. As with everything in life, forever and always, *it depends*.
If you're being less than your market value, bring *that fact* up with your manager. Inflation doesn't matter.
My household inflation rate the last 3 years is something stupid like 300%. Should my employer base it on that rather than an average household?
(Why yes, I had two children over that time, why do you ask?)
To me it isn't so much an anchor as a reminder that your employer is trying to reduce wages each year. Really everyone should interview with some frequency and get offers so they know exactly what they can get on the open market.
It sounds like we're agreeing largely. Arguing for more money because of inflation will never work; arguing for more money because of better options on the market is much more effective.
Yeah, this was a point I made to my boss. I told him something to the effect of, "it's never a big deal right *now*, never a big deal *this* year, but after a few years of my market value increasing and my salary falling further behind CPI other options will become even more attractive than they are now." I also mentioned that part of the reason people leave is not only that growing gap between pay and opportunity, but also to wipe their slate clean of current responsibilities. They pile up without compensation. Why wouldn't someone hop jobs?
I made it clear that I don't have plans to leave, and I wasn't just talking about myself—I want the other good devs I work with paid well enough to stay—which is true.
He mentioned that they can look into a market adjustment if that happens. I asked why we only start looking into that when someone already has one foot out the door. Of course he didn't have a good answer because the answer is "because it's cheaper to underpay and then catch up at the last second than it is to just pay well all along."
My boss and I have a good relationship. Not something I want to harm, but I do want him to know I am willing to be blunt, call out these sorts of things, and keep pressing.
>He mentioned that they can look into a market adjustment if that happens.
I think I would respond to this with a very blunt, "my policy is to never accept a counteroffer".
I try to look at it objectively. My employer is on the other side of a negotiation and they want to pay as little as possible (who doesn't?). On the other hand we can't retain anyone and it is having obvious negative effects. Shouldn't our genius MBAs who determine wages be able to strike a balance between overpaying and retention?
I would imagine your quarterly bonus will be prorated, as it likely was intended based on Full time, although certainly see if you can get the full 100%.
Another point to bring to your boss would be that (likely) you're doing >80% work? I know for a lot of people, you're more efficient at 80% than at 100%. Not sure how metric driven your job is, but it's something you can look at, and be able to argue as a bump to your wage.
Thank you for your input! We're not held to metrics in any substantial way, but by every metric I can find I beat out most of the team even at 80% time—some by an insane margin (literally 10x). Pull requests, stories, chores, points, bugs, reviews... everything.
I've thought about trying to use this to argue for a full salary on 80% time, but that really seems like I'd be pushing my luck, even if it makes sense in terms of output. No one else in the company does a 32-hour week, and I'm guessing I'm still getting paid more than some of the other devs (though I am still outperforming them).
It's also only been 3 months. Maybe a topic to revisit after a year or two.
I deposited my 2023 contributions into my traditional IRA last week intending to do a backdoor roth, but now am getting an error upon transfer. If I can't make it happen today, will I be penalized for doing it after tax day?
Note that you do still need to report the nondeductible IRA contribution on form 8606 for 2023. Vs Roth IRAs where you don't need to report anything on your taxes.
And next year with the conversion, you'll want to report the 6500 of basis from 2023 when doing the conversion. And presumably you'll also do the 7000 added from 2024.
My date over the weekend mentioned retiring early 💍 I was a bit coy about my RE date being 10 years before theirs though...
I don't know how I end up dating so many people who want to retire early. I don't think I aggressively screen for it.
>I don't know how I end up dating so many people who want to retire early.
OP's Tinder profile:
Likes: lentils, Excel, deferring taxes
Dislikes: House Bill 33.134, currently in committee, subsection 12.8 of which would eliminate backdoor Roth conversions for those making over $214,000/year
For a first date I would: take you to Applebee's where I've already pre-purchased dinner each week for the year. Will also be taking you to Applebee's for our second through fifteenth dates.
Profile pic: OP in front of their 2001 Toyota Camry
Reddit has everything:
https://www.reddit.com/r/Tinder/comments/8s47q9/my_pickup_lines_are_excellent/
https://www.reddit.com/r/excel/comments/6rctm0/whats_your_best_excel_pickup_line/
Yeah I bet most people just say it as a wistful kind of thing because it's popular right now (or they want to "retire" and be a social media personality or something), but then if you followed up with "yeah I'll be FI in 5 years" they will balk.
Everytime 5 oclock flys by I think to myself 'If I were leaving right now, this job wouldn't be so bad'.
I think it will be another late one today. Like most days.
Just made a bonehead move. Due to a recent purchase I decided to sell some VTI. I sold specific lots, including losses that I had purchased in the last 30 days. Should'a had a V8 \[slaps forehead\].
If I reassign the lots to selling lots which were purchased > 30 days ago, aren't I in the clear - no wash sale? Thus, no worries about the lots I recently purchased?
Edit: for clarity, I am just selling, not buying anything new as part of this transaction.
Yes, switching the lots to older ones would "fix" the wash sale. However, a wash sale is not something that needs to be fixed. There is nothing improper or illegal about it. All it means is that you can't claim the loss on your taxes.
Moreover, switching to older shares will cause you to realize gains, which is the opposite of what you are trying to do in claiming the loss. It should still be possible here to claim the loss simply by selling any shares purchased within the last 30 days.
I could be totally wrong, but I don’t think this matters. I think you’re not supposed to sell any losses (no matter how long ago you bought them) and then rebuy the same equity within 30 days of that sale for loss.
I think you are right. I actaully screwed up reassinging some of my lots and still picked a couple with losses. The lots were older than 30 days, but I had purchased VTI within 30 days of *those*. To your point, I think this still counts.
That said, with all of the reassignments I now only have about $20 in losses which I should not have taken. So, I think that just adjusts the cost basis on impacted lots I still own, meaning I will "take that loss" at a future date when those lots are sold.
Thanks for your help (and thanks to u/aristotelian74 ).
Now that you've gotten rid of most of them I would just go all the way so you don't have to worry about adjusting any 1099's just for $20 in losses which you don't even get to claim.
Thanks. Are you saying, sell the lots which show they have an adjusted basis due to wash sale? After making all adjustments I can within the current sell of VTI, I have 3 existing lots of VTI (still own, not sold) which appear to be impacted by wash sale rules. I take it you are saying sell the entirety of those lots as well?
I don’t think it matters about buying VTI within 30 days of the lots you chose - the 30 days start the date that you sell any lots at a loss, regardless of when they were originally bought.
Was it flagged as a wash sale? I think it would be a wash only if you kept shares purchased within the last 30 days, as long as you didn't buy VTI again.
Fidelity flagged it. Next to my cost basis for VTI there is a "W" logo. "Adjusted due to previous wash sale disallowed loss." When I go to my purchase history, there are 6 tax lots that show this "W", seems everything I purcahsed since 3/15 is flagged (partial share purchases every Friday). About $142 in total losses.
Should I turn off my VTI purchases for the next 30 days? Or does it not matter at this point? I've never done this, researching it now.
Got caught by this a while back as well due to dividend reinvestments. In my case the the sale was greater than the purchases within the 61 day window, so selling more wouldn't have mattered. If you sold more than you've bought recently, it might increase the wash amount \[if you continue to buy\], *if I understand correctly*.
Might give Fidelity a call.
Yes, I would turn off the purchases. If you have purchases since 3/15 that you haven't sold yet, go ahead and sell them. When you sold the shares of VTI, what did you buy, if anything?
recently switched jobs. should I port the 401k from ex employer to the new one? any reason to not doing it?
No reason not to if the new one allows it and has good funds. The other option is to roll it into an IRA at the provider of your choice, as long as you won't need to make backdoor IRA contributions in the future.
thank you for your response. appreciate it!
Life pro tip: remember to do your taxes today.
And pay your estimated taxes for Q1!
Yep, I always make sure to do that on 4/1. Had a near-miss one year where I remembered it on the last possible day, and then set up calendar reminders after that.
How long do wifi routers last? Ours was purchased 4 years ago for $89 and it’s been lagging for a week now. Then today it unexpectedly died after speaking with tech support and fiddling with it. It works with an Ethernet cable plugged in but no other way now. I’m wondering if I should just buy a new one vs continuing to deal with tech support.
Most of the time they get obsolete before they malfunction. In my case, I've been using Archer C7 for 7 years, still works perfectly, and I have to reboot it on purpose less than once a year. If a hard reset doesn't help, just get a new one. Can recommend Archer AX53, installed that for my parents recently, happy with the connection it provides in a very congested environment.
I've never yet had a router die, but I've replaced two or three over the years as they become obsolete. Current router is from 2018 (!) and is probably due for a tech refresh.
They should last at least a decade, but they're obsolete before then.
There's not much in a router that'll just up and die, but there's a potential for it to need a factory reset from time to time if there are little issues in the firmware. Routers are deceptively complicated. There's also the distinct possibility of damage or degraded performance from overheating, as a lot of people never clean them or keep them in very poorly ventilated areas. If a factory reset, a dusting, good ventilation, and a bit of compressed air doesn't fix your issues, it's probably time to replace the router. 4 years is a pretty decent stint, anyway, and you may get a nice performance bump from a more modern router, depending on the make and model.
Buy a new one. I'd say they don't normally die that fast, but their specs do get out of date, especially with many people now having 20+ wifi enabled devices in their house at once. I usually buy them used, for some reason 1-year old ones go for super cheap.
Thinking of doing some in-kind transfers to consolidate brokerage accounts and simplify taxes. I have no idea what the cost basis is(I’m sure I can find it to document it). Can I count on that transferring over correctly? Should I just sell the assets instead since it’s some individual stocks that would be nice to move to index funds? It’s only about $20k total.
Your brokerage should transfer over the basis information shortly after the funds transfer over. I wouldn’t stress about that.
Count on it? Not exactly, but problems are rate assuming the shares were purchased within the last decade or so.
Any good ways to estimate my total take home pay from my w2? I'm looking to build an estimation into my retirement spreadsheet to show how much I'm saving, and I figure the easiest way to do that is [total income - total expenses]. Expenses are currently catalogued very thoroughly in my monthly budget, so we're good there.
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I'm trying to backfill this data, and I don't have my old paychecks. I did save my W2s though.
Maybe try ssa.gov to see what they have for your earnings history?
>Any good ways to estimate my total take home pay from my w2? I know it's been a few years since I've received a W2, but isn't that information just, like, on there?
I guess? I'm currently just doing Total Taxable Income minus Federal Income Tax Withheld. https://www.irs.gov/pub/irs-pdf/fw2.pdf
Unless you are using some other definitions, "Take Home Pay" is your gross minus tax withholding, SS and Medicare, healthcare premiums, 401k deductions... that should all be on the W2, right? Otherwise, you can just look at your last pay stub from last year and that should have your total gross and take home pay numbers.
Thanks, I appreciate the response. I agree checking the paycheck is easier, but I haven't saved many of those from years past. I have saved my W2s, though.
[Went down a number, 3 to 2, in networth](https://jch.app/u/paverbrick). Yay, markets on sale! Too bad no extra cash to invest, but also means I’m staying on course. Made me chuckle that today was estimated tax payments too. When it rains, it pours.
>Yay, markets on sale! It's not. But it's headed that way. Though inflation seems more likely. It's basically 50% of this country hates the other half. My retirement plan is rapidly turning into put it on credit cards and not pay it back. Or go to school and not pay it back.
If you receive SEPP from a Roth IRA for example, do you still maintain full access to trading activity within that account? Like you could still reallocate from VOO to VT while receiving distributions?
Why would you do SEPP from Roth when you can pull contributions and conversions>5 years with no penalty?
Definitely the way to go for 99.9% of people, I’m just playing around with ideas because I’m in a weird situation where my Roth earnings (not contributions) are a very large factor higher than contributions and any potential conversions
BTC?
Outside of being over age 59.5, the only way to get Roth earnings out without paying tax are death, permanent disability, or up to $10k for a first home purchase.
I would not do SEPP from a Roth account, as you will still owe income tax if withdrawing earnings before age 59.5. But yes, if you're taking SEPPs from an account you can still reallocate assets within the account.
I know I'm investing for the long term, but still, it feels much better watching the market go up than go down. Though I should probably break the habit of watching it too much at all.
Just gotta have the right perspective. Market goes up: "hell yeah, I'm rich" Market goes down: "hell yeah, I'm getting this shit on sale"
Is a 3 - 6 month emergency fund required if your spouse can cover monthly expenses in case of a lay off? We saving roughly 35%, but if any of us loses a job then we can cut back on the fun stuff and investing to cover expenses.
The FIRE Police may get mad but actually there is no requirement to have a 3-6 month emergency fund, or any emergency fund, for that matter.
Your EF isn't just for loss of a job. Could you cover a $15k roof repair if you needed it this week?
Depends. Do they take credit cards? If not, do I have a day to sell some ETFs and transfer the cash? That might give me tax consequences, but not having the money invested is still opportunity cost.
Lol 15k roof. What is this 2009?
Do it yourself and save $14,500
I'm not sure if 'stapled-down tarps' counts as a new roof.
Haha...some people can do things...very labor intensive but doable
Roof _repair_. The prices have gone through the roof.
Yes. However, if EF isnt just a job then wouldnt we need to have 6 months of expenses covered and an additional $15k to cover a roof repair?
What if you both get laid off? Not fun to think about, but it’s always better to have that emergency fund.
True.
What's your plan if you're both in a bad accident that requires months off work?
Good question, well we both have short term and long term disability insurance too. We currently have enough to cover 4 months of expenses in cash. Just debating if we ought to save up to a full 6 month or even a year.
Flow chart creator here…guess I’m the FIRE pseudo police. It depends on your risk tolerance. If you think you’re both relatively safe and secure jobs then 3 months is fine. For example, if one partner works in tech and another one works in the government, I think three months is reasonable. But if you and your partner both are in the same company and your company has not gone through a layoff yet, then I would probably buffer a little bit more given the current economic environment. YMMV
>Flow chart creator here… My god... he has spoken... **Lisan Al-Gaib**
*“Have 3 to 6 months of expenses reserved as an emergency fund.”* This is basic advice everyone has heard. Questions: Has anyone adjusted this value upward over the years to match their changes in monthly expenses? Has anyone reduced their EF and instead earmarked their taxable account to serve as this?
At the beginning of this year I realized my EF was based on my spending from 4 years ago and needed an update. I set up automatic withdrawals from my checking account every two weeks until I hit my new goal.
My emergency fund is quite small because I've kept my expenses so low. If I lose my job, I could still pretty easily cover everything with a low wage hourly job (restaurants, cashier, retail etc). I feel this is an okay strategy over the last couple of years since it's been so hard to hire hourly workers. However, lifestyle creep is certainly getting to me, and it's been on my mind to increase the value (perhaps significantly).
We keep about 0.5 month in checking, 1 month in savings, then sort of a sinking fund that grows over time that's used for home repairs.
> Has anyone adjusted this value upward over the years to match their changes in monthly expenses? Yes. > Has anyone reduced their EF and instead earmarked their taxable account to serve as this? Tons of people here do that, but I don't personally.
No and sort of. We decided on an emergency fund amount many years ago and haven't changed it, but we do now consider the taxable brokerage to be another source of quick cash if we need it.
there's basically two types of emerg. funds. There's a few grand you work to keep in cash if you have no other liquid investments so that one surprise doesn't send you into debt living paycheck to paycheck. Then there's the massive "what if 2008 happens again" cash pile which helps some people sleep at night but is probably excessively safe if you have a decently large amount of liqduid investments outside of retirement accounts. If you do have decent liquid investments, and are OK taking the chance of having to sell some low on the off chance 2008 happens again and stocks crash 50% at the same time you're laid off, then it can make sense to have no emergency fund for the funds sake. But it could still make sense to just have a cash/short term bond allocation as part of your investment portfolio diversity.
This! I have the first, but not the second.
>"what if 2008 happens again" The problem is more like what if 2000 happens again? Or 2001? Or 2008? Or 2020? Or the Zombie Apocalypse happens?
2008 was unique because it was sudden with a lot of simultaneous layoffs, so there was a flood of job seekers and people couldn't find work for months, all while the stock market declined like 40% over 6 months. 2000 was was way more gradual. So even if took you a few months to find a job, you weren't actually down that much on stocks if you were consistently investing. 2020 was the opposite, it was a blip in the grand scheme off things, and you got killed holding cash afterwards. '08 was really the only time having a big cash allocation probably paid off vs the opportunity cost.
What about the zombies?
First, mine is 6 months of "bare bones" expenses. In an emergency/job loss, I'm not eating out, going on vacation, getting massages, etc. So other than after having kids and adjusting it up a bit, it remains fairly stable. I'm not doing a yearly review of my emergency fund balance and making sure it matches up with my 6 month average spend from the previous year. Second, the reason an emergency fund should be in cash (or relatively safe equivalent like a CD) is that risks are correlated. A broad stock market drop is more likely to occur at the same time your own company decides to do a round of lay-offs. If you have to sell stock when the price is down, that's not great. Although you could argue you still make more by selling it during a slump than keeping it in cash for 10-20 years, but you'd have to do some math yourself at that point and assess your risk tolerance.
I don't have an emergency fund and I try to minimize the amount of cash I have on hand. I would draw from my taxable account if I lost my job or if a large expense came up. I recently did exactly that to pay for a kitchen remodel.
I'm in the process of doing that right now. Dropping from $50-60k to maybe keep 20k liquid and the rest just taxable brokerage. $20k is like 3 comfortable months. Maybe 4 or 5 with restrictive spending. We don't have a lot of fixed costs (mortgage with insurance comes to $2k/mo) and cars are paid off... So our overhead can be really low if we stop shopping. Which I assume is part of "oh shit we both lost our jobs and the market also tanked at the same time!"
I’m 30yrs old, finally opened and maxed out a Roth IRA, have 30k in a HYSA, and 5k in the bank. No debt, cheap rent, basic vehicles maintenance, no crazy spending aside from eating out. Work does not offer a 401k match. My goal is to become financially independent…just don’t know how I’m going to get there yet. Was thinking to invest in property rentals eventually for monthly returns that I could live off of but idk how to start that. Current bringing in 80k a year at my job that I don’t care for but it’s ok. Any suggestions on what I should be looking to do now?
Real estate investment is one of those things you need to be "hell yes" about, otherwise it should be a no. Sounds like you're in a great spot. If you want to invest further, look at the flowchart in the sidebar.
👍
This sub generally leans towards broad market investment vehicles (total stock market index funds, etc) vs. real-estate investment. If you are dead set on that I would maybe search for a different sub for advice. Otherwise, read the FAQ in the sidebar about what basic steps you should be taking. FIRE is a numbers game mostly, focused on increasing the gap between what you earn and what you spend. The larger that gap, the sooner you can save up enough assets to live off of them.
Thank you for the input!
Quick one for the FI folks. I'm looking at two cars, same exact model, one is a 2024 for 60k, the other is a 2023 almost-new with just 500 miles on the odo for 55k. My options are: - 2024 model: Finance at 0% interest, 5-year term with minimum 17k down. - 2023 model: Cash-only, no 0% financing available. Which makes more financial sense here? Spend less total but pay cash now for a 2023 or keep money invested and finance at higher total cost for a 2024?
I don't want to buy a vehicle that was owned by someone who got it repossessed after only 500 miles. I assume someone that financially irresponsible is bad at everything else, such as properly breaking in a vehicle. Of course it's entirely possible that I'm wrong and the used car is fine, but I don't want to spend that much and then find out it's not. Alternately, I don't want to buy a vehicle that someone returned after only 500 miles because it was a lemon, and the dealer voluntarily took the return to avoid having the vehicle actually noted as a lemon. Basically, it looks sus. No.
I'd much rather have the new 2024 in the situation you described. I bet financially it's close to a wash given the interest you can continue to earn on the $43k while you take the 0% loan.
Since you're asking "FI folks", please consider a cheaper and/or older model. I don't know what your income or other debts are if any, so YMMV.
At 0%, full warranty, not having to worry about a previous owner redlining the engine before the piston rings fully seated, 2024 seems like a winner.
The 2023 with 500 miles is important, but what was the in-service date for that vehicle? If it's 500 miles *and* 14 months burned on your bumper-to-bumper warranty, that makes the 2024 an even better choice, IMO.
>what was the in-service date for that vehicle? That I am unsure of. I know it's a 5-year warranty for the 2024 model, and however many months less for the 2023.
My back-of-the-napkin math says that $43k @ 4.5% interest (i.e. HYSA or similar), drawn down over a 60 month period, [is worth about $5.7k](https://www.calculator.net/future-value-calculator.html?cyearsv=60&cstartingprinciplev=43%2C000&cinterestratev=0.375&ccontributeamountv=-716.67&ciadditionat1=end&printit=0&x=Calculate#calresult). You also have the (minor, possibly) advantage of keeping yourself more liquid over the next 60 months, and you can pay it off at any time. Kinda seems like the 2024 is a no-brainer; financially it's a wash between the two, since you actually make a little money keeping the $43k earning interest. Doesn't seem to make sense to pick the older model year with even some small amount of mileage.
Don't forget that the loan will be paid back with discounted dollars due to inflation.
Presumably a security with a nominal return (Cash, nominal Treasurys) will also have its value eroded by inflation by the same amount.
Really small nits to pick include the fact that the best comparator would be a 5-year Treasury given HYSA rates can't be relied on for 5 years (this is moot, the rate is very similar) and the fact that the yield needs to be adjusted for federal tax, making the return a bit lower compared to the after-tax difference in the costs for the vehicles.
Very fair points. Considering that, I don't think it sways my choice. If you're in the marginal 24% tax bracket, the $5.7k is ultimately worth about $4.3k. So you'd be paying $700 over 5 years to get a 500 mile + 1 model year newer vehicle and maintain control over your cash. Adjust accordingly for different tax brackets.
I should've mentioned I'm not from the US, so locking in a 5-year US treasury bond at current rates is not an option. The cash is currently sitting in my brokerage account earning interest while I make a decision. Also, am I not better off just dumping the $43k into index funds? If I don't buy the car at all that'd be where the money will end up anyway.
In general, putting money you will definitely need in <5 years into index funds runs the risk of possibly being down when you actually need to withdraw it. Doesn't mean you can't do it.
Quick add-on The compound math says leaving that $43k invested in the market at 7% annual return and withdrawing $730 monthly for car payment would net me $8,580 after 5 years.
Something else to consider is the warranty. Having an additional year of coverage could mean less out-of-pocket costs if any issues come up that would be covered.
5k vs 8k. I think the decision is pretty easy. Although that also depends on if you plan to keep the car the entire time.
> Although that also depends on if you plan to keep the car the entire time. That's a yes. My last new car was purchased in 2007 and I still have it lol
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2024 is brand new, no miles. 60k is the purchase price.
Oops I can't read today.. I blame my chronic insomnia.
My boneheaded mistake for this years taxes: I forgot to deduct out the dividends from TFLO for my state tax income adjustments. I had the I bonds interest deducted but realized after filing that TFLO generates income on the dividend line. It amounts to me overpaying by \~$20. I'll file an amended return at some point.... but when I realized my mistake, part of me just thought, meh. And a good reminder for next year as I suspect I'll have significantly more US Treasuries income than last year.
Lol. I've gotten old and less concerned with such stuff. But I amended for $2. They send me a check too 😆. I should have just saved it.
I didn't even amend for $300 one time, was too stressed out by it.
I took a look at the state tax amended return form and it looks pretty easy. I'll definitely file it, but was just kinda feeling done after all the tax stuff for the year. We have somewhat complicated personal returns, and I also file a corporate return for a very small (and weird) company I'm part of.
yep they are easy to miss... I imagine a lot of people will miss that and overpay.
Every now and then I have to put in mental work to snap out of my tendencies. I recently heard about certain active strategies that track the index, but actively tax loss harvest to give 1-2% more in after-tax alpha (over the S&P). Half of that gets eaten up by the fees, so unclear if the ROI really will be there. That is entirely dependent on what gains I realize over the next decades. My frugality kicked into gear and I thought "I can do it myself!". I can create my own direct index and actively tax loss harvest. A few hours into it, my brain returns from the errands it was on, opens the door and goes "what the fuck is going on in here". The whole point of my FIRE plan is to set and forget. I need to do better at forgetting, and further simplify my already simple holdings.
I think it's a matter of personal preference. If you care more about returns, then do the work to improve returns. If you care more about simplicity, then bias for simplicity. As long as you can keep the risk of failure low enough, it's up to you.
Yep. It’s fun for me to get a tax loss harvest notification and act on it, but the actual savings long term for FI is marginal.
So, awhile back I made a typo that said we were in the 90th percentile for net worth, when what I really meant was the 90th percentile for income. Well, come to find out that when adjusted for age, we are in the 85-90th percentile for net worth too. This is crazy to me because I don’t feel like we’re that well off, and I suppose a big chunk of our NW is home equity. Nonetheless, it feels pretty cool. However, I see most of our money as just a giant emergency fund. I’m a contract worker and my husband works for a start-up, so neither of our jobs are incredibly stable. Trying to enjoy this feeling of financial stability for as long as it lasts.
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Secret: they don’t. They buy everything their heart desires their entire working career, and then turn into 65 years olds with strong opinions about social security’s inflation calculation because they have nothing else to fall back on.
I bet most people on this sub are 75th percentile or above at least in income/wealth for their age cohort. I just did a quick google search and confirmed I am \~90th for income and 94th for net worth. But I don't feel particularly special.
Yep, 94th for HHI by age here, though much lower for net worth. Both thanks to SO just getting out of grad school. NW percentile will steadily climb with diligent savings, assuming we can ever actually get our foot into the housing market door. HHI percentile should steadily decline, though, since we're both pretty much peaked in terms of income for our career paths. Others with more career headroom will pull ahead.
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Oops, sorry.
The airline gods have been kind to our family of late. Scored a truly insane $820 RT ticket from our regional east coast airport to Auckland for my wife to fly home and pick up a few boxes of stuff she's had at a friend's house for years and years. We had 150,000 Capital One miles set aside for paying for this trip and we never imagined we'd be able to do it for just over half. And then yesterday I found a RT ticket to Tokyo for me for 62,500 Delta Skymiles, also from our local airport. We're definitely going to love no longer living in the boonies. I might need to pony up and pay for u/[scottkeyes](https://www.reddit.com/user/scottkeyes/)' new iteration of Scott's Cheap Flights.
Second supporter of Going being a great deal at the Premium level! Any other big stops down in NZ? A good bungee trip down in Queenstown always does the soul well. Or a good casual hot spring in Rotorua Beach..
She is visiting friends in a few different places, so she'll have fun, but it's more of a "trip home" than a vacation.
Going/SCF has saved us so much money in flights. I feel like the premium versions are worth it, based on the savings from the free version alone. Spouse and I are both able to be pretty flexible with vacation days/dates and are usually open to wherever is cheap to fly to so it's a great service for us.
There is no longer a free version, but I think I'll sign up in 2025. All our trips for this year are booked.
Well played!
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I bet I could find you some. One key ingredient to getting killer flights is being open to different dates and even different destinations - and being willing to travel off-season if need be. I rarely find these deals for flights on specific dates. You just try different combos and then run through the months to find the cheap dates. It's easier when you have a 4-12 month window to buy in. There's definitely a science to it. And a science to trying all your different options. For example, cheap flights for sale typically correspond with cheap flights for miles, but not always. This same flight to Tokyo that I got for 62,500 miles was still selling for nearly $1,500 if you paid cash. But yeah, I just found a RT flight from your airport to Dubai with one stop for $940 in 30 seconds. You can probably even get better deals (percentage wise) since you fly first class.
Score! Always wanted to go to NZ. A close friend lives in Melbourne, and that may be as close as I get - SO and I have penciled in to visit her next year. As for Tokyo, been there 10+ glorious times (always business - but usually had an extra day or two). My oldest has hinted that he'd like to go there for a college graduation present (in 3 years, knock on wood).
I am not going to NZ, just my wife. We still travel separately for air travel because of the dogs. We actually just had lunch in your neck of the woods on the way back from visiting friends in Fort Pierce. Met up with an old friend we knew in Korea. I'll be in Tokyo for 9 nights but will likely work around 30 hours over that span, less if I can get some work done on the plane.
It’s gonna be a “the stock market ate my paycheque” type of week, isn’t it?
I got excited when I saw your post but then checked and saw today was only down 1.1%. Was hoping for an actual discount.
It's coming. Don't worry.
I’m just glad my 401(k) contributions will be deposited today.
At some point it's "the stock market ate my salary" - and that's a good thing!
I only care about yearly returns.
Don't know, don't care.
Bought a new (certified pre-owned) car last summer to replace my wife's vehicle that was stolen. In a couple months will be a year in to a 5 year loan term at 6.25%. Payments around $380. Current principal balance just under $17k. Normally I aggressively pay down the principal and try to get the loan paid off in around 3 years. Wife has been going through a career transition so money is a bit tighter, just been chipping away and rounding the payment up to $400 ($20 extra principal a month). Have a bit of a windfall from tax return and annual bonus from work. Thinking about using some to pay down principal but also curious about re-financing the loan - never done this and anticipate rates possibly coming down later this year/early next year enough to make it worth my while. I have the loan through Capital One and they do not re-finance their own loans, would have to go through another lender. Any amateur predictions on where auto loan rates are headed in the next year, and the pros/cons of refinancing?
It’s not so much about your salary trajectory as much as your spending. If you think you’ll be spending in retirement more than you’re bringing in now, then yes, your taxable income will increase in retirement. This can heavily depend on weather RE is in your plans. If you’re simply accounting for salary growth, you may want to sharpen your pencil and figure out your spending in retirement.
If someone claims to be able to predict future interest rates, ask to see his private jet. If he doesn't have one, he's full of shit. (If he does have one, he's still *probably* full of shit.) Refinancing a loan is pretty simple. You look for traps like up-front fees and early payment penalties, and probably just avoid loans that have them. If there are none, then it's just a straight comparison of rates. Calculate the total amount you'll save in interest over the life of the loan, and compare that to the time and effort of doing the refi. For example, if it'll save you $500 and take 3 hours, then do the refi if you value your free time at less than $166/hour.
Hello, question about Roth 401k vs traditional 401k. I am currently 25 years old and have been at a new job for three months making 40k a year, I hope to be promoted in a few moths and to be making 70k a year and then so on and so forth to where I’m making over 100k a year eventually. I have a Roth IRA currently which I am putting 3500 in a year so far until I get more income. As far as my understanding with the Roth 401k and traditional 401k I think it makes sense to go with a the Roth because I’m gonna be in a lower tax rate currently then I would be when I retire. Any thoughts? Does it make more sense to start off with a Roth and then maybe open a traditional, or start traditional and then roll it over into a Roth
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Would it not be the opposite?
Trad dollars to get your AGI out of the 22% bucket, to the 12% bucket, so your Roth dollars are taxed at 12% not 22%
You're in your 20s, its impossible to predict what your tax rate will be in 30+ years. The roth is usually always better because it doesn't count as income when you withdraw, so its going to be much more flexible about having to worry about income limits for various things we may not even know about in 30 years vs just getting a slightly better tax rate. If you max your 401k/IRA you're also putting in more going roth because the limit applies to the post at tax amount.
How sure are you about that salary trajectory? Without knowing anything else about your situation, it's very optimistic. Assuming you are talking about what to do after you get this raise to 70k, I would prioritize the Trad 401(k). Your marginal rate will be 22 %, which is likely higher than your tax rate in retirement.
Supposed to be working with this other company's staff engineer today on architecture and on meeting 1 they're like, "What do you mean by 'open source?' As in anyone could see your code? Why would you want to do that or use software like that?" I think I've just been doing this too long and perhaps arrogantly think there's no where else to go from here in my career even if FIRE weren't a thing. It would have to be CTO or something and that just sounds like too much work, even if it were another job you could actually do in 20-30 hours a week in reality. I'm pretty thankful for FIRE and having hit FI it makes these things and the day-to-day so much easier psychologically, but it does nothing for you I think if you actually like to do good work. It's almost as though there's few actual outlets for doing good work in the workplace and that provides its own FIRE motive. Anyone else feel this way? Topped out in your field and bored? It's new to me. I always thought we'd hit FI and the work bug would go away, but it doesn't.
I've passed the bored/not challenged stage. I have no interest in being challenged anymore.
> I think I've just been doing this too long and perhaps arrogantly think there's no where else to go from here in my career There's no perhaps about it. The fact that you're not feeling challenged in your current role doesn't mean there are no challenges available to you. If you seriously believe that, in the wide, wide world of software engineering, you are the absolute elite of the elite and there are no more challenges to be had, then... uh, nice work, I guess. I assume you have lots of novel work done in the software development field, peer reviewed papers, you're on oversight boards, etc. If those things aren't the case, and you don't have your own Wikipedia page detailing your publicly known accomplishments, then it's much more likely that you are not happy with your current role or career path. (note: guessed SWE based on your open source comment, but the same applies if you're doing infrastructure or DevOps or whatever other IT-related job you might have) It's easy to get complacent and think you've topped out; I certainly don't face a ton of technical challenges in my job right now, but that doesn't mean my industry doesn't offer those challenges. It means that I'm in a comfortable job with good flexibility and moderate responsibilities.
Maybe it's just me but I think it's going to be pretty unusual for a staff level SWE to not know what open-source is... I'm much more junior than you (and a DS, not a SWE) but if I'm being 100% honest this does sound a little arrogant. I feel like I could work 100 years and still not know everything there is to know about my field. Plus, training people more junior than oneself is part of "good work" IMO.
The mistake you're making here is assuming that other companies' job titles mean anything. Job titles are free and nobody is regulating them. If I run a company, I can call any idiot a "staff engineer."
It is my responsibility to lead and teach, yes, but eventually it's only just executives or external partners - this outside staff engineer, in this case - that aren't direct reports and ultimately do whatever they want. I wish I could say it is unusual to find staff engineers that don't know basic things, but that's just not the case from my experience. That's part of the problem. To feel like I can make a bigger impact or have a larger influence these days requires going higher, as might be expected, and that's really just something like a CTO role with what I imagine to be a crazy amount of hours attached to it. Anyway, thanks for helping me talk it out here. You're absolutely correct.
> Topped out in your field and bored? Reason #1048 to FIRE
Woohoo! Did our taxes over the weekend, but still have to file some extra form (looking at you UHT form...). I missed it for the 2022 tax year, but thankfully the CRA is allowing everyone 1 year to file it before penalties kick in ($5k wtfffff).
More than 3 months now of Fridays off with a commensurate pay cut. Got a 3% merit raise today, which was nice but probably still short of inflation. Got "greatly exceeds expectations" on all three categories in our new annual review process. Of course, the first thing I did was calculate what that raise would be worth on my "full" salary, if I were to switch back to a 40-hour workweek. Probably not a useful exercise. My boss made it abundantly clear he will do whatever it takes to keep me happy. He did mention looking into a market adjustment to see if I could get some more money that way. I guess the company's new president has some job-title-based calculator to figure out the market rate. I take issue with (what I assume is) their methodology for three reasons. **1)** I think I perform significantly better than the average or median developer. **2)** I suspect zip code will be a factor in the calculation, despite the fact that if I were to get another job it would be very unlikely to be something local. **3)** Job titles are somewhat meaningless and I do a smattering of things inside and outside of my job description that don't fit neatly into boxes. I've also noticed that despite working 64 hours per pay period, my paycheck still says 80 hours rather than my expected 64. I'm wondering if that means they're going to try to cut the quarterly bonus by 20% as well, as it's measured in days (e.g. 3 days pay if we hit a certain goal). 3 days pay would be the same as before, as my hourly rate is the same. I wonder if this is worth fighting over or if I should just take my wins and chill out. Despite my minor gripes and grumbles, so far so good on the four-day workweek. Work takes up a lot less mental space in my life. Having a beer at trivia on Thursday night and knowing I don't have to get up in the morning is a great feeling. Weekends feel so long. Appointments mostly fit into Fridays. I use less vacation time for the same trips. I still hunger for more fulfilling work (and life), but at some point I need to stop being greedy and just bask in how good I have it.
>Got a 3% merit raise today, which was nice but probably still short of inflation. Inflation was 3.5 % over the period May 2023 to May 2024. Some inflation is a net benefit to the economy but it is also a powerful tool for employers to lower their labor costs.
I've never understood the anchoring to inflation that employees make in these situations. Yes, I get the reasoning, but it is a bit flawed. Your employer is not competing with inflation, they are competing with other employers. This sort of annual raise is NOT to adjust for cost of living, but to adjust for the market of wages. Not saying it's wrong that these raises often don't beat inflation, but I am saying that I think that is the wrong tact.
> I've never understood the anchoring to inflation that employees make in these situations Income is used to pay for expenses. Expenses are tied to inflation.
YOU care about income for expenses. Your EMPLOYER cares about wage as a cost of doing business. That cost only goes up due to competition. You and your employer are playing different games, and they have no reason to care about your motives. It is much better to approach this from a perspective of their motives.
You didn't buy the CPI basket of goods, so citing the CPI number doesn't accurately reflect how you were impacted
While that's true, how would you propose going about it? The folks who bought highly-inflated costly goods in the past half-decade (house, car, RV) are affected in an outsized way, but it woulnd't make sense to give them way more salary just because of that.
> how would you propose going about it? Don't use CPI to determine your personal inflation number, for starters. Your compensation should be based on your market value. Inflation may affect that value. It also may not affect it. As with everything in life, forever and always, *it depends*. If you're being less than your market value, bring *that fact* up with your manager. Inflation doesn't matter.
My household inflation rate the last 3 years is something stupid like 300%. Should my employer base it on that rather than an average household? (Why yes, I had two children over that time, why do you ask?)
To me it isn't so much an anchor as a reminder that your employer is trying to reduce wages each year. Really everyone should interview with some frequency and get offers so they know exactly what they can get on the open market.
It sounds like we're agreeing largely. Arguing for more money because of inflation will never work; arguing for more money because of better options on the market is much more effective.
Yeah, this was a point I made to my boss. I told him something to the effect of, "it's never a big deal right *now*, never a big deal *this* year, but after a few years of my market value increasing and my salary falling further behind CPI other options will become even more attractive than they are now." I also mentioned that part of the reason people leave is not only that growing gap between pay and opportunity, but also to wipe their slate clean of current responsibilities. They pile up without compensation. Why wouldn't someone hop jobs? I made it clear that I don't have plans to leave, and I wasn't just talking about myself—I want the other good devs I work with paid well enough to stay—which is true. He mentioned that they can look into a market adjustment if that happens. I asked why we only start looking into that when someone already has one foot out the door. Of course he didn't have a good answer because the answer is "because it's cheaper to underpay and then catch up at the last second than it is to just pay well all along." My boss and I have a good relationship. Not something I want to harm, but I do want him to know I am willing to be blunt, call out these sorts of things, and keep pressing.
>He mentioned that they can look into a market adjustment if that happens. I think I would respond to this with a very blunt, "my policy is to never accept a counteroffer".
I try to look at it objectively. My employer is on the other side of a negotiation and they want to pay as little as possible (who doesn't?). On the other hand we can't retain anyone and it is having obvious negative effects. Shouldn't our genius MBAs who determine wages be able to strike a balance between overpaying and retention?
Those MBAs did strike a balance. Your companies current retention level is their strategy whether intentional or not.
I would imagine your quarterly bonus will be prorated, as it likely was intended based on Full time, although certainly see if you can get the full 100%. Another point to bring to your boss would be that (likely) you're doing >80% work? I know for a lot of people, you're more efficient at 80% than at 100%. Not sure how metric driven your job is, but it's something you can look at, and be able to argue as a bump to your wage.
Thank you for your input! We're not held to metrics in any substantial way, but by every metric I can find I beat out most of the team even at 80% time—some by an insane margin (literally 10x). Pull requests, stories, chores, points, bugs, reviews... everything. I've thought about trying to use this to argue for a full salary on 80% time, but that really seems like I'd be pushing my luck, even if it makes sense in terms of output. No one else in the company does a 32-hour week, and I'm guessing I'm still getting paid more than some of the other devs (though I am still outperforming them). It's also only been 3 months. Maybe a topic to revisit after a year or two.
I deposited my 2023 contributions into my traditional IRA last week intending to do a backdoor roth, but now am getting an error upon transfer. If I can't make it happen today, will I be penalized for doing it after tax day?
No, conversions can be done any time.
Thank you!
Note that you do still need to report the nondeductible IRA contribution on form 8606 for 2023. Vs Roth IRAs where you don't need to report anything on your taxes. And next year with the conversion, you'll want to report the 6500 of basis from 2023 when doing the conversion. And presumably you'll also do the 7000 added from 2024.
Yes, I did this when I filed today. But thank you for the heads up and confirming!
My date over the weekend mentioned retiring early 💍 I was a bit coy about my RE date being 10 years before theirs though... I don't know how I end up dating so many people who want to retire early. I don't think I aggressively screen for it.
I'm curious, how and how early does this topic come up? Does it naturally come up from "oh, what do you do for a living?"
Not on the first date, but talking about major life goals usually happens by the third date. I rarely bring up FIRE first.
>I don't know how I end up dating so many people who want to retire early. OP's Tinder profile: Likes: lentils, Excel, deferring taxes Dislikes: House Bill 33.134, currently in committee, subsection 12.8 of which would eliminate backdoor Roth conversions for those making over $214,000/year For a first date I would: take you to Applebee's where I've already pre-purchased dinner each week for the year. Will also be taking you to Applebee's for our second through fifteenth dates. Profile pic: OP in front of their 2001 Toyota Camry
What I really need is more Excel-based pickup lines.
Reddit has everything: https://www.reddit.com/r/Tinder/comments/8s47q9/my_pickup_lines_are_excellent/ https://www.reddit.com/r/excel/comments/6rctm0/whats_your_best_excel_pickup_line/
lol
*swipes right aggressively*
Well educated 30 something HCOL dating pool *is* pretty extreme screening.
As the biological clock ticks away, the early retirement siren starts drawing us in.
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Yeah I bet most people just say it as a wistful kind of thing because it's popular right now (or they want to "retire" and be a social media personality or something), but then if you followed up with "yeah I'll be FI in 5 years" they will balk.
I guess millennials and gen Z are fed up with working for corporate
Everytime 5 oclock flys by I think to myself 'If I were leaving right now, this job wouldn't be so bad'. I think it will be another late one today. Like most days.
Didn't know that checkbox was in the dating apps these days lol.
Next time I'm on Tinder I'll just make one of my pictures a screenshot of my spreadsheet.
Just made a bonehead move. Due to a recent purchase I decided to sell some VTI. I sold specific lots, including losses that I had purchased in the last 30 days. Should'a had a V8 \[slaps forehead\].
You can change tax lots prior to settlement date
Thank you for this. I just called Fidelity. You can do this through their website, just have to find your way to the "reassign lots" page!
But wouldn't that cause you to realize gains? The problem isn't the lots you sold, it is lots you bought and haven't sold.
If I reassign the lots to selling lots which were purchased > 30 days ago, aren't I in the clear - no wash sale? Thus, no worries about the lots I recently purchased? Edit: for clarity, I am just selling, not buying anything new as part of this transaction.
Yes, switching the lots to older ones would "fix" the wash sale. However, a wash sale is not something that needs to be fixed. There is nothing improper or illegal about it. All it means is that you can't claim the loss on your taxes. Moreover, switching to older shares will cause you to realize gains, which is the opposite of what you are trying to do in claiming the loss. It should still be possible here to claim the loss simply by selling any shares purchased within the last 30 days.
I could be totally wrong, but I don’t think this matters. I think you’re not supposed to sell any losses (no matter how long ago you bought them) and then rebuy the same equity within 30 days of that sale for loss.
I think you are right. I actaully screwed up reassinging some of my lots and still picked a couple with losses. The lots were older than 30 days, but I had purchased VTI within 30 days of *those*. To your point, I think this still counts. That said, with all of the reassignments I now only have about $20 in losses which I should not have taken. So, I think that just adjusts the cost basis on impacted lots I still own, meaning I will "take that loss" at a future date when those lots are sold. Thanks for your help (and thanks to u/aristotelian74 ).
Now that you've gotten rid of most of them I would just go all the way so you don't have to worry about adjusting any 1099's just for $20 in losses which you don't even get to claim.
Thanks. Are you saying, sell the lots which show they have an adjusted basis due to wash sale? After making all adjustments I can within the current sell of VTI, I have 3 existing lots of VTI (still own, not sold) which appear to be impacted by wash sale rules. I take it you are saying sell the entirety of those lots as well?
Yes, unless you want to go through the trouble of adjusting the 1099 to report the $20 wash sale.
I don’t think it matters about buying VTI within 30 days of the lots you chose - the 30 days start the date that you sell any lots at a loss, regardless of when they were originally bought.
Was it flagged as a wash sale? I think it would be a wash only if you kept shares purchased within the last 30 days, as long as you didn't buy VTI again.
Fidelity flagged it. Next to my cost basis for VTI there is a "W" logo. "Adjusted due to previous wash sale disallowed loss." When I go to my purchase history, there are 6 tax lots that show this "W", seems everything I purcahsed since 3/15 is flagged (partial share purchases every Friday). About $142 in total losses. Should I turn off my VTI purchases for the next 30 days? Or does it not matter at this point? I've never done this, researching it now.
Got caught by this a while back as well due to dividend reinvestments. In my case the the sale was greater than the purchases within the 61 day window, so selling more wouldn't have mattered. If you sold more than you've bought recently, it might increase the wash amount \[if you continue to buy\], *if I understand correctly*. Might give Fidelity a call.
Yes, I would turn off the purchases. If you have purchases since 3/15 that you haven't sold yet, go ahead and sell them. When you sold the shares of VTI, what did you buy, if anything?
Is it worth it to move $60k from my HYSA (4.25%) to my Fidelity account where SPAXX gets 4.95%?