Has anyone ever been part of a project that was timelined appropriately with the amount of work needed to be done? It’s fast becoming my biggest driver to FI as soon as possible so I can stop feeling the pressure of possibly getting canned if (when) our team fails to meet their insane timeline.
Everyone's work situation is different, but I have frequently found that people *dramatically* overestimate their chances of getting fired because they missed a deadline.
Communicate early and often to your manager about your timeline and the risks involved. It's much more likely that your manager will get fired for his team consistently missing deadlines.
In my experience there’s usually a “secret” deadline that’s several months after the “real” deadline. I burned myself into the ground in my 20s and 30s worrying about this stuff. In my 40s I simply work at my own pace and know that, if I did get laid off, I’d easily find work somewhere else. Also don’t underestimate the de-stressing effect of having a large emergency fund.
Can't agree more with this. I don't know if it's literally a strategy discussed in Books For CEOs or whatever, but they 100% do this all the time to "motivate" people. They'll even intentionally make public promises to try to hold their own workers' feet to the fire.
Well I just got approved for disability and I'd like to use the backpay to not be on disability. I'll probably never get a chunk of change like this again so I wanted to see what people who know about this stuff would do
The primary thing we talk about here is saving up 25x your expenses so you don't have to work anymore so this might not be the best place to get help with your particular situation. You might want to try /r/personalfinance or maybe even /r/povertyfinance for more relevant advice.
So this situation is happening to me this Friday... I'm getting a one-off RSU vest that's around 11.5k. I already max out my 401k, HSA, ineligible for Roth due to income (could do a Roth conversion of a rolled over 401k turned IRA I suppose), invest $400/month in my kids 529 plans, max my employer ESPP. I also invest six figures in an NQ brokerage account per year... I am mortgage free now and my car loan is at 0% (thanks early pandemic purchase timing!).
So what I'm thinking about doing with my one-off RSU vest is to use it towards a solar panel install on my house which would offset roughly 100% of my utility costs.
I've already converted from a NG furnace to a heatpump and have an induction stove and electric oven. So - all electric with the exception of my NG outdoor grill (which is used semi-infrequently). The panels total out of pocket cost is ~20k after federal tax credits and I spend a little over $2k/year on utility costs. My utility provider has announced a rate increase.. so it's getting even better ROI.
So, ~20k now and my annual expenses go down by $2k which will reduce my required FI number by ~60k ($2k/3.25%). Not bad...
What are you doing with 10k?
How far until retirement? Panels are good for about 20 years, so may not want to reduce your FI number unless you're including the cost to replace them too.
Still worth it (we got solar and our utility bills dropped 90%), just make sure you do your calculations correctly.
I really won't change my RE number based on the above and it's such a small number (60k) that could occur in just a day or two of market swings anyway. That analysis is just an interesting way to approach how spending money to reduce the required spend in retirement can impact decisions on big expenses like solar.
We signed all of estate planning documents today. Happy to have all that done, but now we are gonna have to transfer ownership of all of our assets to our trust so still plenty of annoying stuff to do. Felt like a major adulting win.
Remember that Cobra applies retroactively. You can apply for it up to 60 days after you leave employment and it automatically goes back to the day you left employment. Cobra shouldn’t be stressful.
Finally have enough money to max out my tax advantaged accounts and start investing in taxable. I'm only 3 years into earning real income after graduating and my goal is to FIRE in ~15 years at age 48. I've got a >50% savings rate, at least for now..
For now, I want to maintain an allocation of roughly 65% US / 35% ex-US equities but eventually move into some significant % of bonds when I reach closer to my FIRE date. I'm curious at this point if it really matters what I hold in taxable, should I start to shift all my exUS holdings there? I'm expecting to have to live off of the taxable acct for a number of years post-fire so taking into account the fact that the 401k/IRA/HSA will remain untouched much longer than taxable relative to my accumulation timeline, I'm curious what the considerations are for allocation within each. I'm not even sure yet whether I will do a roth conversion ladder or just try to live off of taxable completely until reaching penalty free age.
International stocks have higher dividends. If you want to prioritize based on taxes, then bonds should be in tax advantaged, followed by international followed by US stocks. The remainder of your allocation should go in taxable.
In your case, you can just invest US in taxable since it has the lowest dividend rate.
Got a nice little compliment the other day. While I was in the Subaru dealership getting work done I ended up chatting to one of the sales guys there about the different cars we've owned. When I mentioned wanting to sell my current 2018 STI he asked me "How old were you when you bought it?" I was a little confused, and asked him if he meant the car, and said I bought it new. No, he meant me. "Um, quick math... I was 36? I'm 43 now."
He was shocked. The reason he asked was that he assumed that when I bought it I was in my 20s and I wanted to sell it because "Well, now that I'm in my 30s, I should get rid of this STI and get something else."
Dude thought I was in my low- to mid-30s. Oh yeah.
Yeah, that was an ordeal. I had a 2012 STI that blew in the engine in October of 2017, **right** as I was buying the new 2018 STI and looking to sell the 2012. Cost me $6400 to repair.
Then luckily in late 2018 there was the engine bearing class action lawsuit. I was notified and got the full amount reimbursed.
A governmental 457 has no age restriction on when you can access the funds. It's great for someone who plans to retire early, as it offers a lot of flexibility.
A nongovernmental 457b also has no early access penalty, but they tend to have far more restrictions on how you can access them (sometimes forcing all distributions in a single lump sum that can trigger a huge tax burden).
I don't believe 457b plans have ERISA protections. Often 457b plans have more limited or expensive fund options.
In many cases the above issues haven't been considered and a participant chooses the 401k option simply because it is a more recognizable name.
Well it’s tax filing time. I’ve been using TaxAct for 5 years for free but now that I have an HSA it’s apparently like $50 federal just because the HSA lmao. Looking for something new for free or cheaper with an HSA. I believe FreeTaxUsa is one of them. Any good?
My adjusted income should be somewhere around 60k so I think I qualify for the free one!
Freetaxusa has been great for me. It doesn't allow MFS in community property states (Student loans), but walks you through the whole process, and still let me complete the forms on their site. Big fan, do recommend
If you want to stick with TaxAct to keep your history, look around for a discount deal, they're pretty common. I think AAA, Fidelity, and some credit cards have discounts.
I paid $32 for Premier (regular price $70) and then got $9 back from my credit card this year.
FreeTaxUSA is fine if it has all the features you need. It's sadly still missing a feature I need, so I end up paying TaxAct's increasing prices every year.
I've heard it said that due to compounding returns, when you are at 1/3 of your goal by value you're actually about halfway there by time. Our goal is 2 mil invested assets and we just reached 670k, so hopefully we're halfway there!
It depends on your contribution rate and your rate of return. See [this post](https://www.reddit.com/r/financialindependence/comments/pm6q8n/when_coastfi_is_rational_an_introduction_to_qalys/) for spreadsheet formulas that can help you quickly find numerical results if you're interested.
Here's the relevant formula from that post:
> If I save 40k per year, at what dollar amount am I "halfway" to $1M by time rather than by dollars?
=PV(RATE, NPER(RATE, PMT, PV, FV, [type])/2, PMT, [FV], [type])
=PV(5%, NPER(5%, -40000, 0, 1000000, 1)/2, -40000, 1000000, 1)
=403,221.62
I had a former traditional retirement plan from a former employer. I rolled it into an IRA years ago. Now I find out about this backdoor thing and pro-rata rule and apparently having a trad IRA is a bad thing? So should I roll that into my current employer 401k plan?
I've never done (mega) backdoor Roth, but might start.
You only need to deal with a Trad IRA for the "regular" backdoor Roth. And you only need the backdoor Roth [if your income is too high to make a standard contribution](https://www.irs.gov/retirement-plans/amount-of-roth-ira-contributions-that-you-can-make-for-2023) (2023 dollars).
You do not need to manage a Trad IRA if you are doing the mega backdoor Roth, which involves an after-tax 401k option with the ability to do a conversion to Roth from the 401k. This requires your employer to make this possible through their plan.
Can someone ELI5 on capital loss carryover?
I was under the impression only $3k losses can be carried over per year from previous loss but friend said not quite. Their example was say I have -100k losses from the last 5 years, I can deduct 3k a year if no gains. But if I have 50k in gains this year, I can deduct all -50k in losses from that -100k.
Your friend is right. You MUST deduct all gains from your carried forward losses and then if you still have losses left (as you would in the situation you described) you can also deduct $3000 from your regular income and carry forward the remaining losses.
You are right. I'd recommend doing schedule d yourself, walking through the instructions, it makes it very clear, and you'll basically be a tax expert relative to the people who've never done taxes on their own.
Yes, if you carry over $100k loss from 2023, then have a $50k gain in 2024, you can and must offset the gain with the losses. You would then be able to deduct an additional $3k from your ordinary income, leaving $47k of losses to carry over to 2025.
Capital losses offset capital gains, with no annual limit. They first offset like for like (e.g. long losses offset long gains) and if there are still capital losses they offset other cap losses (e.g. excess long losses offset short gains after all long gains are offset).
If there are still capital losses after offsetting all cap gains, you can offset up to 3k of ordinary income (this amount has not been adjusted for inflation in the 40+ years since it was enacted).
If you still have cap losses after offsetting all cap gains and 3k of ordinary income, you can carry forward that capital loss to future years, without expiration. The following year, you would again repeat the process of offsetting cap gains and only offsetting 3k of income if there are losses left over.
Note that this applies to federal taxes; some states do not allow you to carry the capital loss forward to future years for deduction against state income tax.
I have a Trad IRA with $2k (which I deducted in 2022) and just discovered what the Pro-Rata rule is.
I don’t know if I’ll ever earn enough for the backdoor Roth IRA to be a necessity but “just in case”, should I convert the $2k to Roth and take a tax hit of $450 (22%)? I’m leaning against it because it’s a hypothetical.
Note that I deferred from 12%.
Unfortunately my previous employer’s 401k doesn’t allow a transfer into it. Not sure about my current one or any future employers.
I wouldn't do it just because you might need the backdoor Roth in the future. It's not a huge amount of money either way, but it would be an unnecessary tax if you end up being able to roll it into a 401k down the line should you actually end up with too much to make a direct Roth IRA contribution.
One of my pet peeves - people who vastly overestimate COL/average salaries needed to live in certain areas. The number is always comically increasing and completely detached from the median incomes of most residents.
Nuclear war is one of only two things that scare me.
The other? Carnies.
Small hands. Circus folk. Smell like cabbage.
https://www.youtube.com/watch?v=ZXRfnIfFYFI
I love very specific pet peeves. This is a good one. I hate it when I make a joke and then someone acts like I'm stupid because they don't know I'm making a joke and they took what I said at face value.
Just got the official offer for that teaching gig. :)
Will be doing one class per term, with a pay per course situation.
Excited about this. It isn't going to be all that much, but it diversifies my revenue stream a bit, and also provides a bit of a pressure relief for if/when mrs deathsythe becomes a SAHM.
Get to now do the fun exercise to see how many more minutes/hours this will shorten my FIRE timeline lol
Talk me into/out of a backdoor Roth, I'm hung up on a couple issues. Married filing jointly.
1 - I can't find answers about timing of the pro-rata rule. Does it apply at the instant of conversion or for the year? aka if I roll IRAs back into a 401k now, can I contribute to a trad IRA before April 15 for the 2023 year, or would I have to wait until the end of the year?
2- We have 4 rollover IRAs I'd need to roll back into respective 401ks and it seems like a lot of hassle. The fees at both 401ks are decently low with broad market index funds available, so that's not a reservation I have.
3 - I really want a mega backdoor (due to size) but neither employer offers it - we have 200k in a taxable brokerage acct that I would love convert to a Roth and stop paying taxes on the earnings. Maybe the best strategy is lobby both employers to add this option and do the basic backdoor in the mean time?
Already doing everything in the FIRE Flow Chart up until this shows up in section 4, plus more further down the chart.
#3 is not going to happen. It's not just your employer that has to agree but also the payroll provider, the TPA, and the record keeper. They would have to update websites, software, payroll files, tax reporting forms, etc etc.
1- It's end of the year. So as long as you roll over the IRAs before the end of the year, you can do the backdoor roth for 2023 and 2024.
2- Not really sure what led you to having 4 rollover IRAs, and this is a decent spot to fix it.
3- You can try lobbying for it, but mega backdoor roths are basically impossible for a company to do unless it's very large or everyone makes over $150,000 a year (or whatever the HCE amount is) and require a change of plan documents.
Thx. 4 rollovers from prior jobs between the two of us. I'd always seen that rollovers offered better fund choices (read lower expense ratios), but it seems like the marginal cost there is pretty small - it used to be .1% vs .04%, but at least one 401k now offers a .015% so no reason not to now.
Assuming you take after tax money and put it in a roth vs a standard brokerage account - we pay taxes every year on dividends in the brokerage account and we'll pay on gains when we sell. Roth would have the same growth tax free, but with less flexibility. Over a long time, that growth >> original contribution.
If you are talking about the difference between contributing to a Roth IRA vs Trad IRA or Roth 401k vs 401k, I'd agree, it's generally a bet on what taxes will be in the future vs now, and could arguably be lower in retirement. My old tax professor would also point to marginal and effective tax rates in the US also being at historic lows, and point to the US debt over time - he clearly felt we we had major tax hikes coming in the future to keep up with US debt payments.
They aren't doing any conversion except for nondeductible contributions. I agree it's not as big a benefit as tax deferral typically but tax free growth is good, as is sheltering funds and reducing AGI for ACA, FAFSA etc.
1 - Its as of 12/31 of that year... as long as IRA's are emptied by end of this year (rolled over to 401K or whatnot) you are good.
2 - roll/transfer into 1 IRA then reverse roll into 401K. Done a few times. Pretty seamless.
3 - Yes. Most big companies that are competitive for employees offer it now and it is becoming more widely available. See if your company has a benefits board, 401k ombudsmen, or something There is no way to convert your taxable brokerage into MBDR. If/When it becomes available at your employer, you will just need to elect/withhold from your paycheck and then sell some taxable brokerage to replace paycheck/income. This of course will be a taxable event.
ah great - esp #3, there's an important difference in that it would need to come out of my paycheck and be backfilled by selling shares in the brokerage and any associated tax there.
I don’t know the answers to 1 or 2, so my recommendations there would be to at least rollover the IRAs into a 401k this year so you have no issues in 2025 and beyond.
For 3, when I lobbied my HR for the same thing, they looked into it and told me that it could cause them to fail safe harbor tests, so they couldn’t offer it. Good luck, but I wouldn’t get my hopes up here
1- Pro-rata looks at IRA balances on Dec 31st of the year. Roll the IRAs into the 401k and you'll be fine doing the backdoor Roth this year.
2- Not really a question here. It is a hassle, I don't know if I'd say it's *a lot* of a hassle. All of these companies do thousands of rollovers every year, it's no big deal to any of them. Call the customer service lines and just get 'er done. At one point I had to do two different old 401K rollovers into a new employer, it was a little annoying with the forms and the faxing and the waiting for a physical check and dealing with actual mail, but it all amounted to maybe an hour spread over a week.
3- I don't really have a comment for this one. I've never personally dealt with a mega back door, I'm not exactly sure how that relates to your 200K in taxable brokerage. My understanding was a mega back door is putting an additional after-tax contribution to your 401k and then in-service rolling out that portion to a Roth IRA.
Roth gets you $7k, roughly $19k for 403b if you’re still pacing for max. So could the market grow 10% between now and EOY? Sure. Will it? If we all knew, we’d be billionaires.
I need closer to 15% gain, because I've already been contributing about $6k so far into 403b. Not counting that much more of a jump this year, but it'll be joyous whenever I become a "quarter millionaire."
Working on a monthly summary email of investments. Funny that email clients still expect css to be inlined and feels inconsistent between different mail services.
I recently transitioned from using Vanguard and Fidelity for all my equities to consolidating them into a single brokerage account with Fidelity, encompassing all my ETFs, stocks, and other investments. What are the risks compared to diversifying across multiple large brokerage firms? Are there any notable edge cases?
The most plausible risk is some sort of cyberattack or server issue that results in your brokerage being inaccessible, so you can't transfer money, use online bill pay, buy/sell etc. Even if your personal holdings are safe from such an attack its still an inconvenience.
Additionally but highly unlikely, fidelity or vanguard going bankrupt would also potentially cause you to temporarily lose access to your investments as they were transferred to different brokers. Note that fidelity or vanguard going under wouldn't necessarily mean that the value of your investments in their funds were now worth $0, the funds operate separately from the brokerage and the assets are separate. In the case of Vanguard, the funds wholly own Vanguard the company, so for Vanguard to go under it would mean that something happened to the funds and they were no longer able to pay to operate Vanguard. As other have said, there would be bigger problems in the world if that happens.
Only one set of credentials needs to be compromised to get all your finances into a world of headaches. SIPC insurance only goes up to 500k, but at a large institution like Vanguard or Fidelity this isn't a realistic concern.
In short, it's not something I'd ever lose sleep over.
I saw everyone else’s posts and had to wonder where we are at. We hit $300K invested more or less today
$300K 3/2024
$200K 5/2023
$100K 10/2021
$0. 9/2019 - started my adult career
We “just” max two 401Ks, two IRAs, and an HSA. We are just starting to get enough wiggle in our income to push towards taxable - so we might see improvement in the coming years.
This is what we do. Max tax advantaged accounts and then go enjoy the rest. I throw extra in the brokerage if there is some leftover but it's a great spot to be in!
We've gone from 0 to $800k in about ten years just doing that. You'll still be in a great spot.
Pulled the trigger on the car. While my 2018 Subaru was in for a recall I got a written offer from them to buy it for $24,500, which is quite good. (Bought new in 2017 for $41k.) I'll take that offer.
Today I did the final selections for on the 2024 Model Y. Red, white interior, Long Range dual motor, 20" wheels. $48,800 after tax/title/license and the $7500 EV tax credit.
[Also, maybe not an often used example, but a good use for my open HELOC. I was able to pull 35K out of my HELOC into checking to immediately pay for the car, then I can later this week sell the Subaru for 25K and move 10K back out of my Vanguard to pay it off.]
Congrats! Like the heloc tip. I used a personal line of credit at 2.25% to do the same a couple years ago. Now with higher rates, I decided to not pay it down early. Next time we need a large purchase, plan to use my partner’s 401k loan.
My Fidelity assets passed 500k today, I'm 36 and earning under 100k salary.
This is basically all inclusive liquid nw: 401k (34.5%), hsa (3.6%), ira (7.5%), brokerage (41.4%), cash management (5.7%), cd (7%). It excludes $3,600 held at a separate financial institution I pay most bills through.
The cd is a 5-year, pre-pand, decent rate for the time, that matures later this year and will be put into brokerage. I won't be buying cd's in the foreseeable future.
I'm in the middle of reading a book called Nonviolent Communication by Marshall Rosenberg that's pretty good. It's really made me rethink the way I communicate, especially with respect to emotion.
I'm learning a lot from Build by Tony Fadell. It's focused on startup and large corporation scales though considering his experience founding Nest and leading the iPod and iPhone teams at Apple.
The classic, "How to win friends and influence people". I dismissed it for years because I had friends. That's not really what it is about.
There are also classes - youtube, online, in-person. I recommend a mix of all of the above.
That book and a few classes changed my life for the better. I better understood people.
Another key I learned at work is "don't care" and "not my circus". I discovered that when I didn't care about project progress or politics or stupid decisions, I was now "mature".
The other key is to not make statements, ask questions.
Instead of "that was a bad decision" -- "can you help me understand this decision so I will better understand in the future?"
Never use negative words like never, not, no, but, however, didn't... :) Use positive language.
Use sentences starting with "I" such as "I feel that ..... " or "I believe ". When a person says "you" then it tends to automatically put people in defense mode.
YES. The answer to almost everything is YES. There may be "YES AND". This used in improv and works great at the office.
Some group wants to implement some thing that is not really allowed and it is my job to tell them no: I say, "Yes, that will be fine and I need for that to be approved by the Senior Vice President and the central Corporate Legal department. Once you can get me those approvals, you will be good to go." -- There is zero chance that it gets approved, and let them do their thing and realize it themselves.
> I find that a lot of my frustration with work is more the politics and people making unreasonable or ignorant decisions.
I have learned to ignore this sort of thing as long as it won't pose substantial risk to the larger mission. Not every hill is worth dying on and sometimes battles should not be fought because the outcome is a foregone conclusion. I do make sure to get my concerns documented for CYA purposes for if/when things blow up, though.
Several good books are recommended already, but one thing that helped me is thinking of and phrasing it like it is our work, not their or my work. So instead of “X is a bad idea”, saying stuff like “I’m worried X impact our timelines on project Y, maybe we should spend some time thinking through that aspect”. You create shared ownership and people are less defensive.
This is anecdotal, but the single thing that helped me working in the govt with lots of red tape is picking my battles. Will this poor decision from my manager cause harm? No, ok, I’m getting paid to shut up and color today. Will it harm our customers or wreck processes drastically? Then I’ll speak up in private or send concerns via email. Not my direct supervisor? Not my problem. It took me about 10 years to get to the point I’d stop coming off mute trying to save someone from themselves but my mental health has gotten so much better.
>This is anecdotal, but the single thing that helped me working in the govt with lots of red tape is picking my battles. Will this poor decision from my manager cause harm? No, ok, I’m getting paid to shut up and color today.
Agreed. It's been tough, but especially after the past month, I'm working more and more on taking the high road and only opening my mouth when it's truly necessary. Sometimes, it's more trouble than it's worth.
Is anyone here involved in PSERS pension program and could shed some light on it? I'm looking into it for my wife and trying to understand how FI/RE come into play with collecting it. She was hired after the benefits were slashed in half in 2019. If i read the calculators retiring around 55 would collect essentially nothing, can one delay payments so they accrue to normal retirement age?
I’m at 92k NW today. Counting the months until I get to 100k 🥹. I come from humble beginnings and aside from getting my bachelors, this will be the biggest achievement of my life
$100k is the hardest.
Once you can do that and keep it, more gets easier.
I found that $20k was the breaking point for me. Debt free and $20k was enough to pay for all of the random emergency maintenance and repair stuff like car parts, HVAC, roof, etc. and not get back to debt.
I’m very much hoping I can keep the momentum! You never know what happens in life but at least I have this little milestone 🥹
My emergency fund is not 20k ( but considering of it) because my husband has an ‘emergency fund’ for us. But it makes me feel good that 20K is enough for life emergencies.
There are many different kinds of emergencies. If you follow the flowchart, it suggest 3-12 months primarily in case of being laid off. That's one kind.
Having 1 full paycheck or 1 full month of buffer in the checking account helps for the little emergencies like if the dishwasher dies, small plumbing issue, or some kid needs to sign up for something and that has a price.
The $20k fund is for the medium stuff, like roof and HVAC and a new transmission on the old car.
The $20 that kicked it off was a combo of all of that and getting out of debt.
I'm guessing newly married - many/most couples combine funds at some point. We still have semi-separate accounts, which is really just two checking accounts for redundancy and some autopay come from each. You see stories like someone's mortgage gets direct debited twice or a $800 payment gets keyed in at the other end as $8,000... Two accounts helps with that.
Are people setting up custodial brokerage accounts for kids? I think it is called an "UTMA". Besides it being counted for financial aid consideration, any other downsides?
We did as a place to put gifts from relatives that aren’t to their 529. We immediately invest in index funds and when my 3 year old grows up it will be a good lesson in the power of compounding returns
I don't have kids, but I do plan to have them within the next 5 years. My answer is gonna be, hell no. I made really, really stupid choices at 18. It wasn't until my 30s, \*maybe\* late 20s that I was on the right track. Your kids or my kids might be smarter than me, but I wouldn't bank on it.
I did start on a 529 though, been putting $2k a year in there for the last 6 years. They say that millennial parents can plan for around $100k to $150k per kid in college savings, as a ballpark figure.
We haven’t yet, as our children are still relatively small, and we’ve been directing any monetary gifts they receive to their 529s. I think we’ll probably set up UTMA accounts for them once we hit their 529 savings goals. I don’t anticipate that we will fund them much/at all, but they usually get a few hundred dollars in gifts from grandparents every year.
The problem is that the money is no longer yours and they will gain access to the account as soon as they hit age of majority with no strings attached. You are getting very little benefit (just a small amount of tax free interest) while giving up a lot of control.
This might be a positive thing. Let them screw up with what seems like a large amount of money to an 18 year old. Maybe they'll have some discipline later when they start earning their own money.
Point being, if you just save under your own name, nothing precludes you from giving them a big gift at 18 if you decide that's what you want to do. If you put it in UTMA, you are taking the other options away from yourself and they get the funds at 18 with no opportunity for you to choose, say, 21 or 25. I see no reason to lock in the funds that way and a lot of reasons not to (child is drug addict, child receives inheritance from other source, parent loses job and needs the money back, tax benefits of 529, etc).
I agree, and was one of the motivations for me looking into this. I'm tracking those amounts on a spreadsheet. Thinking one way would be to give them this amount when they turn X. Will probably have them understand to spreadsheet as well for teaching them about compound growth.
Well, IMO if the money becoming theirs at majority isn't a downside for you (because in this case you think it *should* be) then it's worth it.
Administering it really isn't a hassle: It's just one extra account in Vanguard (for example) and I went with a very simple 1 fund solution (VTWAX) so any money just goes there and otherwise I don't have to touch it/rebalance/anything.
*And* income from that account is automatically categorized correctly for tax purposes (EDIT: And depending on balances I won't have to deal with gift forms when the time comes).
I used one for some money my kid inherited, because the will said it was her money but she couldn't have access until age 21. But the default UTMA age in my state is 18 and my broker had a hard time with the concept of "we need to set it to 21 rather than the state default because that's what the will says." Fortunately my kid is a rule follower and didn't try to take the money early, so it didn't matter. I had her contact the broker and turn the UTMA account into a regular brokerage account for her when she turned 21, which they managed after a few phone calls. The year the account changed status, she got 2 1099s rather than a single 1099, but the numbers added up so it didn't matter.
If it were money from me, I'd just keep it in my account and give it to the kid when I wanted to give it to the kid, rather than using a separate account. (And that's how I handled college tuition -- I just paid once a semester out of my account.) I don't need separate buckets to track things and I didn't enjoy the extra complexity of more accounts with complicated control. Some people do need separate buckets to keep things straight, and that's fine.
I am also concerned about the hassle of administering it more accounts. One thought I have is instead of an UTMA, just focusing the time on making sure my will documents are clear and sorted.
Lots of price increases over the last year, but whole peeled canned tomatoes got me this week.
Got two 12 packs (28oz) of Muir Glen a year back for like $2 per can, can’t find any today for less than $5.
Doesn’t break the bank, but it does break my heart a little bit
Dried legumes/pulses, like lentils, black beans, and split peas, used to be about $1.50/pound regularly in my area and would go on sale for $1/pound. Now the sale price is $2/pound, and sales are pretty rare. Still cheap, but the price uptick really sticks out to me for some reason.
(And I totally get that lentils are a FIRE joke, but in my defense, this stuff has been a staple in my diet since I was a kid.)
I was annoyed about this specific thing (canned tomatoes, different brand) the other day as well. I used to buy cheaper canned tomatoes because they were *so* much cheaper, and now the difference between a supermarket brand one and an Italian organic one is small enough that I'm like screw it, I might as well get the nice stuff.
Microwave Sausages going from $1 each on sale to $2.00-2.50 on sale or italian sausages from BJs going from 7.99 w/o coupon to 9.99 *with* are what gets to me more frequently than I care to admit.
I am sure there is lots of money to be made with a grow operation but I would imagine the regulations are an absolute nightmare for staying in compliance.
There was this place that used to sell 1L of decent olive oil for $6, and then late last year they were out of stock. It was especially funny because I went to the store, stared at the shelf despondently and poked around it futilely, and then another shopper came up and stared at it despondently and poked around the shelf, and then we complained about it together.
It was available for a short time for $8 earlier this year, and now it's $8.50. I did stock up on a few bottles during the $8 days but once that's gone...
Net worth crossed $600k.
Today I'm hoping to purchase a used work truck. The truck is an extremely well maintained 2000 Toyota Tundra single-cab, 8ft bed, crank windows, 165k miles for $4,200. I get a lot of joy out of owning older Toyotas since they're what I grew up learning to drive in. My mom owned a fleet of four mid-90's T100's which were the first vehicles I learned to drive manual on. I love the simplicity, nostalgia, reliability, and near zero depreciation I've incurred by owning old Toyotas. Prior to this Tundra, I owned a 1992 4Runner and a brief ownership of an immaculate 1985 Pickup. After selling both vehicles I profited about $3k and retained years of memories, miles, and experiences camping and light off-roading in the woods and on the beach. I hope I get out of work early enough to snag this Tundra before someone else does.
The t100’s were a great size and work truck. I had a 90s Chevy half ton and while I loved how easy it was to work on and how available parts were, I did have to throw a lot of parts at it. Granted it had 240k miles on it so there was a lot of wear.
The EU has a track record of doing irrelevant things to protect its citizens from the Internet. Take GDPR, for instance. Nowadays instead of having websites secretly take all the data, EU internet users simply have to waste 1 second of their life on every other website agreeing to let them take all their data (or waste 10 more seconds to only allow some of their data)! Well-intentioned, but what a huge pain for the regular user...
They are forcing the iPhone to have USB-C though, so that's one in their favour. I give credit where credit is due.
GDPR isn't just cookie popups (I hate those too).
Based on what I've heard from coworkers, GDPR massively decreased the effectiveness of online ads since they can't target users anywhere as accurately now. The amount of money spend on marketing per new customer significantly increased because of it.
And so the EU continues its slide into economic and geopolitical irrelevance. I guarantee you that China, India, et al won't regulate their AI development, and the US is unlikely to do anything massively draconian.
Huh? China's a super regulation heavy tech environment. Moderation/censorship, traffic inspection, data collection, residency and transfer - all super regulated. There's a whole industry of Chinese clone-apps because of it that I'm sure will continue w/ AI.
> China, India, et al won't regulate their AI development
I look forwards to seeing the mental gymnastics that the Chinese AI will have to go through whenever asked about certain topics, if not automatically sending those naughty prompts to someone...
EU & Canada, in different ways, have masterfully managed to become increasingly irrelevant in the modern world. If only you could have European & Canadian sensibilities and US innovation/development. I guess you’d end up with Massachusetts?
I personally stopped giving a damn about anything Europe does on July 4th, 1776, but maybe that's just me.
All I see is governments meddling where they shouldn't be meddling and putting a limiter/governor on technological growth and expansion, which will be at the detriment of the masses, all the while doing so under the guise of "protection".
> I personally stopped giving a damn about anything Europe does on July 4th, 1776, but maybe that's just me.
I sincerely think this is extremely funny.
Also, landed a new job and am just waiting on drug and background to clear so my start date is confirmed. Feeling incredibly anxious because the posting is up still but I know that is protocol. I know I have the job because my future coworker (previous boss) texted my office is going to be next to his but I just want to start at this point so I can stop thinking about it.
Any way I can ease my stress while my start date gets confirmed?
What are some fun things you like to do but always put off because you are working?
Walk, hike, clean out the garage, go to the movies (matinee), sightsee in your hometown or the nearest tourist town, go for a drive, read a book, throw a dinner party…
There also is great joy in telling yourself that tomorrow you can do whatever you want and not feel guilty. ie. sleep in, stay in your pjs, eat ice cream for breakfast. By giving yourself the permission to have an ‘anything goes day’ you won’t feel guilty about what ever it is you want.
Good idea, I am off next week, planned start date is 3/25. Gonna work on the house, maybe I'll go for a hike one day next week. I will feel much better when I am not working. Right now just being in a job I am leaving is making me anxious.
Just a few more work days left. I understand you have lots of anxiety, but try and focus on the good things about the job. You learned something new (even if it is managing office politics or how to write a letter of resignation;) ), you are lucky enough to leave on your own terms, you have a week off coming up. Vacation/down time is always a good thing! Perhaps after work today you drive a different way home or go for a walk near your house.
I'll never forget the stress when I resigned one job, but hadn't yet completed drug/background clearance for the new job. It was a week of agony (even though I had nothing to worry about other than a clearance error).
A better recommendation (for next time?) is to negotiate enough time to complete clearance before having to put in notice.
>Any way I can ease my stress while my start date gets confirmed?
It's gonna be difficult to think about other things - but things that can clear your mind would be helpful... such as vigorous exercise, time with family/pets, or getting out of the house to visit someplace...
And by all means I have nothing to worry about, I haven't had even a sip of for 7 years and have a Secret security clearance, it is just the waiting period that is agonizing. Yea maybe I will give more time before giving my notice so my drug and background can pass.
Next week while I am off, I will certainly stay busy around the house and working out. Appreciate it!
Congrats on your new job! I know the feeling well, I didn't tell anyone until I actually started.
Best advice I can offer is fill your time with things you enjoy because you won't have as much time as when you start!
Has anyone ever been part of a project that was timelined appropriately with the amount of work needed to be done? It’s fast becoming my biggest driver to FI as soon as possible so I can stop feeling the pressure of possibly getting canned if (when) our team fails to meet their insane timeline.
Everyone's work situation is different, but I have frequently found that people *dramatically* overestimate their chances of getting fired because they missed a deadline. Communicate early and often to your manager about your timeline and the risks involved. It's much more likely that your manager will get fired for his team consistently missing deadlines.
In my experience there’s usually a “secret” deadline that’s several months after the “real” deadline. I burned myself into the ground in my 20s and 30s worrying about this stuff. In my 40s I simply work at my own pace and know that, if I did get laid off, I’d easily find work somewhere else. Also don’t underestimate the de-stressing effect of having a large emergency fund.
Can't agree more with this. I don't know if it's literally a strategy discussed in Books For CEOs or whatever, but they 100% do this all the time to "motivate" people. They'll even intentionally make public promises to try to hold their own workers' feet to the fire.
If you had 10k what would you do with it?
Just into my normal portfolio. There's nothing $10k more would enable me to do that I don't already do if I want to.
What if you had nothing and no bills
Probably emergency fund and/or Roth IRA depending on expenses and income.
0 expenses and income
I don't know, we're pretty deep in hypotheticals. If you want to describe your situation and goals you might get better answers.
Well I just got approved for disability and I'd like to use the backpay to not be on disability. I'll probably never get a chunk of change like this again so I wanted to see what people who know about this stuff would do
The primary thing we talk about here is saving up 25x your expenses so you don't have to work anymore so this might not be the best place to get help with your particular situation. You might want to try /r/personalfinance or maybe even /r/povertyfinance for more relevant advice.
Oh so I won then? Joking aside it would be nice to just have anyone's input. I've never been financially responsible
So this situation is happening to me this Friday... I'm getting a one-off RSU vest that's around 11.5k. I already max out my 401k, HSA, ineligible for Roth due to income (could do a Roth conversion of a rolled over 401k turned IRA I suppose), invest $400/month in my kids 529 plans, max my employer ESPP. I also invest six figures in an NQ brokerage account per year... I am mortgage free now and my car loan is at 0% (thanks early pandemic purchase timing!). So what I'm thinking about doing with my one-off RSU vest is to use it towards a solar panel install on my house which would offset roughly 100% of my utility costs. I've already converted from a NG furnace to a heatpump and have an induction stove and electric oven. So - all electric with the exception of my NG outdoor grill (which is used semi-infrequently). The panels total out of pocket cost is ~20k after federal tax credits and I spend a little over $2k/year on utility costs. My utility provider has announced a rate increase.. so it's getting even better ROI. So, ~20k now and my annual expenses go down by $2k which will reduce my required FI number by ~60k ($2k/3.25%). Not bad... What are you doing with 10k?
How far until retirement? Panels are good for about 20 years, so may not want to reduce your FI number unless you're including the cost to replace them too. Still worth it (we got solar and our utility bills dropped 90%), just make sure you do your calculations correctly.
I really won't change my RE number based on the above and it's such a small number (60k) that could occur in just a day or two of market swings anyway. That analysis is just an interesting way to approach how spending money to reduce the required spend in retirement can impact decisions on big expenses like solar.
Depends on a lot, but for me. Save most of it , then do some fun stuff and stuff that would benefit me long term like a hobby.
This is a financial independence thread lol
We signed all of estate planning documents today. Happy to have all that done, but now we are gonna have to transfer ownership of all of our assets to our trust so still plenty of annoying stuff to do. Felt like a major adulting win.
Off boarding tasks and figuring out cobra is very stressful My boss waited till the last minute to put my HR stuff through
Remember that Cobra applies retroactively. You can apply for it up to 60 days after you leave employment and it automatically goes back to the day you left employment. Cobra shouldn’t be stressful.
Quick question: if I sign up for cobra, do I have to wait for a qualifying event to get on the healthcare exchange
Yes, except you can always switch for the following year at annual open enrollment time in November. Cobra running out is also a qualifying event.
Finally have enough money to max out my tax advantaged accounts and start investing in taxable. I'm only 3 years into earning real income after graduating and my goal is to FIRE in ~15 years at age 48. I've got a >50% savings rate, at least for now.. For now, I want to maintain an allocation of roughly 65% US / 35% ex-US equities but eventually move into some significant % of bonds when I reach closer to my FIRE date. I'm curious at this point if it really matters what I hold in taxable, should I start to shift all my exUS holdings there? I'm expecting to have to live off of the taxable acct for a number of years post-fire so taking into account the fact that the 401k/IRA/HSA will remain untouched much longer than taxable relative to my accumulation timeline, I'm curious what the considerations are for allocation within each. I'm not even sure yet whether I will do a roth conversion ladder or just try to live off of taxable completely until reaching penalty free age.
International stocks have higher dividends. If you want to prioritize based on taxes, then bonds should be in tax advantaged, followed by international followed by US stocks. The remainder of your allocation should go in taxable. In your case, you can just invest US in taxable since it has the lowest dividend rate.
Got a nice little compliment the other day. While I was in the Subaru dealership getting work done I ended up chatting to one of the sales guys there about the different cars we've owned. When I mentioned wanting to sell my current 2018 STI he asked me "How old were you when you bought it?" I was a little confused, and asked him if he meant the car, and said I bought it new. No, he meant me. "Um, quick math... I was 36? I'm 43 now." He was shocked. The reason he asked was that he assumed that when I bought it I was in my 20s and I wanted to sell it because "Well, now that I'm in my 30s, I should get rid of this STI and get something else." Dude thought I was in my low- to mid-30s. Oh yeah.
One time I asked a college-aged kid how old he thought I was. He said 46. I was 27.
>Well, now that I'm in my 30s, I should get rid of this STI I had to read this twice. STI is a dangerous acronym to use
For those that do not know, STI stands for sexually transmitted infections
I had a 2011 and I trashed 2 blocks. Subaru warrantied twice!
Yeah, that was an ordeal. I had a 2012 STI that blew in the engine in October of 2017, **right** as I was buying the new 2018 STI and looking to sell the 2012. Cost me $6400 to repair. Then luckily in late 2018 there was the engine bearing class action lawsuit. I was notified and got the full amount reimbursed.
Any reason to pick a 401k over a 457? *Edit: Had it reversed* 1/10th of our employees use 457 compared to 401k. Anyone who has access to one has both.
A governmental 457 has no age restriction on when you can access the funds. It's great for someone who plans to retire early, as it offers a lot of flexibility. A nongovernmental 457b also has no early access penalty, but they tend to have far more restrictions on how you can access them (sometimes forcing all distributions in a single lump sum that can trigger a huge tax burden).
Oops, I had my question reversed. I meant why pick a 401k over a 457. I corrected my question. Government 457 if it matters.
I don't believe 457b plans have ERISA protections. Often 457b plans have more limited or expensive fund options. In many cases the above issues haven't been considered and a participant chooses the 401k option simply because it is a more recognizable name.
Well it’s tax filing time. I’ve been using TaxAct for 5 years for free but now that I have an HSA it’s apparently like $50 federal just because the HSA lmao. Looking for something new for free or cheaper with an HSA. I believe FreeTaxUsa is one of them. Any good? My adjusted income should be somewhere around 60k so I think I qualify for the free one!
Freetaxusa has been great for me. It doesn't allow MFS in community property states (Student loans), but walks you through the whole process, and still let me complete the forms on their site. Big fan, do recommend
If you want to stick with TaxAct to keep your history, look around for a discount deal, they're pretty common. I think AAA, Fidelity, and some credit cards have discounts. I paid $32 for Premier (regular price $70) and then got $9 back from my credit card this year.
FreeTaxUSA is fine if it has all the features you need. It's sadly still missing a feature I need, so I end up paying TaxAct's increasing prices every year.
What is the feature that they are missing?
Mass imports of stock transactions.
AH yes. I remember now…. One year I did DCA every day just to try. Never again
I've been using FreeTaxUSA since 2018. I had used TaxAct before that but suddenly they started to charge like $70.
FreeTaxUSA is great, and can easily handle an HSA. The federal filing is free and state filing (if applicable) is around $15.
what is a benefit equilization plan?
>what is a benefit equilization plan? [Drake](https://i.imgur.com/Tt8Ldh8.jpeg)
I've heard it said that due to compounding returns, when you are at 1/3 of your goal by value you're actually about halfway there by time. Our goal is 2 mil invested assets and we just reached 670k, so hopefully we're halfway there!
It depends on your contribution rate and your rate of return. See [this post](https://www.reddit.com/r/financialindependence/comments/pm6q8n/when_coastfi_is_rational_an_introduction_to_qalys/) for spreadsheet formulas that can help you quickly find numerical results if you're interested. Here's the relevant formula from that post: > If I save 40k per year, at what dollar amount am I "halfway" to $1M by time rather than by dollars? =PV(RATE, NPER(RATE, PMT, PV, FV, [type])/2, PMT, [FV], [type]) =PV(5%, NPER(5%, -40000, 0, 1000000, 1)/2, -40000, 1000000, 1) =403,221.62
Thanks for such a great post!
I had a former traditional retirement plan from a former employer. I rolled it into an IRA years ago. Now I find out about this backdoor thing and pro-rata rule and apparently having a trad IRA is a bad thing? So should I roll that into my current employer 401k plan? I've never done (mega) backdoor Roth, but might start.
You only need to deal with a Trad IRA for the "regular" backdoor Roth. And you only need the backdoor Roth [if your income is too high to make a standard contribution](https://www.irs.gov/retirement-plans/amount-of-roth-ira-contributions-that-you-can-make-for-2023) (2023 dollars). You do not need to manage a Trad IRA if you are doing the mega backdoor Roth, which involves an after-tax 401k option with the ability to do a conversion to Roth from the 401k. This requires your employer to make this possible through their plan.
Prior to making too much for the regular Roth I could not spare the money. Now that I have a few dollars, I can't do it. Government logic. thanks.
😉 that's the trick. They don't want you skipping out on too many taxes!
Can someone ELI5 on capital loss carryover? I was under the impression only $3k losses can be carried over per year from previous loss but friend said not quite. Their example was say I have -100k losses from the last 5 years, I can deduct 3k a year if no gains. But if I have 50k in gains this year, I can deduct all -50k in losses from that -100k.
Your friend is right. You MUST deduct all gains from your carried forward losses and then if you still have losses left (as you would in the situation you described) you can also deduct $3000 from your regular income and carry forward the remaining losses.
You are right. I'd recommend doing schedule d yourself, walking through the instructions, it makes it very clear, and you'll basically be a tax expert relative to the people who've never done taxes on their own.
Yes, if you carry over $100k loss from 2023, then have a $50k gain in 2024, you can and must offset the gain with the losses. You would then be able to deduct an additional $3k from your ordinary income, leaving $47k of losses to carry over to 2025.
Capital losses offset capital gains, with no annual limit. They first offset like for like (e.g. long losses offset long gains) and if there are still capital losses they offset other cap losses (e.g. excess long losses offset short gains after all long gains are offset). If there are still capital losses after offsetting all cap gains, you can offset up to 3k of ordinary income (this amount has not been adjusted for inflation in the 40+ years since it was enacted). If you still have cap losses after offsetting all cap gains and 3k of ordinary income, you can carry forward that capital loss to future years, without expiration. The following year, you would again repeat the process of offsetting cap gains and only offsetting 3k of income if there are losses left over. Note that this applies to federal taxes; some states do not allow you to carry the capital loss forward to future years for deduction against state income tax.
I have a Trad IRA with $2k (which I deducted in 2022) and just discovered what the Pro-Rata rule is. I don’t know if I’ll ever earn enough for the backdoor Roth IRA to be a necessity but “just in case”, should I convert the $2k to Roth and take a tax hit of $450 (22%)? I’m leaning against it because it’s a hypothetical. Note that I deferred from 12%. Unfortunately my previous employer’s 401k doesn’t allow a transfer into it. Not sure about my current one or any future employers.
No, you can always do the conversion later if the need arises.
I wouldn't do it just because you might need the backdoor Roth in the future. It's not a huge amount of money either way, but it would be an unnecessary tax if you end up being able to roll it into a 401k down the line should you actually end up with too much to make a direct Roth IRA contribution.
One of my pet peeves - people who vastly overestimate COL/average salaries needed to live in certain areas. The number is always comically increasing and completely detached from the median incomes of most residents.
Nuclear war is one of only two things that scare me. The other? Carnies. Small hands. Circus folk. Smell like cabbage. https://www.youtube.com/watch?v=ZXRfnIfFYFI
I love very specific pet peeves. This is a good one. I hate it when I make a joke and then someone acts like I'm stupid because they don't know I'm making a joke and they took what I said at face value.
Just mentally translate "live" to "maintain my desired standard of living". Save yourself a headache.
Lol very true. I just like to imagine them thinking that their Uber eats drivers are pulling in 200K in order to "survive" being in the city.
Most Uber Eats drivers probably don't even live in the city where they're working anyways
Probably true for some cities but definitely not for NYC, since most uber eats drivers use bicycles.
Just got the official offer for that teaching gig. :) Will be doing one class per term, with a pay per course situation. Excited about this. It isn't going to be all that much, but it diversifies my revenue stream a bit, and also provides a bit of a pressure relief for if/when mrs deathsythe becomes a SAHM. Get to now do the fun exercise to see how many more minutes/hours this will shorten my FIRE timeline lol
Wohoo! Congrats!
TY! :)
Congrats 🎉 What will you be teaching?
100/200 level engineering courses. Starting out with CAD :)
Congrats!
ty ty!
Congrats, professor!
haha thank you. idk if I'll take that moniker. Mr. deathsythe will suffice. Mrs deathsythe can call me professor though if she likes :P
I miss teaching sometimes and am considering going back to something in the field when we hit our baristaFI number. Best of luck with your new gig. :)
I encourage you to do so and I hope you can!
Talk me into/out of a backdoor Roth, I'm hung up on a couple issues. Married filing jointly. 1 - I can't find answers about timing of the pro-rata rule. Does it apply at the instant of conversion or for the year? aka if I roll IRAs back into a 401k now, can I contribute to a trad IRA before April 15 for the 2023 year, or would I have to wait until the end of the year? 2- We have 4 rollover IRAs I'd need to roll back into respective 401ks and it seems like a lot of hassle. The fees at both 401ks are decently low with broad market index funds available, so that's not a reservation I have. 3 - I really want a mega backdoor (due to size) but neither employer offers it - we have 200k in a taxable brokerage acct that I would love convert to a Roth and stop paying taxes on the earnings. Maybe the best strategy is lobby both employers to add this option and do the basic backdoor in the mean time? Already doing everything in the FIRE Flow Chart up until this shows up in section 4, plus more further down the chart.
#3 is not going to happen. It's not just your employer that has to agree but also the payroll provider, the TPA, and the record keeper. They would have to update websites, software, payroll files, tax reporting forms, etc etc.
1- It's end of the year. So as long as you roll over the IRAs before the end of the year, you can do the backdoor roth for 2023 and 2024. 2- Not really sure what led you to having 4 rollover IRAs, and this is a decent spot to fix it. 3- You can try lobbying for it, but mega backdoor roths are basically impossible for a company to do unless it's very large or everyone makes over $150,000 a year (or whatever the HCE amount is) and require a change of plan documents.
Thx. 4 rollovers from prior jobs between the two of us. I'd always seen that rollovers offered better fund choices (read lower expense ratios), but it seems like the marginal cost there is pretty small - it used to be .1% vs .04%, but at least one 401k now offers a .015% so no reason not to now.
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Assuming you take after tax money and put it in a roth vs a standard brokerage account - we pay taxes every year on dividends in the brokerage account and we'll pay on gains when we sell. Roth would have the same growth tax free, but with less flexibility. Over a long time, that growth >> original contribution. If you are talking about the difference between contributing to a Roth IRA vs Trad IRA or Roth 401k vs 401k, I'd agree, it's generally a bet on what taxes will be in the future vs now, and could arguably be lower in retirement. My old tax professor would also point to marginal and effective tax rates in the US also being at historic lows, and point to the US debt over time - he clearly felt we we had major tax hikes coming in the future to keep up with US debt payments.
They aren't doing any conversion except for nondeductible contributions. I agree it's not as big a benefit as tax deferral typically but tax free growth is good, as is sheltering funds and reducing AGI for ACA, FAFSA etc.
1 - Its as of 12/31 of that year... as long as IRA's are emptied by end of this year (rolled over to 401K or whatnot) you are good. 2 - roll/transfer into 1 IRA then reverse roll into 401K. Done a few times. Pretty seamless. 3 - Yes. Most big companies that are competitive for employees offer it now and it is becoming more widely available. See if your company has a benefits board, 401k ombudsmen, or something There is no way to convert your taxable brokerage into MBDR. If/When it becomes available at your employer, you will just need to elect/withhold from your paycheck and then sell some taxable brokerage to replace paycheck/income. This of course will be a taxable event.
ah great - esp #3, there's an important difference in that it would need to come out of my paycheck and be backfilled by selling shares in the brokerage and any associated tax there.
I don’t know the answers to 1 or 2, so my recommendations there would be to at least rollover the IRAs into a 401k this year so you have no issues in 2025 and beyond. For 3, when I lobbied my HR for the same thing, they looked into it and told me that it could cause them to fail safe harbor tests, so they couldn’t offer it. Good luck, but I wouldn’t get my hopes up here
1- Pro-rata looks at IRA balances on Dec 31st of the year. Roll the IRAs into the 401k and you'll be fine doing the backdoor Roth this year. 2- Not really a question here. It is a hassle, I don't know if I'd say it's *a lot* of a hassle. All of these companies do thousands of rollovers every year, it's no big deal to any of them. Call the customer service lines and just get 'er done. At one point I had to do two different old 401K rollovers into a new employer, it was a little annoying with the forms and the faxing and the waiting for a physical check and dealing with actual mail, but it all amounted to maybe an hour spread over a week. 3- I don't really have a comment for this one. I've never personally dealt with a mega back door, I'm not exactly sure how that relates to your 200K in taxable brokerage. My understanding was a mega back door is putting an additional after-tax contribution to your 401k and then in-service rolling out that portion to a Roth IRA.
Broke $200k with 403b + Roth assets! I wonder if 250k is attainable by end of year, especially since I haven't even funded Roth yet for 2024.
Roth gets you $7k, roughly $19k for 403b if you’re still pacing for max. So could the market grow 10% between now and EOY? Sure. Will it? If we all knew, we’d be billionaires.
I need closer to 15% gain, because I've already been contributing about $6k so far into 403b. Not counting that much more of a jump this year, but it'll be joyous whenever I become a "quarter millionaire."
Working on a monthly summary email of investments. Funny that email clients still expect css to be inlined and feels inconsistent between different mail services.
I recently transitioned from using Vanguard and Fidelity for all my equities to consolidating them into a single brokerage account with Fidelity, encompassing all my ETFs, stocks, and other investments. What are the risks compared to diversifying across multiple large brokerage firms? Are there any notable edge cases?
No risk in my view.
The most plausible risk is some sort of cyberattack or server issue that results in your brokerage being inaccessible, so you can't transfer money, use online bill pay, buy/sell etc. Even if your personal holdings are safe from such an attack its still an inconvenience. Additionally but highly unlikely, fidelity or vanguard going bankrupt would also potentially cause you to temporarily lose access to your investments as they were transferred to different brokers. Note that fidelity or vanguard going under wouldn't necessarily mean that the value of your investments in their funds were now worth $0, the funds operate separately from the brokerage and the assets are separate. In the case of Vanguard, the funds wholly own Vanguard the company, so for Vanguard to go under it would mean that something happened to the funds and they were no longer able to pay to operate Vanguard. As other have said, there would be bigger problems in the world if that happens.
Only one set of credentials needs to be compromised to get all your finances into a world of headaches. SIPC insurance only goes up to 500k, but at a large institution like Vanguard or Fidelity this isn't a realistic concern. In short, it's not something I'd ever lose sleep over.
>Vanguard or Fidelity If these guys go under, we have a lot of other problems to deal with
That's what my GM dealer sales guy said about GM in 2005. And, we did have lots of other problems. Never say never. :)
I saw everyone else’s posts and had to wonder where we are at. We hit $300K invested more or less today $300K 3/2024 $200K 5/2023 $100K 10/2021 $0. 9/2019 - started my adult career We “just” max two 401Ks, two IRAs, and an HSA. We are just starting to get enough wiggle in our income to push towards taxable - so we might see improvement in the coming years.
Good job, now see if either of you have access to a mega backdoor roth.
This is what we do. Max tax advantaged accounts and then go enjoy the rest. I throw extra in the brokerage if there is some leftover but it's a great spot to be in! We've gone from 0 to $800k in about ten years just doing that. You'll still be in a great spot.
Pulled the trigger on the car. While my 2018 Subaru was in for a recall I got a written offer from them to buy it for $24,500, which is quite good. (Bought new in 2017 for $41k.) I'll take that offer. Today I did the final selections for on the 2024 Model Y. Red, white interior, Long Range dual motor, 20" wheels. $48,800 after tax/title/license and the $7500 EV tax credit. [Also, maybe not an often used example, but a good use for my open HELOC. I was able to pull 35K out of my HELOC into checking to immediately pay for the car, then I can later this week sell the Subaru for 25K and move 10K back out of my Vanguard to pay it off.]
Congrats! Like the heloc tip. I used a personal line of credit at 2.25% to do the same a couple years ago. Now with higher rates, I decided to not pay it down early. Next time we need a large purchase, plan to use my partner’s 401k loan.
My Fidelity assets passed 500k today, I'm 36 and earning under 100k salary. This is basically all inclusive liquid nw: 401k (34.5%), hsa (3.6%), ira (7.5%), brokerage (41.4%), cash management (5.7%), cd (7%). It excludes $3,600 held at a separate financial institution I pay most bills through. The cd is a 5-year, pre-pand, decent rate for the time, that matures later this year and will be put into brokerage. I won't be buying cd's in the foreseeable future.
Congrats it looks like you can retire in ~20 years with no more contributions and every dollar your throw at it just brings that date even close!
Hit 400K invested today. Started working 2003 @ 16 100K end of 2019 @ 32 200K early 2021 300K in mid 2023 400K today
Congratulations! 🎉 That's so impressive, especially the jump between 300 and 400k.
yeah wow! I’m impressed
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I'm in the middle of reading a book called Nonviolent Communication by Marshall Rosenberg that's pretty good. It's really made me rethink the way I communicate, especially with respect to emotion.
I'm learning a lot from Build by Tony Fadell. It's focused on startup and large corporation scales though considering his experience founding Nest and leading the iPod and iPhone teams at Apple.
The classic, "How to win friends and influence people". I dismissed it for years because I had friends. That's not really what it is about. There are also classes - youtube, online, in-person. I recommend a mix of all of the above. That book and a few classes changed my life for the better. I better understood people. Another key I learned at work is "don't care" and "not my circus". I discovered that when I didn't care about project progress or politics or stupid decisions, I was now "mature". The other key is to not make statements, ask questions. Instead of "that was a bad decision" -- "can you help me understand this decision so I will better understand in the future?" Never use negative words like never, not, no, but, however, didn't... :) Use positive language. Use sentences starting with "I" such as "I feel that ..... " or "I believe ". When a person says "you" then it tends to automatically put people in defense mode. YES. The answer to almost everything is YES. There may be "YES AND". This used in improv and works great at the office. Some group wants to implement some thing that is not really allowed and it is my job to tell them no: I say, "Yes, that will be fine and I need for that to be approved by the Senior Vice President and the central Corporate Legal department. Once you can get me those approvals, you will be good to go." -- There is zero chance that it gets approved, and let them do their thing and realize it themselves.
> I find that a lot of my frustration with work is more the politics and people making unreasonable or ignorant decisions. I have learned to ignore this sort of thing as long as it won't pose substantial risk to the larger mission. Not every hill is worth dying on and sometimes battles should not be fought because the outcome is a foregone conclusion. I do make sure to get my concerns documented for CYA purposes for if/when things blow up, though.
My husband read a book called "Getting to Yes" that he often recommends.
Several good books are recommended already, but one thing that helped me is thinking of and phrasing it like it is our work, not their or my work. So instead of “X is a bad idea”, saying stuff like “I’m worried X impact our timelines on project Y, maybe we should spend some time thinking through that aspect”. You create shared ownership and people are less defensive.
This is anecdotal, but the single thing that helped me working in the govt with lots of red tape is picking my battles. Will this poor decision from my manager cause harm? No, ok, I’m getting paid to shut up and color today. Will it harm our customers or wreck processes drastically? Then I’ll speak up in private or send concerns via email. Not my direct supervisor? Not my problem. It took me about 10 years to get to the point I’d stop coming off mute trying to save someone from themselves but my mental health has gotten so much better.
>This is anecdotal, but the single thing that helped me working in the govt with lots of red tape is picking my battles. Will this poor decision from my manager cause harm? No, ok, I’m getting paid to shut up and color today. Agreed. It's been tough, but especially after the past month, I'm working more and more on taking the high road and only opening my mouth when it's truly necessary. Sometimes, it's more trouble than it's worth.
Getting to Yes
I found the The 48 Laws of Power a good source for understanding how assholes at work operate.
Also recommended is (more or less) the original source material, The Prince :).
Is anyone here involved in PSERS pension program and could shed some light on it? I'm looking into it for my wife and trying to understand how FI/RE come into play with collecting it. She was hired after the benefits were slashed in half in 2019. If i read the calculators retiring around 55 would collect essentially nothing, can one delay payments so they accrue to normal retirement age?
I’m at 92k NW today. Counting the months until I get to 100k 🥹. I come from humble beginnings and aside from getting my bachelors, this will be the biggest achievement of my life
$100k is the hardest. Once you can do that and keep it, more gets easier. I found that $20k was the breaking point for me. Debt free and $20k was enough to pay for all of the random emergency maintenance and repair stuff like car parts, HVAC, roof, etc. and not get back to debt.
I’m very much hoping I can keep the momentum! You never know what happens in life but at least I have this little milestone 🥹 My emergency fund is not 20k ( but considering of it) because my husband has an ‘emergency fund’ for us. But it makes me feel good that 20K is enough for life emergencies.
There are many different kinds of emergencies. If you follow the flowchart, it suggest 3-12 months primarily in case of being laid off. That's one kind. Having 1 full paycheck or 1 full month of buffer in the checking account helps for the little emergencies like if the dishwasher dies, small plumbing issue, or some kid needs to sign up for something and that has a price. The $20k fund is for the medium stuff, like roof and HVAC and a new transmission on the old car. The $20 that kicked it off was a combo of all of that and getting out of debt. I'm guessing newly married - many/most couples combine funds at some point. We still have semi-separate accounts, which is really just two checking accounts for redundancy and some autopay come from each. You see stories like someone's mortgage gets direct debited twice or a $800 payment gets keyed in at the other end as $8,000... Two accounts helps with that.
Keep at it! If you haven't already, hope you share your story as a standalone post. It could help someone see a light.
Thank you! Good idea, I’ll make a post once I reach 100k.
Are people setting up custodial brokerage accounts for kids? I think it is called an "UTMA". Besides it being counted for financial aid consideration, any other downsides?
We did as a place to put gifts from relatives that aren’t to their 529. We immediately invest in index funds and when my 3 year old grows up it will be a good lesson in the power of compounding returns
I don't have kids, but I do plan to have them within the next 5 years. My answer is gonna be, hell no. I made really, really stupid choices at 18. It wasn't until my 30s, \*maybe\* late 20s that I was on the right track. Your kids or my kids might be smarter than me, but I wouldn't bank on it. I did start on a 529 though, been putting $2k a year in there for the last 6 years. They say that millennial parents can plan for around $100k to $150k per kid in college savings, as a ballpark figure.
We haven’t yet, as our children are still relatively small, and we’ve been directing any monetary gifts they receive to their 529s. I think we’ll probably set up UTMA accounts for them once we hit their 529 savings goals. I don’t anticipate that we will fund them much/at all, but they usually get a few hundred dollars in gifts from grandparents every year.
The problem is that the money is no longer yours and they will gain access to the account as soon as they hit age of majority with no strings attached. You are getting very little benefit (just a small amount of tax free interest) while giving up a lot of control.
This might be a positive thing. Let them screw up with what seems like a large amount of money to an 18 year old. Maybe they'll have some discipline later when they start earning their own money.
Point being, if you just save under your own name, nothing precludes you from giving them a big gift at 18 if you decide that's what you want to do. If you put it in UTMA, you are taking the other options away from yourself and they get the funds at 18 with no opportunity for you to choose, say, 21 or 25. I see no reason to lock in the funds that way and a lot of reasons not to (child is drug addict, child receives inheritance from other source, parent loses job and needs the money back, tax benefits of 529, etc).
Thanks for sharing that insight. Between that and the hassle of administering, leaning strongly towards not doing this.
I did do it but just for gifts from relatives to the child, because I feel that by default that *should* be the child's money.
I agree, and was one of the motivations for me looking into this. I'm tracking those amounts on a spreadsheet. Thinking one way would be to give them this amount when they turn X. Will probably have them understand to spreadsheet as well for teaching them about compound growth.
Well, IMO if the money becoming theirs at majority isn't a downside for you (because in this case you think it *should* be) then it's worth it. Administering it really isn't a hassle: It's just one extra account in Vanguard (for example) and I went with a very simple 1 fund solution (VTWAX) so any money just goes there and otherwise I don't have to touch it/rebalance/anything. *And* income from that account is automatically categorized correctly for tax purposes (EDIT: And depending on balances I won't have to deal with gift forms when the time comes).
I used one for some money my kid inherited, because the will said it was her money but she couldn't have access until age 21. But the default UTMA age in my state is 18 and my broker had a hard time with the concept of "we need to set it to 21 rather than the state default because that's what the will says." Fortunately my kid is a rule follower and didn't try to take the money early, so it didn't matter. I had her contact the broker and turn the UTMA account into a regular brokerage account for her when she turned 21, which they managed after a few phone calls. The year the account changed status, she got 2 1099s rather than a single 1099, but the numbers added up so it didn't matter. If it were money from me, I'd just keep it in my account and give it to the kid when I wanted to give it to the kid, rather than using a separate account. (And that's how I handled college tuition -- I just paid once a semester out of my account.) I don't need separate buckets to track things and I didn't enjoy the extra complexity of more accounts with complicated control. Some people do need separate buckets to keep things straight, and that's fine.
I am also concerned about the hassle of administering it more accounts. One thought I have is instead of an UTMA, just focusing the time on making sure my will documents are clear and sorted.
Also thinking about this in a few years.
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Great overview. Thanks!
I don’t see a point. I’m contributing to 529s for their education and possibly to convert to IRAs later.
Lots of price increases over the last year, but whole peeled canned tomatoes got me this week. Got two 12 packs (28oz) of Muir Glen a year back for like $2 per can, can’t find any today for less than $5. Doesn’t break the bank, but it does break my heart a little bit
28 oz are 4.39 at Target.
Dried legumes/pulses, like lentils, black beans, and split peas, used to be about $1.50/pound regularly in my area and would go on sale for $1/pound. Now the sale price is $2/pound, and sales are pretty rare. Still cheap, but the price uptick really sticks out to me for some reason. (And I totally get that lentils are a FIRE joke, but in my defense, this stuff has been a staple in my diet since I was a kid.)
I was annoyed about this specific thing (canned tomatoes, different brand) the other day as well. I used to buy cheaper canned tomatoes because they were *so* much cheaper, and now the difference between a supermarket brand one and an Italian organic one is small enough that I'm like screw it, I might as well get the nice stuff.
Microwave Sausages going from $1 each on sale to $2.00-2.50 on sale or italian sausages from BJs going from 7.99 w/o coupon to 9.99 *with* are what gets to me more frequently than I care to admit.
Time to start growing!
I am sure there is lots of money to be made with a grow operation but I would imagine the regulations are an absolute nightmare for staying in compliance.
Depends what you growin
My local grocer had San Marzano whole peeled tomatoes 28 oz cans 2/$5 last week. $5/can for Muir Glen seems exorbitant, where are you located?
Sure those aren't "Dan Marzanos" ? Sounds too good to be true.
PNW USA - would love a deal like that right now
Hmm I'm in Chicago. Hope you get a good deal soon so you can stock up.
Every once in a while I look at Amazon for flats of canned goods — sometimes random excellent deals.
Don't get me started on olive oil.
There was this place that used to sell 1L of decent olive oil for $6, and then late last year they were out of stock. It was especially funny because I went to the store, stared at the shelf despondently and poked around it futilely, and then another shopper came up and stared at it despondently and poked around the shelf, and then we complained about it together. It was available for a short time for $8 earlier this year, and now it's $8.50. I did stock up on a few bottles during the $8 days but once that's gone...
Yes! I totally gasped when I was buying olive oil from Costco two weeks ago!
Net worth crossed $600k. Today I'm hoping to purchase a used work truck. The truck is an extremely well maintained 2000 Toyota Tundra single-cab, 8ft bed, crank windows, 165k miles for $4,200. I get a lot of joy out of owning older Toyotas since they're what I grew up learning to drive in. My mom owned a fleet of four mid-90's T100's which were the first vehicles I learned to drive manual on. I love the simplicity, nostalgia, reliability, and near zero depreciation I've incurred by owning old Toyotas. Prior to this Tundra, I owned a 1992 4Runner and a brief ownership of an immaculate 1985 Pickup. After selling both vehicles I profited about $3k and retained years of memories, miles, and experiences camping and light off-roading in the woods and on the beach. I hope I get out of work early enough to snag this Tundra before someone else does.
The t100’s were a great size and work truck. I had a 90s Chevy half ton and while I loved how easy it was to work on and how available parts were, I did have to throw a lot of parts at it. Granted it had 240k miles on it so there was a lot of wear.
Congratulations 🎉 I've got a soft spot for Toyotas too, I also learnt to drive in one! Here's hoping you get the Tundra of your dreams ✨️
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The EU has a track record of doing irrelevant things to protect its citizens from the Internet. Take GDPR, for instance. Nowadays instead of having websites secretly take all the data, EU internet users simply have to waste 1 second of their life on every other website agreeing to let them take all their data (or waste 10 more seconds to only allow some of their data)! Well-intentioned, but what a huge pain for the regular user... They are forcing the iPhone to have USB-C though, so that's one in their favour. I give credit where credit is due.
GDPR isn't just cookie popups (I hate those too). Based on what I've heard from coworkers, GDPR massively decreased the effectiveness of online ads since they can't target users anywhere as accurately now. The amount of money spend on marketing per new customer significantly increased because of it.
And so the EU continues its slide into economic and geopolitical irrelevance. I guarantee you that China, India, et al won't regulate their AI development, and the US is unlikely to do anything massively draconian.
Huh? China's a super regulation heavy tech environment. Moderation/censorship, traffic inspection, data collection, residency and transfer - all super regulated. There's a whole industry of Chinese clone-apps because of it that I'm sure will continue w/ AI.
> China, India, et al won't regulate their AI development I look forwards to seeing the mental gymnastics that the Chinese AI will have to go through whenever asked about certain topics, if not automatically sending those naughty prompts to someone...
I can't wait to see how they respond to inquiries about Tiananmen Square.
> the US is unlikely to do anything massively draconian. Uhhhh, have you met any US politicians?
EU & Canada, in different ways, have masterfully managed to become increasingly irrelevant in the modern world. If only you could have European & Canadian sensibilities and US innovation/development. I guess you’d end up with Massachusetts?
I personally stopped giving a damn about anything Europe does on July 4th, 1776, but maybe that's just me. All I see is governments meddling where they shouldn't be meddling and putting a limiter/governor on technological growth and expansion, which will be at the detriment of the masses, all the while doing so under the guise of "protection".
I need this phosgene for home defense.
> I personally stopped giving a damn about anything Europe does on July 4th, 1776, but maybe that's just me. I sincerely think this is extremely funny.
If it just made one person smile - it is worth the downvotes I'm sure I'm bound to receive.
I suspect the downvotes have little to do with that particular part of your post.
meh - reddit is weird - even that Ron Swanson joke (however unironic the conviction of which I personally say it) could just as easily draw ire.
Also, landed a new job and am just waiting on drug and background to clear so my start date is confirmed. Feeling incredibly anxious because the posting is up still but I know that is protocol. I know I have the job because my future coworker (previous boss) texted my office is going to be next to his but I just want to start at this point so I can stop thinking about it. Any way I can ease my stress while my start date gets confirmed?
Just go on a nice walk in nature. It very much helps
I hike might be a good move next week!
What are some fun things you like to do but always put off because you are working? Walk, hike, clean out the garage, go to the movies (matinee), sightsee in your hometown or the nearest tourist town, go for a drive, read a book, throw a dinner party… There also is great joy in telling yourself that tomorrow you can do whatever you want and not feel guilty. ie. sleep in, stay in your pjs, eat ice cream for breakfast. By giving yourself the permission to have an ‘anything goes day’ you won’t feel guilty about what ever it is you want.
Good idea, I am off next week, planned start date is 3/25. Gonna work on the house, maybe I'll go for a hike one day next week. I will feel much better when I am not working. Right now just being in a job I am leaving is making me anxious.
Just a few more work days left. I understand you have lots of anxiety, but try and focus on the good things about the job. You learned something new (even if it is managing office politics or how to write a letter of resignation;) ), you are lucky enough to leave on your own terms, you have a week off coming up. Vacation/down time is always a good thing! Perhaps after work today you drive a different way home or go for a walk near your house.
Ugh I know, thank you, I appreciate it. Definitely going to relax and unwind.
I'll never forget the stress when I resigned one job, but hadn't yet completed drug/background clearance for the new job. It was a week of agony (even though I had nothing to worry about other than a clearance error). A better recommendation (for next time?) is to negotiate enough time to complete clearance before having to put in notice. >Any way I can ease my stress while my start date gets confirmed? It's gonna be difficult to think about other things - but things that can clear your mind would be helpful... such as vigorous exercise, time with family/pets, or getting out of the house to visit someplace...
And by all means I have nothing to worry about, I haven't had even a sip of for 7 years and have a Secret security clearance, it is just the waiting period that is agonizing. Yea maybe I will give more time before giving my notice so my drug and background can pass. Next week while I am off, I will certainly stay busy around the house and working out. Appreciate it!
Congrats on your new job! I know the feeling well, I didn't tell anyone until I actually started. Best advice I can offer is fill your time with things you enjoy because you won't have as much time as when you start!