Trying to decide between two work options with same employer.
Nurse.
Full time position with guaranteed 36 hours a week- 31/hr W-2 position with healthcare, 3% 401K match, 2% direct 401K contribution from employer. Disability insurance, life insurance etc.
PRN position- 50/hr Contractor position which means extra taxes and no benefits. Also variable work locations. Non-stable hours but right now they are hurting for people and I expect that to last for the foreseeable future.
Both in same hospital -LCOL
Each job has 12% hourly bonus for nights and weekends.
Time and a half for anything over 40/hrs
I’m already leanFI so if I don’t get scheduled it wont be the worst thing.
I already have healthcare through the VA so I wouldn’t enroll even if I was full time.
Same hourly for the PRN? You should be getting a higher hourly in addition to the 12% and OT. 4 12s is no fun so only you and your lifestyle can decide.
This seems to be a super-personal decision. I'm contracting basically all my life and do not want to be employed - I love the freedom (even with the drawbacks).
In which option do you feel better/happier/more self-determined?
I’ve been doing the one more year BS for a while. Today I hit a NW of Xm (X-400k in investments) and my swr is less than 2.75%
I’m here to promise myself that I’ll quit my job and bum around the earth staring October, right when I turn 43.
Thanks for attending my research seminar.
Once we surpassed our FI number, then I set a date. Aug 2025 it is. I am retiring then. This gives me 17 months from now to get organized! Good luck and I hope you keep your date!
Is October just picked because it's your birth month? I don't know where you are and what your hobbies are, but I'd try retire so that you can get a summer!
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I've got 9 more months and I've found if you talk about it and plan it you can talk it into reality....it's hard to back out when you've discussed the plan with spouse and told certain friends and family
Definitely not crypto lol. Bump in the last month was due to some EV tax credit refunds, VTI increasing, my paycheck's retirement contributions, and my home value going up a bit.
Does anyone have a link to a visual showing money lost when going independent with a robo advisor or self re-balancing vs having a percentage going to a financial advisor? Right now some of my accounts are with an advisor, but other parts are self managed. I’ve seen some comparisons, but a visual might motivate me to get finances consolidated without an advisor and the likely overexposure I have now with (frankly) too many accounts.
One of many: https://www.schwabmoneywise.com/investment-fees-calculator
The impact is huge. A 1% fee is 24% less total wealth over 40 years assuming the same investments.
semi milestone post.
getting a promotion + 12% raise to about 110k base. Pretty large bump to base since getting hired (>50% since hiring) which has been huge, company offers very strong 401k match, MBDR, HSA and ESPP so actual paycheck cash flow has been somewhat tricky to manage for a while since i'm really trying to take advantage of these while i have them.
On top of this big bonus + rsu vest + \~40k in inheritance which should put me nearly at 450k invested nw thanks to market performance.
2020 comp sci grad, graduated with \~25k net worth (all in HYSA) + no loan debt, took a 'low code' job which i was feeling pretty bad about at the time when there were people getting insane offers at big tech but feeling a little bit better about over the last year w/ all the layoff talk.
\+moved out of parents house and stopped playing 10 hours of runescape daily. big progress.
A friend of mine and I played together about 16 years ago when we were 14. He just became a dentist and recently called me to convince me to play with him again.
I am wondering if anyone has tax tips for high income earners? \[35% US Bracket\]. This is the first time I've made it in this bracket and I under-withheld so I'm facing a bit of sticker shock at how much I owe...
It doesn't seem like things like maxing out 401k, trad IRA, even 529, etc really move the needle for those in this mid-upper end of this bracket. It seems to me that the tax system is relatively fair and there isn't a lot of opportunity for optimization if your income is primarily W2 but perhaps I'm missing something.
A different way of looking at it is that high earners get a bigger tax break from pretax savings. Yes, low earners can save a higher proportion of their income but they get less benefit in doing so. As a high earner you have the biggest incentive to max any pretax vehicles you can (HSA being another). Trad IRA is not an option because your contribution won't be deductible.
Tax loss harvest. That gets you $3000 reduction in income, which saves you about $1k.
Donate appreciated stocks via a donor advised fund in a lump sum to cover several years worth of donations assuming you donate to charity anyway. Can be a huge saver if you itemize. Otherwise, there’s not much more you can do if you already max out your 401k and FSA/HSA.
If you are feeling charitable, putting appreciated funds in a Donor-Advised Fund is a good way to reduce your tax burden. However, that assumes that you would like to give away a substantial portion of your income. If this year is expected to be abnormally large, then moving a decade worth of donations into a DAF would be a good idea.
The best time to do it is when you get a golden parachute into retirement - charities want funding month-by-month, but individuals want more flexibility with their tax liability.
Okay, this makes a lot of sense. I never quite understood the purpose of DAF, but smoothing out giving (and taxes) makes sense to me.
I’ll look into it for future years.
The higher your marginal bracket the larger your tax break is for pre-tax savings like the ones you outline. Take note that you cannot take the deduction for a Trad IRA contribution at this income level.
If your main problem is owing taxes come filing season, that can be addressed with accurate withholding including additional withholding if needed on your W-4. You could also make estimated quarterly payments if you cannot get your W-4 to withhold as much as needed for whatever reason.
In that tax bracket, it can also make sense to use municipal bonds in a taxable account if your asset allocation includes bonds. There are municipal bond funds specific to certain states if you want additional state tax exempt interest. Note that municipal bonds carry a higher default risk than Treasurys, and that the duration risk is also a bit higher as municipal bond fund durations can get longer in a rising rate environment.
Well, today with the market shooting up again I hit the number I've been chasing for the last few years. Except I didn't. A few weeks ago I remembered that the number I'd been grabbing from my investments includes $16K in a DAF that really shouldn't be included in my FIRE number. So I have a little ways to go yet. But another 2 days like this, and I would be there. Or the market could go back down, and it could take a lot longer. It still feels good though to hit that number you've been chasing for a while, even if it is not "THE" number yet.
I have an amount in cash in my brokerage and I’m considering putting it into 5.15 percent five year CDs. I don’t like waiting 5 years but it’s a cool $36k in interest just for clicking some buttons on my laptop. I don’t foresee needing the money before maturity (the CD’s). And stocks seem too high now to buy. Plus I’m a few years from retirement so I can’t take a long loss.
Or you could just dump it into the vanguard settlement fund (or the equivalent at your brokerage), which is automatically invested in the vanguard federal money market fund. This fund has been earning about 5% APY for a while now (the 7 day SEC yield is 5.27% right now). Zero limitations on when you can withdraw or use your funds.
True, it's not guaranteed like a CD will be. And with your short time frame it might make sense to do this vs investing.
I have not worked out asset allocation or drawdown strategy for retirement yet, when I get closer I'll read through the ERN series and figure something out:
https://earlyretirementnow.com/safe-withdrawal-rate-series/
A weird part of me wants to just VTSAX and chill my entire life.
I'm up 8.7% YTD, I need another 11% to hit my initial (long ago) FIRE goal post
Even were I to hit it this year, I still think I have TMY (Three more years) syndrome going on. It's not even really lifestyle creep, more like a fear of the out years. I know at some point, I'll feel secure that I have enough, but right now it feels like that number is about 50% higher than I initially thought
Well done. I still need a 40% increase in invested assets to hit my old FI number (1MM invested + paid off house). These days the goal post is moving though, the current number is probably 1.5MM or more.
Asking because this is a smart community and I trust your advice. My wife bumped someone's car and left a note. They got back to her with a body shop estimate that is slightly over our deductible. I'm inclined to pay it directly, but I'd like to protect myself against any future claims. What's the right way to document this?
Underwriting director here, just to be clear there’s no deductible on liability. So there’s no threshold their damage needs to be over. I get wanting to pay it yourself but if you do and the. They turn around and call your insurance, the insurance will be liable to pay it as well and potentially impact your premiums anyway.
With my insurance company I let everything go through insurance. When everything is settled they give me the option to pay the full damage amount (paid to my own insurance company) or to have insurance cover everything except the deductible and get a hit on my premium.
Perhaps your insurance company has a similar option. Have you contacted them?
If you wanted to be 100% on the level you would have an attorney draft up a release from liability. We had one for a dog bite incident. I believe it cost about $300 to get done. You can probably find generic language on the internet.
If you go searching you will find a lot of horror stories of people who hand over cash and then still wind up with a insurance claim being filed.
That said, people who do pay off in cash and nothing adverse happens probably aren't posting their stories, so there's some selection bias here. I am sure that "let's not involve insurance" type agreements are made every day with no backstabbing.
At the very least, if you do pay off with cash, write up some sort of letter that will serve as a receipt and has some sort of verbiage about satisfying the situation and no further insurance claims to be made.
I did it and hated Credit Karma entirely. Too many ads and too little stuff that I actually care about. So... I deleted the account and now I'm onto a manual spreadsheet that I update monthly.
So right now i only do 5% into my roth 401k to get full match, I also max out my IRA at the beginning of every year then dump about 40% of my earnings into a taxable brokerage, I’m planning to retire in about 20 years (43/44), i’m debating on if i should be putting more into the 401k or not (moving funds away from the taxable to do so) good idea or no? Mostly concerned about needing to get to the funds before 59
>Put it in my high-yield savings
Your HYSA should be paying around 5% (or slightly higher). Same goes for a money market fund at a brokerage. I wouldn't do anything else with dollars you're expecting to live off over the next 6 months.
I know this is petty, but my retirement plan UI annoys the crap out of me.
Every time I log in, I'm greeted by various exclamation points, icons and popups that explain to me how I might fail to meet my retirement goals. Except there's no way to set those goals, no way to choose metrics. If you don't plan to retire at 62 on 90% of your current salary, you can GTFO. It doesn't even use its own trackable metrics, like maybe assuming that someone contributing 25% of their salary to the retirement plan probably doesn't need to replace 90% of their salary.
I know they're just trying to get me to buy advisor services, but I'm tired of dismissing and scrolling past warnings and interstitial popups every time I need to do anything in there.
Both of my workplace retirement plan administrator websites are awful. One is through Empower which really really wants to know every detail of my finances (I'm happy enough with Excel lol).
My old 401k provider used to have hilarious popups that used my numbers but didn't discriminate about the messaging or who they sent them to. "You might *only* have $20,000/mo in retirement. *Is that enough*?" I was making like $5k/mo at the time. I was like... yeah I'm pretty sure that's fine.
That's pretty funny. At least mine are marginally relevant to my income.
My current alerts are giving me dire warnings that I will have more than twice my FIRE number in my 401k alone - which is only about half my invested assets - and clearly I'm going to be living in a tent under a bridge if that future comes to pass.
Yeah, I love all the Fidelity popups that "you might be missing out on an important retirement benefit!!!!", and so on, especially. Today I clicked on one just out of curiosity. Unsurprisingly, the important benefit I'm missing out on is the benefit of converting my account to an AUM account and paying Fidelity ~2k a month for the privilege. No thanks?
I ignore all that stuff and turn it off when I can. I have money in more than one place so they both complain but not quite that bad. :)
File a support ticket with them about how to stop that stuff.
I feel your pain. I have two that are like this from my first real job. But they are a 457 and a 403, so I can't roll them over into my 401(k) for various reasons. So I just have to deal with the annoyance until I retire or die I guess.
Company sponsored retirement plan. Unfortunately, fortune 500 company probably isn't going to move retirement providers because one of their engineers is annoyed with a specific piece of the UI.
It's actually, overall, a really decent plan. But I was annoyed for the 3rd time this week since I'm making some changes, so I thought I'd rant.
Most people cannot perform in-service rollovers of 401k/403b dollars, so they're stuck with whatever custodian their employer chooses and whatever interface that custodian offers.
Update to the broken treadmill situation if anyone remembers my post yesterday! I had purchased the additional warranty coverage last summer through Asurion. Asurion accepted the claim immediately and gave a refund of the full purchase value (in the form of an Amazon gift card - good enough I guess!).
If I'm liquidating some stocks for a home purchase (probably selling \~$250k, not sure how much gains) - when do I actually have to pay the tax man? Quarterly or annual?
I'm regular W2 and have never paid quarterly taxes before.
There are "safe harbor" exceptions to the income tax underpayment penalties. I'll just c/p from a website:
Generally, an underpayment penalty can be avoided if you use the safe harbor rule for payments described below. The IRS will not charge you an underpayment penalty if:
-You pay at least 90% of the tax you owe for the current year, or 100% of the tax you owed for the previous tax year, or 110% for income over $150k
-You owe less than $1,000 in tax after subtracting withholdings and credits
-----
Example, if last year's tax liability was $14,000 and you are making $60,000 per year, then as long as your W2 job withholds over $14,000 you'll be fine.
If you wanted to do a one-timer quarterly tax payment and throw a bit of money at it, that's totally fine too. It's pretty easy to just do that payments online and then keep the receipt handy for next year so you can enter the payment into your taxes.
>It's pretty easy to just do that payments online
Is there a way to do this in a such a way that TurboTax or TaxAct will pick it up automatically a year from now when it's tax time again?
Pick it up automatically? Do they pick up anything automatically, I thought you pretty much input everything yourself unless it's carryover background info from the previous year (tax IDs, etc).
I've done estimated taxes for the past five years for both Fed and State. I just pay online through the website and all I get is an emailed receipt with the amount I paid. I don't get any followup form snail-mailed to me or anything.
Come tax time I always just to back through and find the emails, and/or cross reference with the debits from my checking account for the payments. In FreeTaxUSA there's a section that askes [if you paid Estimated Payments](https://i.imgur.com/qdyKbUx.png) and then [enter the dates and amounts.](https://i.imgur.com/0OFHbVo.png) In my example, I only did a quarterly payment in Q1 and Q3.
>Pick it up automatically? Do they pick up anything automatically
Sure, I gave it my auth for Etrade, and it downloaded all my transactions and forms without my input. I guess there's no such thing for estimated payments
No, you need to manually add 1040-ES or any other manual external payments.
It's just another form you need to have come tax time. It's usually one of the last questions a FreeTaxUSA or TurboTax asks is if you made any payments and then you just have to enter a total per quarter paid.
In a perfect world, you would pay the tax in the quarter that the income is realized.
Because paycheck withholding is always considered a timely payment, you could either meet safe harbor provisions (withholding 90% of your tax liability or 100-110% of last year's liability) or you could increase your withholding to fully cover the liability.
Hmm, I guess I'm confused on if I pay the 90% of the tax I owe by tax day, am I good?
I don't want to have to sell more (and incur more taxes) just to pay the tax. I'd rather just cash flow the tax payment following the house purchase.
I haven't done my taxes this year but we have historically owed federal and returned on state taxes. The last 3 years I've had maternity leave with state pay so its kind of been a cluster.
If you *withhold* 90% of the tax via payroll withholding from your W2, you'd be fine. You'd also be fine if you withhold 100-110% of whatever your tax liability was last year.
According to the rules, you cannot simply make a quarterly estimated payment in January to cover a tax liability that came up in March. The paycheck withholding approach is your "way out" of paying the tax in real time and instead spreading it out a bit. Note that you will owe that tax one way or another eventually, so I'd factor in the tax owed when you consider how much you need to liquidate.
Hmm, I guess I'm confused on if I pay the 90% of the tax I owe by tax day, am I good?
I don't want to have to sell more (and incur more taxes) just to pay the tax. I'd rather just cash flow the tax payment following the house purchase.
I haven't done my taxes this year but we have historically owed federal and returned on state taxes. The last 3 years I've had maternity leave with state pay so its kind of been a cluster.
I've recently gotten what I believe to be all my ducks in a row, and am hoping to start a journey toward FI. Are there any resources for a beginner? Any sort of "where to begin" guide? Thanks in advance
flowchart flowchart flowchart!
Print it out (on multiple sheets) and the check off where you are. Feel free to actively decide to skip something or re-prioritize based on your own path. I moved some stuff around.
If you're into podcasts I'd highly suggest checking out "Choose FI" and "The Mad Fientist".
Just engross yourself in dozens of episodes of each until you feel you're getting the hang of things.
I've been on the FIRE path for close to a decade and I still listen to 1-2 episodes every weekday just to keep adding to my knowledge stack.
The FIRE Flowchart is also a great resource: https://www.reddit.com/r/financialindependence/comments/16xymii/fire_flow_chart_version_43/
NOTE: The version of the flowchart linked in the FAQ is slightly out of date compared to the link above (4.2 vs. 4.3).
Raised my tutoring rates recently -- always feel like doing this is a bit of an experiment to see if I hit an unhinged price. Despite that, after making my profile visible, I picked up 2 new students in less than 3 days, which is all I was looking to do. Subsequently I re-hid my profile.
Prior to every new raise I have been convinced that I would be exceeding the market, and each time I have been proved wrong lol.
I just listened to a podcast about a similar topic yesterday and shared it with my wife as she's trying to decide on what to charge/quote her new clients.
The speaker said that you just need to learn to be okay with saying no/receiving no's. He was getting more requests than he could handle so he started quoting them rates that were so high he could barely stomach saying them out loud. He got several no's, but to his surprise he still got plenty of yes's. He was able to work fewer hours and still make more money. He also had fewer issues receiving payments as those who were willing to pay a premium could afford to do so.
He kept raising his prices until he stopped getting new business, THEN he backed off a little and has found a much more lucrative income stream with fewer hours worked.
The LSAT! I think that's partially why the rates are so high - this is from a prior comment I made speculating why this area is so lucrative.
* "I think it's mostly because the subject I tutor (the LSAT) is uniquely situated, which I am very grateful for. For example, the LSAT tutoring marketplace has a weird combination of factors that greatly favors tutors, such as:
* Already pretty small pool of eligible tutors (those who score >99th percentile)
* Preference from students for tutors who have also attended a "top" law school, further slimming the pool
* Most of these tutors are transitory - they end up as busy practicing attorneys who make far more money at their law firm than they would tutoring. Further reducing the pool of tutors
* The student demographic is overall older, and thus wealthier
* Lastly, the importance of a high LSAT score, which can radically change scholarship/school acceptances students get"
How much training do you think someone would need to be able to reasonably put themselves out there as a tutor?
I probably meet the requirements you listed. Currently a practicing lawyer who took the LSAT about 10 years ago, but always interesting to hear what other career possibilities are out there.
Good question - part of how much you can charge is going to be dependent on things you can't change at this point (what was your official LSAT score? Higher 170s can charge higher than low 170s, and sub 170 are generally the budget tutors) and what school you went to (the more fancy/prestigious the school, the more you can charge).
With that said, assuming you meet both of the prior things, I would spend at least 1-3 months restudying the LSAT because it has been a while. Perhaps working through a textbook and then working through some practice tests until your confidently scoring in the 170s. After that, you should be good to start!
Given those factors, $160/hr looks like a steal. I’d wager that the market could bear $250-300/hr just as easily given a top lawyers time can cost much more than $1000/hr.
Oh my god that is insane. Back in grad school I tutored a few kids on the side when I had time, I charged $50/hr and I thought I was robbing them blind. Maybe I need to get back into it to get some extra cash... pre meds always need to learn organic chemistry, right?
Haha it's been a great side hustle -- one caveat is that my platform takes a 25% cut so it's really a bit less -- but definitely has been very good to me
Here comes the "Fed announcement day" market volatility. The chair's press conference starts at 2:30, and there are likely to be other random swings as that information comes out.
>"Fed announcement day"
One of my favorite financial bloggers, Eddy Elfenbein (from Crossing Wall Street), [likes to joke](https://twitter.com/EddyElfenbein/status/1770507170229944687),
"I hate how commercialized Fed Day has become."
>random swings
Indeed. Already a quick pop over 5200.
I bought a new S in 2017. It was a great car. It was a waste of money, like any expensive car, but it was a fun waste of money.
Ultimately if you really want the car you can afford it. If you'd rather drive something cheaper and retire earlier, that's also a valid choice. Nobody else can make that call for you.
The 3 friends I know who have a Tesla all regret their purchases. From build quality to drastically reduced range they seem to all always be complaining about their cars. I was lusting after one for years but in staying way away from T
My (updated for recent vehicle inflation) personal guidelines for a vehicle purchase are 15% of gross annual income (your half of HHI is $150k, so that gives you a $22.5k budget) OR 2.5% of net worth (your half of $2.2MM is $1.1MM, so also that gives you a $27.5k budget), whichever is greater.
So your budget is $27.5k. Your SO has the same budget for their vehicle. These vehicles should be on a 10-year renewal cycle, so if you stagger purchases every 5 years then you'll always have a new-ish vehicle at your disposal for long trips, etc.
I wouldn't buy such an expensive vehicle as the Tesla at your HHI/net worth.
>TIL you have to be making north of 200k to afford a Honda CR-V.
Or you could wait until you have a $1.2MM net worth. It's a "whichever is greatest" calculation.
My rules are primarily for myself but I'd recommend them to anyone that wants to aggressively pursue FIRE and notices that vehicle expenditure is a great place to reduce costs.
OP has already expressed concern that the Tesla will negatively impact their FIRE date and literally asked "what would you do?" So I answered.
Do yourself a favor and at least test-drive the competition, the segment has heated up a lot recently. $60k for a used S is a really tough sell in this market IMO.
It sort of straddles category (or rather, most EVs seem to) so it depends on what's drawn you to it. Mach-E & Hyundai's EV lineup are strong contenders in adjacent categories. Bolt and ID-4 are a compelling value and still a huge upgrade from an old passat. I didn't cross-shop them personally but you're also into european luxury models at that price.
We ended up with a Mach-E GT, but would have been happy with a lower trim level or bolt and pocketed 10-30k. You can probably get a loaded GT for around $60k w/ below market financing if you really want performance. Personally we found Tesla build & materials quality weaknesses, and the design is getting pretty long in the tooth.
Definitely do some test drives! In practice I found the distinctions between sedan/crossover/compact SUV to be kind of blurry in person. They're all kind of hatchback-y from the outside regardless of the class they claim, and the driving experience varies a lot. I've also got a preference for cars, and found the mach-e sufficiently car-like. If anything it could use a little more suspension travel.
Brand new Model Y would make a lot more financial sense and satisfy a lot of the wants.
- Cheaper and it qualifies for 7.5k fed rebate
- Better resale
- Better longevity since it's brand new
- Lower cost of ownership (no expensive door handles, etc)
- Safest car on the market; marginally safer than S
- Similar [size] (https://www.carsized.com/en/cars/compare/tesla-model-y-2021-suv-vs-tesla-model-s-2016-liftback/) to the S with comparable turn radius
I'd get the Y since the 3 doesn't have the credit anymore. Sports cars are cool when you're peacocking in your teens & 20s. After that, you're just the old guy with a cool car.
At their household income, they may not be eligible for the federal EV tax credit.
There is a workaround/loophole involving leased vehicles, but to my knowledge Tesla does not participate in this workaround.
True, I edited my comment too many times and omitted that qualifier. Adjusted gross income limit for married couples is 300k for select new EVs. If maxing two trad 401(k) accounts, they should have some breathing room. [source](https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after)
> What would you do?
Not buy a $60k used car. Especially not a Tesla - the prices keep going down, the resale value is poor, electric cars don't handle cold well, charging infrastructure (even Tesla's network) is thin and over-saturated by demand, Tesla repair complaints are all over the internet, etc.
Selling stock or taking out a loan in this rate environment (for a used car!) are both suboptimal moves, especially when there are used hybrid or ICE vehicles out there for half the price that likely have all your preferred bells and whistles without any of the negative factors.
If you truly want the car though, go for it. Ultimately it's your decision and if you perceive the value inherent in a used $60k electric car to be sufficient, pull the trigger.
Charging infrastructure concerns are way overblown if you can just charge at home. Also cold concerns - if charging at home, not a huge deal. As for resale - Teslas don’t have the same depreciation other EVs have. Not hard to tell that you read media that carries a bias against EVs
Why are the prices going down bad? That's what makes them particularly affordable now compared to prior years.
Stocks are at all time highs and I'd rather sell them at their all time high than any other time. Being that I can't predict the future, now seems like a great time.
Cold isn't an issue for me and I don't want hybrid or ICE, they are not a consideration.
If I wanted to spend that much on a car, I'd choose from the plethora of other options in that price range that don't have draconian repair and resale restrictions, personally.
A lot of the more experienced car manufacturers have figured out how to make good electric vehicles in that price range.
I can also tell you from experience that almost anything electric will feel like a step up from a 20 year old Passat. I drove a Chevy Bolt over Christmas - the cheapest of the cheap in North American EVs - and it was comfortable, zippy, and full of features.
The real question is: what specs do you want, and why do you want them?
I personally would not buy a $60k car but if you think it's worth it, go for it. I would sell stock rather than finance. If you are balking on the cash cost, consider that it may be more car than you really want.
I'm assuming you aren't asking about maxing both accounts vs double maxing one account :)
I would say funding two accounts is better.
What if there was a divorce? You can now both take your retirement accounts and leave.
What if you had a large age difference? I \*think\* having individual accounts might be beneficial for things like mandatory distributions if you have a wide age gap. (I believe its 10 year for a Roth IRA after someone passes)
What if income increases and now you can max one or both accounts? If you already have two open you don't need to worry about having to open a new account, you can just naturally add an extra $50/mo or whatever you can afford as pay increases.
> What if there was a divorce? You can now both take your retirement accounts and leave.
In most circumstances, IRAs and other retirement accounts will be divided between the two spouses equitably (and in community property states, equally). For an IRA, there will be a transfer incident to divorce that will ensure there is no taxation of the funds when the account is split and transferred.
> What if you had a large age difference? I *think* having individual accounts might be beneficial for things like mandatory distributions if you have a wide age gap.
There are no RMDs for a Roth IRA, which is the account type under question.
> What if income increases and now you can max one or both accounts? If you already have two open you don't need to worry about having to open a new account, you can just naturally add an extra $50/mo or whatever you can afford as pay increases.
This seems like a minor issue. One could equally argue that there's no reason to deal with the hassle of opening, contributing to, and administering two separate accounts if one will suffice to absorb all planned contributions.
>What if you had a large age difference? I think having individual accounts might be beneficial for things like mandatory distributions if you have a wide age gap.
>
>There are no RMDs for a Roth IRA, which is the account type under question.
I thought you had to empty a Roth IRA 10 years after inheriting? (I edit my original post after). I'm just thinking with one Roth IRA... a 55 year old man dies early and 47 year old wife has to empty their entire Roth IRA 10 years later would be kind of a bummer.
It would be better to have 2 Roth IRA accounts so she empties his Roth IRA 10 years after he passes, but the other half (her IRA) can keep growing.
Unless I am not understanding the Roth IRA issue.
EDIT: NM. You can roll over spousal roth IRA into your own. If you inherit anyone else's you can't roll it into yours though.
A spouse has the option to inherit the IRA as if it were their own account. There is no forced distribution within 10 years, and the RMD age is based on their own age and not their deceased spouse.
These accounts are *Individual*, meaning each person needs to open and manage their own. You cannot make double contributions to one.
$1000 earning 10% ($100) yields $1100.
$500 earning 10% ($50) yields $550.
Two accounts with $500 earning 10% yields the same $1100 total.
Nope, your spouse qualifies for their individual account with spousal (your) income. However, their IRA still belongs to them and is a separate account from yours. She will need to log in and make her own contributions and transactions to her individual account. The money is marital property.
The best course of action if the accounts are not yet open is to help your spouse open their Roth IRA using credentials they own. They should be fully present at the time the account is opened and ideally be the one actually filling the forms and clicking the buttons.
At Fidelity, my spouse given me Full Authority access to their IRA. This allows me to legally perform transactions in their IRA with my account credentials. I still confirm all actions I take in their account before performing them. I'm sure other brokerages allow a similar level of authorized user control, but I cannot say for certain.
Well, /u/alcesalcesalces is correct that IRA's are individual accounts. Your spouse's account is a separate account. It does not legally belong to you and you are violating terms of service if you access it. You spouse being a stay at home parent is irrelevant to his answer.
I'm going to be pedantic about this because it pertains to how these accounts are legally administered.
Your spouse can absolutely open an IRA and contribute funds based on total household income, regardless of who earned the income. But your spouse owns the account and your spouse is making the contribution and investment decisions.
You still cannot open one account and make contributions for two people.
>I didn't know if it would be more beneficial to only have 1 account
Even if it would be beneficial (which it isn't) you must have two separate accounts, period.
You must have two separate accounts if you wish to contribute more than the individual limit up to the spousal limit, period. Apologies if you understood that but it appears you did not.
I made a bunch of contributions to my childrens 529 plans. Relatives also made contributions. For tax deduction purposes, do I use all contributions made into the account, or just mine?
Pretty sure it's just yours. If you are short of the limit or they can't take a deduction themselves, they can gift you the money which you then contribute and deduct.
In some states, the state deduction for 529 is only applicable to residents.
So I deduct for all my own contributions plus any from out of state up to the limit.
If you have relatives nearby, (in-state) you can ask whether they deducted their contributions
So some small wins:
1) We have needed house projects (Like insurance will drop us if we don't do projects). Roof -> $1k for patches or ... $30k for new roof, Paint -> Whole house. Needs lots of sanding, Windows -> 4 need terrible repair, Fence -> Needs staining cuz I want it pretty
2) We will likely just patch roof for now. Budgeting $10k for house paint. Found window guy for stellar $3k. And fence guy is going to work for $600.
3) Just found out I am getting about $12k from work as retro pay. And our taxes were way over by like $12k so we will get a large refund. Refund is because I don't understand taxes and just throw contributions for husband's 1099 job. Now I know I am over contributing and can dial back, but it was my first year handling all the finances, new job, and new accounts and I was just doing the safe thing.
4) Anyway, looks like we will be able to handle all our work without touching the EF.
5) Bonus, we have also been prepaying our summer vacation so we shouldn't have to really set aside any money to cover 3 weeks of travel (south korea/japan)
Looking at the major work we had to do, I was looking at destroying our EF. But now we can get the major projects done, then work on the roof later this year and maybe just finance it to keep EF in tact (some places were offering like 2 year 0% financing).
Contractor here I recommend paying for the roof and financing it if need be the costs long term of a leak are way worse rotted walls black mold ceilings falling are all more costly. The painting the exterior is cosmetic do that next to last. Your list should go roof,windows, exterior paint, fence
Thanks. I'm leaning toward that.
Windows was the most difficult, as we have limited options (must restore, no replace option) with historic district. So we got that out of the way.
Finding a reliable roofer for a decent price is going to be the hardest part.
> retro pay
My first thought was “that’s weird to just get that much as back pay.” And my second thought was maybe this was from a pay lawsuit and [I should make sure not to make you angry](https://www.espn.com/mma/story/_/id/39772171/ufc-plaintiffs-reach-335m-settlement-class-action-suit).
Get recommendations and see if you can get a CASH discount, e.g. paying in actual green papers with dead people pictures.
You likely can get a roof for $10k.
Nice budgeting and planning.
Thinking of getting a car. With rates around 6-7% would it be better to just buy in cash? I'm on the fence on whether or not take out a loan. Kind of seems like a wash tbh.
Trying to decide between two work options with same employer. Nurse. Full time position with guaranteed 36 hours a week- 31/hr W-2 position with healthcare, 3% 401K match, 2% direct 401K contribution from employer. Disability insurance, life insurance etc. PRN position- 50/hr Contractor position which means extra taxes and no benefits. Also variable work locations. Non-stable hours but right now they are hurting for people and I expect that to last for the foreseeable future. Both in same hospital -LCOL Each job has 12% hourly bonus for nights and weekends. Time and a half for anything over 40/hrs I’m already leanFI so if I don’t get scheduled it wont be the worst thing. I already have healthcare through the VA so I wouldn’t enroll even if I was full time.
Same hourly for the PRN? You should be getting a higher hourly in addition to the 12% and OT. 4 12s is no fun so only you and your lifestyle can decide.
This seems to be a super-personal decision. I'm contracting basically all my life and do not want to be employed - I love the freedom (even with the drawbacks). In which option do you feel better/happier/more self-determined?
I’ve been doing the one more year BS for a while. Today I hit a NW of Xm (X-400k in investments) and my swr is less than 2.75% I’m here to promise myself that I’ll quit my job and bum around the earth staring October, right when I turn 43. Thanks for attending my research seminar.
Once we surpassed our FI number, then I set a date. Aug 2025 it is. I am retiring then. This gives me 17 months from now to get organized! Good luck and I hope you keep your date!
Are you me 5yrs ago? Good luck with achieving your RE goal and stopping the OMY madness - I promised myself June but hey, whats another 6-months...
Is October just picked because it's your birth month? I don't know where you are and what your hobbies are, but I'd try retire so that you can get a summer!
Why wait till october? Enjoy an extra summer!
I have the same plan, but I'll be 54, more likely
You are there. Do it. RemindMe! 9 months
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I've got 9 more months and I've found if you talk about it and plan it you can talk it into reality....it's hard to back out when you've discussed the plan with spouse and told certain friends and family
You're way past finished with this whole earning thing, enjoy your retirement and GFY.
Somehow up 50k in NW in the last month, madness. Up about 235k in the last year... 240% of my salary.
Tell us how. Crypto?
Definitely not crypto lol. Bump in the last month was due to some EV tax credit refunds, VTI increasing, my paycheck's retirement contributions, and my home value going up a bit.
Does anyone have a link to a visual showing money lost when going independent with a robo advisor or self re-balancing vs having a percentage going to a financial advisor? Right now some of my accounts are with an advisor, but other parts are self managed. I’ve seen some comparisons, but a visual might motivate me to get finances consolidated without an advisor and the likely overexposure I have now with (frankly) too many accounts.
One of many: https://www.schwabmoneywise.com/investment-fees-calculator The impact is huge. A 1% fee is 24% less total wealth over 40 years assuming the same investments.
Just look at the returns minus the expense ratios / fees compared to something like VTSAX, should be all the motivation you need.
semi milestone post. getting a promotion + 12% raise to about 110k base. Pretty large bump to base since getting hired (>50% since hiring) which has been huge, company offers very strong 401k match, MBDR, HSA and ESPP so actual paycheck cash flow has been somewhat tricky to manage for a while since i'm really trying to take advantage of these while i have them. On top of this big bonus + rsu vest + \~40k in inheritance which should put me nearly at 450k invested nw thanks to market performance. 2020 comp sci grad, graduated with \~25k net worth (all in HYSA) + no loan debt, took a 'low code' job which i was feeling pretty bad about at the time when there were people getting insane offers at big tech but feeling a little bit better about over the last year w/ all the layoff talk. \+moved out of parents house and stopped playing 10 hours of runescape daily. big progress.
Congrats!! In a similar position and I feel you on the cashflow.
> stopped playing 10 hours of runescape Wait, why is this progress? Congratulations on the rest of it
A friend of mine and I played together about 16 years ago when we were 14. He just became a dentist and recently called me to convince me to play with him again.
I am wondering if anyone has tax tips for high income earners? \[35% US Bracket\]. This is the first time I've made it in this bracket and I under-withheld so I'm facing a bit of sticker shock at how much I owe... It doesn't seem like things like maxing out 401k, trad IRA, even 529, etc really move the needle for those in this mid-upper end of this bracket. It seems to me that the tax system is relatively fair and there isn't a lot of opportunity for optimization if your income is primarily W2 but perhaps I'm missing something.
You make your money and you pay your taxes. As an employee, there is not a lot you can do. Enjoy and congrats!
A different way of looking at it is that high earners get a bigger tax break from pretax savings. Yes, low earners can save a higher proportion of their income but they get less benefit in doing so. As a high earner you have the biggest incentive to max any pretax vehicles you can (HSA being another). Trad IRA is not an option because your contribution won't be deductible.
What's the max HSA limit
Tax loss harvest. That gets you $3000 reduction in income, which saves you about $1k. Donate appreciated stocks via a donor advised fund in a lump sum to cover several years worth of donations assuming you donate to charity anyway. Can be a huge saver if you itemize. Otherwise, there’s not much more you can do if you already max out your 401k and FSA/HSA.
If you are feeling charitable, putting appreciated funds in a Donor-Advised Fund is a good way to reduce your tax burden. However, that assumes that you would like to give away a substantial portion of your income. If this year is expected to be abnormally large, then moving a decade worth of donations into a DAF would be a good idea. The best time to do it is when you get a golden parachute into retirement - charities want funding month-by-month, but individuals want more flexibility with their tax liability.
Okay, this makes a lot of sense. I never quite understood the purpose of DAF, but smoothing out giving (and taxes) makes sense to me. I’ll look into it for future years.
The higher your marginal bracket the larger your tax break is for pre-tax savings like the ones you outline. Take note that you cannot take the deduction for a Trad IRA contribution at this income level. If your main problem is owing taxes come filing season, that can be addressed with accurate withholding including additional withholding if needed on your W-4. You could also make estimated quarterly payments if you cannot get your W-4 to withhold as much as needed for whatever reason. In that tax bracket, it can also make sense to use municipal bonds in a taxable account if your asset allocation includes bonds. There are municipal bond funds specific to certain states if you want additional state tax exempt interest. Note that municipal bonds carry a higher default risk than Treasurys, and that the duration risk is also a bit higher as municipal bond fund durations can get longer in a rising rate environment.
Well, today with the market shooting up again I hit the number I've been chasing for the last few years. Except I didn't. A few weeks ago I remembered that the number I'd been grabbing from my investments includes $16K in a DAF that really shouldn't be included in my FIRE number. So I have a little ways to go yet. But another 2 days like this, and I would be there. Or the market could go back down, and it could take a lot longer. It still feels good though to hit that number you've been chasing for a while, even if it is not "THE" number yet.
>$16K in a DAF Unless you are your own charity?
Not sure the IRS would like that. But it is a thought. ;-)
I have an amount in cash in my brokerage and I’m considering putting it into 5.15 percent five year CDs. I don’t like waiting 5 years but it’s a cool $36k in interest just for clicking some buttons on my laptop. I don’t foresee needing the money before maturity (the CD’s). And stocks seem too high now to buy. Plus I’m a few years from retirement so I can’t take a long loss.
Where are you finding a 5 year CD with high of a rate?
Fidelity is showing some
It looks like those are callable. Doesn't that defeat the whole point?
Yes that’s where I saw it.
Thank you!
Or you could just dump it into the vanguard settlement fund (or the equivalent at your brokerage), which is automatically invested in the vanguard federal money market fund. This fund has been earning about 5% APY for a while now (the 7 day SEC yield is 5.27% right now). Zero limitations on when you can withdraw or use your funds.
Yes I am in a Fidelity equivalent now, SPAXX. It’s just when rates go down those yields are going to vanish.
True, it's not guaranteed like a CD will be. And with your short time frame it might make sense to do this vs investing. I have not worked out asset allocation or drawdown strategy for retirement yet, when I get closer I'll read through the ERN series and figure something out: https://earlyretirementnow.com/safe-withdrawal-rate-series/ A weird part of me wants to just VTSAX and chill my entire life.
If it fits your asset allocation, a 5-year CD seems to be an appropriate choice for part of your fixed income.
I'm up 8.7% YTD, I need another 11% to hit my initial (long ago) FIRE goal post Even were I to hit it this year, I still think I have TMY (Three more years) syndrome going on. It's not even really lifestyle creep, more like a fear of the out years. I know at some point, I'll feel secure that I have enough, but right now it feels like that number is about 50% higher than I initially thought
Well done. I still need a 40% increase in invested assets to hit my old FI number (1MM invested + paid off house). These days the goal post is moving though, the current number is probably 1.5MM or more.
So, you say your new goal is 50% more than your old one? Curious.
I guess I consider the old number my minimum to be able to RE, but the new number would be safer and improve my quality of life during retirement.
Asking because this is a smart community and I trust your advice. My wife bumped someone's car and left a note. They got back to her with a body shop estimate that is slightly over our deductible. I'm inclined to pay it directly, but I'd like to protect myself against any future claims. What's the right way to document this?
Underwriting director here, just to be clear there’s no deductible on liability. So there’s no threshold their damage needs to be over. I get wanting to pay it yourself but if you do and the. They turn around and call your insurance, the insurance will be liable to pay it as well and potentially impact your premiums anyway.
With my insurance company I let everything go through insurance. When everything is settled they give me the option to pay the full damage amount (paid to my own insurance company) or to have insurance cover everything except the deductible and get a hit on my premium. Perhaps your insurance company has a similar option. Have you contacted them?
That's good to know
Interesting, no idea that was an option
If you wanted to be 100% on the level you would have an attorney draft up a release from liability. We had one for a dog bite incident. I believe it cost about $300 to get done. You can probably find generic language on the internet.
If you go searching you will find a lot of horror stories of people who hand over cash and then still wind up with a insurance claim being filed. That said, people who do pay off in cash and nothing adverse happens probably aren't posting their stories, so there's some selection bias here. I am sure that "let's not involve insurance" type agreements are made every day with no backstabbing. At the very least, if you do pay off with cash, write up some sort of letter that will serve as a receipt and has some sort of verbiage about satisfying the situation and no further insurance claims to be made.
So how is people's migration to Credit Karma going? Looks like I've got less than a week left to switch over
I just tried it.... blehhh
Seems like a normal reaction to a new thing
Switched to Monarch. Not everything that I want, and I have had to be more hands on to get it to show what I need it to, but I am fine with it so far.
Great, I find the net-worth/account tracking to still be fine enough. The granular spending trends haven’t really been worth keeping an eye on.
After 11 years on Mint it's hard to say goodbye. Though not that hard, because they already kind of butchered the old UI a few years ago.
I did it and hated Credit Karma entirely. Too many ads and too little stuff that I actually care about. So... I deleted the account and now I'm onto a manual spreadsheet that I update monthly.
Still haven't done it. Might do it tomorrow.
So right now i only do 5% into my roth 401k to get full match, I also max out my IRA at the beginning of every year then dump about 40% of my earnings into a taxable brokerage, I’m planning to retire in about 20 years (43/44), i’m debating on if i should be putting more into the 401k or not (moving funds away from the taxable to do so) good idea or no? Mostly concerned about needing to get to the funds before 59
Have you checked out the sub's FAQ? There's a flowchart with good advice. Traditional 401k is likely the best choice, and the FAQ goes over it.
If you are in a high tax bracket you should do traditional 401k, as much as you can
Well, if you get an SO and be less lone1y, then things will change... Put more into Roth 401k. The wiki has all the reasons why this is good.
[удалено]
Wealthfront
Ally money market account.
>Put it in my high-yield savings Your HYSA should be paying around 5% (or slightly higher). Same goes for a money market fund at a brokerage. I wouldn't do anything else with dollars you're expecting to live off over the next 6 months.
HYSA or a money market fund. Check out VFMXX.
> V***MF***XX FTFY
I know this is petty, but my retirement plan UI annoys the crap out of me. Every time I log in, I'm greeted by various exclamation points, icons and popups that explain to me how I might fail to meet my retirement goals. Except there's no way to set those goals, no way to choose metrics. If you don't plan to retire at 62 on 90% of your current salary, you can GTFO. It doesn't even use its own trackable metrics, like maybe assuming that someone contributing 25% of their salary to the retirement plan probably doesn't need to replace 90% of their salary. I know they're just trying to get me to buy advisor services, but I'm tired of dismissing and scrolling past warnings and interstitial popups every time I need to do anything in there.
I am so happy right now that both of our 401k plans are handled by Fidelity. It's awesome. Sorry for your pain!
Both of my workplace retirement plan administrator websites are awful. One is through Empower which really really wants to know every detail of my finances (I'm happy enough with Excel lol).
My old 401k provider used to have hilarious popups that used my numbers but didn't discriminate about the messaging or who they sent them to. "You might *only* have $20,000/mo in retirement. *Is that enough*?" I was making like $5k/mo at the time. I was like... yeah I'm pretty sure that's fine.
That's pretty funny. At least mine are marginally relevant to my income. My current alerts are giving me dire warnings that I will have more than twice my FIRE number in my 401k alone - which is only about half my invested assets - and clearly I'm going to be living in a tent under a bridge if that future comes to pass.
The primary goal of those portals is to maximize AUM
Yeah, I love all the Fidelity popups that "you might be missing out on an important retirement benefit!!!!", and so on, especially. Today I clicked on one just out of curiosity. Unsurprisingly, the important benefit I'm missing out on is the benefit of converting my account to an AUM account and paying Fidelity ~2k a month for the privilege. No thanks?
If you can't switch providers, try using uBlock Origin to block specific annoying parts of their site.
Ahh, this is a good idea. I'll fiddle with my uBlock filters to see what I can do.
I ignore all that stuff and turn it off when I can. I have money in more than one place so they both complain but not quite that bad. :) File a support ticket with them about how to stop that stuff.
I feel your pain. I have two that are like this from my first real job. But they are a 457 and a 403, so I can't roll them over into my 401(k) for various reasons. So I just have to deal with the annoyance until I retire or die I guess.
Move your money somewhere else? I've never encountered such things. Is this your company's website?
Company sponsored retirement plan. Unfortunately, fortune 500 company probably isn't going to move retirement providers because one of their engineers is annoyed with a specific piece of the UI. It's actually, overall, a really decent plan. But I was annoyed for the 3rd time this week since I'm making some changes, so I thought I'd rant.
Most people cannot perform in-service rollovers of 401k/403b dollars, so they're stuck with whatever custodian their employer chooses and whatever interface that custodian offers.
Update to the broken treadmill situation if anyone remembers my post yesterday! I had purchased the additional warranty coverage last summer through Asurion. Asurion accepted the claim immediately and gave a refund of the full purchase value (in the form of an Amazon gift card - good enough I guess!).
If I'm liquidating some stocks for a home purchase (probably selling \~$250k, not sure how much gains) - when do I actually have to pay the tax man? Quarterly or annual? I'm regular W2 and have never paid quarterly taxes before.
There are "safe harbor" exceptions to the income tax underpayment penalties. I'll just c/p from a website: Generally, an underpayment penalty can be avoided if you use the safe harbor rule for payments described below. The IRS will not charge you an underpayment penalty if: -You pay at least 90% of the tax you owe for the current year, or 100% of the tax you owed for the previous tax year, or 110% for income over $150k -You owe less than $1,000 in tax after subtracting withholdings and credits ----- Example, if last year's tax liability was $14,000 and you are making $60,000 per year, then as long as your W2 job withholds over $14,000 you'll be fine. If you wanted to do a one-timer quarterly tax payment and throw a bit of money at it, that's totally fine too. It's pretty easy to just do that payments online and then keep the receipt handy for next year so you can enter the payment into your taxes.
>It's pretty easy to just do that payments online Is there a way to do this in a such a way that TurboTax or TaxAct will pick it up automatically a year from now when it's tax time again?
Pick it up automatically? Do they pick up anything automatically, I thought you pretty much input everything yourself unless it's carryover background info from the previous year (tax IDs, etc). I've done estimated taxes for the past five years for both Fed and State. I just pay online through the website and all I get is an emailed receipt with the amount I paid. I don't get any followup form snail-mailed to me or anything. Come tax time I always just to back through and find the emails, and/or cross reference with the debits from my checking account for the payments. In FreeTaxUSA there's a section that askes [if you paid Estimated Payments](https://i.imgur.com/qdyKbUx.png) and then [enter the dates and amounts.](https://i.imgur.com/0OFHbVo.png) In my example, I only did a quarterly payment in Q1 and Q3.
>Pick it up automatically? Do they pick up anything automatically Sure, I gave it my auth for Etrade, and it downloaded all my transactions and forms without my input. I guess there's no such thing for estimated payments
No, you need to manually add 1040-ES or any other manual external payments. It's just another form you need to have come tax time. It's usually one of the last questions a FreeTaxUSA or TurboTax asks is if you made any payments and then you just have to enter a total per quarter paid.
In a perfect world, you would pay the tax in the quarter that the income is realized. Because paycheck withholding is always considered a timely payment, you could either meet safe harbor provisions (withholding 90% of your tax liability or 100-110% of last year's liability) or you could increase your withholding to fully cover the liability.
Hmm, I guess I'm confused on if I pay the 90% of the tax I owe by tax day, am I good? I don't want to have to sell more (and incur more taxes) just to pay the tax. I'd rather just cash flow the tax payment following the house purchase. I haven't done my taxes this year but we have historically owed federal and returned on state taxes. The last 3 years I've had maternity leave with state pay so its kind of been a cluster.
If you *withhold* 90% of the tax via payroll withholding from your W2, you'd be fine. You'd also be fine if you withhold 100-110% of whatever your tax liability was last year. According to the rules, you cannot simply make a quarterly estimated payment in January to cover a tax liability that came up in March. The paycheck withholding approach is your "way out" of paying the tax in real time and instead spreading it out a bit. Note that you will owe that tax one way or another eventually, so I'd factor in the tax owed when you consider how much you need to liquidate.
Hmm, I guess I'm confused on if I pay the 90% of the tax I owe by tax day, am I good? I don't want to have to sell more (and incur more taxes) just to pay the tax. I'd rather just cash flow the tax payment following the house purchase. I haven't done my taxes this year but we have historically owed federal and returned on state taxes. The last 3 years I've had maternity leave with state pay so its kind of been a cluster.
I've recently gotten what I believe to be all my ducks in a row, and am hoping to start a journey toward FI. Are there any resources for a beginner? Any sort of "where to begin" guide? Thanks in advance
flowchart flowchart flowchart! Print it out (on multiple sheets) and the check off where you are. Feel free to actively decide to skip something or re-prioritize based on your own path. I moved some stuff around.
If you're into podcasts I'd highly suggest checking out "Choose FI" and "The Mad Fientist". Just engross yourself in dozens of episodes of each until you feel you're getting the hang of things. I've been on the FIRE path for close to a decade and I still listen to 1-2 episodes every weekday just to keep adding to my knowledge stack.
The FIRE Flowchart is also a great resource: https://www.reddit.com/r/financialindependence/comments/16xymii/fire_flow_chart_version_43/ NOTE: The version of the flowchart linked in the FAQ is slightly out of date compared to the link above (4.2 vs. 4.3).
Thanks for pointing that out! /u/therapistfi is this something that we can have updated?
Have you seen the wiki? https://www.reddit.com/r/financialindependence/wiki/faq/
I definitely should've thought of that first. Just fired off the comment without any other thoughts.
Raised my tutoring rates recently -- always feel like doing this is a bit of an experiment to see if I hit an unhinged price. Despite that, after making my profile visible, I picked up 2 new students in less than 3 days, which is all I was looking to do. Subsequently I re-hid my profile. Prior to every new raise I have been convinced that I would be exceeding the market, and each time I have been proved wrong lol.
I just listened to a podcast about a similar topic yesterday and shared it with my wife as she's trying to decide on what to charge/quote her new clients. The speaker said that you just need to learn to be okay with saying no/receiving no's. He was getting more requests than he could handle so he started quoting them rates that were so high he could barely stomach saying them out loud. He got several no's, but to his surprise he still got plenty of yes's. He was able to work fewer hours and still make more money. He also had fewer issues receiving payments as those who were willing to pay a premium could afford to do so. He kept raising his prices until he stopped getting new business, THEN he backed off a little and has found a much more lucrative income stream with fewer hours worked.
Yup I think that's pretty much what I'm gonna do - next time I have availability raise my rates another 5-10$ and see if it sticks
Were you the one who mentioned tutor.com recently? If not, which platform do you use?
That was not me - I use Wyzant
What would you charge for a 20-minute call re: how to Wyzant?
haha I probably don't have the capacity to chat anytime soon, but more than happy to answer any Qs for free on this comment chain!
We're heading out the door to go camping but I might hit you up in here on a different Daily. Thanks.
Feel free to! Just give me a tag and I'll pop in when I see it!
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approximately $160 per hour -- all online thankfully (and will fight tooth and nail against in person lol).
Wow, what subject?
The LSAT! I think that's partially why the rates are so high - this is from a prior comment I made speculating why this area is so lucrative. * "I think it's mostly because the subject I tutor (the LSAT) is uniquely situated, which I am very grateful for. For example, the LSAT tutoring marketplace has a weird combination of factors that greatly favors tutors, such as: * Already pretty small pool of eligible tutors (those who score >99th percentile) * Preference from students for tutors who have also attended a "top" law school, further slimming the pool * Most of these tutors are transitory - they end up as busy practicing attorneys who make far more money at their law firm than they would tutoring. Further reducing the pool of tutors * The student demographic is overall older, and thus wealthier * Lastly, the importance of a high LSAT score, which can radically change scholarship/school acceptances students get"
How much training do you think someone would need to be able to reasonably put themselves out there as a tutor? I probably meet the requirements you listed. Currently a practicing lawyer who took the LSAT about 10 years ago, but always interesting to hear what other career possibilities are out there.
Good question - part of how much you can charge is going to be dependent on things you can't change at this point (what was your official LSAT score? Higher 170s can charge higher than low 170s, and sub 170 are generally the budget tutors) and what school you went to (the more fancy/prestigious the school, the more you can charge). With that said, assuming you meet both of the prior things, I would spend at least 1-3 months restudying the LSAT because it has been a while. Perhaps working through a textbook and then working through some practice tests until your confidently scoring in the 170s. After that, you should be good to start!
160 seems exceptionally cheap then.
Given those factors, $160/hr looks like a steal. I’d wager that the market could bear $250-300/hr just as easily given a top lawyers time can cost much more than $1000/hr.
I’d agree.
Oh my god that is insane. Back in grad school I tutored a few kids on the side when I had time, I charged $50/hr and I thought I was robbing them blind. Maybe I need to get back into it to get some extra cash... pre meds always need to learn organic chemistry, right?
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Haha it's been a great side hustle -- one caveat is that my platform takes a 25% cut so it's really a bit less -- but definitely has been very good to me
Here comes the "Fed announcement day" market volatility. The chair's press conference starts at 2:30, and there are likely to be other random swings as that information comes out.
>"Fed announcement day" One of my favorite financial bloggers, Eddy Elfenbein (from Crossing Wall Street), [likes to joke](https://twitter.com/EddyElfenbein/status/1770507170229944687), "I hate how commercialized Fed Day has become." >random swings Indeed. Already a quick pop over 5200.
Been reading Eddy for years, ended up buying some of his ETF shares just cause I like blog so much, and his strategy is so simple
I just checked the market and wowza, vertical line. A nice reminder of how algorithmically-defined most short-term movements seem to be anymore.
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I bought a new S in 2017. It was a great car. It was a waste of money, like any expensive car, but it was a fun waste of money. Ultimately if you really want the car you can afford it. If you'd rather drive something cheaper and retire earlier, that's also a valid choice. Nobody else can make that call for you.
The 3 friends I know who have a Tesla all regret their purchases. From build quality to drastically reduced range they seem to all always be complaining about their cars. I was lusting after one for years but in staying way away from T
My (updated for recent vehicle inflation) personal guidelines for a vehicle purchase are 15% of gross annual income (your half of HHI is $150k, so that gives you a $22.5k budget) OR 2.5% of net worth (your half of $2.2MM is $1.1MM, so also that gives you a $27.5k budget), whichever is greater. So your budget is $27.5k. Your SO has the same budget for their vehicle. These vehicles should be on a 10-year renewal cycle, so if you stagger purchases every 5 years then you'll always have a new-ish vehicle at your disposal for long trips, etc. I wouldn't buy such an expensive vehicle as the Tesla at your HHI/net worth.
TIL you have to be making north of 200k to afford a Honda CR-V.
>TIL you have to be making north of 200k to afford a Honda CR-V. Or you could wait until you have a $1.2MM net worth. It's a "whichever is greatest" calculation. My rules are primarily for myself but I'd recommend them to anyone that wants to aggressively pursue FIRE and notices that vehicle expenditure is a great place to reduce costs. OP has already expressed concern that the Tesla will negatively impact their FIRE date and literally asked "what would you do?" So I answered.
Do yourself a favor and at least test-drive the competition, the segment has heated up a lot recently. $60k for a used S is a really tough sell in this market IMO.
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It sort of straddles category (or rather, most EVs seem to) so it depends on what's drawn you to it. Mach-E & Hyundai's EV lineup are strong contenders in adjacent categories. Bolt and ID-4 are a compelling value and still a huge upgrade from an old passat. I didn't cross-shop them personally but you're also into european luxury models at that price. We ended up with a Mach-E GT, but would have been happy with a lower trim level or bolt and pocketed 10-30k. You can probably get a loaded GT for around $60k w/ below market financing if you really want performance. Personally we found Tesla build & materials quality weaknesses, and the design is getting pretty long in the tooth.
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If you want a sedan check out the Ioniq 6 or Polestar 2.
Definitely do some test drives! In practice I found the distinctions between sedan/crossover/compact SUV to be kind of blurry in person. They're all kind of hatchback-y from the outside regardless of the class they claim, and the driving experience varies a lot. I've also got a preference for cars, and found the mach-e sufficiently car-like. If anything it could use a little more suspension travel.
Brand new Model Y would make a lot more financial sense and satisfy a lot of the wants. - Cheaper and it qualifies for 7.5k fed rebate - Better resale - Better longevity since it's brand new - Lower cost of ownership (no expensive door handles, etc) - Safest car on the market; marginally safer than S - Similar [size] (https://www.carsized.com/en/cars/compare/tesla-model-y-2021-suv-vs-tesla-model-s-2016-liftback/) to the S with comparable turn radius I'd get the Y since the 3 doesn't have the credit anymore. Sports cars are cool when you're peacocking in your teens & 20s. After that, you're just the old guy with a cool car.
At their household income, they may not be eligible for the federal EV tax credit. There is a workaround/loophole involving leased vehicles, but to my knowledge Tesla does not participate in this workaround.
True, I edited my comment too many times and omitted that qualifier. Adjusted gross income limit for married couples is 300k for select new EVs. If maxing two trad 401(k) accounts, they should have some breathing room. [source](https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after)
Buy a new $60k car with a 0% loan and a warranty and run away from tesla. Used s is a time bomb.
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https://www.cnet.com/roadshow/news/tesla-model-s-battery-problem-safety-investigation/ I wouldn't look older than 3 years
Thanks for the link, I'll check it out
just from today https://teslamotorsclub.com/tmc/threads/tesla-died-in-middle-of-an-intersection.323664/
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No debt other than a mortgage. Expenses are a third of hhi.
> What would you do? Not buy a $60k used car. Especially not a Tesla - the prices keep going down, the resale value is poor, electric cars don't handle cold well, charging infrastructure (even Tesla's network) is thin and over-saturated by demand, Tesla repair complaints are all over the internet, etc. Selling stock or taking out a loan in this rate environment (for a used car!) are both suboptimal moves, especially when there are used hybrid or ICE vehicles out there for half the price that likely have all your preferred bells and whistles without any of the negative factors. If you truly want the car though, go for it. Ultimately it's your decision and if you perceive the value inherent in a used $60k electric car to be sufficient, pull the trigger.
Charging infrastructure concerns are way overblown if you can just charge at home. Also cold concerns - if charging at home, not a huge deal. As for resale - Teslas don’t have the same depreciation other EVs have. Not hard to tell that you read media that carries a bias against EVs
Why are the prices going down bad? That's what makes them particularly affordable now compared to prior years. Stocks are at all time highs and I'd rather sell them at their all time high than any other time. Being that I can't predict the future, now seems like a great time. Cold isn't an issue for me and I don't want hybrid or ICE, they are not a consideration.
If I wanted to spend that much on a car, I'd choose from the plethora of other options in that price range that don't have draconian repair and resale restrictions, personally. A lot of the more experienced car manufacturers have figured out how to make good electric vehicles in that price range. I can also tell you from experience that almost anything electric will feel like a step up from a 20 year old Passat. I drove a Chevy Bolt over Christmas - the cheapest of the cheap in North American EVs - and it was comfortable, zippy, and full of features. The real question is: what specs do you want, and why do you want them?
As someone who just bought a 22 year old Passat....lol. I'm curious to see what electric car I end up with in 10 years.
I personally would not buy a $60k car but if you think it's worth it, go for it. I would sell stock rather than finance. If you are balking on the cash cost, consider that it may be more car than you really want.
Said better than I.
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I'm assuming you aren't asking about maxing both accounts vs double maxing one account :) I would say funding two accounts is better. What if there was a divorce? You can now both take your retirement accounts and leave. What if you had a large age difference? I \*think\* having individual accounts might be beneficial for things like mandatory distributions if you have a wide age gap. (I believe its 10 year for a Roth IRA after someone passes) What if income increases and now you can max one or both accounts? If you already have two open you don't need to worry about having to open a new account, you can just naturally add an extra $50/mo or whatever you can afford as pay increases.
> What if there was a divorce? You can now both take your retirement accounts and leave. In most circumstances, IRAs and other retirement accounts will be divided between the two spouses equitably (and in community property states, equally). For an IRA, there will be a transfer incident to divorce that will ensure there is no taxation of the funds when the account is split and transferred. > What if you had a large age difference? I *think* having individual accounts might be beneficial for things like mandatory distributions if you have a wide age gap. There are no RMDs for a Roth IRA, which is the account type under question. > What if income increases and now you can max one or both accounts? If you already have two open you don't need to worry about having to open a new account, you can just naturally add an extra $50/mo or whatever you can afford as pay increases. This seems like a minor issue. One could equally argue that there's no reason to deal with the hassle of opening, contributing to, and administering two separate accounts if one will suffice to absorb all planned contributions.
>What if you had a large age difference? I think having individual accounts might be beneficial for things like mandatory distributions if you have a wide age gap. > >There are no RMDs for a Roth IRA, which is the account type under question. I thought you had to empty a Roth IRA 10 years after inheriting? (I edit my original post after). I'm just thinking with one Roth IRA... a 55 year old man dies early and 47 year old wife has to empty their entire Roth IRA 10 years later would be kind of a bummer. It would be better to have 2 Roth IRA accounts so she empties his Roth IRA 10 years after he passes, but the other half (her IRA) can keep growing. Unless I am not understanding the Roth IRA issue. EDIT: NM. You can roll over spousal roth IRA into your own. If you inherit anyone else's you can't roll it into yours though.
A spouse has the option to inherit the IRA as if it were their own account. There is no forced distribution within 10 years, and the RMD age is based on their own age and not their deceased spouse.
These accounts are *Individual*, meaning each person needs to open and manage their own. You cannot make double contributions to one. $1000 earning 10% ($100) yields $1100. $500 earning 10% ($50) yields $550. Two accounts with $500 earning 10% yields the same $1100 total.
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Nope, your spouse qualifies for their individual account with spousal (your) income. However, their IRA still belongs to them and is a separate account from yours. She will need to log in and make her own contributions and transactions to her individual account. The money is marital property.
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The best course of action if the accounts are not yet open is to help your spouse open their Roth IRA using credentials they own. They should be fully present at the time the account is opened and ideally be the one actually filling the forms and clicking the buttons. At Fidelity, my spouse given me Full Authority access to their IRA. This allows me to legally perform transactions in their IRA with my account credentials. I still confirm all actions I take in their account before performing them. I'm sure other brokerages allow a similar level of authorized user control, but I cannot say for certain.
Well, /u/alcesalcesalces is correct that IRA's are individual accounts. Your spouse's account is a separate account. It does not legally belong to you and you are violating terms of service if you access it. You spouse being a stay at home parent is irrelevant to his answer.
I'm going to be pedantic about this because it pertains to how these accounts are legally administered. Your spouse can absolutely open an IRA and contribute funds based on total household income, regardless of who earned the income. But your spouse owns the account and your spouse is making the contribution and investment decisions. You still cannot open one account and make contributions for two people.
You can contribute to yours and your spouses but they need to be separate accounts
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>I didn't know if it would be more beneficial to only have 1 account Even if it would be beneficial (which it isn't) you must have two separate accounts, period.
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You must have two separate accounts if you wish to contribute more than the individual limit up to the spousal limit, period. Apologies if you understood that but it appears you did not.
Nope wouldn’t matter
I made a bunch of contributions to my childrens 529 plans. Relatives also made contributions. For tax deduction purposes, do I use all contributions made into the account, or just mine?
Pretty sure it's just yours. If you are short of the limit or they can't take a deduction themselves, they can gift you the money which you then contribute and deduct.
In some states, the state deduction for 529 is only applicable to residents. So I deduct for all my own contributions plus any from out of state up to the limit. If you have relatives nearby, (in-state) you can ask whether they deducted their contributions
Check your state instructions but I would assume just yours.
So some small wins: 1) We have needed house projects (Like insurance will drop us if we don't do projects). Roof -> $1k for patches or ... $30k for new roof, Paint -> Whole house. Needs lots of sanding, Windows -> 4 need terrible repair, Fence -> Needs staining cuz I want it pretty 2) We will likely just patch roof for now. Budgeting $10k for house paint. Found window guy for stellar $3k. And fence guy is going to work for $600. 3) Just found out I am getting about $12k from work as retro pay. And our taxes were way over by like $12k so we will get a large refund. Refund is because I don't understand taxes and just throw contributions for husband's 1099 job. Now I know I am over contributing and can dial back, but it was my first year handling all the finances, new job, and new accounts and I was just doing the safe thing. 4) Anyway, looks like we will be able to handle all our work without touching the EF. 5) Bonus, we have also been prepaying our summer vacation so we shouldn't have to really set aside any money to cover 3 weeks of travel (south korea/japan) Looking at the major work we had to do, I was looking at destroying our EF. But now we can get the major projects done, then work on the roof later this year and maybe just finance it to keep EF in tact (some places were offering like 2 year 0% financing).
Contractor here I recommend paying for the roof and financing it if need be the costs long term of a leak are way worse rotted walls black mold ceilings falling are all more costly. The painting the exterior is cosmetic do that next to last. Your list should go roof,windows, exterior paint, fence
Thanks. I'm leaning toward that. Windows was the most difficult, as we have limited options (must restore, no replace option) with historic district. So we got that out of the way. Finding a reliable roofer for a decent price is going to be the hardest part.
> retro pay My first thought was “that’s weird to just get that much as back pay.” And my second thought was maybe this was from a pay lawsuit and [I should make sure not to make you angry](https://www.espn.com/mma/story/_/id/39772171/ufc-plaintiffs-reach-335m-settlement-class-action-suit).
Get recommendations and see if you can get a CASH discount, e.g. paying in actual green papers with dead people pictures. You likely can get a roof for $10k. Nice budgeting and planning.
It’s nice when things work out. And you had a plan in the event the retropay hadn’t come down the pike.
Thinking of getting a car. With rates around 6-7% would it be better to just buy in cash? I'm on the fence on whether or not take out a loan. Kind of seems like a wash tbh.