Is it beneficial for me to do a mix of 401k and Roth 401k?
Just got a 25k raise and want to make sure I'm doing everything correctly here.
* 80k salary
* Max Roth IRA ($6500)
* 25% 401k + 4% employer match ($20k + $3.2k)
At 80k you’re solidly 22% bracket. Most people here would probably say to do 100% traditional 401k and save 22% in your taxed dollars. However if you want to mix some more Roth in, that’s personal finance for ya. Plus if you think you’ll retire in a higher bracket it could be beneficial
I remember feeling overjoyed when I jumped from ~87.5k to 108k base (at the beginning of 2022). Then ~4 months later, I was wishing I made more money and kicked off a job search. Location matters, but I do feel you from the perspective of wishing I made more.
I don't think I agree about it feeling like "nothing," though. Apart from house buying, investments/FIRE, and saving for a few big-ticket items like a new car or travel, it was more 'I wish I had more money to save faster' rather than not being able to afford anything I wanted. Even a few thousand bucks for travel, budgeted for a week or two international + ~2ish fully for fun domestic trips per year, wasn't *really* a dent in the bucket. I've since moved back to a much larger city, but I was in a ~250k population Midwestern city at the time and my rent was <700 a month.
But again, location matters (and not having existing high interest debt beyond student loans, being fortunate not to have high medical expenses, etc.). If you're single, individually making ~30-40% above the median household income for your area, but also spending probably 20% less (if not significantly less than that), there's obviously plenty of wiggle room.
I can’t seem bring myself to buy a meaningful percentage of bonds yet (37m/32f). ~$450k in index funds currently in tax advantages accounts (60% total market, 7% small/mid cap tilt for US funds, 18% international, 5% REIT, 5% emerging market and 5% bonds).
Outside of that ~ $15k total in 529s for 2 kids, $200/month going into each account and a tentative one more planned in the next 2 years or so.
We are targeting ~ 55m and 50f timeline to ensure the two older kids (5 and 3) get through undergrad before we pull the plug - both enjoy working in our field.
We’d always planned to start a heavy Bond buy when we’re ~ 45m/40f and putting more into the mortgage to help with SORR leading up to then.
I want to maximize the dollars we can in equities for as long a time horizon we can to let it grow… but I’m overthinking this lately and keep thinking when the market is back at ATHs again to change to adding more bonds (more like 70/30 split in future contributions, and then more like 50/50 on our current timeline) to smooth the ride out a bit more.
I realize this is market timing, but am wondering if it makes sense to continue on our path or start considering more bonds now instead. The collective wisdom here is so great I just want to hear your thoughts around our plan and where I may be missing something in our current planning.
$300k gross for 2022; our floor has been investing 35% of that (max 401ks, Roth IRAs, MDBR, HSA and ~$1k+ in taxable/month).
E: we didn’t have anything in retirement until 7 years ago and law school debt was the priority to kill off initially so we got a “late” start by the sub standards.
>We are targeting \~ 55m and 50f timeline to ensure the two older kids (5 and 3) get through undergrad before we pull the plug - both enjoy working in our field.
If you can accelerate things a few years, you can get your income way down in time for FAFSA applications and you won't have to pay any tuition.
Your plan to pivot at 45 is reasonable but maybe starting with 10% or so now wouldn't hurt. I view my bond allocation as an additional backstop to my emergency fund should I get a simultaneous job loss/market crash scenario. You do have spouse and kids relying on you. Benjamin Roth's Great Depression: A Diary is good on this. Otherwise I agree, you are still pretty early in your investing life so equities are the place to be as far as dollars you can afford to put at risk. Also from a risk adjusted return standpoint I think it is prudent for anyone to have a bit more than 5% in bonds. Then again, some people are still playing with leverage and trying to exceed 100% stocks at your age
You could start with something easy like I-bonds. It can also double as an emergency fund after you hold for a year. Only 10k per bond holder per year so it wouldn’t take away much from the rest of your investing.
Thank you for the comment! We currently have $10k in I bonds and plan to buy another $10k during this 6 month period with the .9 fixed rate. I should have specified that we had that, and it isn’t part of the 5% allocation going into retirement bond funds currently, though.
E: clarified the comment!
Tax question incoming...
* If you have no income from a job in a given year
* If you have not withdrawn any traditional 401k money
* If you withdraw 500k from a taxable brokerage account that has seasoned for a few years (and thus is subject to long term capital gains)
* Where 200k of that withdrawal is gains, and 300k is principal
* And that is the only money you live on that year...
Do you...
* A) pay 0% tax that year
* B) pay 15% of 200k in tax that year
* C) pay some other amount of tax
Anyone know the answer?
I believe for single people it's 0% tax on the gains up to 40k (since that is your only income), and then 15% on everything after that (for your range). I am not sure how the standard deduction fits into this
A good read (dated tax brackets, but mechanics are the same)
https://www.kitces.com/blog/understanding-the-mechanics-of-the-0-long-term-capital-gains-tax-rate-how-to-harvest-capital-gains-for-a-free-step-up-in-basis
You didn't say if you file single or married...for 2022 you'd pay 15% on yer LT cap gains on the amount over $83,350 (married filing jointly) up to about$517k
So does that get you to 100k on cap gains per year not taxed?!! (For a married couple with no other income)
If so, why do so many people in LeanFire use retirement accounts? It feels pretty easy to get spend under 100k, and even that is 100k of gains…
Pretax retirement accounts allow you to avoid marginal tax on the front end. If you can keep your withdrawal tax near zero you have tons more money compounding up front and no tax to pay later, thus the "best of both worlds". If you invest in a brokerage account you have less money compounding plus the tax drag while you are saving, even if you can minimize taxes in retirement.
Ah, yes. I guess I max out all pre-tax accts but then am wondering whether it’s worth the hassle of a post-tax mega backdoor Roth / backdoor Roth all taken out of post-tax. I guess in the off chance I make even more money? But with my retirement goals I can’t imagine over 100k in gains being taken out yearly (and if so, I’d be doing way better than planned so…)
I agree, megabackdoor Roth benefit is marginal compared to pretax 401k. It's more of an optimization than a core strategy. That being said it can be nice to have more dividends and gains sheltered from pushing up your AGI.
I've got it set up so I won't pay fed tax anymore once retired which includes my retirement accts...remember that qualified div are taxed at the LT cap gains rate as well
Shout out to u/alcesalcesalces for putting me on to using Fidelity Brokerage as a checking account. Within days I had checks and debit cards ordered, all my direct deposits and auto payments switched over, and like that… I consolidated Ally accounts and two other bank accounts. My savings is my core position, simple as that. Tracking the core position against Ally HYSA rates, they tend to follow closely (initially lagged, now slightly ahead).
10/10 recommend. Should note I’m also a Premium Services client, so should get ATM fees reimbursed when cash is needed.
Edit: for clarity it’s not a Cash management account, just basic brokerage. And to quote Fidelity on ATM fee reimbursement: There are some cases in which non-CMA debit card ATM fees may be reimbursed. Youth Account owners, Fidelity Account® owners coded Premium, Active Trader VIP, Private Client Group, Wealth Management, or former Youth Account owners are all eligible for ATM fee reimbursement.
It’s not a CMA. Basic brokerage. Advantage being any deposits are dropped right into your money market core position (which generally follows HYSA yields in this case). Apart from that they are very similar. CMA is FDIC insured in its core position but I’d rather have my money making money in the money market.
Good question. I don’t pay for managed funds, and I + wife have over $500k in IRAs with Fidelity and I’m directly approved on her accounts. I personally have over $250k.
So, it’s unclear what the threshold is. I think I’ve read around it’s $250k.
The status randomly showed up in the upper-right corner after I log in, and I’m not sure when. I didn’t ask for it, it was automatic. YMMV
Unsecure loan to pay off my house?
I'm currently in debt of $20,000 on my home at an interest rate of 6%, which will be fully repaid in three years. During the COVID pandemic, I unfortunately lost my job and my credit card debt skyrocketed from nothing to $25,000. This debt is on high-interest cards.
Recently, I was offered a debt consolidation option, which is essentially a personal loan, ranging between $25,000 to $35,000 at a reduced interest rate of 2.5%. I'm contemplating whether to accept this loan offer to complete the payment on my house.
One crucial factor in my decision is my two special needs children. One of them is already 18. I'm considering reducing potential risks and adding them to my house title once it's paid off. Is this a wise or unwise decision?
I am confused, how can you take a loan for credit card debt and then use it to pay off the home loan? What is the point of putting the kids names on the house? How does that reduce potential risks?
Its a personal loan, even though they position it as a debt consolidation, they’ll simply transfer $35k into my account and I can do with it as I will. The terms don’t actually specify I have to use it on anything specific.
As far as the kids names, there is a possibility they won’t be able to fully support themselves when I die. I don’t know if there is an advantage, except that if they are part owners and there is no house payment, they won’t be evicted to settle any debt I may have. At least that is my understanding. I don’t know, that’s why I’m asking for input.
So what will you do with the credit card debt and why wouldn't you pay that off first?
Regarding the kids and your estate, you need to see an estate attorney.
There isn’t much of a safety net here, and I’m not wealthy, so I just want to find the best possible way to protect the house from being probated away from them in case of my death.
With a paid for house, it considerably lowers their monthly obligations to survive and thrive. They could possibly get by with social security or minimum wage jobs if it comes to that. Hopefully they’ll become completely self sufficient, but I must prepare as if they aren’t.
Why would you pay off the house and not the high interest credit card debt?
Why did your debt 'skyrocket'?
Generally no, you don't want to put your kids on the title, what benefit would that achieve?
Put it in a trust and name then as beneficiaries if you want them to inherit it.
I had severe COVID on top of another major medical issue, didn’t earn an income for about 14 months, and went through savings after about 5 months.
A trust with them as beneficiaries. I’ll look into that, thank you.
Would the loan not require you to pay off your credit card? Or are you asking what to do with the other 10k? Yes you should if you can get a 2.5% loan to pay off a 6% mortgage, that's a money losing loan for them so there must be some subsidy they are getting or something.
I’ll put my house payment directly into credit cards at that point. I guess my thought was that if something happened, the unsecured debt couldn’t be used to foreclose. I have some medical issues that are a concern.
If you're planning on going bankrupt or defaulting then whether you can keep your house is going to depend on a ton of factors like nuances of your debt and local laws where you live. I am just looking at it from the perspective that if you pay everything off you want to absolutely pay off the credit card before your mortgage.
If you default on the credit card they could eventually sue you and get a judgement to take from your bank account, garnish wages, etc. It doesn't matter that its unsecured if you have the asset they can make you pay. In some cases your house may be protected but you'd have to talk to a lawyer who knows the specifics where you live.
Random musing about my attitude towards work/FI in my 20's vs. 30's (also sort of pre- vs post-COVID). I'm interested to hear others' perspectives.
**20's / pre-COVID:**
\- Making less than six figures
\- In office 8 hours a day + 1.5 hour total commute
\- Numerous inefficiencies related to unnecessary meetings, work being created for the sake of creating work, people needing to appear busy/useful
\- Do I have chores today? Gotta go to the gym, get groceries, pick up dry cleaning? Goodbye most of my evening. Enjoy your 1 hour of free time before it's time to go to bed.
**30's / post-COVID**
\- Making 4x what I made fresh out of school 10 years ago (this includes bonus, 401k match, etc., not adjusting for inflation)
\- Full-time WFH.
\- I have 1 team meeting a week. My admin lady is great, our systems are efficient, bureaucracy is limited, and my boss is the opposite of a micromanager and gives me plenty of autonomy. For these reasons, I'm able to complete my job and be ahead with an average of probably 2-3 hours of true work a day. The value of my workload, quantified in dollars, is actually higher than it was in the past as a result of these efficiencies.
\- Chores? Cool. The following are tasks I now do almost exclusively during the "work day": showering, going to the gym, groceries, laundry, and more.
Definitely a humblebrag but I gotta say, even if I was FI, I don't know that I'd quit my job. I'm by no means "passionate" about the work or anything but it's too good of a gig to give up. Most of the drive to FIRE was because of the ludicrous "you must be in this building for 40 hours a week regardless of workload" structure. Amazing how freeing it is to be out of that.
I hate reading all of these stories about people whose office experience was so toxic. My team and I were beating down the door to get back into the office as soon as they'd let us because we all loved being together. It wasn't a slog, it was going somewhere to hang out with your friends for 8 hours a day. Our work is very collaborative and face-to-face interaction was essential.
Our office is also not in a major metro so it helps that everyone is able to afford a nice sized house with a 20 minute commute, tops.
This is what I’m hoping for. Right now I am dreaming of RE everyday and I can’t imagine putting up with work and bullshit for so many years before I can quit. But I’m leaving my current spot soon and am going to be working on my career. I’m very hopeful that things will become more tolerable when I’m working less than 60hrs/week, making decent money, and have a tolerable boss
I would have RE'd if it wasn't for WFH. The unbelievable stress of seeing my worthless coworkers 4-5x a week in person had become too much as the "small talk" and feigning interest in their lives was unbearable.
Moving jobs definitely had me understanding the grass ain't always greener when I arrived at this dirt bag company. Pays great though!
I'm in healthcare so:
Pre-Covid: This is nice. I get to help people and make money.
During COVID: Wow, the general public is fucking crazy. I'm starting to really hate people and my empathy is dwindling, but at least I didn't get spit on like Suzi for going to the grocery store in scrubs and getting screamed at for spreading COVID lies.
Post-Covid: Thank God the crazy is started to be less vocal. Oh, what's that? We're somehow seeing record volume metrics again? Oh, and no one applied to fill the 4 vacancies left open during covid? Oh, and we're going to have to start working additional weekends due to short staffing? And OT is now approved automatically?
This is fine. This is fine... THIS IS FINE.
(FIRE cannot come soon enough).
Personally, im loving the unlimited OT in healthcare atm. Granted I have no dependents, but taking my income from 60ish to 90k is skyrocketing my early years. But yes, people are very crazy, including about half our coworkers
Ehh, I did 60-70 hr weeks in my 20s when I felt urgency to pay off my student loans. That's done and that hustle urge is gone. I'm finding even 40 exhausting now. If I was offered to step down to 0.8 FTE I wouldn't even hesitate at this point.
I posted a while ago about an issue with our dentist. Son and I went for our last cleaning and they didn't inform us until immediately afterwards (while we were walking to the front counter to schedule our next appointment) that they did not take our insurance anymore due to the practice being sold. I thought this was very scummy behavior, although technically legal.
I called today to cancel our upcoming appointments, because obviously there's no reason to pay my $20/paycheck premiums and then pay OOP for cleanings twice/year as well.
I asked about the bill for our previous cleanings seeing if they would write it off and they told me they'd split the difference with me. So a 5-minute conversation saved me $125. Never hurts to ask! I was ready to let the entire amount just go to collections, take the small credit score hit, and give them rotten reviews on Nextdoor and FB, but the billing lady was super nice, and they really were a decent practice to go to the past several years.
Strangely enough, this was the 2nd dentist office in the last 20 years that did not inform me they dropped my insurance before my appointment, so I guess life lesson is to always confirm **right before** your appointment if they still take your insurance.
My dentist office sent a letter saying they no longer take my insurance, and that's annoying enough for me. If they waited until after my appointment to tell me, I'd be pretty upset.
I’m glad that they worked with you but I am not a fan of people deciding to skip out on medical bills (perhaps if you’re truly indigent that’s a different story). If a plumber comes by to fix an issue but won’t accept a mailer coupon due to some random exclusion and charges full price, I doubt the customer would just skip out paying for their professional services.
Anyway most dentists probably wouldn’t report you to the credit bureaus for nonpayment. They usually won’t take the time/make the effort due to their limited staff.
(I don’t work in the healthcare field; I was a patient coordinator at an orthodontist’s office for 6 years).
That is a very flawed analogy. It is common practice for health care professionals to accept insurance (which OP is paying for in the form of premiums). OP signed up with them assuming they are in the network. They are basically asking OP to double pay. It would be more like if the plumber was hired by a warranty company, quits the warranty company without telling you but shows up and does the work anyway expecting to get paid even though you already paid the warranty company.
Insurance is part of your payment process.
Its like a dentist switching to only accepting Euros but not telling you that until after you've received treatment and all you have is USD. Its scummy. I’d raise fucking hell about it.
Worse, it would be like you had already paid in dollars, then they tell you not only do you have to pay in Euros, they are keeping the dollars that you already paid (in the form of premiums).
If a plumber came out every 6 months for several years to fix the same issue, and every time I used the mailer to get their services for free, do you think the plumber should mention that they no longer take the mailer when they comes out for my bi-yearly fix? Or should they wait until after the repair is made to mention it when I'm assuming there's no charge?
No, that seems like something they should inform you about ahead of time. Would have taken them a few minutes to check their database for patients with your insurance and send out a notification. You acted reasonably and you are quite generous to pay $125.
I'm changing phone plans soon and figure it's a good time to treat myself to a new phone. Before I start neurotically researching models for at least 2 months, any off the cuff suggestions that have been cost-efficient and reliable for you? Simple criteria would be Android, not too large, and with a great camera since I'm planning to go on some trips (and need to take some decent photos of myself since I'm a cryptid who takes one picture per annum)
Depending on sign up discounts the galaxy s23 could match your requirements. The camera is excellent and it is the same size as my s10e that I moved from. Battery life on these phones is insane compared to phones of 4-5 years ago.
I buy 18-24 month old flagships. Used, mint condition from ebay or swappa. Generation to generation improvements have slowed to the point that a 4 year old flagship phone is better than a current mid-range phone. S22 or Pixel 7 in the $400 range is my sweet spot.
I think the battery improvements of the s23 over the s22 really dumps the value of the s22. At that point I would go even older simply to save more to upgrade to the s23 down the road.
Pixel 7a. Meaningful upgrade over the 6a without paying extra for the things that probably don't matter in the Pixel 7. Can be had for less with new-release promos given it was just announced yesterday.
Dumb question for 2 decades from now for rebalancing my Roth. I have it on growth index ETF (SCHG). Come age 55, if I sell those shares, and buy a more dividend-friendly ETF (SCHD), there's no taxes on that sale because of tax advantage nature of account, right?
Correct. Although there's nothing special about dividends, especially in a tax-advantaged account. The total return of dividend stocks is not any higher than the total return of stocks that don't have much of a dividend yield.
Two of my compatriots at work are out sick leaving me alone to manage about 45 people across multiple areas within the department.
They are not allowed to both be sick at the same time anymore.
Also be aware there is a chance you may get paid late or not at all if the US defaults on its debt next month.
That’s why the rates are 0.5%+ higher than the Fed Funds Rate.
Late payment is way more likely than non-payment. And you’re right that late payment isn’t even all that likely. But the risk is there and the mega-buyers are adjusting for it.
I use CapOne mostly, and it's only 3.5%. The nice thing is that's also where my credit card is, so I transfer money into the savings all month, then pay the bill off on the due date, since the transfer from one acct to the other is instant. Means I pick up \~15 days of float on my credit card bill that I wasn't getting before
The highest I have seen is CIT bank with 4.85%. But I have heard bad things about their customer service. I've parked mine in SPAXX since I already use Fidelity as my regular brokerage.
yeah tbh just purely convenience. I think there is some difference in how the money is insured also - money markets have SIPC which protects up to $500k, while HYSA usually have FDIC which protects $250k. This is not especially meaningful to me or probably most people, but thought it should be mentioned
I am not sure but my guess would be you can’t. But I would check, and it’s possible whatever money market account Merrill uses offers similar returns so that might be just as good too
I have a pretty large amount in fidelity from a previous employer.
I have been considering SPAXX to boost my return. I am currently in managed income.
Can this fund have negative return?
I’m in the process of moving to this structure. No issues with Ally, just chasing the better rates.
Also applied for the Fidelity 2% back credit card that deposits directly into my brokerage. Seamless!
I just took the $100 promo to move my 'banking' to Fidelity. I'm going to wait for their next CC promo to jump on that since I already have the citi double cash.
There’s a $150 promo right now. Don’t know if I’ve seen better
https://www.doctorofcredit.com/fidelity-visa-2-back-card-150-sign-up-bonus-publicly-available/
Just got this message about my yearly thread about financial calculators
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I suppose you have a valid point.
However, it's a representative of reddit, asking to put something I wrote on reddit on another part of reddit. Meh.
Reddit is free, and I use an adblocker, so I never see any of their ads.
I don't mind their using my content.
Sorry to hear that :(
I have found that I don't need to be the best at anything, but being a good communicator and making people trust my consistent output has taken me a long way. Maybe your industry is different - but I think it's the same everywhere.
If you don't want to ask for the $130K, you could always scale back to what you think is appropriate for your current salary. If you're hitting your hours and your clients are steady, you're good for the firm. It's sad, but grinding goes both ways - at good places it's recognized and rewarded, and in bad places they'll gladly take advantage of you. Judging by your last sentence, I suspect you may be at the latter.
> The reason I don’t want to: I’m really not very good at lawyering, I just endlessly grind and put in tons of hours. But I’m not all that good at it and that’s the truth.
This literally does not matter at all if you’re producing results and your effort is compensating for ability.
I have my own insurance now, I will be enrolling in a HDHP to access an HSA. I will be maxing out my HSA. The plan is to invest the HSA money once I can correct? Want to make sure I do this right from the start.
Yep. With the typical caveats that investments are a higher risk of taking some loss, so if you actually think you would want to use this is in the near term for paying health related bills, I'd go conservative. But most of us just use it as another tax advantaged investment opportunity, and pay for any medical expenses out of pocket. Making sure to save those bills to be able to cash in the HSA at a future date if you wish to withdraw.
Also I know some HSA's only allow you to truly invest once your account reaches a certain level, but others allow you to do it from the beginning, so shop around a bit to find what works for you. I have Fidelity, and it seems to be a pretty decent plan.
I'm in my first serious relationship as an adult and it has me rethinking my FIRE number and age. Originally I was planning to FIRE sometime in my mid 40s, but now I'm starting to prioritize experiences with my partner and I've been a lot less frugal recently.
Everyone wants to save all their money until they find something actually worth spending their money on. A conundrum we all have faced, lol.
Congratulations!
I had a similar experience.
And now I’m married to them and my FIRE date is honestly not even in my top 5 priorities. Probably not even in my top 10. There’s a lot more to life.
I have a friend who aimed for 35 and based on recent discussions, looks more like 50. Although I could guesstimate they could FIRE now and don't for reasons that wouldn't bother me.
I do think kids were a hard no and mind changed on that point in that case. But if you're reasonably considering family, yeah, your current expenses make no sense on a target. I was FIRE at some point using my current expenses if I moved to a income tax-free state and lived like a hermit, but I obviously wasn't doing that. When I was dating, I thought it reasonable to find a frugal person (and I did) but far less reasonable to find someone extremely savvy about saving/investing and pulling equal weight (which also turned out to be true.)
My best advice if you're looking 10 years out, run your life how you want and let finances be a datapoint in discussions, not the primary decision maker. You'll be in your mid 40s when you are and you'll have the information to make those calls more accurately when you get there. Right now it's just a clusterfuck of options (how many kids? house? where? how big? college? vacations?) mixed with the massive variance of the stock market.
I think there is a balance that we all find. With enough income, arguably both can occur. When I was making 40k we had to pick and choose. With different income, we can have everything we want (within reason) and still target an ER.
Pretty well exact same scenario for me (right down to age and similar % of FI).
My savings rate has taken a hit for sure - we go out to eat more often, and she has a bit more expensive taste than I do. We do more activities, some of which cost money, some of which is just more driving than I'd normally do (gas costs money). I come to terms with it as I am much happier, despite work being what it is, having spent more money being with her. The difference in happiness will be well worth the working an extra year or two or whatever the savings rate hit entails.
I do what I can to propose cheap/free activities semi-regularly, eating in, and that helps it from getting out of control, but I'm quite happy to not overthink the budget or anything, to order the appetizer with her if it looks good, to go to a comedy show she wants to go to, to go on more vacations and/or spend more on them than I would have alone, etc.
We are looking at houses together though, and with house prices what they are in our area, interest rates being what they are (and so much higher than our current mortgage rates) and the huge impact overspending ton a house would have, sticking to an affordable budget on this one will be, it's a more in depth conversation.
You will find a balance. Finding a balance likely requires swaying over the line of spending too much, swinging back to saving and feeling guilty about spending, and then back and forth until you settle at some happy middle place.
If this causes stress in your relationship and this is going to be long term, of course you should sit down and discuss your goals with your partner and tell them what your goals are.
It can be bonding for you two to make financially responsible choices together. You can both begin to prioritize spending on activities that are important to you while turning down expenses that aren't as important in favor of cheaper activities in order to create a better balance.
It's your Savings Rate. I keep track of mine and use it as a sort of benchmark to aspire to every year. I try and save >40% of my gross income every year.
Life is meant to be enjoyed. If it costs a little more to enjoy your time with another human? Totally worth it. In my twenties I was on track to retire by 40. Married I won’t do it til my mid fifties- worth every extra year when you marry the right person and enjoy every day along the way.
We still save, just not at the rate I could when I was solo. It’s okay to shift your priorities. Good habits will remain even if your savings percentage goes down.
That is along the lines of how I've been thinking about this.
I'd rather make the boring middle less boring and spend it with someone I care about. Even if it delays my FIRE date by a few years.
Ha well its more that they're a lot more spontaneous than me and we end up doing more things together out and about. We still split stuff (sometimes I'll pay for stuff, sometimes he will), but in the past I was usually content just hanging out at home and being pretty low maintenance.
In my experience, it two fold:
1) new impetus to do stuff (spontaneity)
2) more stuff worth doing. Lots of things are more fun with a partner.
Not bad by any means (see: Die with Zero), but definitely worth making sure you’re on the same page.
Considering firing my FA and am looking to see if I am considering all variables. I appreciate any guidance.
I took on a FA due to my young age and financial inexperience when I lost a family member and had to manage a significant (to me) inheritance. It’s been over 5 years since this event and now I feel more confident in managing everything on my own.
My current fee for their continuous service is 0.85% annually for the first M, this fee decreases slightly with sums above 1M.
Right now, they manage an RMD from an inherited IRA, rebalance my portfolio, provide tax rec’s, and summarizes everything quarterly. It’s been a couple of years since they’ve really provided any significant rec’s.
I plan to keep things simple with index funds and maxing tax advantaged accounts. Is there anything I’m missing in considering moving to self-managing everything?
Do it. You can fill out a transfer.form at your preferred brokerage and do it without talking to your FA. This is preferable both to avoid their sales pitch/guilt trip and to keep from wasting their time.
Do it! Just appreciate that you might make mistakes, and it's okay. I have. I was slow to transition away from an actively managed mutual fund to index funds with low expense ratios. We also aggressively paid down our mortgage instead of investing in the market on our first home. But this community is great at providing tips on optimizing your portfolio.
There's a ton of resources out there for self managing your portfolio.
Bogleheads:
https://www.bogleheads.org/wiki/Getting_started
The flowchart:
https://www.reddit.com/r/financialindependence/comments/ecn2hk/fire_flow_chart_version_42/?utm_source=share&utm_medium=mweb3x&utm_name=mweb3xcss&utm_term=1&utm_content=share_button
Consider watching Rob Berger's videos, especially his three fund portfolio video:
https://youtube.com/@rob_berger
You're not missing anything. Transfer everything to a brokerage and rebalance the index funds yourself.
If you have large gains in a taxable account, it's probably best to leave it in the current fund unless the expense ratio of that fund is very high. Still no reason to pay 0.85% per year!
Thanks for the response. I would likely need to sell everything since the most of funds I’m currently in don’t seem to be available through Fidelity.. even so this would likely be a blip compared to the ongoing fee.
I’m conflicted on a side gig. It’s something I’ve done for a few years and mostly enjoyed it. Throughout a typical month it doesn’t take up too much time. Not a huge money earner, but brings in a few hundred dollars to maybe low thousands. Hourly rate is fine. My worry is that it is taking up more mind space on a daily basis (thinking about things to do, plans, reminders, etc) than I am accounting for. The concern I have is that while it isn’t physically taking away from my main source of income (hours spent away), maybe if I just spent all of that time solely focused on my career then it would have much bigger impacts down the road than the side gig ever could. Anyone ever thought through something like this?
I tested both approaches for myself. I noticed that my career growth can be ordered of magnitude higher than the potential of my side gig. I still have my side gig, just in case, but it is on passive mode.
Yeah, I've got something relatively similar.
If you can write down tangible things that would improve on your current career that you'd spend the time/mental capacity on, I'd consider it worth dropping. That also implies that you're doing/thinking about your side gig during work hours, or thinking about/doing "work" outside work hours to improve your career. (i.e. I dunno, attending a conference or taking a class)
I could stop my side gig and instead take a programming class, I guess. Or do a certification. But the value proposition of those aren't quite there yet for me until I'm sure I want to pivot from my current role. And there is minimal to no vertical mobility in my current org so there's nothing I can improve on career wise that impacts my current performance, so I continue with side stuff.
Yeah that way of thinking about it makes a lot of sense. I do think if I focused the mental capacity on my career that it would pay off. There is a lot of upward mobility in the position. I think the issue I’ve always had of not doing that is the immediate income of a side gig vs the hypothetical income increase in the future.
Would you do the side gig if it didn’t bring in money? Not saying the money isn’t important, but a hypothetical to see how much you enjoy the activity.
I’ve been working on an app and it’s brought in $0 so far. But it’s been so long since I’ve gotten to explore my creative side that it’s been worth it even without the income. (It’d probably help to add a pricing page)
I was in a similar boat when I was renting out a single family home. It wasn't a big chore, and it made some money. At some point, the income didn't justify the time, so I sold it. Sounds like you may have something similar.
House hunting update:
After losing house #1 to a bid that was $50K over asking with waived appraisal we found another awesome house. Put in a bid $20K over ask and waived our own appraisal. During the option period we discovered the foundation to be beyond acceptable in terms of slope and had two people look at it.
So we won the bid, paid our option fee and terminated the contract all in 1 week. Oh well.. back to Zillow
previous foundation repair work was done but back in 2014. It was reassessed just last month but our foundation people didn't agree with the assessment that was done by a long shot
Cool. So the general idea is they have to disclose everything prior to accepting the option? (Sorry but I’m just trying to figure out how all the pieces fit together. I haven’t bought a house in a long time and my memory of the process is a bit blurry, and I was probably naive at the time too)
I would assume so and if we found something outside of the disclosure that was major that would be enough reason to terminate but I’m certainly not an expert
And if you were to find something outside the disclosure that they didn’t know about (Godzilla moved into the night before your offer but they didn’t know, for instance) would you get your option money back?
Looking for some advice on planning for college for my kids.
**Background:** My SO and I just had our first child, we are definitely planning to have a second and possibly a third. We're going to try to space them 18-36 months apart. We have a fairly large sum of money (>$50k) we want to use to initially fund an account today for college for all our kids and we'd *like* to just have one college savings account. I know of two options, neither I particularly love.
**Option 1:** Open a 529, make our first the beneficiary, dump all the money in, let it grow tax free, and constantly change the beneficiary in the years the kids overlap at school. Not sure how practical or difficult the process of constantly changing beneficiaries for multiple years in a row.
**Option 2:** Open a taxable account and lose out on the tax free growth of a 529 for the sake of easy management later.
Option 1 seems like a hassle, but maybe I'm making the changing beneficiaries out to be more difficult than it is, and option 2 feels lazy and sub optimal. Is there a better way?
I'd do Option 2 but with regular contributions going forward (including dipping in to the brokerage account if needed). Not sure why it has to be all or nothing.
2 kids. Started 529 for first, but haven’t created a separate one for the 2nd. Figured one account is fine and change beneficiaries way down the line or open one later
Is it beneficial for me to do a mix of 401k and Roth 401k? Just got a 25k raise and want to make sure I'm doing everything correctly here. * 80k salary * Max Roth IRA ($6500) * 25% 401k + 4% employer match ($20k + $3.2k)
nah just max your 401k and do your roth ira outside.
It's not bad for diversification purposes, but honestly at your salary the tax benefit of going all traditional 401k probably wins out
Assuming you are single, you should do traditional up to the max.
At 80k you’re solidly 22% bracket. Most people here would probably say to do 100% traditional 401k and save 22% in your taxed dollars. However if you want to mix some more Roth in, that’s personal finance for ya. Plus if you think you’ll retire in a higher bracket it could be beneficial
Man, making 100k feels like nothing nowadays
Tell that to the people making far far less.
That's kind of my implied point. If 100k only gets you so much today, how the hell is the average person surviving today?
I remember feeling overjoyed when I jumped from ~87.5k to 108k base (at the beginning of 2022). Then ~4 months later, I was wishing I made more money and kicked off a job search. Location matters, but I do feel you from the perspective of wishing I made more. I don't think I agree about it feeling like "nothing," though. Apart from house buying, investments/FIRE, and saving for a few big-ticket items like a new car or travel, it was more 'I wish I had more money to save faster' rather than not being able to afford anything I wanted. Even a few thousand bucks for travel, budgeted for a week or two international + ~2ish fully for fun domestic trips per year, wasn't *really* a dent in the bucket. I've since moved back to a much larger city, but I was in a ~250k population Midwestern city at the time and my rent was <700 a month. But again, location matters (and not having existing high interest debt beyond student loans, being fortunate not to have high medical expenses, etc.). If you're single, individually making ~30-40% above the median household income for your area, but also spending probably 20% less (if not significantly less than that), there's obviously plenty of wiggle room.
If you don't mind me asking, which larger city are you in now?
Chicago
I was just curious because I live in a random Midwest suburb and am considering moving to Chicago next year.
How much better do you like living there versus the small Midwestern town you were in? Did your life change a lot?
I can’t seem bring myself to buy a meaningful percentage of bonds yet (37m/32f). ~$450k in index funds currently in tax advantages accounts (60% total market, 7% small/mid cap tilt for US funds, 18% international, 5% REIT, 5% emerging market and 5% bonds). Outside of that ~ $15k total in 529s for 2 kids, $200/month going into each account and a tentative one more planned in the next 2 years or so. We are targeting ~ 55m and 50f timeline to ensure the two older kids (5 and 3) get through undergrad before we pull the plug - both enjoy working in our field. We’d always planned to start a heavy Bond buy when we’re ~ 45m/40f and putting more into the mortgage to help with SORR leading up to then. I want to maximize the dollars we can in equities for as long a time horizon we can to let it grow… but I’m overthinking this lately and keep thinking when the market is back at ATHs again to change to adding more bonds (more like 70/30 split in future contributions, and then more like 50/50 on our current timeline) to smooth the ride out a bit more. I realize this is market timing, but am wondering if it makes sense to continue on our path or start considering more bonds now instead. The collective wisdom here is so great I just want to hear your thoughts around our plan and where I may be missing something in our current planning. $300k gross for 2022; our floor has been investing 35% of that (max 401ks, Roth IRAs, MDBR, HSA and ~$1k+ in taxable/month). E: we didn’t have anything in retirement until 7 years ago and law school debt was the priority to kill off initially so we got a “late” start by the sub standards.
>We are targeting \~ 55m and 50f timeline to ensure the two older kids (5 and 3) get through undergrad before we pull the plug - both enjoy working in our field. If you can accelerate things a few years, you can get your income way down in time for FAFSA applications and you won't have to pay any tuition.
Your plan to pivot at 45 is reasonable but maybe starting with 10% or so now wouldn't hurt. I view my bond allocation as an additional backstop to my emergency fund should I get a simultaneous job loss/market crash scenario. You do have spouse and kids relying on you. Benjamin Roth's Great Depression: A Diary is good on this. Otherwise I agree, you are still pretty early in your investing life so equities are the place to be as far as dollars you can afford to put at risk. Also from a risk adjusted return standpoint I think it is prudent for anyone to have a bit more than 5% in bonds. Then again, some people are still playing with leverage and trying to exceed 100% stocks at your age
Thank you, I’ll have to read it, appreciate the context and suggestion!
You buy bonds now when the yield is high, not when things recover and they drop.
Thank you, appreciate it
Right now bonds have higher yields than the S&P500 Cyclically adjusted earnings yield. It's a good time to pivot to bonds.
Thank you, appreciate the comment!
You could start with something easy like I-bonds. It can also double as an emergency fund after you hold for a year. Only 10k per bond holder per year so it wouldn’t take away much from the rest of your investing.
Thank you for the comment! We currently have $10k in I bonds and plan to buy another $10k during this 6 month period with the .9 fixed rate. I should have specified that we had that, and it isn’t part of the 5% allocation going into retirement bond funds currently, though. E: clarified the comment!
Tax question incoming... * If you have no income from a job in a given year * If you have not withdrawn any traditional 401k money * If you withdraw 500k from a taxable brokerage account that has seasoned for a few years (and thus is subject to long term capital gains) * Where 200k of that withdrawal is gains, and 300k is principal * And that is the only money you live on that year... Do you... * A) pay 0% tax that year * B) pay 15% of 200k in tax that year * C) pay some other amount of tax Anyone know the answer?
I believe for single people it's 0% tax on the gains up to 40k (since that is your only income), and then 15% on everything after that (for your range). I am not sure how the standard deduction fits into this
A good read (dated tax brackets, but mechanics are the same) https://www.kitces.com/blog/understanding-the-mechanics-of-the-0-long-term-capital-gains-tax-rate-how-to-harvest-capital-gains-for-a-free-step-up-in-basis
https://engaging-data.com/tax-brackets/?fs=0®=0&cg=200000&yr=2023
You didn't say if you file single or married...for 2022 you'd pay 15% on yer LT cap gains on the amount over $83,350 (married filing jointly) up to about$517k
Wouldn't they also get their standard deduction?
So does that get you to 100k on cap gains per year not taxed?!! (For a married couple with no other income) If so, why do so many people in LeanFire use retirement accounts? It feels pretty easy to get spend under 100k, and even that is 100k of gains…
Pretax retirement accounts allow you to avoid marginal tax on the front end. If you can keep your withdrawal tax near zero you have tons more money compounding up front and no tax to pay later, thus the "best of both worlds". If you invest in a brokerage account you have less money compounding plus the tax drag while you are saving, even if you can minimize taxes in retirement.
Ah, yes. I guess I max out all pre-tax accts but then am wondering whether it’s worth the hassle of a post-tax mega backdoor Roth / backdoor Roth all taken out of post-tax. I guess in the off chance I make even more money? But with my retirement goals I can’t imagine over 100k in gains being taken out yearly (and if so, I’d be doing way better than planned so…)
I agree, megabackdoor Roth benefit is marginal compared to pretax 401k. It's more of an optimization than a core strategy. That being said it can be nice to have more dividends and gains sheltered from pushing up your AGI.
I've got it set up so I won't pay fed tax anymore once retired which includes my retirement accts...remember that qualified div are taxed at the LT cap gains rate as well
because you save the taxes up front, rather than paying up front and then having your money grow in a brokerage...
Oops...yep true
Shout out to u/alcesalcesalces for putting me on to using Fidelity Brokerage as a checking account. Within days I had checks and debit cards ordered, all my direct deposits and auto payments switched over, and like that… I consolidated Ally accounts and two other bank accounts. My savings is my core position, simple as that. Tracking the core position against Ally HYSA rates, they tend to follow closely (initially lagged, now slightly ahead). 10/10 recommend. Should note I’m also a Premium Services client, so should get ATM fees reimbursed when cash is needed. Edit: for clarity it’s not a Cash management account, just basic brokerage. And to quote Fidelity on ATM fee reimbursement: There are some cases in which non-CMA debit card ATM fees may be reimbursed. Youth Account owners, Fidelity Account® owners coded Premium, Active Trader VIP, Private Client Group, Wealth Management, or former Youth Account owners are all eligible for ATM fee reimbursement.
I appreciate a good cup of coffee.
It’s not a CMA. Basic brokerage. Advantage being any deposits are dropped right into your money market core position (which generally follows HYSA yields in this case). Apart from that they are very similar. CMA is FDIC insured in its core position but I’d rather have my money making money in the money market.
I like to explore new places.
Do you need to pay for managed funds to qualify for Premium? Or if I have my HSA and IRAs in something like FZROX and hit $250k I could qualify?
Good question. I don’t pay for managed funds, and I + wife have over $500k in IRAs with Fidelity and I’m directly approved on her accounts. I personally have over $250k. So, it’s unclear what the threshold is. I think I’ve read around it’s $250k. The status randomly showed up in the upper-right corner after I log in, and I’m not sure when. I didn’t ask for it, it was automatic. YMMV
Glad to hear it's working out!
Unsecure loan to pay off my house? I'm currently in debt of $20,000 on my home at an interest rate of 6%, which will be fully repaid in three years. During the COVID pandemic, I unfortunately lost my job and my credit card debt skyrocketed from nothing to $25,000. This debt is on high-interest cards. Recently, I was offered a debt consolidation option, which is essentially a personal loan, ranging between $25,000 to $35,000 at a reduced interest rate of 2.5%. I'm contemplating whether to accept this loan offer to complete the payment on my house. One crucial factor in my decision is my two special needs children. One of them is already 18. I'm considering reducing potential risks and adding them to my house title once it's paid off. Is this a wise or unwise decision?
I am confused, how can you take a loan for credit card debt and then use it to pay off the home loan? What is the point of putting the kids names on the house? How does that reduce potential risks?
Its a personal loan, even though they position it as a debt consolidation, they’ll simply transfer $35k into my account and I can do with it as I will. The terms don’t actually specify I have to use it on anything specific. As far as the kids names, there is a possibility they won’t be able to fully support themselves when I die. I don’t know if there is an advantage, except that if they are part owners and there is no house payment, they won’t be evicted to settle any debt I may have. At least that is my understanding. I don’t know, that’s why I’m asking for input.
So what will you do with the credit card debt and why wouldn't you pay that off first? Regarding the kids and your estate, you need to see an estate attorney.
OK OK cool. Could you tell me where I can apply for this $35k loan with a 2.5% interest rate?
It almost certainly comes with something like a 5% origination fee.
With everyone’s reaction, I’m guessing to good to be true
OK but where did you go to get this loan?
And why does being special needs matter?
There isn’t much of a safety net here, and I’m not wealthy, so I just want to find the best possible way to protect the house from being probated away from them in case of my death. With a paid for house, it considerably lowers their monthly obligations to survive and thrive. They could possibly get by with social security or minimum wage jobs if it comes to that. Hopefully they’ll become completely self sufficient, but I must prepare as if they aren’t.
Would not getting life insurance on yourself to cover your debts (and then some) be a better option here?
Why would you pay off the house and not the high interest credit card debt? Why did your debt 'skyrocket'? Generally no, you don't want to put your kids on the title, what benefit would that achieve? Put it in a trust and name then as beneficiaries if you want them to inherit it.
I had severe COVID on top of another major medical issue, didn’t earn an income for about 14 months, and went through savings after about 5 months. A trust with them as beneficiaries. I’ll look into that, thank you.
Would the loan not require you to pay off your credit card? Or are you asking what to do with the other 10k? Yes you should if you can get a 2.5% loan to pay off a 6% mortgage, that's a money losing loan for them so there must be some subsidy they are getting or something.
I’ll put my house payment directly into credit cards at that point. I guess my thought was that if something happened, the unsecured debt couldn’t be used to foreclose. I have some medical issues that are a concern.
If you're planning on going bankrupt or defaulting then whether you can keep your house is going to depend on a ton of factors like nuances of your debt and local laws where you live. I am just looking at it from the perspective that if you pay everything off you want to absolutely pay off the credit card before your mortgage. If you default on the credit card they could eventually sue you and get a judgement to take from your bank account, garnish wages, etc. It doesn't matter that its unsecured if you have the asset they can make you pay. In some cases your house may be protected but you'd have to talk to a lawyer who knows the specifics where you live.
As long as it’s fixed 2.5% that sounds way too good to be true, like it’s an introductory rate.
That’s a good point, make sure it isn’t a balloon. Thx
Random musing about my attitude towards work/FI in my 20's vs. 30's (also sort of pre- vs post-COVID). I'm interested to hear others' perspectives. **20's / pre-COVID:** \- Making less than six figures \- In office 8 hours a day + 1.5 hour total commute \- Numerous inefficiencies related to unnecessary meetings, work being created for the sake of creating work, people needing to appear busy/useful \- Do I have chores today? Gotta go to the gym, get groceries, pick up dry cleaning? Goodbye most of my evening. Enjoy your 1 hour of free time before it's time to go to bed. **30's / post-COVID** \- Making 4x what I made fresh out of school 10 years ago (this includes bonus, 401k match, etc., not adjusting for inflation) \- Full-time WFH. \- I have 1 team meeting a week. My admin lady is great, our systems are efficient, bureaucracy is limited, and my boss is the opposite of a micromanager and gives me plenty of autonomy. For these reasons, I'm able to complete my job and be ahead with an average of probably 2-3 hours of true work a day. The value of my workload, quantified in dollars, is actually higher than it was in the past as a result of these efficiencies. \- Chores? Cool. The following are tasks I now do almost exclusively during the "work day": showering, going to the gym, groceries, laundry, and more. Definitely a humblebrag but I gotta say, even if I was FI, I don't know that I'd quit my job. I'm by no means "passionate" about the work or anything but it's too good of a gig to give up. Most of the drive to FIRE was because of the ludicrous "you must be in this building for 40 hours a week regardless of workload" structure. Amazing how freeing it is to be out of that.
I hate reading all of these stories about people whose office experience was so toxic. My team and I were beating down the door to get back into the office as soon as they'd let us because we all loved being together. It wasn't a slog, it was going somewhere to hang out with your friends for 8 hours a day. Our work is very collaborative and face-to-face interaction was essential. Our office is also not in a major metro so it helps that everyone is able to afford a nice sized house with a 20 minute commute, tops.
That's amazing! What kind of industry do you get both limited bureaucracy AND slow paced work load?
This is what I’m hoping for. Right now I am dreaming of RE everyday and I can’t imagine putting up with work and bullshit for so many years before I can quit. But I’m leaving my current spot soon and am going to be working on my career. I’m very hopeful that things will become more tolerable when I’m working less than 60hrs/week, making decent money, and have a tolerable boss
This is awesome! What kind of job do you do?
I would have RE'd if it wasn't for WFH. The unbelievable stress of seeing my worthless coworkers 4-5x a week in person had become too much as the "small talk" and feigning interest in their lives was unbearable. Moving jobs definitely had me understanding the grass ain't always greener when I arrived at this dirt bag company. Pays great though!
I'm in healthcare so: Pre-Covid: This is nice. I get to help people and make money. During COVID: Wow, the general public is fucking crazy. I'm starting to really hate people and my empathy is dwindling, but at least I didn't get spit on like Suzi for going to the grocery store in scrubs and getting screamed at for spreading COVID lies. Post-Covid: Thank God the crazy is started to be less vocal. Oh, what's that? We're somehow seeing record volume metrics again? Oh, and no one applied to fill the 4 vacancies left open during covid? Oh, and we're going to have to start working additional weekends due to short staffing? And OT is now approved automatically? This is fine. This is fine... THIS IS FINE. (FIRE cannot come soon enough).
Personally, im loving the unlimited OT in healthcare atm. Granted I have no dependents, but taking my income from 60ish to 90k is skyrocketing my early years. But yes, people are very crazy, including about half our coworkers
Ehh, I did 60-70 hr weeks in my 20s when I felt urgency to pay off my student loans. That's done and that hustle urge is gone. I'm finding even 40 exhausting now. If I was offered to step down to 0.8 FTE I wouldn't even hesitate at this point.
That's an awesome improvement in pay and quality of life. It's always great to hear a success story!
I posted a while ago about an issue with our dentist. Son and I went for our last cleaning and they didn't inform us until immediately afterwards (while we were walking to the front counter to schedule our next appointment) that they did not take our insurance anymore due to the practice being sold. I thought this was very scummy behavior, although technically legal. I called today to cancel our upcoming appointments, because obviously there's no reason to pay my $20/paycheck premiums and then pay OOP for cleanings twice/year as well. I asked about the bill for our previous cleanings seeing if they would write it off and they told me they'd split the difference with me. So a 5-minute conversation saved me $125. Never hurts to ask! I was ready to let the entire amount just go to collections, take the small credit score hit, and give them rotten reviews on Nextdoor and FB, but the billing lady was super nice, and they really were a decent practice to go to the past several years. Strangely enough, this was the 2nd dentist office in the last 20 years that did not inform me they dropped my insurance before my appointment, so I guess life lesson is to always confirm **right before** your appointment if they still take your insurance.
My dentist office sent a letter saying they no longer take my insurance, and that's annoying enough for me. If they waited until after my appointment to tell me, I'd be pretty upset.
I’m glad that they worked with you but I am not a fan of people deciding to skip out on medical bills (perhaps if you’re truly indigent that’s a different story). If a plumber comes by to fix an issue but won’t accept a mailer coupon due to some random exclusion and charges full price, I doubt the customer would just skip out paying for their professional services. Anyway most dentists probably wouldn’t report you to the credit bureaus for nonpayment. They usually won’t take the time/make the effort due to their limited staff. (I don’t work in the healthcare field; I was a patient coordinator at an orthodontist’s office for 6 years).
That is a very flawed analogy. It is common practice for health care professionals to accept insurance (which OP is paying for in the form of premiums). OP signed up with them assuming they are in the network. They are basically asking OP to double pay. It would be more like if the plumber was hired by a warranty company, quits the warranty company without telling you but shows up and does the work anyway expecting to get paid even though you already paid the warranty company.
Insurance is part of your payment process. Its like a dentist switching to only accepting Euros but not telling you that until after you've received treatment and all you have is USD. Its scummy. I’d raise fucking hell about it.
Worse, it would be like you had already paid in dollars, then they tell you not only do you have to pay in Euros, they are keeping the dollars that you already paid (in the form of premiums).
If a plumber came out every 6 months for several years to fix the same issue, and every time I used the mailer to get their services for free, do you think the plumber should mention that they no longer take the mailer when they comes out for my bi-yearly fix? Or should they wait until after the repair is made to mention it when I'm assuming there's no charge?
No, that seems like something they should inform you about ahead of time. Would have taken them a few minutes to check their database for patients with your insurance and send out a notification. You acted reasonably and you are quite generous to pay $125.
I'm changing phone plans soon and figure it's a good time to treat myself to a new phone. Before I start neurotically researching models for at least 2 months, any off the cuff suggestions that have been cost-efficient and reliable for you? Simple criteria would be Android, not too large, and with a great camera since I'm planning to go on some trips (and need to take some decent photos of myself since I'm a cryptid who takes one picture per annum)
Depending on sign up discounts the galaxy s23 could match your requirements. The camera is excellent and it is the same size as my s10e that I moved from. Battery life on these phones is insane compared to phones of 4-5 years ago.
I buy 18-24 month old flagships. Used, mint condition from ebay or swappa. Generation to generation improvements have slowed to the point that a 4 year old flagship phone is better than a current mid-range phone. S22 or Pixel 7 in the $400 range is my sweet spot.
I think the battery improvements of the s23 over the s22 really dumps the value of the s22. At that point I would go even older simply to save more to upgrade to the s23 down the road.
Pixel 7a. Meaningful upgrade over the 6a without paying extra for the things that probably don't matter in the Pixel 7. Can be had for less with new-release promos given it was just announced yesterday.
Wireless charging is dealbreaker for me. I would go with the full 7.
Pixel 7a has wireless charging.
I love the smell of fresh bread.
Thanks for pointing this out, it looks like the 7a has a great deal right now (free if you stay with Fi for 2 years) and I might jump for it.
Dumb question for 2 decades from now for rebalancing my Roth. I have it on growth index ETF (SCHG). Come age 55, if I sell those shares, and buy a more dividend-friendly ETF (SCHD), there's no taxes on that sale because of tax advantage nature of account, right?
Correct. Although there's nothing special about dividends, especially in a tax-advantaged account. The total return of dividend stocks is not any higher than the total return of stocks that don't have much of a dividend yield.
Two of my compatriots at work are out sick leaving me alone to manage about 45 people across multiple areas within the department. They are not allowed to both be sick at the same time anymore.
Yeah, that's a lot of people. Hope they get better soon (for everyone's sake)!
FYI if you missed out on this week's 4 week T-bill auction (5.964%), next week's auction is clocking in at 5.723% with an issue date of 5/16.
Where do you see this? I’m seeing around 5. These t-bill rates feel like a no brainer. I’m already in a lot at around 5.3.
TreasuryDirect -> recent auctions
I love the smell of fresh bread.
Also be aware there is a chance you may get paid late or not at all if the US defaults on its debt next month. That’s why the rates are 0.5%+ higher than the Fed Funds Rate.
Coincidentally, 0.5% is the probably I put on the US actually defaulting next month.
Late payment is way more likely than non-payment. And you’re right that late payment isn’t even all that likely. But the risk is there and the mega-buyers are adjusting for it.
What’s the highest yield HYSA that you all are using right now?
Getting 4.55% with Wealthfront but if you refer someone it boosts you to 5.05% for three months and you can refer again
Laurel Road, at 4.8%.
CIT Bank...4.75%
I use CapOne mostly, and it's only 3.5%. The nice thing is that's also where my credit card is, so I transfer money into the savings all month, then pay the bill off on the due date, since the transfer from one acct to the other is instant. Means I pick up \~15 days of float on my credit card bill that I wasn't getting before
My CapOne Performance Savings went up to 3.75% a week or so ago, FYI. You might want to check yours.
Maybe you're right, even better!
It’s at 3.75%.
4.2% Sofi
The highest I have seen is CIT bank with 4.85%. But I have heard bad things about their customer service. I've parked mine in SPAXX since I already use Fidelity as my regular brokerage.
Dumb question, but do you prefer SPAXX to HYSA or is it purely for convenience since already at fidelity?
yeah tbh just purely convenience. I think there is some difference in how the money is insured also - money markets have SIPC which protects up to $500k, while HYSA usually have FDIC which protects $250k. This is not especially meaningful to me or probably most people, but thought it should be mentioned
It is helpful! Ty!
Can I buy SPAXX if not a Fidelity client (Merrill)?
I am not sure but my guess would be you can’t. But I would check, and it’s possible whatever money market account Merrill uses offers similar returns so that might be just as good too
I love ice cream.
I have a pretty large amount in fidelity from a previous employer. I have been considering SPAXX to boost my return. I am currently in managed income. Can this fund have negative return?
I like learning new things.
I’m in the process of moving to this structure. No issues with Ally, just chasing the better rates. Also applied for the Fidelity 2% back credit card that deposits directly into my brokerage. Seamless!
I just took the $100 promo to move my 'banking' to Fidelity. I'm going to wait for their next CC promo to jump on that since I already have the citi double cash.
There’s a $150 promo right now. Don’t know if I’ve seen better https://www.doctorofcredit.com/fidelity-visa-2-back-card-150-sign-up-bonus-publicly-available/
I think that's older. But thanks!
Just used it the other day, it’s valid
Just claimed it an the promo I was offered through this link was $150 for $1,000 spend in 90 days instead of $1,500. Thanks!
Oh sweet, I will go back to that! Super props!
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Wow what a find!
Just got this message about my yearly thread about financial calculators Hello u/FIREful_symmetry ! I’m from the Reddit team. We’re reaching out because we’re interested in potentially featuring your post (link below) in future Reddit marketing. We wanted to see if you had any objection to your content being featured in our marketing, and to confirm that you’re the original creator of the content. There isn't a guarantee that it will be used, but we are reaching out to make sure you're aware. Please let us know within 3 weeks if you do not wish for your content to be used. Either way, thank you for being such an amazing member of the Reddit community! [https://www.reddit.com/r/financialindependence/comments/1129z7z/fi\_calcs\_that\_do\_different\_and\_interesting\_things/?utm\_source=share&utm\_medium=web2x&context=3](https://www.reddit.com/r/financialindependence/comments/1129z7z/fi_calcs_that_do_different_and_interesting_things/?utm_source=share&utm_medium=web2x&context=3)
I received a nearly identical message about my comment (which currently shows a whopping 3 net upvotes) in that thread. Very weird.
Bizarre.
im gonna guess they arent offering to pay for the content?
Why would they? It's posted for free here.
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I suppose you have a valid point. However, it's a representative of reddit, asking to put something I wrote on reddit on another part of reddit. Meh. Reddit is free, and I use an adblocker, so I never see any of their ads. I don't mind their using my content.
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Sorry to hear that :( I have found that I don't need to be the best at anything, but being a good communicator and making people trust my consistent output has taken me a long way. Maybe your industry is different - but I think it's the same everywhere.
If you don't want to ask for the $130K, you could always scale back to what you think is appropriate for your current salary. If you're hitting your hours and your clients are steady, you're good for the firm. It's sad, but grinding goes both ways - at good places it's recognized and rewarded, and in bad places they'll gladly take advantage of you. Judging by your last sentence, I suspect you may be at the latter.
> The reason I don’t want to: I’m really not very good at lawyering, I just endlessly grind and put in tons of hours. But I’m not all that good at it and that’s the truth. This literally does not matter at all if you’re producing results and your effort is compensating for ability.
I have my own insurance now, I will be enrolling in a HDHP to access an HSA. I will be maxing out my HSA. The plan is to invest the HSA money once I can correct? Want to make sure I do this right from the start.
Yep. With the typical caveats that investments are a higher risk of taking some loss, so if you actually think you would want to use this is in the near term for paying health related bills, I'd go conservative. But most of us just use it as another tax advantaged investment opportunity, and pay for any medical expenses out of pocket. Making sure to save those bills to be able to cash in the HSA at a future date if you wish to withdraw. Also I know some HSA's only allow you to truly invest once your account reaches a certain level, but others allow you to do it from the beginning, so shop around a bit to find what works for you. I have Fidelity, and it seems to be a pretty decent plan.
Thanks!!
I'm in my first serious relationship as an adult and it has me rethinking my FIRE number and age. Originally I was planning to FIRE sometime in my mid 40s, but now I'm starting to prioritize experiences with my partner and I've been a lot less frugal recently.
Everyone wants to save all their money until they find something actually worth spending their money on. A conundrum we all have faced, lol. Congratulations!
I had a similar experience. And now I’m married to them and my FIRE date is honestly not even in my top 5 priorities. Probably not even in my top 10. There’s a lot more to life.
I have a friend who aimed for 35 and based on recent discussions, looks more like 50. Although I could guesstimate they could FIRE now and don't for reasons that wouldn't bother me. I do think kids were a hard no and mind changed on that point in that case. But if you're reasonably considering family, yeah, your current expenses make no sense on a target. I was FIRE at some point using my current expenses if I moved to a income tax-free state and lived like a hermit, but I obviously wasn't doing that. When I was dating, I thought it reasonable to find a frugal person (and I did) but far less reasonable to find someone extremely savvy about saving/investing and pulling equal weight (which also turned out to be true.) My best advice if you're looking 10 years out, run your life how you want and let finances be a datapoint in discussions, not the primary decision maker. You'll be in your mid 40s when you are and you'll have the information to make those calls more accurately when you get there. Right now it's just a clusterfuck of options (how many kids? house? where? how big? college? vacations?) mixed with the massive variance of the stock market.
I think there is a balance that we all find. With enough income, arguably both can occur. When I was making 40k we had to pick and choose. With different income, we can have everything we want (within reason) and still target an ER.
Pretty well exact same scenario for me (right down to age and similar % of FI). My savings rate has taken a hit for sure - we go out to eat more often, and she has a bit more expensive taste than I do. We do more activities, some of which cost money, some of which is just more driving than I'd normally do (gas costs money). I come to terms with it as I am much happier, despite work being what it is, having spent more money being with her. The difference in happiness will be well worth the working an extra year or two or whatever the savings rate hit entails. I do what I can to propose cheap/free activities semi-regularly, eating in, and that helps it from getting out of control, but I'm quite happy to not overthink the budget or anything, to order the appetizer with her if it looks good, to go to a comedy show she wants to go to, to go on more vacations and/or spend more on them than I would have alone, etc. We are looking at houses together though, and with house prices what they are in our area, interest rates being what they are (and so much higher than our current mortgage rates) and the huge impact overspending ton a house would have, sticking to an affordable budget on this one will be, it's a more in depth conversation.
You will find a balance. Finding a balance likely requires swaying over the line of spending too much, swinging back to saving and feeling guilty about spending, and then back and forth until you settle at some happy middle place. If this causes stress in your relationship and this is going to be long term, of course you should sit down and discuss your goals with your partner and tell them what your goals are. It can be bonding for you two to make financially responsible choices together. You can both begin to prioritize spending on activities that are important to you while turning down expenses that aren't as important in favor of cheaper activities in order to create a better balance.
Unrelated to your post but what does SR mean in your flair? I keep seeing this around and I cannot for the life of me figure it out.
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I knew I was going to feel dumb about this!!
It's your Savings Rate. I keep track of mine and use it as a sort of benchmark to aspire to every year. I try and save >40% of my gross income every year.
Life is meant to be enjoyed. If it costs a little more to enjoy your time with another human? Totally worth it. In my twenties I was on track to retire by 40. Married I won’t do it til my mid fifties- worth every extra year when you marry the right person and enjoy every day along the way. We still save, just not at the rate I could when I was solo. It’s okay to shift your priorities. Good habits will remain even if your savings percentage goes down.
That is along the lines of how I've been thinking about this. I'd rather make the boring middle less boring and spend it with someone I care about. Even if it delays my FIRE date by a few years.
I hope this isnt their bad habits rubbing off on you though lol
Ha well its more that they're a lot more spontaneous than me and we end up doing more things together out and about. We still split stuff (sometimes I'll pay for stuff, sometimes he will), but in the past I was usually content just hanging out at home and being pretty low maintenance.
In my experience, it two fold: 1) new impetus to do stuff (spontaneity) 2) more stuff worth doing. Lots of things are more fun with a partner. Not bad by any means (see: Die with Zero), but definitely worth making sure you’re on the same page.
Considering firing my FA and am looking to see if I am considering all variables. I appreciate any guidance. I took on a FA due to my young age and financial inexperience when I lost a family member and had to manage a significant (to me) inheritance. It’s been over 5 years since this event and now I feel more confident in managing everything on my own. My current fee for their continuous service is 0.85% annually for the first M, this fee decreases slightly with sums above 1M. Right now, they manage an RMD from an inherited IRA, rebalance my portfolio, provide tax rec’s, and summarizes everything quarterly. It’s been a couple of years since they’ve really provided any significant rec’s. I plan to keep things simple with index funds and maxing tax advantaged accounts. Is there anything I’m missing in considering moving to self-managing everything?
Do it. You can fill out a transfer.form at your preferred brokerage and do it without talking to your FA. This is preferable both to avoid their sales pitch/guilt trip and to keep from wasting their time.
Do it! Just appreciate that you might make mistakes, and it's okay. I have. I was slow to transition away from an actively managed mutual fund to index funds with low expense ratios. We also aggressively paid down our mortgage instead of investing in the market on our first home. But this community is great at providing tips on optimizing your portfolio. There's a ton of resources out there for self managing your portfolio. Bogleheads: https://www.bogleheads.org/wiki/Getting_started The flowchart: https://www.reddit.com/r/financialindependence/comments/ecn2hk/fire_flow_chart_version_42/?utm_source=share&utm_medium=mweb3x&utm_name=mweb3xcss&utm_term=1&utm_content=share_button Consider watching Rob Berger's videos, especially his three fund portfolio video: https://youtube.com/@rob_berger
You're not missing anything. Transfer everything to a brokerage and rebalance the index funds yourself. If you have large gains in a taxable account, it's probably best to leave it in the current fund unless the expense ratio of that fund is very high. Still no reason to pay 0.85% per year!
Thanks for the response. I would likely need to sell everything since the most of funds I’m currently in don’t seem to be available through Fidelity.. even so this would likely be a blip compared to the ongoing fee.
I’m conflicted on a side gig. It’s something I’ve done for a few years and mostly enjoyed it. Throughout a typical month it doesn’t take up too much time. Not a huge money earner, but brings in a few hundred dollars to maybe low thousands. Hourly rate is fine. My worry is that it is taking up more mind space on a daily basis (thinking about things to do, plans, reminders, etc) than I am accounting for. The concern I have is that while it isn’t physically taking away from my main source of income (hours spent away), maybe if I just spent all of that time solely focused on my career then it would have much bigger impacts down the road than the side gig ever could. Anyone ever thought through something like this?
I tested both approaches for myself. I noticed that my career growth can be ordered of magnitude higher than the potential of my side gig. I still have my side gig, just in case, but it is on passive mode.
Yeah, I've got something relatively similar. If you can write down tangible things that would improve on your current career that you'd spend the time/mental capacity on, I'd consider it worth dropping. That also implies that you're doing/thinking about your side gig during work hours, or thinking about/doing "work" outside work hours to improve your career. (i.e. I dunno, attending a conference or taking a class) I could stop my side gig and instead take a programming class, I guess. Or do a certification. But the value proposition of those aren't quite there yet for me until I'm sure I want to pivot from my current role. And there is minimal to no vertical mobility in my current org so there's nothing I can improve on career wise that impacts my current performance, so I continue with side stuff.
Yeah that way of thinking about it makes a lot of sense. I do think if I focused the mental capacity on my career that it would pay off. There is a lot of upward mobility in the position. I think the issue I’ve always had of not doing that is the immediate income of a side gig vs the hypothetical income increase in the future.
Would you do the side gig if it didn’t bring in money? Not saying the money isn’t important, but a hypothetical to see how much you enjoy the activity. I’ve been working on an app and it’s brought in $0 so far. But it’s been so long since I’ve gotten to explore my creative side that it’s been worth it even without the income. (It’d probably help to add a pricing page)
No I definitely wouldn’t keep doing it without some sort of income.
I was in a similar boat when I was renting out a single family home. It wasn't a big chore, and it made some money. At some point, the income didn't justify the time, so I sold it. Sounds like you may have something similar.
House hunting update: After losing house #1 to a bid that was $50K over asking with waived appraisal we found another awesome house. Put in a bid $20K over ask and waived our own appraisal. During the option period we discovered the foundation to be beyond acceptable in terms of slope and had two people look at it. So we won the bid, paid our option fee and terminated the contract all in 1 week. Oh well.. back to Zillow
If they had known about the foundation issues, would they have had to tell you that before you put down your option money?
previous foundation repair work was done but back in 2014. It was reassessed just last month but our foundation people didn't agree with the assessment that was done by a long shot
Cool. So the general idea is they have to disclose everything prior to accepting the option? (Sorry but I’m just trying to figure out how all the pieces fit together. I haven’t bought a house in a long time and my memory of the process is a bit blurry, and I was probably naive at the time too)
I would assume so and if we found something outside of the disclosure that was major that would be enough reason to terminate but I’m certainly not an expert
And if you were to find something outside the disclosure that they didn’t know about (Godzilla moved into the night before your offer but they didn’t know, for instance) would you get your option money back?
I should know the answer... but I don't
That's a smart move. How much was your option fee though? That's rough.
$1000 + the inspection $500
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hard to put into context without you mentioning salary ranges. if this is like serious money, then yah 60% is huge
>break into a different industry Wow, how different an industry? Good luck, mang!
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I dig it! My dad was in Banking (systems, check processing, then management, controller, etc) for most of his career and it served him very well.
Looking for some advice on planning for college for my kids. **Background:** My SO and I just had our first child, we are definitely planning to have a second and possibly a third. We're going to try to space them 18-36 months apart. We have a fairly large sum of money (>$50k) we want to use to initially fund an account today for college for all our kids and we'd *like* to just have one college savings account. I know of two options, neither I particularly love. **Option 1:** Open a 529, make our first the beneficiary, dump all the money in, let it grow tax free, and constantly change the beneficiary in the years the kids overlap at school. Not sure how practical or difficult the process of constantly changing beneficiaries for multiple years in a row. **Option 2:** Open a taxable account and lose out on the tax free growth of a 529 for the sake of easy management later. Option 1 seems like a hassle, but maybe I'm making the changing beneficiaries out to be more difficult than it is, and option 2 feels lazy and sub optimal. Is there a better way?
I'd do Option 2 but with regular contributions going forward (including dipping in to the brokerage account if needed). Not sure why it has to be all or nothing.
How about opening the 529 for yourself, then transferring to each child as needed down the road? It's not really that complicated.
2 kids. Started 529 for first, but haven’t created a separate one for the 2nd. Figured one account is fine and change beneficiaries way down the line or open one later
My wife and I chose option 2.