Financial Independence Is only contributing to a 401k and Roth IRA a path to FI? |
- Is only contributing to a 401k and Roth IRA a path to FI?
- Meeting FIRE folks in their natural habitat
- Difficulty striking a balance between work for FIRE vs time off now?
- What is the size of your emergency fund?
- Daily FI discussion thread - March 28, 2019
- Do FIRE redditors have lower divorce rates?
- Putting up with a job you hate for Financial Independence
- Annuities use during FI?
- Contributing tax free money into a Roth 401k
- Where do I find people with the FI/RE mindset?
- What can I do to become FI if starting at age 30?
- FIRE and Donating Plasma
- How do people budget/rationalize taking larger vacations?
- At then end of your FIRE road, how will you define retiring early? What are you going to do with all that free time? :)
- 401K administrator's mistakes keep me from putting in the full amount, and it could cost me 50 to 100K over time
- Optimum process of withdrawals in retirement opinions and historical data
- What are the main roadblocks to reach FIRE quicker through cooperation?
| Is only contributing to a 401k and Roth IRA a path to FI? Posted: 28 Mar 2019 08:20 AM PDT 27, 70k a year. Yearly Contributions 401k - 19000 401k Match (5%) - 3500 Roth IRA - 6000 If I start with $30k, add $28.5 a year for 30 years with 7% compounding interest. I would have 3 Mil in the bank. Hell, if I did it for 20 years I would still have 1.3Mil. I could definitely get away living on 40k a year in retirement. Does this mean I can spend my extra money without guilt? [link] [comments]  |
| Meeting FIRE folks in their natural habitat Posted: 27 Mar 2019 08:32 PM PDT Today I went in to my local bank to close accounts to get rid of monthly fees. Long overdue. Got to talking with the banker who was helping me close the accounts and while making small talk, I found out he was househacking (sharing house with a friend to be able to afford move from LCOL to HCOL). We also got to talking briefly about mutual funds vs. index funds, retirement planning and money management issues. As we were parting ways, he asked me (almost hesitantly...as you would if telling people about your cult) if I had heard of FIRE. Ha ha. Only too well, my friend. Only too well. :) What are your experiences stumbling into FIRE folks out in the wild? [link] [comments]  |
| Difficulty striking a balance between work for FIRE vs time off now? Posted: 28 Mar 2019 01:44 PM PDT I'm having a lot of mental trouble avoiding work every month because of the incessant thought of the opportunity cost of not working, the lost compounded interest gains, etc. What it comes down to is, if I really wanted to, I can fill every single date of every month with extra shifts, vs work only my bare minimum 12 a month. I don't particularly hate my job, and find it easy which doesn't help me stop volunteering for extra work.. I had a lot of mental anguish a couple months ago while on a vacation trip for 10 days, as I kept thinking about the tens of thousands I could have earned PLUS the ten thousand 'pretax' dollars I would save by not even spending on the vacation itself. I just couldn't enjoy it. I am beginning to recognize perhaps I have an unhealthy obsession with accumulating towards FIRE. Anyone dealt with a similar situation? I don't want to become a miserly scrooge like workaholic...but it's really really tough when it comes down to it (i.e giving up a FIRE goal of 7 years from today and having to extend it to 12 or 15 years) [link] [comments]  |
| What is the size of your emergency fund? Posted: 28 Mar 2019 11:46 AM PDT Many people advocate XX months of expenses. Regardless of how you got there, what is the size ($ not months) of your liquid emergency fund? [link] [comments]  |
| Daily FI discussion thread - March 28, 2019 Posted: 28 Mar 2019 01:07 AM PDT Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. [link] [comments]  |
| Do FIRE redditors have lower divorce rates? Posted: 28 Mar 2019 01:37 PM PDT Do you guys think so? Since, this sub is more about sticking through the market through thick and thin and delaying instant gratification for a later good, working on achieving a goal, etc.etc Of course I am purely speculating and there's no way to prove this hypothesis. [link] [comments]  |
| Putting up with a job you hate for Financial Independence Posted: 28 Mar 2019 06:27 AM PDT As the title suggests, I don't particularly like my job. The hours aren't great, the stress is high, and the people I work with are tend to be nastier than in other jobs I've had. But if I continue on this path I would be able to achieve financial freedom much sooner than in a more normal job. I've worked more normal 9-5 jobs and I was bored out of my mind, now I work 60 hours in a normal week, up to 100 hours during busy season and my stress has increased significantly. Background: I work in a high cost of living area and am able to save about 40-50% of my after tax income by having roommates and commuting from a lower cost of living area. Has anyone dealt with similar circumstances? How do you weigh monetary gains in the long term against overall happiness now? Edit: thank you all for the replies, general consensus seems to be F that [link] [comments]  |
| Posted: 28 Mar 2019 02:39 PM PDT Hello all, currently on my journey to FI, and I'm trying to find good sources on annuities use as passive income during FI, specifically the type and management there of. Would like some feedback, please. Thank you. [link] [comments]  |
| Contributing tax free money into a Roth 401k Posted: 28 Mar 2019 11:08 AM PDT I used to be all aboard the hype train when it came to contributing pre-tax dollars to your 401k. Get those extra few dollars that would go to tax compounding and working for you right? Today I think I realized that I'm in a position to contribute money to my Roth 401k without paying federal income tax on it. I've been wrong before about thinking these things through so check my logic and tell me if I'm being dumb. Ok so the main reason this is possible is because I have two kids and this year the child income tax credit basically doubled per kid. For 2019 you get a whopping $2000 tax credit per kid so that's $4000 for my family. With a $79k salary and a $6.6k bonus that I've already received this year, that brings my tax liability way down in the range of about $2.7k for the year. (I calculated all this using the IRS 2019 Withholding Calculator)Well, before I started my FI journey and ran all these numbers I got my bonus while my allowances were still set low so I paid a bunch of income tax already. Before I realized all this I also made my maximum 2019 contribution of 6000 dollars to my traditional IRA…all this to say I've already more than met my tax liability for 2019…in fact as things stand now I'll likely get a $700ish refund even if I pay 0 more dollars in federal income tax and don't donate another cent to my pre-tax 401k. So I'm thinking, if that's the case I should crank my allowances way up (to avoid paying any more federal income tax) and dump the rest of my 2019 401k contributions into Roth only. Unless I'm misunderstanding things I'll basically get to contribute money tax free into my Roth right? On a more humorous note I found this meme while researching the child tax credit that I now relate to very hard. https://20somethingfinance.com/wp-content/uploads/2018/01/Child-Tax-Credit.jpg [link] [comments]  |
| Where do I find people with the FI/RE mindset? Posted: 28 Mar 2019 08:28 AM PDT Hey all, So struggling to find people with similar view/mindsets on things - everyone just wants to party an, buy €30,000 cars and stuff, while complaining about the whole system and how unfair it is etc, which don't get me wrong, is completely understandable. After a while though it gets tiring, and I feel like I'm just completely isolated and alone in this journey. Everybook I've ever read ever always says that you become who you spend time with - basically how do I find people with a more complementary mindset to the FI/RE approach, as apposed to the traditional route people take? [link] [comments]  |
| What can I do to become FI if starting at age 30? Posted: 28 Mar 2019 12:59 PM PDT TL;DR - What Masters, Certificate, (or even additional Bachelors), if any, can I pursue starting at age 30, with only my BA in English as background, that could pay off for me financially? I'm 30, making 42k (gross), but I make another ~8k on the side (not easily predictable year to year as I've been growing my side hustle). There are limits to how much I can make on the side, and in general, as I do landscaping. I'm saving around 30% of my net income currently (bumping this up each month) and only am equipped with a 5k emergency fund in a high interest savings. I plan on maxing a Roth IRA in 2019. No investments. I own a 12k~ truck outright and have no other debt. I've always been great at academics, I got a full ride to school but studied English and Music, fields that aren't particularly great at making money. I've found myself in manual labor and pursuing my areas of education more as hobbies. I've all but given up on careers in my fields of study, as I'm too old and want to increase my income, not drop it. However, I like my current job and have considered going back to school for Landscape Architecture. Looking at the cost of 3-year Masters programs on top of the income I'll lose if i pursue one, it's hard to tell how long it would take for this to pay off (I haven't done specific calculations on this yet as I've just begun exploring the idea). This has got me wondering about any other educational opportunities that I ought to look into, from a standpoint of mostly financial benefit in the mid and long-terms. [link] [comments]  |
| Posted: 28 Mar 2019 11:47 AM PDT Has anyone taken a serious look at plasma donation in terms of reaching their pre/post FIRE goals and lifestyle? I understand for a variety of reasons that plasma donation may not be able to be worked into people's plans, but from my standpoint that money can make a big difference on both sides of the FIRE equation. You can earn anywhere from $300 - $500 a month, and can do so from age 18-70. One obvious caveat is that there may not be a need/demand for plasma donations in the future, but for now I don't see many downsides. I'd be curious to hear people's thoughts on plasma donations and other alternate means of earning for retirement, as well as supplementing their post-retirement income. [link] [comments]  |
| How do people budget/rationalize taking larger vacations? Posted: 28 Mar 2019 08:50 AM PDT Hey all, this is a post just to find out how people here handle budgeting/paying for vacation. My wife and I really enjoy traveling and value the cultural experiences of being a different country. My struggle is that vacations cost a significant amount of money so I looking for creative ways that people have paid for trips or ways that they saved that helped them not feeling guilty about spending money on trips. I found some similar posts when doing a search but didn't turn up this exact question when I looked. Sorry if this is a duplicate thread. A bit of backstory: I am 28 and married. My wife is 27. We have taken two vacations since we got married almost four years ago. One was the honeymoon and one was a trip to Europe after I completed a masters degree. I am employed full-time while my wife is completing a masters. Our household income is $90k (was at 70k until a year ago). We max my 401k and Roth IRAs for both of us so our current saving's rate is somewhere in the 30%-40%. We used to stick religiously to a budget but then I started a second part-time masters and my wife has been doing a fellowship that give her free tuition so we have been busy and stressed. We haven't had much free time to spend money so the budget has fallen to the wayside. Our net worth is ~$220k. Some details on our vacations so far. Our honeymoon we spent <$2500 on (maybe $2000?). We flew to SF a week before I had a conference for work. So my flight was free and we used credit card points for her flight. Expenses were generally just modest accommodations in SF for a week and food. The second week I was at a conference in San Jose so it wasn't vacation but I enjoyed the conference, work paid for my food, and my wife could enjoy some free time in San Jose for the week. Overall it felt like we didn't spend too much money to enjoy a really expensive city. Our second trip was to Europe. I flew over a week early for work and then my wife met up with me in London. We spent a week there, then took the Eurostar to Paris and stayed for a week. Finally we flew to Edinburgh, rented a car, and drove around Scotland for a week. We used points again but only for part of my wife's flight. Work paid for mine and reimbursed me for a premium economy seat when I bought a coach seat so our two flights together only cost $67 I think. Overall the trip was $6000 for three weeks. Maybe not terrible but it feels like a lot of money. We used money that I received from work as reimbursement for my last graduate classes. We are now thinking about taking another trip to Europe in a year after my wife finishes her masters, and I finish my second masters. The cost will again be significant. I have been building miles and hope to get free flights over again. Probably spending two to three weeks with the locations likely to be Denmark, Northern Germany, and Sweden. My wife and I have discussed using a combination of my bonus, our tax refund, and maybe some percentage of whatever her starting salary is when she gets hired. I am familiar with churning but it seems like a lot of work so haven't taken the plunge on that. TLDR: Curious how people budget/rationalize taking larger vacations. [link] [comments]  |
| Posted: 28 Mar 2019 07:37 AM PDT |
| Posted: 28 Mar 2019 06:42 AM PDT I posted this in legal advice, but I thought I would post it here since other people pursuing FI might have run into this issue when trying to max out 401K/403b contributions. I work for the state, and I have a 403b (like a 401k). I am 52. Normally the max you can put in is 18500, but the year you turn 50, that max goes up to 25000 because of catch up contributions, and for the past three years putting the max aside has been my goal. However, each year long about September, I reach the 18500 mark and my plan administrator stops taking money out of my check, because I have reached the limit for people under 50. I have to call and tell them since I am over 50 the cap is 25K. It takes several pay periods for them to allow me to contribute again, and by that time it is too late to contribute the full amount for the year. (They can't tell me how long it will take to start up again, otherwise I would just up the amount taken out of checks for the following months. It also messes me up when I try and change it back the beginning of the next year). This has happened two years in a row, and each year this meant I put several thousand less that I was legally able to into my retirement. A few thousand once isn't a big deal, but a few thousand every year between now and retirement age will really screw me. (no way to know how much, but if I miss one pay period per year, figure 2K per year for 15 years = 30K I should have been able to put in but couldn't, plus the average compounded return of 8%, it might end up being around 50K less at retirement age per pay period missed). Have any of you run into this problem? If so, what steps did you take? Thanks! EDIT: Thanks for all the advice! Some people have rightly pointed out that I could just take the money and invest it myself in a brokerage account, and the actual loss would be the difference between what I could make and what it would make in a 401K. That is true. I don't know how to calculate it, but it would still be a loss. In addition, I have other reasons to have put this money in a 401K . One reason is I have three kids who will be going to college soon. A pile of money in an retirement account won't count against their financial aid, but a pile of money in a brokerage account will. I have other reasons, but the main point is the administrator of my plan isn't let me use the plan the way I should be able to. [link] [comments]  |
| Optimum process of withdrawals in retirement opinions and historical data Posted: 27 Mar 2019 09:10 PM PDT I'm interested in the most efficient method of withdrawing from investment accounts in early retirement in order to maximize returns, but most importantly reduce risk. For one example, having a 90/10 asset allocation, selling shares annually and rebalancing allocation annually, and transferring the proceeds to a money market fund to draw monthly expenses from. Another scenario could use laddering of short term bonds instead of money market account. I am also curious if there is data or a convenient model/calculator using historical data to compare situations. If anyone has any experience or links, I appreciate it very much! [link] [comments]  |
| What are the main roadblocks to reach FIRE quicker through cooperation? Posted: 27 Mar 2019 11:42 PM PDT Hi, I'm new to FIRE (first reddit post actually) and was wondering why the road to FIRE seems to be a finacially lonely one? Pooling assets and income should help everyone achieve FIRE much quicker. What makes it financially unsound and is that the case internationally? Thanks! Edit: I calculated scenarios where money gets pooled and there seems to be no advantage. The amount being compounded is not important if you split it evenly afterwards. It's all about the compounding itself. So no need to join portfolios with your SO ;) [link] [comments]  |
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