Financial Independence Daily FI discussion thread - July 10, 2019 |
- Daily FI discussion thread - July 10, 2019
- Has anyone made a big career switch for happiness / satisfaction?
- Has anyone risked FIRE to start your own business?
- No income tax and low cost of living: How living in Bankok as a digital nomad helps me with FI/RE
- Congress is Coming for Your IRA
- My post-ER income is so low that I never owe federal taxes. Is there some way I should change my portfolio to take advantage of this?
- Advice for a college senior
- Weekly Self-Promotion Thread - July 10, 2019
- Health Insurance budget for Early Retirement
- Anyone want to FIRE because it could be bad sitting beside a computer all day?
- Personality types: INFPs and FIRE (the struggle is real)
- Appreciation vs. Depreciation
- A 4% SWR has a 30 year limit, what do I do after?
| Daily FI discussion thread - July 10, 2019 Posted: 10 Jul 2019 01:08 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]  |
| Has anyone made a big career switch for happiness / satisfaction? Posted: 09 Jul 2019 11:09 PM PDT This isn't strictly FI, but hopefully it's not too unrelated and mods will allow it. It seems like a lot of us here are pursuing FIRE because we aren't happy with our work, and don't want to be stuck doing it until we die. In the Want to live longer? Retire early thread, there is a lot of discussion about this and how terrible corporate life is. This comment by filmfan2 really resonated with me:
That's exactly how I feel. The problem is I'm in my early 30s. Now on the FIRE path I'm doing pretty good. I'm in a LCOL part of Europe, have been working since 16 and now work in tech, so if I stick with what I'm doing for another 15-20 years I should be golden. I really don't know if I can though. So I'm wondering if anyone has made a big career switch while pursuing fire. I know of barristaFIRE, but that's not really what I mean. If I switch I'd probably need to work longer (I'm in tech now, so it would probably be a big paycut), so I would want to do something I really enjoy that makes me happy. I don't really know what that would be though, so has anyone done anything like this? [link] [comments]  |
| Has anyone risked FIRE to start your own business? Posted: 10 Jul 2019 07:18 AM PDT 1.) How has it worked so far? 2.) Are you happy with your decision? 3.) What was the outcome? 4.) Where are you at now? [link] [comments]  |
| No income tax and low cost of living: How living in Bankok as a digital nomad helps me with FI/RE Posted: 10 Jul 2019 10:22 AM PDT My monthly budget flow in $US: https://i.imgur.com/FtpY8J8.png Moving to a different country is not possible for most people for family or similar reasons, but it can really help to achieve FI/RE for those who are able and willing to relocate. Thailand has a 0% income tax on foreign income if the income is not brought into Thailand in the same calendar year. Bangkok offers a great quality of living but the cost of living is much lower than in Western countries. I pay only $243 per month for a new and fully furnished 334 sqft studio apartment in Bangkok with access to pool and gym. Here are some vlogs where expats show their Bangkok apartments: $195 per month: https://www.youtube.com/watch?v=e6vHuCaC07Y $325 per month: https://youtu.be/4ykJRy9TcUg?t=74 $432: https://www.youtube.com/watch?v=az9plU6Gn-o $455: https://www.youtube.com/watch?v=aZ5Bs0uy114 I make my money mainly as a digital nomad, working online for Western companies. I do have to pay for the visa though. A 5-year "elite visa" (official website) costs $16,300 upfront = $272 per month. If you see that as a kind of income tax then my personal tax rate is 5.0%. I am not a US citizen and my country does not tax citizens if they live abroad. [link] [comments]  |
| Congress is Coming for Your IRA Posted: 10 Jul 2019 11:04 AM PDT Not my title, just what it was posted under in the WSJ This was an opinion piece posted in the WSJ yesterday. I hadn't heard about the Secure Act, pretty disappointing stuff: Like grave robbers opening King Tut's tomb, Congress can't wait to get its hands on America's retirement-account assets. The House passed the Setting Every Community Up for Retirement Enhancement Act, known by the acronym Secure, in May. The vote was 417-3. The Secure Act is widely expected to pass the Senate by unanimous consent. While ostensibly helping Americans save for retirement, the bill would actually reduce the value of all retirement savings plans: individual retirement accounts, 401(k)s, Roth IRAs, the works. The main problem with the Secure Act is that it eliminates the stretch IRA, the fixed star in the financial-planning firmament since 1999. The stretch IRA lets savers leave their retirement accounts to children, grandchildren or other beneficiaries. Under current rules, the recipients can parcel out the required minimum distributions from the accounts over the course of their actuarial lifetimes. Payouts tend to be relatively small for children but grow in size over the decades until the inherited IRA might comfortably provide for the child's retirement through the power of tax-deferred compounding. A parent could die with the knowledge that, whatever vicissitudes their children might experience in life, they won't have to worry about retirement. Congress wants to kill this. The Secure Act gives nonspouse beneficiaries 10 years to pull out all the money in an IRA. The effect would be to make more of an IRA subject to higher taxes sooner, as distributions are made in supersize chunks. As much as one-third more of an inherited IRA would get gobbled up by taxes than under current rules. When the Tax Cuts and Jobs Act expires in 2025, taxes will rise across the board. If President Trump signs the Secure Act into law, the stage will be set for a taxpocalypse sometime in the next decade. In exchange for its windfall under the Secure Act, Congress will push back the age at which retirees must take their first required minimum IRA distributions from 70½ to 72. This isn't the deal American savers were promised when they made contributions to their IRAs the last 20 years. Before, the optimal approach was for savers to leave their IRAs to their children or grandchildren and stretch the payouts over decades. Under the Secure Act, an IRA owner could still leave the account to a surviving spouse, who'd remain exempt from the 10-year clock. But the widow would be paying taxes in the higher "filing single" bracket. The bracket can easily jump from 12% to 25% or from 24% to 35% as the mandatory payout ratios automatically increase with age. For example, the required minimum distribution for a 70-year-old is 3.7% of the retirement-account balance; for a 90-year-old it is 8.8%. Should a $1 million IRA pass to a high-earning adult daughter, at best she would have to take payouts adding $100,000 of annual income on top of her salary for a decade. If she lives in a high-tax state, half the annual payout's value could be lost to taxes. It gets worse. The Secure Act would be a college planning nightmare for middle-income parents. If the parents of college-age children inherit a $500,000 IRA, the resulting highly taxed mandatory distributions—say, $50,000 a year for 10 years—would make them richer on paper than they actually are, eviscerating their ability to qualify for need-based financial aid. If those parents decide to postpone taking the distributions for four years to avoid the financial-aid effect, they would need to double up on distributions after graduation to compensate, which would land them in a higher tax bracket. If the grandparents skip a generation and leave the IRA directly to the college-bound grandchild, the "kiddie tax" would require the distributions to be taxed at the parents' rates. Whichever way the family turns, they lose. The Secure Act would be an estate-planning catastrophe for people with significant IRAs. It would take the sensible planning done up until now and stand it on its head. In the past, an IRA owner might have established a trust if his intended beneficiaries were young. Under the Secure Act, IRAs will no longer be subject to annual required minimum distributions, so an IRA of $1 million placed in a trust for the benefit of an 8-year-old could conceivably receive nothing for nine years. Then at year 10, by law, the IRA would have to pay out everything. Now the young beneficiary turns 18, and suddenly he gets a windfall. With a decade of additional compound growth, the original IRA could have grown to $2 million or more. All is delivered in one year, so most of it is taxed in the highest brackets. If the trust language allows the trustee to keep the money in the trust, it will be taxed at the exorbitant federal trust tax rate of 37% on income over $12,500. And don't forget state taxes. The insurance industry loves the Secure Act's mandate that annuities be offered as a payout option in all retirement plans. Insurance companies sold more than $230 billion worth of annuities in 2018, and they would like to push that figure higher. Annuitizing retirement-plan assets is generally a bad idea unless the retiree needs all the cash for living expenses and can find a very low-cost annuity that is indexed to CPI-E—the inflation rate facing senior citizens that includes their increasingly expensive medical care. Unfortunately, such an annuity doesn't exist. The mandatory offer of an annuity is a first step that could lead to the mandatory annuitization of all retirement accounts. This would shoehorn the distributions into higher brackets, accelerate the collection of tax revenue, and eliminate the "problem" of the inherited IRA. Best of all, politicians would get to accomplish all this without voting to raise taxes. Ted Cruz of Texas is the Senate's main holdout against the Secure Act. His concern is that the House version dropped a niche provision that would allow tax-advantaged 529 Plans to pay for home schooling. He might be able to hold out, but it'll be a stretch. [End.] [link] [comments]  |
| Posted: 10 Jul 2019 09:37 AM PDT I have about $800k invested. 85% It occurs to me that I might be forgoing tax advantaged income (in the form of dividends or something) that I should be using. Any pointers to books or articles on this topic? Thanks! [link] [comments]  |
| Posted: 10 Jul 2019 04:10 PM PDT I'm looking for advice regarding job selection as an upcoming college senior. For the past year or two, I've become increasingly interested in the concept of FIRE but I'm unsure of what I should prioritize when searching for a job. I feel that I'm in a unique position because it seems most people discover FIRE after they've already entered the workforce. Should I look for jobs that offer the best benefits, most flexible work schedule, highest pay, etc? I'm also near DC so government jobs are an option. I'm just pretty lost in regards to what direction to head in. Any advice would be greatly appreciated. [link] [comments]  |
| Weekly Self-Promotion Thread - July 10, 2019 Posted: 10 Jul 2019 01:08 AM PDT Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread. Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely. Link-only posts will be removed. Put some effort into it. [link] [comments]  |
| Health Insurance budget for Early Retirement Posted: 10 Jul 2019 11:43 AM PDT I am working on outlining my budget for Early Retirement to know what my retirement number in investments will need to be. Anyone have experience with rough monthly costs for health insurance would be for a family of 3, me, my wife, and our 3 year old son. I have everything else nailed down in the budget, but since my wife and I's work covers our health insurance, I have no idea what to budget for each month when we retire. Seems like $1,000-$1,500 a month might be reasonable based on some rough numbers I saw on healthcare.gov, but I am looking more for some first hand knowledge. Thanks! [link] [comments]  |
| Anyone want to FIRE because it could be bad sitting beside a computer all day? Posted: 10 Jul 2019 05:20 AM PDT I can't imagine doing that for 40 years and the amount of eye strain, wrist pain, back pain you get from doing that... [link] [comments]  |
| Personality types: INFPs and FIRE (the struggle is real) Posted: 10 Jul 2019 09:07 AM PDT INFP here; I'm a textbook INFP in that I struggle to bring myself down from out of the clouds and into reality so to speak most days. I have a 9-5ish type job in an industry not suitable to me as I feel pursuing my creative goals (for money) would not be lucrative enough to support my basic needs let alone FIRE. At least, I can't think of how I'd be able to do that. Because this particular personality type does have SO many different interests, is known for switching careers/jobs frequently and being typically unfulfilled in their careers/jobs in addition to being underpaid, I would really love to hear from those INFPs on the board who have reached FI, are close to it, or who made big adjustments in their lives that have put them on the right path towards achieving FI within their goal timeframe. Are you someone that switched from lower paying, creative pursuits to a higher paying job that you don't like to ensure you reach FI quicker? Are you someone that by chance decided to focus on FI only instead of RE due to having a lower paid position that you actually enjoy working at? Do you ever feel sometimes there are inherent INFP qualities that make it a bit hard to discipline yourself in certain areas of finance that you need to be disciplined in to make FIRE a reality? Would love to hear your experiences. [link] [comments]  |
| Posted: 10 Jul 2019 05:55 AM PDT For the purposes of FIRE I feel networth is a fairly useless number. Has anyone here found away to track estimated appreciation and depreciation rates on each of there assets? I don't think this would be difficult for stocks for example, but maybe more defficult for determining depreciation rates of vehicles or more obscure assets. This could maybe be used to forecast networth based on current assets as well. This isn't a fully formed thought yet, but looking for anyone who may have this already developed. [link] [comments]  |
| A 4% SWR has a 30 year limit, what do I do after? Posted: 10 Jul 2019 06:27 AM PDT If a 4% SWR has a 30 year limit and my money is gone. What do I do after? Sounds like a fantasy ...
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