Messages

106

Expat life / Re: Taiwan Investment Visa

« on: February 18, 2021, 11:04:09 PM »

Awhile back I pinged the people I know who have done this and they weren't able to put anything into writing for a guest post...

... so nothing planned to share how this works, sorry.

107

General Discussion / Re: Looking for FIRE community in Taipei

« on: February 18, 2021, 11:02:20 PM »

There haven't been any events that I'm aware of for years...

but I'm always happy to meet up for a coffee

108

Taxes / Re: 457(b) account upon retirement

« on: February 13, 2021, 12:11:35 AM »

Yes, you can rollover a 457b into a Traditional IRA.
They are taxed the same.

A reason you may choose not to do this: you can make penalty-free withdrawals from a 457b before age 59.5 (still pay taxes.)

109

Early Retirement / Re: Sell home to fund early retirement?

« on: December 31, 2020, 06:41:26 PM »

Here is my analysis of taxes for Cali if we were to move in that direction...
https://www.gocurrycracker.com/going-back-to-cali/

tldr: maybe we pay $1,000 in state taxes on $60k annual income (less with tax credits.)

I would be OK with a $1k tax bill.

For Nevada, I see a lot of people moving to Reno these days (nice weather, close to skiing and Tahoe, low income taxes.)

110

Taxes / Re: Filing tax return while living abroad

« on: December 30, 2020, 10:08:19 PM »

Alas, establishing residency is a bit more involved... you gotta actually go there, get a driver's license, register to vote, close bank accounts in NY and open them in X, etc...

If you are establishing permanent residency in a foreign country and can show you have clearly severed ties with NY, you may be able to skip the intermediate state option if you can meet Group A or Group B exceptions in full (need to meet all 3.)

Note NY's nuance to whether you are a resident is based on your domicile: "Your New York domicile does not change until you can demonstrate that you have abandoned your New York domicile and established a new domicile outside New York State"

Check out this page and the items they link to:
https://www.tax.ny.gov/pit/file/pit_definitions.htm

111

Taxes / Re: Filing tax return while living abroad

« on: December 30, 2020, 06:49:34 PM »

It depends on which state...

If you live in California or NY (and maybe other aggressive taxing states) then moving to another state first is a good idea. They will chase you for years, I hear.

We were in Washington, which has no state income tax.

112

Early Retirement / Re: Sell home to fund early retirement?

« on: December 30, 2020, 06:46:43 PM »

San Diego is really nice.

What is your thinking for moving elsewhere? We have actually considered moving to California but still trying to figure it all out. Thanks!

113

Early Retirement / Re: FIRE planning with expected inheritance

« on: December 29, 2020, 06:56:23 PM »

sounds good! Thanks!

114

Early Retirement / Re: Sell home to fund early retirement?

« on: December 29, 2020, 06:55:12 PM »

Hi Paul

I think the best way to think about this is as 2 separate but important questions -

1 - do I want to live in this house?
2 - what about the money?

If the answer to 1 is definitely no, then sell. If not, then see if it makes financial sense to keep it.

For 2, you don't need to wait until age 59.5 to access retirement funds -
- it's only 2 years, can you save enough cash to fund 2 years (combined with renting out primary home?)
- google "rule of 55" - you can possibly access your 401k funds at age 55 with no penalty
- google "SEPP" - you can setup a small separate IRA to withdraw funds from without penalty, it just requires a small bit of math and planning
- pay the 10% penalty for 2 years - costs $1k to get $10k out of the IRA, but maybe cheaper than the tax you avoid now

115

Early Retirement / Re: FIRE planning with expected inheritance

« on: December 22, 2020, 10:00:31 PM »

Very good news! On all fronts!

Well done on threading the needle with all of this - sounds like you found the right balance with lots of unknowns and difficult tradeoffs.

Would you be interested in writing a guest post about your experience to help others do the same? The cliffs of IRMAA would be a cool band name and an even better guest post

116

Taxes / Re: GCC Tax Calculator Question

« on: December 01, 2020, 09:17:45 PM »

Thank you kindly.

I added a note to the disclaimers section of the calculator noting that it doesn't calculate the NIIT.

If there is anything else you would like to see included/changed, please let me know!

117

Taxes / Re: GCC Tax Calculator Question

« on: November 30, 2020, 09:48:18 PM »

I haven't included the NIIT in the tax calc as the primary focus was on 0% gain harvests.

Do you think this would be an useful thing to add to the calc?

118

Taxes / Re: ACA/Taxes in early retirement

« on: November 28, 2020, 05:44:48 AM »

Seems reasonable - no poking warranted.

About 4 years ago there was some GOP discussion for an age based subsidy instead of an AGI based subsidy, so maybe not just a return to the good ole days. Unless there is also an asset test, that would be good news for Roth conversion fans. This was all before we were repeatedly promised a new plan "in 2 weeks" that never materialized. Whatever happens, planning for subsidy elimination is the safe bet.

Just one additional thing - the arrival of the RMD isn't necessarily a critical milestone. RMDs start small and don't really ramp quickly until after age 80... so you may have an extra decade of wiggle room. With zero growth (super simplified) - If you have $1 million at age 72 you would only be required to withdraw $40k or so. At age 80 its $50k. Both well under the top of the 12% bracket.

119

Taxes / Re: Tax Harvest question

« on: November 28, 2020, 01:43:50 AM »

Yes, true.

Add the standard deduction to your numbers and they will equal mine.

120

Taxes / Re: ACA/Taxes in early retirement

« on: November 24, 2020, 08:34:47 PM »

Has this math perhaps changed since the Tax Cuts and Jobs Act? We file jointly and the article says we'd pay 25%+ tax rate when we earn $35,000-$50,000 in combined income, qualified dividends, Roth Conversions, and capital gains - which has been the range of our earnings the past few years - yet TurboTax tells us we're paying a <5% effective rate when we file our federal taxes.

You are paying an effective tax rate of <5% on federal taxes. Your marginal rate is more like 25%... an extra $1 of earnings will increase your federal tax due by $0.10 and reduce your ACA subsidies by ~$0.15.

With the TCJA, the 15% tax bracket became the 12% tax bracket and exemptions were eliminated. How income impacts ACA subsidies remains the same. The linked article is still 99% accurate.