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Messages - gocurrycracker

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Early Retirement / Re: Seeking Guidance
« on: June 14, 2021, 08:04:38 AM »
Hi - your question is a bit broad so difficult to provide guidance.

I would start by reading a simple path to wealth

Fidelity or Vanguard, either is fine. Just pick one

Taxes / Re: Retiring with Pension, how to manage taxes
« on: June 14, 2021, 08:01:29 AM »
There is no 15% tax bracket for ordinary income (e.g. a pension.) There is a 12% bracket.

The answer to Roth conversions or capital gain harvesting could be neither.
If you get health insurance via the ACA, that is probably the case unless you have a really big TSP.

For Roth conversions, if you can pay a lower tax rate now than you will at age 72+ with RMDs, then do them. If not, don't.

If you also have the opportunity to harvest capital gains and pay 0 tax and 0 increase in health insurance premiums, then also do those. If not, don't.

General Discussion / Re: trust and estate planning
« on: May 20, 2021, 07:44:57 PM »
just move somewhere and do life things - get a driver's license, rent/buy a place to live, register to vote, etc...

We will probably end up in California

General Discussion / Re: trust and estate planning
« on: May 19, 2021, 08:16:04 PM »
How do you plan to avoid the WA estate tax which kicks in at 2.1M? 

The simple answer is for at least one of us to avoid death until we establish residency elsewhere

General Discussion / Re: trust and estate planning
« on: May 09, 2021, 07:29:53 PM »
We don't have a formal estate plan - all accounts have a TOD to transfer control to the other spouse. No need for trusts or fancy instruments, if we both die in a horrific accident then the assets default to the kids

Taxes / Re: Dependent care credit vs dependent flex
« on: April 29, 2021, 08:22:47 AM »
Yes - this was discussed a bit in the comments of this post

The tax you would save on a 10k deduction is about $1,200

1.2k < 5k

Taxes / Re: Better understanding of capital gains harvesting?
« on: April 09, 2021, 09:28:30 PM »
1. Are only the GAINS on taxed by the state, or as in this example - would the full $77k be taxed by the state?

2. With the ACA subsidies, is the $77k what's measured or only the gains?

Only the gains are taxed.
Same with ACA.

Imagine if that weren't the case - you have $100k in cash and you buy stock and then immediately sell for the same price.
e.g. Buy $100k of VTI at $200. Sell $100k of VTI at $200. You now have $100k in cash, again.

Do you have a gain of zero (and thus no tax) or are you taxed on $100k?

Definitely the former.

Other / Re: Investing in NTD as a Taiwanese
« on: April 09, 2021, 09:27:22 PM »
What is the logic for investing in USD?

The index philosophy says (generally) that Taiwan is roughly 2% of total world stock market valuation, and therefore you should have about 2% of your portfolio invested in Taiwan. If you are a Taiwan citizen/long-term resident you could have some (reasonable) home bias.

There are global ETFs that you can purchase in Taiwan in NTD - I don't know anything about them.
You can also hedge against the currency (hold assets in something other than NTD and/or invest in vehicles that track a different currency)

I have some thinking to do.... 

Please keep us updated! Best of luck!

Early Retirement / Re: Looking for guidance
« on: March 24, 2021, 02:44:48 AM »
Yup - don't know when your going to die. I suppose that would take all the fun out of it...

If you like the look of San Miguel de Allende but prefer fewer expats, try Guanajuato (college town), Querétaro (bigger city, has a Costco), or Dolores Hidalgo (small number of expats, nice Mexico feel.) SMA has always had a large expat population which does help expand the number and variety of restaurants, and if you prefer to see zero Canadians or Americans you can do that too just by locating yourself 10 minutes outside the city center.

For Roth conversions - yes, they can save you money. The question is how much. They have the biggest advantage when there is a substantial marginal rate delta, say you avoid paying tax at 35% by paying 12% today. Those big deltas mostly occur for people with lots of $ in their IRA.

See this financial review where I calculated the tax savings for doing a lot of Roth conversion, which could save up to $1.5 million in taxes for the Bobs. That seems like a lot.

But when you look at the NPV of those tax savings it amounts to something around $60k. Maybe that is also a big number, but it is only a few percent of their total portfolio value.

AND... you only pay big taxes later if you have large RMDs. And you only have large RMDs if your portfolio is large. Which happens only if you have a sustained period of strong growth post retirement.... or in other words, you are already at the stage in life where you know you have more money than you can spend.

So yes, do Roth conversions. But maybe don't make them more important than living where you want, when you want, how you want. Get the cake first, and then if you like sprinkle some Roth conversion frosting on top.

Vacations are nice.

Have you been to Tennessee? Might be a good vacation destination before committing.

Just using my home town as an example... cheap to live there, but if you aren't big on pheasant hunting, high school wrestling, and talking about how fast the corn is growing as entertainment options / socializing, then you might not enjoy it. Add in a bit of local stress / drama / politics for extra fun, e.g. "Why do all of these frickin New Yorkers move to my town and (insert complaint here.)"

Maybe you'll love it. I dunno. I like this post for some things to think through:

Another thing to consider - paying less in taxes doesn't necessarily mean another place is better. For example, we plan to move to California in a few years where we will pay more in taxes than we would if we were in Nevada or New Hampshire.

Some people view paying taxes as against their religion or whatever, and will gladly pay $2 to avoid $1 in tax. Or get $1 less in local school investment.

I'll pay them happily - its just a line item on my list of expenses, and the ROI seems reasonable.

“What is it worth to get an extra $40k+/year every year for the rest of your life? (pension + 12k bonus)”

This is my million dollar question…  I’m having a hard time answering it!
I like that you referred to "the million dollar question." Using the 4% rule, $40k/year in income requires investments of... $1 million. Or about the cost of a house in Flushing.

Let me poke some holes and ask some questions that don't necessarily need answers and see if it helps...?

Being tired is hard. High stress jobs pollute everything in life...

Generally speaking, every place we could live has issues. A lot of times the things we dislike in one place seem monumental and the issues in another place seem minor or quaint. "The grass is greener..." Quitting a job can reduce the issues in your current location or even make them disappear... commuting traffic, shopping hours, crowds, etc...

Financially, is the issue you can quit now and live in the LCOL area but not the HCOL area? I didn't see clearly the COL in either location. But we can throw some numbers out there...

In 4 years with your health insurance benefit, you pay $20/month. With a family of 4 on the ACA, maybe you pay $6k - $8k/year plus any care you use.

With income cut in half, taxes will be cut by 2/3. (More with no FICA taxes)

Is the HCOL area still high cost of living at that point?

What is it worth to get an extra $40k+/year every year for the rest of your life? (pension + 12k bonus)

Can you transfer to another job in the same agency?

Will a vacation help reduce short term stress to be less tired for the decision making process?

How do your wife and kids feel about the LCOL area?

Early Retirement / Re: Looking for guidance
« on: March 18, 2021, 07:27:37 PM »
A few other thoughts:

If you are outside the US you would have a completely different experience with inflation. The difference between SS cola and US inflation is probably small by comparison.

The ROI for delaying SS can be substantial if you live beyond age 90+/-

Roth conversions aren't that awesome - don't let the tax tail wag the dog. If you can do them, great. If not, I wouldn't make life changes to force it.

That said, I'd still keep a few years worth of spending in cash (which would allow Roth conversions.)
Then, if the market goes up can delay SS. If it goes down, can take SS early(er) or flip some burgers.

If more work is a strong likelihood, in many cases just working one more year has the best financial roi

Also consider Mexico - it's wonderful - great food, friendly people, same timezones as US, easy flights

Taxes / Re: Taxes a toxic nightmare, is there a antidote?
« on: March 18, 2021, 07:04:39 PM »
1 would suffice.

I would just read some reviews and choose one that seemed a good fit for personality and experience.

General Discussion / Re: Managing credit cards after retiring
« on: March 17, 2021, 09:40:06 PM »
Pensions and Roth conversions are income, as are dividends and capital gains

For several years (before blog income) I applied for cards as retired with only investment income and was regularly approved for cards.

If the income on any one card is "low" then you can go for breadth (have several cards) or pay the cards off early (every week instead of every month.) Then ask for a limit increase after showing that pattern for awhile.

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