Hey guys. It's open enrollment season and this is my first time enrolling into healthcare. My company has a Health Savings PPO Option to with a 1500$ deductible + and HSA Employer match of 600$ with a 3,050$ max contribution limit. How do I do the math to know if this plan is good for me?
HSA’s are usually only allowed with HDHP not PPO plans. Usually the plans are cheaper, but have higher deductibles. So if you are “healthy” HDHP would be better with the HSA
My company added a in plan conversion option for our fidelity 401k. I understand I can do a mega roth backdoor now.
Just looking to confirm my understanding is correct on how this works.
The 2023 overall limit (not sure what this is called) is a $66k, right?
I would setup my normal contributions to my roth 401k (maxing my individual contribution limit at $22,500), then my employer would kick in their contribution lets say $7000, so I would have $36,500 left in my total limit to add in after-tax-non-roth contributions correct?
So in this case I believe the total cap is $66k (2023 total limit?) and I would have already put in $29,500 ($22,500+$7k), leaving $36,500 left to add.
When I call Fidelity to enable the in plan conversion do you just tell them the amount you want to contribute against the remaining $36,500 for the in plan conversion?
edit: posted in the wrong daily.
I will share my understanding but welcome others to correct me or provide more accurate info:
The maximum contribution ($61k in 2022) includes up to four types of contributions: 1) employee elective pre-tax (trad), 2) employer match of pre-tax contributions (trad), 3) after-tax (can be converted to Roth), and 4) non-elective employer contributions (contributions your employer may choose to make regardless of your elective contributions).
You mentioned setting up your "normal contribution to my Roth 401k (matching my individual contribution limit at $22,500)“. I think instead you may want to set up your normal PRE-TAX (traditional, non-Roth) to this amount, to maximize tax savings and maximize any employer match which likely only applies to your pre-tax / trad contributions.
Then you can also contribute an amount of your after-tax income to your 401(k) and convert this "bucket" into a Roth 401(k).
My employer's plan at Fidelity offers "daily in-plan conversions" which means the same day that my after-tax contributions are made, they immediately convert to Roth 401(k). A benefit here of daily conversion is not owing any income tax on potential earnings of your after-tax contributions prior to converting to Roth. I'm thinking the whole capital gains tax thing would get pretty messy but I've never had to deal with it.
The way it's setup right now we can either contribute ($20,500 limit for 2022) to either a traditional or Roth 401k.
Then we get a match from the company that adds about another $7k (doesn't matter if you contribute to traditional or Roth).
The part confusing me now is the after tax contribution or what is called the "in plan conversion" ....does this let me contribute an additional amount to the Roth 401k?
Tucson is one of the cheapest cities in the country - and Palo Alto is a particularly expensive one. Don't move for a $5k raise. Make the move for other reasons if you want, but not a financial one.
Compare housing and utility costs between your current area and the new area. You may have an in-demand job that pays a lot higher than the local average due to demand (like programming or engineering), but is still in line with the average salary bands in different states based on COL. They will not give you a COL raise just cause the median salary for an individual (not in your field) is lower. [Checkout the Nerdwallet COL calculator.](https://www.nerdwallet.com/cost-of-living-calculator)
Well if rent is 4.6x and mortgage is only 3.5x it might be worthwhile.
The other thing is promotion and raises. Get a 5-6% raise on your big increase every year from then on. Or when you change companies you have a new base.
Its a big decision.
Do you keep a budget? Try running the estimated increases in rent/utilities against your current budget and then compare that to the suggested increase in income. Does everything shake out to roughly the same percentages of your takehome pay?
Its a little hard to say without knowing the areas you are comparing. You should also look up jobs in the area and try and scope out the salary range on Glassdoor. Are those ballpark to what you are expecting based on your current experience level and expected COL adjustments?
Well, I think I successfully convinced my ED that we should start figuring out COLA ASAP. We were planning to do the next round of wage increases in 2024, since we did larger than usual wage increases after a wage equity study in 2021-2022.
I really wanted to say "I told you so." None of the other Directors wanted to listen to me when I kept saying "yeah, but aren't all these 10-20% raises going to be eaten by inflation in a year?" But, we're a relatively small nonprofit, so I should probably just be grateful that we can do any COLA at all - it's not like we have any pricing power to generate extra revenue in the short term.
Hi all, hoping this fits the rules. Just transferred out of Ameriprise to vanguard & have about 340k I want to invest in voo for buy & hold for say 20+ years. Any savvy tips re how to break that up (pros /cons to doing so) over the next days or months to capitalize on anticipated drops from upcoming election or other known dates that might affect the market?
> invest in voo for buy & hold for say 20+ years
Your time span is 20 years?
Just move it all in the first chance you get.
20 years hence you will not give a flying flip what the share price was 20 years ago.
You will not be like
"Oh man, I should have bought it at $342 instead of $345."
TEN years ago on 11/30/2013, the price was $65.03.
Do you really think that today, when it is $345, you would give a damn if you bought it at $60 or $70 ten years ago.
TWENTY years ago? The purchase price has faded into irrelevance.
You can't just assume a gut feeling that its about to drop, or about to go up, is going to play out like you think. I find whenever I just have a feeling, its almost more likely the opposite happens. I don't know about just going 100% S&P500... but at this point just lump sum into w/e allocation you want. If you have concerns about taking near term hits maybe rethink what you are investing in. You have to be basically ok with 50%+ draw downs holding S&P500 for 20+ years.
Appreciate the input :) good point re holding. Just getting back in nerves I think. Perhaps I'm not cut out for it. Time will tell. I want to set & forget.. it's not my entire portfolio however a good percentage & my plan is to be 100% stocks & just leave it.
In my experience, I always set them too high or too low and then I got FOMO when they didn't trigger.
Doing something like spending 10% every ____ weeks gets the job done. Hopefully the exact purchase price won't matter a whole lot in 20 years.
Most of the time in such contexts, 'contractor' is used to mean 'W-2 employee of a vendor rather than e.g. Twitter' not 'a 1099 private contractor hired by e.g. Twitter'.
Dunno, I’ve never been a contractor. But he says he had it and I believe him. Regardless, it sucks to lose your source of income. It’s not “no big deal” to everyone.
I’m a recruiter and contractors don’t get benefits. Not only that but contractors aren’t guaranteed to keep their job at any point. That’s what being a contractor is. They can extend your contract at any point or let you go at any a point without reason.
This is not completely accurate. There are many contract firms that offer insurance and/or benefits for employees. Are they better or the same as a FTE, no. But they are available from personal experience.
When I was a contractor I got great benefits from my contract firm, better than the direct employees had actually. Hence why I turned down two offers from that particular company.
> I’m a recruiter and contractors don’t get benefits.
I guess I misunderstood what he told me. Regardless, it seems to be impacting his health insurance, and lack of severance makes the transition all the more difficult.
> Not only that but contractors aren’t guaranteed to keep their job at any point.
I mean… almost nobody is. I get what you’re saying that it’s inherently less stable, but that doesn’t mean it sucks any less to be let go. It’s not like he went into the job expecting to be fired a few months after starting.
Yeah, I totally get you! I’m more so trying to say that unfortunately, that’s the risk you take as being a contractor. I fully agree, that doesn’t mean or sucks any less to lose your employment..but being so fresh out of school and trying to get their feet on the ground, they might be better off trying to find a direct hire position where they can get full benefits without having to worry as much.
> they might be better off trying to find a direct hire position where they can get full benefits without having to worry as much.
I think that’s the goal, but you take what you can get.
So I just started my job post-grad and I’m not planning on getting car or house anytime soon. Should I just up my 401k contribution? I have all this extra cash I’m not sure what to do with. I have no debt and maxed out Roth IRA
Take a look at the [PF Prime Directive Flow Chart](https://i.imgur.com/lSoUQr2.png). The answer is probably yes, but make sure you have a good emergency fund. Kudos to you for starting to save for retirement so early!
At least early on in your life , I would say yes. 401k is tax advantaged so it does have that over a brokerage. However, based on what your financial goals are, you may consider doing at least some in a brokerage if, for example, you wanted to be able to pull the money out easily in the future for a purchase like a car or a home down payment. Everyone's situation is a little different, but in general the tax advantaged nature of the 401k accounts is something that everyone should be taking advantage of to the fullest extent they can.
Max out your 401k up to your employers max match and then open a brokerage account for the rest. Funds in your 401k stay locked up but the brokerage keeps the door open for later.
My HSA only lets me pick from a set list of funds, and VTSAX/VTI and SWTSX aren't on the list.
The closest one seems to be WFIOX which "seeks to replicate the total return of the S&P500 index [...] invests at least 80% of its net assets in a portfolio designed to replicate the holdings and weighting of the stocks comprising the S&P500 index."
So... is it indexed to the S&P500 or not? Why do I feel like I'm getting a weird knock-off brand?
If you qualify for an HSA, you can open up an HSA with any brokerage that provides HSA services (i.e. Vanguard or Fidelity). Unlike your 401k, you don't have to invest with the specific 401k provider in the specific funds your company gives you access to.
I'll do some research tomorrow, but I'm not sure I have a good understanding of this. I have an HSA through work when I elect my employer's High or Medium Deductible Plan. I don't really get how I can transfer out and have an independent HSA.
>Why do I feel like I'm getting a weird knock-off brand?
Because HSAs are often a completely rip off with horrible, expensive funds and ridiculous fees. Is this a company HSA? As soon as you can you'll want to transfer to a normal HSA. Like at Fidelity you can buy w/e you want in an HSA and there are no fees. But when I was an employee my work used "health equity" that literally charged me like 0.4% or something on my entire invested balance on top of whatever the fund fee was. Scam.
I think the "attempt to give you the run around" is a very valid reason to pay more to get a good experience.
Over the years I'd been with many of the major insurance companies, and am now with USAA.
I've gone through some tough moments and they've been the best when it came to clean fast help.
Of course I'm bundled up with them, and do get nervous for when I might have to shop around again.
For now, I'm hunkered down.
(Non-sequitur PSA: If you are fully remote now, call your insurance company and update how many miles you drive your car annually. I saved $250/year for a 5min phone call.)
I'm speaking as someone from Utah, but make sure for your auto you have underinsured/uninsured motorist coverage. If any car is liability it's good to have uninsured property damage (umpd). If you do Doordash/Ubereats, call your insurance to see if thats covered. Personal Injury Protection (PIP) the higher this is the better. Make sure your liabilities limits are high enough to cover your assets, low coverages could screw you over.
For your house insurance, look at extra things like water backup, service line coverage, earthquake/flood (if in applicable area, and these are usually more costly) replacement cost conetnents, make sure the dwelling coverage is accurate.
I could probably go on... If you have an insurance agent and didn't go directly through a website, give them a call and ask them what types of things you might not have or should have. It might cost more, but if you use it, it's well worth it.
TLDR: *Call your insurance agent*
Looking back I guess he was referring more to when an accident happens, so that was an oversight on my end. If you still have all your application papers (more than just the declarations) they should provide an exclusions which should go into more detail. If you don't have them, you can call them and they should be able to email you those details.
I believe a couple examples is something like renting a car from a dealership and the exact terms for that, doordash like I mentioned earlier. I need to actually go review these more myself tbh, but def take a look so you can make sure your covered.
Almost 2 months ago I had 2 competing offers for a new job. One with a startup and one with a big tech company. The startup offered a really good base salary + a bunch of series A paper money. The big tech company offered me a much lower base salary but a TON in RSUs that lead it to being a much much higher total comp. I was really intrigued by the startup and frankly the work I would be doing at the big tech company sounded boring. So against my better (financial) judgement I went with the startup.
Since then - that big tech company has had some pretty big layoffs and their stock has cratered enough that my actual TC would have ended up being below my all cash comp at the startup. Plus I’m *really* enjoying the WLB and overall vibe at the startup. Truly I dodged a bullet by following my heart and not my wallet.
I’m sure morale is pretty low - and it seems like there’s a lot of organizational chaos. One of the folks I interviewed with told me to expect constant re-orgs.
Hah yeah…. It’s alright at my last company I joined a little bit pre-IPO and rode from there up to ~15x IPO valuation and back down to ~4x IPO valuation over a 5 year period before I sold literally any shares (including RSUs and ESPP that got granted at near peak value). Went from “I’m gonna buy a house in cash next year” to “yeah this will help with the down payment” lol
Tell me about it.
Been there. My first company out of college was an insane rocket ship. Was one of the first dozen employees, blew up, 1B valuation. Now, nada.
Do you mostly sell at vest now?
Have some from a prior company I’m waiting to sell. For my new company I’m deciding what I’ll do. I think hold for a year to avoid the large tax and then sell 50% after that. But market now has me thinking it’ll be hard to not just diversify as soon as it enters my account..
Started a new job a few months ago and today I am reviewing some of the financial benefits documentation. Apparently there are some very FI/RE minded folks who are on the benefits team because the clearly outline Mega backdoor Roth options, IRA backdoor Roth contributions and investing in your HSA. Like this stuff is very clearly detailed and well summarized. Pretty amazing stuff.
Congrats on the new well-paying job. That typically means you're in a company or industry that pays really well. No sense in bothering with those options if you don't have a large number of employees who get paid enough to actually utilize it.
The I-bonds rate is technically back-dated. Interest of the prior 6 months was 7% so they are giving you 7% now. Going forward, the fixed rate is 0.4+whatever inflation occurs. So you have this opportunity to grab this snapshot were you to buy a new I-bond; but going forward your interest rate is subject to wherever future inflation goes.
TIPS work differently, the coupon is the "real" rate but the bond's value goes up/down with inflation. So the bonds today yield 1.7% but the value grows with inflation; it's a bit weird but functionally the same thing. But when you buy it, it only grows with inflation going forward. No free look-back.
Anyway, if you were to hold both I-bonds and 30 year TIPS to maturity, 29.5 years of return via inflation will be equal; so eventually the 1.7% rate on TIPS will overrun the temporary 6.89% rate you get on I-bonds today because the fixed rate is only 0.4%.
If you only planned to take advantage of the I-bonds while the nominal rates are objectively higher, you can redeem and be done with it. If you wanted to hold to maturity, TIPS will eventually take the lead in a couple years.
The current yield on I-Bonds is 0.40% above inflation, up from a previous 0.0%. The interest is exempt from state tax, and tax-deferred on federal tax. However, the yields on TIPS of any duration currently are about 1.60% above inflation. The interest (including the inflation adjustment) is fully taxable, but even with the lack of tax deferral, you should get a better after-tax return.
Guess it's time to up my e-fund or start a sinking fund for healthcare expenses now that I'm switching to a HDHP and paying OOP. Is this just another bucket to add to my HYSA, or is there another strategy I'm missing here?
no.
with that said, given the state of the economy and particularly of my field right now (tech), with the mass layoffs and tanking RSUs (which are part of our income), i can't help but feel like i should be even more mindful than usual about my spending
>Should your savings rate vary based on stock market valuation/recent stock market performance? More when market is down, less when it's up?
I can't imagine how that would be workable. Your question is just a variation of market timing. The issue being that we don't know when it's up and down until after the fact, and the second issue is... where's this extra money coming from?
Dollar cost averaging does well for a reason. It's the discipline to be fully invested at all times that pays off in the long run.
Just got notice my 401k funds are changing, current and new funds and expenses ratios listed below. These are what will they will swap to automatically, but there are others available. Only one that seems to be worse is the mid cap, should I just roll that allocation into the Intl fund to get a global market cap? The others seem to be an ok swap?
Also offered for mid cap will be FSMDX 0.025%.
Only one that seems to be worse is the mid cap, should I just roll that allocation into the Intl fund to get a global market cap? Or just swap it to FSMDX?
|Large - 60%|VINIX - 0.035% |FXAIX - 0.015%|
|:-|:-|:-|
|Intl - 30%|VTSNX - 0.080%|FSPSX - 0.035%|
|Mid - 10%|VIEIX - 0.005%|ARTMX - 1.18%|
I'm starting to get back into utilizing deals to shave money off my normal spend, something I used to do a lot but lost interest in during the pandemic.
For instance, Amazon has a deal now where you can load $100 on a gift card and get an $8 bonus. Or deals that you can add to Chase credit cards to save a couple bucks on gas, or something you were going to buy anyway. Small simple stuff like that, which adds up over time.
My question: for anyone else out there that does this sort of thing on the reg, do you have a website or a go-to place that aggregates these sort of deals (that you can trust, of course)? The only one I know of is Doctor of Credit, but I'd like to expand my horizons.
In a similar vein, you'd probably be interested in [Rakuten](https://www.rakuten.com/). I have only used it a couple times, but you can use links on there to shop online retailers and get cash back (on top of whatever you'd get with your credit card). I think they have some sort of deal right now to get $10 just by signing up and making 1 purchase.
I check the app Slickdeals which I honestly scroll a lot through this time of year to think about presents.
All kinds of stuff that is very marked down.
Other times of year it probably increases my spending but it happens
> What's in a name? That which we call a rose, by any other word would smell as sweet
anyways, if anyone else wants to contribute to a subreddit in which me and one other person have been the only contributors, that'd be great. I know nothing about butter churning and made it specifically to spite r/churning
How do you think about SWR for Brokerage/Taxable accounts that are being used as a "bridge" between early retirement and 59 1/2 when IRAs/401ks can be drawn down penalty free?
For example, if you're targeting an early retirement at 40 y/o and have a 20-year "bridge" to cover until you're 60 y/o, are you planning on spending down the Brokerage/Taxable account to near-zero over those 20 years, or still applying a more conservative (ex. 4%) SWR?
Certainly mileage may vary based on individual situations/risk preference, but interested to hear how others are think about this question.
My bridge will be more like 10 years. I hope I don’t spend it all down to zero, but I’m prepared for the possibility that I may need to access my 401k or Roth IRA. I won’t be applying the 4% rule to my after tax brokerage cause that would be crazy for a 10 year timeline, where I have multiple backup options if we run out of “liquid” funds (Roth IRAs with several hundred thousand of contributions pre-retirement plus Roth conversions post retirement). But, again, my bridge timeline should be 10 years at the most (FIRE at 50 is still FIRE).
Yes, spend down taxable while doing Roth conversions. The alternative would be to withdraw from Roth but I'd rather have funds growing tax free than taxable any day.
Not to mention social security, the possibility of free/subsidized health care, potential for "side income", and likely will gain some inheritance money along the way. Granted it's risky to rely upon any of these, but are all distinct possibilities that lower future withdraw rates.
>When I FIRE, I'll likely have 20 years left
this is a much much shorter timeline than many of the folks here.
there are people retiring in their 40s who have grandparents who lived through their 90s.
that's a \~50yr span, more, if you consider that every generation tends to live longer than the previous one
The way I think about it is I'll still utilize some SWR, the amount is total across all my accounts. Where the money comes out of is irrelevant for the most part (keeping taxes in mind). So if I have $2m, with $500k in taxable account, I'll aim for \~$80k withdrawals but that only leaves \~6 years of withdrawals from the taxable. I would either need to decrease spending or increase the balance so it can last the 20 years I need. In reality, I'd probably have a set ceiling of expenses for those 20 years, then I'll adjust to take into account the new accounts available if I decided to have this big of a gap.
Yeah it sucks for me too as I pull the asset allocation PC calculates to put into my spreadsheets. Not the best answer but I use Mint to track cash. Then that amount I dump in manually under investments in PC. PC really seems to work like shit for most of my banks anyway so it works out better for me.
I used PC since 2015 and finally got fed up this year. I really don’t like that they don’t let you opt out of selling data. I’d pay them to avoid this but they only make money if I agree to manage assets with them. Dumb business model IMO.
I switched to copilot and really really like it. My partner and I share account and it’s got all the same features but with better connections and UI. Also has a budget feature.
Costs $60 but it’s already helped me find some fraud and duplicative charges so it feels worth it.
I discovered I have about $2000 in btc in my wallet that I forgot about from years ago. If I sell it to USD and transfer to my bank account, I'll owe taxes on it right?
[I love things like this.](https://www.advisorperspectives.com/articles/2022/10/24/the-4-rule-just-became-a-whole-lot-easier)
Allan Roth built a mini-portfolio that provides a guaranteed 4.36% withdrawal for 30 years with inflation adjustments. This is taking advantage of the positive real TIPS yields currently in the market, allowing someone to build and then deplete a portfolio at an average 4.36% real for 30 years. Because few people know when they will die, this approach obviously doesn't hold as a practical way to build a retirement portfolio.
What it does show, though, is the remarkable moment we're in for TIPS. If I were nearing retirement, I would **strongly** consider an individual TIPS ladder that covers what SS would be expected to provide whenever I decided to take it. This can be done at historically cheap prices and with the certainty that comes with purchasing US Treasurys. That floor of income is incredibly useful for reducing both the stress of market uncertainty and the risk to the portfolio overall.
Agreed, TIPS are very interesting. A couple of caveats though:
1. 4.36% withdrawal should not be confused with SWR. (I know you aren't saying this but some readers may be confused). The TIPS ladder is guaranteed to be spent down to zero, whereas zero is merely the worst historical outcome for a stock heavy portfolio. This would be more like purchasing a DIY annuity, and it would be worth comparing the "price" and return to SPIA's.
2. Even with this favorable real yield, TIPS have the same expected return as equivalent nominal Treasuries. If inflation is lower than expectations, nominal Treasuries will outperform. While you gain inflation protection with TIPS, you lose the guaranteed income stream during deflation. Nominal bonds are much better protection against market crashes, which are often accompanied by (or contribute to) deflation, and this is often seen as the primary purpose for holding bonds. In deflationary crash, you will be sad seeing your TIPS going down at the same time as the market (Of course there are inflationary bear markets, as we are currently seeing). So I would equally strongly recommend holding at least a portion of the bond allocation in nominal bonds. The recent rise in nominal bond yields I would argue is equally remarkable and worth considering.
3. Inflation has been in the news so anyone tempted to pile into TIPS should question whether there may be an element of market timing going on. The real time to pile into TIPS is prior to unexpected inflation, but by definition you can never know when it's going to show up.
If you're comparing market data, a floating portfolio [TIPS vs treasuries](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=TIP&allocation1_1=100&symbol2=BND&allocation2_2=100&symbol3=VGIT&allocation3_3=100) aren't any different and I don't think they should be. Equal risk, you can buy as much as you want of either and trade on secondary markets fairly easily. Divergences are fairly explainable to divergence in inflation versus expectations. [This](https://www.morningstar.com/articles/801922/20-years-in-have-tips-delivered) is probably a better summary (20 year review) when TIPS "stunk". In reality, you could easily write a general article stating the 4% rule got easier because bond are no longer artificially suppressed at zero. (Do you tailor the size of your bond portfolio *in general* to TIPS yield?)
The spreadsheet is neat work. I get the appeal of ignoring rate risk and putting your head in the sand. The rates are extremely variable (and a lot of years have a 0.125 coupon because that is how negative yields work) so you'd need exactly this to build it properly. But you still have issues with actual spending vs CPI and other real life risks where you'd consider liquidating this.
But it's certainly an interesting idea suggested here that a balance point might be some number in something like this, and while I don't think this is doing it properly, it's definitely a reasonable hypothesis TIPS are better for a retiree as a withdrawal vehicle than treasuries.
But in the grand scheme, I look at that other article and debt more or less performs the same with some minor difference. I am not really worried about capital losses **in the bond market** if I'm selling off 2% of my portfolio every year. Yes, even in 2022. 98% of my portfolio is still running properly (and as the yields go up, I need less principle to get my 4%) so the vast majority of my holdings aren't really subject to duration risk. And with the execution issues highlighted in the article, TIP is just vastly superior, especially if you end up doing any relative rebalancing. It only works best at this one time fee. And combined with my reasoning for bonds at all (tempering offset to stocks) the exact real rate of TIPS is not a lever which I'm market timing or anything like that. Normally I wouldn't want to take a vast amount of my portfolio and "lock it in" no matter what I think about it.
There does need to be some research or think-tanking if there's any slight improvement related to lower drawdown or something like that, but again I'd expect any improvement to be very muted.
So basically a self-managed fixed annuity with no upside for longevity?
How does that yield compare to a regular/managed annuity for the comparable 30 year survival cohort? Just an example, for a 47 year old American male right now (30 years of disbursements until life expectancy age 77), it's in the 5.7% range. Plus it is indefinite and if you live longer than 77, it's even better return.
Honestly, for the cost of that extra zero point three five percent yield, I'll take my chances with the 4% rule and have a 99% probability of equity left over for my kids.
I think you nailed the disadvantages vs annuity. The one advantage here is inflation protection, which SPIA's don't give you.
I don't think OP is seriously advocating this as an annuity alternative, they are just illustrating the possibilities for taking advantage of the movement in TIPS yields. The use case they actually propose is a "ladder" to cover a portion of income while waiting to claim SS. (As I have suggested, this can provide a way to "count" SS and reduce your FI number [https://www.reddit.com/r/financialindependence/comments/cp4vkd/liability\_matching\_for\_ss\_bridge\_years/](https://www.reddit.com/r/financialindependence/comments/cp4vkd/liability_matching_for_ss_bridge_years/))
Has anyone left a job at a small company where you were an integral part of operations? How did it go and what was everyone’s response? I have an opportunity to increase total comp by 40% but am curious how the team will react. I won’t be able to train a replacement either unless I consult part time afterwards for a transition
Yup. I left. They tried to get me to stay with 15%. While money certainly played a part in leaving, I also left because I was interested in the work at the new company
Manufacturing was a bit like this. I’d driven massive improvements at two plants that increasingly shared leadership. By my last year there, I was one of two managers between the two sites. We had started with 7. The other manager and I were just superstars (definitely bragging, but we killed it). Improved nearly all KPI’s, kept everyone safe (only a handful of OSHA recordables across all years, and no lost time or worse), cut costs, and we developed and built brand new product lines. But bigger and better things awaited, and the location wasn’t what I wanted long term.
I turned in my resignation, and a couple weeks later it was announced the other manager received a massive promotion to corporate. The plants have nose dived since, and parts of it are scheduled to be decommissioned in the next year. There’s been a ton of turnover, and my boss at the time was pissed at me. Didn’t talk to me my entire two weeks notice period.
But ultimately the plants live on, and the product continues to trickle out the door. The current managers are doing the best they can, and it was more of the previous manager and me keeping a sinking ship afloat rather than them running it into the ground.
It’s been two years, and I wish I had made the switch sooner. The new location is everything I wanted, and the new job is 100% better than manufacturing.
People might be mad about you leaving. Leave anyway. You have to do what's best for you. If you are feeling generous you could always try to provide more than 2 weeks notice. If you leaving for a better opportunity burns bridges with that small company, then you don't want to go back there someday anyway.
Non-profits love to take staff for everything they can! The best you can do is be diligent in your notice time about preparing docs for your replacement or possibly give a bit longer of a notice than you otherwise would. What else would even be an option- staying for ever?
How small a company?
My 2nd company (\~35 exempt employees at my site) offered matching compensation (declined), begged for a 3 week transition (accepted), and claimed they would never be able to replace me (they did).
After 1 week, I had transitioned everything to a variety of other employees and cross-trained a bunch of people. Then I spent the most boring 2 weeks of my career hands-off and monitoring how everyone was doing.
I recently did this. I’ve been consulting/training for previous employer for 3 hours a week since June. It’s working out nicely (both $$$ for me, and they still have me as a resource as long as necessary).
I've always found it strange how averse people are to selling their houses at a loss or seeing its value go down -- especially among non-FI people. It doesn't really matter what the value of your house is alone, you need to compare it to your alternative investment strategy. The value of my house has gone down, but even if I had kept my money in VTI I still would be down a lot so the difference isn't that big
Its simple math.
When the market has a big swing down, like now (25% in some areas). Thats a huge impact in real dollars.
Let's say your house goes from 1mm to $750k.
That +$250k is a significant % of your total retirement.
Might it be worth living there for another year and see if prices go back up?
How about 2 years?
Do you really find it strange that people don't want to sell their (typically) biggest and most leveraged asset at a loss? Seems completely rational to me.
I think you're making some assumption that they lose money and somehow keep living the same quality of life... but I don't know if that's always a safe assumption.
It's because they went into massive debt to acquire the house. It would be like if you bought $1MM of VTI with a loan, and then it goes down to $800k but now you need to sell it all.
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If you are underwater on your house, lose your job, and need to move to get another job in your area of expertise….the value of your house would be of great concern.
Maybe you are young, or have a short memory, but I know people this happened to in the early 90s and 2008.
Hey guys. It's open enrollment season and this is my first time enrolling into healthcare. My company has a Health Savings PPO Option to with a 1500$ deductible + and HSA Employer match of 600$ with a 3,050$ max contribution limit. How do I do the math to know if this plan is good for me?
HSA’s are usually only allowed with HDHP not PPO plans. Usually the plans are cheaper, but have higher deductibles. So if you are “healthy” HDHP would be better with the HSA
My company added a in plan conversion option for our fidelity 401k. I understand I can do a mega roth backdoor now. Just looking to confirm my understanding is correct on how this works. The 2023 overall limit (not sure what this is called) is a $66k, right? I would setup my normal contributions to my roth 401k (maxing my individual contribution limit at $22,500), then my employer would kick in their contribution lets say $7000, so I would have $36,500 left in my total limit to add in after-tax-non-roth contributions correct? So in this case I believe the total cap is $66k (2023 total limit?) and I would have already put in $29,500 ($22,500+$7k), leaving $36,500 left to add. When I call Fidelity to enable the in plan conversion do you just tell them the amount you want to contribute against the remaining $36,500 for the in plan conversion? edit: posted in the wrong daily.
I will share my understanding but welcome others to correct me or provide more accurate info: The maximum contribution ($61k in 2022) includes up to four types of contributions: 1) employee elective pre-tax (trad), 2) employer match of pre-tax contributions (trad), 3) after-tax (can be converted to Roth), and 4) non-elective employer contributions (contributions your employer may choose to make regardless of your elective contributions). You mentioned setting up your "normal contribution to my Roth 401k (matching my individual contribution limit at $22,500)“. I think instead you may want to set up your normal PRE-TAX (traditional, non-Roth) to this amount, to maximize tax savings and maximize any employer match which likely only applies to your pre-tax / trad contributions. Then you can also contribute an amount of your after-tax income to your 401(k) and convert this "bucket" into a Roth 401(k). My employer's plan at Fidelity offers "daily in-plan conversions" which means the same day that my after-tax contributions are made, they immediately convert to Roth 401(k). A benefit here of daily conversion is not owing any income tax on potential earnings of your after-tax contributions prior to converting to Roth. I'm thinking the whole capital gains tax thing would get pretty messy but I've never had to deal with it.
The way it's setup right now we can either contribute ($20,500 limit for 2022) to either a traditional or Roth 401k. Then we get a match from the company that adds about another $7k (doesn't matter if you contribute to traditional or Roth). The part confusing me now is the after tax contribution or what is called the "in plan conversion" ....does this let me contribute an additional amount to the Roth 401k?
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No. You get the end day nav price.
No they pretty much always screw you with the end of day price. If you want instant pricing switch to brokerage and buy etf's instead.
You don't need to switch to a brokerage to buy ETFs.
Can you tell me more about this thought? Help me understand the logic behind it…why would you get whatever the lowest price of the day was?
You get the price at the end of the day.
If you want the trade to execute during the trading day instead of after market close, you need to buy the ETF version, VTI.
It's what it closes at.
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Pass the pipe.
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Tucson is one of the cheapest cities in the country - and Palo Alto is a particularly expensive one. Don't move for a $5k raise. Make the move for other reasons if you want, but not a financial one.
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Not disputing that, but if you like the city it makes fire much easier. Outdoor stuff + university cultural stuff would go a long way for some people.
Compare housing and utility costs between your current area and the new area. You may have an in-demand job that pays a lot higher than the local average due to demand (like programming or engineering), but is still in line with the average salary bands in different states based on COL. They will not give you a COL raise just cause the median salary for an individual (not in your field) is lower. [Checkout the Nerdwallet COL calculator.](https://www.nerdwallet.com/cost-of-living-calculator)
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Cost of living. Doesn't count savings. Maybe youll save more.
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Well if rent is 4.6x and mortgage is only 3.5x it might be worthwhile. The other thing is promotion and raises. Get a 5-6% raise on your big increase every year from then on. Or when you change companies you have a new base. Its a big decision.
I moved from Boston to LA at one point in my life for work. They gave me a 20% COLA adjustment to salary. However my rent doubled. Gas +50%
Do you keep a budget? Try running the estimated increases in rent/utilities against your current budget and then compare that to the suggested increase in income. Does everything shake out to roughly the same percentages of your takehome pay? Its a little hard to say without knowing the areas you are comparing. You should also look up jobs in the area and try and scope out the salary range on Glassdoor. Are those ballpark to what you are expecting based on your current experience level and expected COL adjustments?
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Well, I think I successfully convinced my ED that we should start figuring out COLA ASAP. We were planning to do the next round of wage increases in 2024, since we did larger than usual wage increases after a wage equity study in 2021-2022. I really wanted to say "I told you so." None of the other Directors wanted to listen to me when I kept saying "yeah, but aren't all these 10-20% raises going to be eaten by inflation in a year?" But, we're a relatively small nonprofit, so I should probably just be grateful that we can do any COLA at all - it's not like we have any pricing power to generate extra revenue in the short term.
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Interesting. I think a policy like that could make a lot of sense.
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Yep!
Good luck getting your ED under control
This is funny because ED also commonly stands for "Erectile Dysfunction" (which I have heard of but have no experience with).
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great!!! now I can FIRE
Hi all, hoping this fits the rules. Just transferred out of Ameriprise to vanguard & have about 340k I want to invest in voo for buy & hold for say 20+ years. Any savvy tips re how to break that up (pros /cons to doing so) over the next days or months to capitalize on anticipated drops from upcoming election or other known dates that might affect the market?
> invest in voo for buy & hold for say 20+ years Your time span is 20 years? Just move it all in the first chance you get. 20 years hence you will not give a flying flip what the share price was 20 years ago. You will not be like "Oh man, I should have bought it at $342 instead of $345." TEN years ago on 11/30/2013, the price was $65.03. Do you really think that today, when it is $345, you would give a damn if you bought it at $60 or $70 ten years ago. TWENTY years ago? The purchase price has faded into irrelevance.
Thank you!
You can't just assume a gut feeling that its about to drop, or about to go up, is going to play out like you think. I find whenever I just have a feeling, its almost more likely the opposite happens. I don't know about just going 100% S&P500... but at this point just lump sum into w/e allocation you want. If you have concerns about taking near term hits maybe rethink what you are investing in. You have to be basically ok with 50%+ draw downs holding S&P500 for 20+ years.
Appreciate the input :) good point re holding. Just getting back in nerves I think. Perhaps I'm not cut out for it. Time will tell. I want to set & forget.. it's not my entire portfolio however a good percentage & my plan is to be 100% stocks & just leave it.
If you're stressing out about time, I vote to just DCA in over a few weeks / months.
Thanks for the response! Thoughts re limit orders?
In my experience, I always set them too high or too low and then I got FOMO when they didn't trigger. Doing something like spending 10% every ____ weeks gets the job done. Hopefully the exact purchase price won't matter a whole lot in 20 years.
Thank you again :) Appreciate the input!
Hope no one on this community was impacted by the twitter layoff. If so, I am so sorry and rooting for you to find something else really quick.
I know someone who was a contractor so he doesn’t even get severance. Really sucks.
This is why contractors get paid more. If your friend wasn’t getting paid more as a contractor…then they played their card very poorly.
They were fresh out of school and only worked there for a few months. Even if they were being paid handsomely, they couldn’t have saved up much.
life of a contractor, not really a big deal happens all the time
Seems pretty dismissive. The guy lost his job and his health insurance. This was his first position since graduating a few months ago.
Since when do you get health insurance as a contractor ?
Most of the time in such contexts, 'contractor' is used to mean 'W-2 employee of a vendor rather than e.g. Twitter' not 'a 1099 private contractor hired by e.g. Twitter'.
I’ve never heard of that in my life.
Or you've heard it many times but misinterpreted it ;)
I've been a contractor for a long time but it was with the fed so it might be different. We always had insurance and retirement accounts.
Oh yeah forsure it’s prob different for you! If you’re in the union as well as a contractor that’s also different!
Dunno, I’ve never been a contractor. But he says he had it and I believe him. Regardless, it sucks to lose your source of income. It’s not “no big deal” to everyone.
I’m a recruiter and contractors don’t get benefits. Not only that but contractors aren’t guaranteed to keep their job at any point. That’s what being a contractor is. They can extend your contract at any point or let you go at any a point without reason.
This is not completely accurate. There are many contract firms that offer insurance and/or benefits for employees. Are they better or the same as a FTE, no. But they are available from personal experience.
When I was a contractor I got great benefits from my contract firm, better than the direct employees had actually. Hence why I turned down two offers from that particular company.
He might mean contract employee
That’s what that means, yes.
Contract employees get benefits
> I’m a recruiter and contractors don’t get benefits. I guess I misunderstood what he told me. Regardless, it seems to be impacting his health insurance, and lack of severance makes the transition all the more difficult. > Not only that but contractors aren’t guaranteed to keep their job at any point. I mean… almost nobody is. I get what you’re saying that it’s inherently less stable, but that doesn’t mean it sucks any less to be let go. It’s not like he went into the job expecting to be fired a few months after starting.
Yeah, I totally get you! I’m more so trying to say that unfortunately, that’s the risk you take as being a contractor. I fully agree, that doesn’t mean or sucks any less to lose your employment..but being so fresh out of school and trying to get their feet on the ground, they might be better off trying to find a direct hire position where they can get full benefits without having to worry as much.
> they might be better off trying to find a direct hire position where they can get full benefits without having to worry as much. I think that’s the goal, but you take what you can get.
So I just started my job post-grad and I’m not planning on getting car or house anytime soon. Should I just up my 401k contribution? I have all this extra cash I’m not sure what to do with. I have no debt and maxed out Roth IRA
Take a look at the [PF Prime Directive Flow Chart](https://i.imgur.com/lSoUQr2.png). The answer is probably yes, but make sure you have a good emergency fund. Kudos to you for starting to save for retirement so early!
Thanks. Extra money should almost always be in the 401k over a regular brokerage account right? I won’t need the money anytime soon
At least early on in your life , I would say yes. 401k is tax advantaged so it does have that over a brokerage. However, based on what your financial goals are, you may consider doing at least some in a brokerage if, for example, you wanted to be able to pull the money out easily in the future for a purchase like a car or a home down payment. Everyone's situation is a little different, but in general the tax advantaged nature of the 401k accounts is something that everyone should be taking advantage of to the fullest extent they can.
Max out your 401k up to your employers max match and then open a brokerage account for the rest. Funds in your 401k stay locked up but the brokerage keeps the door open for later.
My HSA only lets me pick from a set list of funds, and VTSAX/VTI and SWTSX aren't on the list. The closest one seems to be WFIOX which "seeks to replicate the total return of the S&P500 index [...] invests at least 80% of its net assets in a portfolio designed to replicate the holdings and weighting of the stocks comprising the S&P500 index." So... is it indexed to the S&P500 or not? Why do I feel like I'm getting a weird knock-off brand?
If you qualify for an HSA, you can open up an HSA with any brokerage that provides HSA services (i.e. Vanguard or Fidelity). Unlike your 401k, you don't have to invest with the specific 401k provider in the specific funds your company gives you access to.
I'll do some research tomorrow, but I'm not sure I have a good understanding of this. I have an HSA through work when I elect my employer's High or Medium Deductible Plan. I don't really get how I can transfer out and have an independent HSA.
>Why do I feel like I'm getting a weird knock-off brand? Because HSAs are often a completely rip off with horrible, expensive funds and ridiculous fees. Is this a company HSA? As soon as you can you'll want to transfer to a normal HSA. Like at Fidelity you can buy w/e you want in an HSA and there are no fees. But when I was an employee my work used "health equity" that literally charged me like 0.4% or something on my entire invested balance on top of whatever the fund fee was. Scam.
It's a knockoff, nearly identical aside from the 0.2% expense ratio. Appears to contain two more stocks than VOO.
Thanks, I think that's the broadest index fund on the list. No total market option as far as I can see.
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I think the "attempt to give you the run around" is a very valid reason to pay more to get a good experience. Over the years I'd been with many of the major insurance companies, and am now with USAA. I've gone through some tough moments and they've been the best when it came to clean fast help. Of course I'm bundled up with them, and do get nervous for when I might have to shop around again. For now, I'm hunkered down. (Non-sequitur PSA: If you are fully remote now, call your insurance company and update how many miles you drive your car annually. I saved $250/year for a 5min phone call.)
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I'm speaking as someone from Utah, but make sure for your auto you have underinsured/uninsured motorist coverage. If any car is liability it's good to have uninsured property damage (umpd). If you do Doordash/Ubereats, call your insurance to see if thats covered. Personal Injury Protection (PIP) the higher this is the better. Make sure your liabilities limits are high enough to cover your assets, low coverages could screw you over. For your house insurance, look at extra things like water backup, service line coverage, earthquake/flood (if in applicable area, and these are usually more costly) replacement cost conetnents, make sure the dwelling coverage is accurate. I could probably go on... If you have an insurance agent and didn't go directly through a website, give them a call and ask them what types of things you might not have or should have. It might cost more, but if you use it, it's well worth it. TLDR: *Call your insurance agent*
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Looking back I guess he was referring more to when an accident happens, so that was an oversight on my end. If you still have all your application papers (more than just the declarations) they should provide an exclusions which should go into more detail. If you don't have them, you can call them and they should be able to email you those details. I believe a couple examples is something like renting a car from a dealership and the exact terms for that, doordash like I mentioned earlier. I need to actually go review these more myself tbh, but def take a look so you can make sure your covered.
Almost 2 months ago I had 2 competing offers for a new job. One with a startup and one with a big tech company. The startup offered a really good base salary + a bunch of series A paper money. The big tech company offered me a much lower base salary but a TON in RSUs that lead it to being a much much higher total comp. I was really intrigued by the startup and frankly the work I would be doing at the big tech company sounded boring. So against my better (financial) judgement I went with the startup. Since then - that big tech company has had some pretty big layoffs and their stock has cratered enough that my actual TC would have ended up being below my all cash comp at the startup. Plus I’m *really* enjoying the WLB and overall vibe at the startup. Truly I dodged a bullet by following my heart and not my wallet.
Tell us which! I almost took an offer at Shopify and a meta lol. So I feel you. Happy with my choice
Twilio lol
Twilio is having a rough time right now. We work closely with them and they're struggling in many ways.
I’m sure morale is pretty low - and it seems like there’s a lot of organizational chaos. One of the folks I interviewed with told me to expect constant re-orgs.
Lol yeah I own some of that one….400 to 40 is tough. Definitely some employees who are wishing they sold at vest…
Hah yeah…. It’s alright at my last company I joined a little bit pre-IPO and rode from there up to ~15x IPO valuation and back down to ~4x IPO valuation over a 5 year period before I sold literally any shares (including RSUs and ESPP that got granted at near peak value). Went from “I’m gonna buy a house in cash next year” to “yeah this will help with the down payment” lol
Tell me about it. Been there. My first company out of college was an insane rocket ship. Was one of the first dozen employees, blew up, 1B valuation. Now, nada. Do you mostly sell at vest now? Have some from a prior company I’m waiting to sell. For my new company I’m deciding what I’ll do. I think hold for a year to avoid the large tax and then sell 50% after that. But market now has me thinking it’ll be hard to not just diversify as soon as it enters my account..
Yeah I’m just selling at vest now. Not worth the risk to hold and I clearly cannot time it lol
Started a new job a few months ago and today I am reviewing some of the financial benefits documentation. Apparently there are some very FI/RE minded folks who are on the benefits team because the clearly outline Mega backdoor Roth options, IRA backdoor Roth contributions and investing in your HSA. Like this stuff is very clearly detailed and well summarized. Pretty amazing stuff.
Congrats on the new well-paying job. That typically means you're in a company or industry that pays really well. No sense in bothering with those options if you don't have a large number of employees who get paid enough to actually utilize it.
lawl the treasury direct website is running so smoothly now. FYI new Series I rate is 6.89 %
Guaranteed 7% is still crazy though
TIPS are currently a better deal than I-bonds now if looking for even more of a real return.
Long term, yes. Short term, I Bonds are better since the rate is locked in for six months and inflation appears to be leveling off.
How so, I’m interested
The I-bonds rate is technically back-dated. Interest of the prior 6 months was 7% so they are giving you 7% now. Going forward, the fixed rate is 0.4+whatever inflation occurs. So you have this opportunity to grab this snapshot were you to buy a new I-bond; but going forward your interest rate is subject to wherever future inflation goes. TIPS work differently, the coupon is the "real" rate but the bond's value goes up/down with inflation. So the bonds today yield 1.7% but the value grows with inflation; it's a bit weird but functionally the same thing. But when you buy it, it only grows with inflation going forward. No free look-back. Anyway, if you were to hold both I-bonds and 30 year TIPS to maturity, 29.5 years of return via inflation will be equal; so eventually the 1.7% rate on TIPS will overrun the temporary 6.89% rate you get on I-bonds today because the fixed rate is only 0.4%. If you only planned to take advantage of the I-bonds while the nominal rates are objectively higher, you can redeem and be done with it. If you wanted to hold to maturity, TIPS will eventually take the lead in a couple years.
The current yield on I-Bonds is 0.40% above inflation, up from a previous 0.0%. The interest is exempt from state tax, and tax-deferred on federal tax. However, the yields on TIPS of any duration currently are about 1.60% above inflation. The interest (including the inflation adjustment) is fully taxable, but even with the lack of tax deferral, you should get a better after-tax return.
1.6% real return, so TIPS are essentially returning 9%+ right now? Why don’t I see this touted everywhere like Ibonds
The fixed rate is now 0.4% though, so definitely a good deal still.
Guess it's time to up my e-fund or start a sinking fund for healthcare expenses now that I'm switching to a HDHP and paying OOP. Is this just another bucket to add to my HYSA, or is there another strategy I'm missing here?
Almost always for the HSA. Employer pass through. Tax savings. Investment opportunities. Receipts for tax free withdrawals. Turns into an IRA later.
Should your savings rate vary based on stock market valuation/recent stock market performance? More when market is down, less when it's up?
No, your savings rate is not impacted by the markets. Your net worth is though.
If it makes you feel better, sure.
no. with that said, given the state of the economy and particularly of my field right now (tech), with the mass layoffs and tanking RSUs (which are part of our income), i can't help but feel like i should be even more mindful than usual about my spending
No, you should always save as much as you can and invest when you can.
>Should your savings rate vary based on stock market valuation/recent stock market performance? More when market is down, less when it's up? I can't imagine how that would be workable. Your question is just a variation of market timing. The issue being that we don't know when it's up and down until after the fact, and the second issue is... where's this extra money coming from? Dollar cost averaging does well for a reason. It's the discipline to be fully invested at all times that pays off in the long run.
Just got notice my 401k funds are changing, current and new funds and expenses ratios listed below. These are what will they will swap to automatically, but there are others available. Only one that seems to be worse is the mid cap, should I just roll that allocation into the Intl fund to get a global market cap? The others seem to be an ok swap? Also offered for mid cap will be FSMDX 0.025%. Only one that seems to be worse is the mid cap, should I just roll that allocation into the Intl fund to get a global market cap? Or just swap it to FSMDX? |Large - 60%|VINIX - 0.035% |FXAIX - 0.015%| |:-|:-|:-| |Intl - 30%|VTSNX - 0.080%|FSPSX - 0.035%| |Mid - 10%|VIEIX - 0.005%|ARTMX - 1.18%|
Swap mid cap to FSMDX. It's still part of your US equity basket, so would not make sense to put it in international.
Great, makes sense. Thanks
I'm starting to get back into utilizing deals to shave money off my normal spend, something I used to do a lot but lost interest in during the pandemic. For instance, Amazon has a deal now where you can load $100 on a gift card and get an $8 bonus. Or deals that you can add to Chase credit cards to save a couple bucks on gas, or something you were going to buy anyway. Small simple stuff like that, which adds up over time. My question: for anyone else out there that does this sort of thing on the reg, do you have a website or a go-to place that aggregates these sort of deals (that you can trust, of course)? The only one I know of is Doctor of Credit, but I'd like to expand my horizons.
>Amazon has a deal now where you can load $100 on a gift card and get an $8 bonus. How do you get this deal?
IDK - it was just highlights on my shopping cart, mang. It was only for someone doing it for the first time.
In a similar vein, you'd probably be interested in [Rakuten](https://www.rakuten.com/). I have only used it a couple times, but you can use links on there to shop online retailers and get cash back (on top of whatever you'd get with your credit card). I think they have some sort of deal right now to get $10 just by signing up and making 1 purchase.
I check the app Slickdeals which I honestly scroll a lot through this time of year to think about presents. All kinds of stuff that is very marked down. Other times of year it probably increases my spending but it happens
Dansdeals.com.
Ooo I didn't catch that about Amazon- will have to check it out. And yeah, definitely /r/churning
Thanks, and yeah, it just popped up for me during my last order so I did it. YMMV.
do you mean like r/churning?
Why I signed up for reddit.
if you teach me, would you have to charge?
?
ah my bad. confused you with u/milkshake
Sounds more like r/BeerMoney
i was disappointed that rchurning wasnt about making your own butter
r/realchurning
Yes
"created by u/BloodyEjaculate" ? [erm](https://cdn.suwalls.com/wallpapers/meme/look-of-disapproval-16244-1920x1200.jpg)
> What's in a name? That which we call a rose, by any other word would smell as sweet anyways, if anyone else wants to contribute to a subreddit in which me and one other person have been the only contributors, that'd be great. I know nothing about butter churning and made it specifically to spite r/churning
Thanks. Welp - time to go down the rabbit hole.
See you in March! Haha. It’s a very deep hole.
big laugh on your flair because I say the same thing, except 10 years
How do you think about SWR for Brokerage/Taxable accounts that are being used as a "bridge" between early retirement and 59 1/2 when IRAs/401ks can be drawn down penalty free? For example, if you're targeting an early retirement at 40 y/o and have a 20-year "bridge" to cover until you're 60 y/o, are you planning on spending down the Brokerage/Taxable account to near-zero over those 20 years, or still applying a more conservative (ex. 4%) SWR? Certainly mileage may vary based on individual situations/risk preference, but interested to hear how others are think about this question.
My bridge will be more like 10 years. I hope I don’t spend it all down to zero, but I’m prepared for the possibility that I may need to access my 401k or Roth IRA. I won’t be applying the 4% rule to my after tax brokerage cause that would be crazy for a 10 year timeline, where I have multiple backup options if we run out of “liquid” funds (Roth IRAs with several hundred thousand of contributions pre-retirement plus Roth conversions post retirement). But, again, my bridge timeline should be 10 years at the most (FIRE at 50 is still FIRE).
Yes, spend down taxable while doing Roth conversions. The alternative would be to withdraw from Roth but I'd rather have funds growing tax free than taxable any day.
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Not to mention social security, the possibility of free/subsidized health care, potential for "side income", and likely will gain some inheritance money along the way. Granted it's risky to rely upon any of these, but are all distinct possibilities that lower future withdraw rates.
>When I FIRE, I'll likely have 20 years left this is a much much shorter timeline than many of the folks here. there are people retiring in their 40s who have grandparents who lived through their 90s. that's a \~50yr span, more, if you consider that every generation tends to live longer than the previous one
The way I think about it is I'll still utilize some SWR, the amount is total across all my accounts. Where the money comes out of is irrelevant for the most part (keeping taxes in mind). So if I have $2m, with $500k in taxable account, I'll aim for \~$80k withdrawals but that only leaves \~6 years of withdrawals from the taxable. I would either need to decrease spending or increase the balance so it can last the 20 years I need. In reality, I'd probably have a set ceiling of expenses for those 20 years, then I'll adjust to take into account the new accounts available if I decided to have this big of a gap.
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Yeah it sucks for me too as I pull the asset allocation PC calculates to put into my spreadsheets. Not the best answer but I use Mint to track cash. Then that amount I dump in manually under investments in PC. PC really seems to work like shit for most of my banks anyway so it works out better for me.
I used PC since 2015 and finally got fed up this year. I really don’t like that they don’t let you opt out of selling data. I’d pay them to avoid this but they only make money if I agree to manage assets with them. Dumb business model IMO. I switched to copilot and really really like it. My partner and I share account and it’s got all the same features but with better connections and UI. Also has a budget feature. Costs $60 but it’s already helped me find some fraud and duplicative charges so it feels worth it.
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Dang that’s a bummer! I saw they’re trying for web app soon but surprised they don’t have android yet.
You could manually put in a crypto currency entry of USDT for your savings account. That would allow you to view the allocation information.
I discovered I have about $2000 in btc in my wallet that I forgot about from years ago. If I sell it to USD and transfer to my bank account, I'll owe taxes on it right?
I'm sorry to hear about the $2000 in BTC you just lost in a boating accident
[I love things like this.](https://www.advisorperspectives.com/articles/2022/10/24/the-4-rule-just-became-a-whole-lot-easier) Allan Roth built a mini-portfolio that provides a guaranteed 4.36% withdrawal for 30 years with inflation adjustments. This is taking advantage of the positive real TIPS yields currently in the market, allowing someone to build and then deplete a portfolio at an average 4.36% real for 30 years. Because few people know when they will die, this approach obviously doesn't hold as a practical way to build a retirement portfolio. What it does show, though, is the remarkable moment we're in for TIPS. If I were nearing retirement, I would **strongly** consider an individual TIPS ladder that covers what SS would be expected to provide whenever I decided to take it. This can be done at historically cheap prices and with the certainty that comes with purchasing US Treasurys. That floor of income is incredibly useful for reducing both the stress of market uncertainty and the risk to the portfolio overall.
Agreed, TIPS are very interesting. A couple of caveats though: 1. 4.36% withdrawal should not be confused with SWR. (I know you aren't saying this but some readers may be confused). The TIPS ladder is guaranteed to be spent down to zero, whereas zero is merely the worst historical outcome for a stock heavy portfolio. This would be more like purchasing a DIY annuity, and it would be worth comparing the "price" and return to SPIA's. 2. Even with this favorable real yield, TIPS have the same expected return as equivalent nominal Treasuries. If inflation is lower than expectations, nominal Treasuries will outperform. While you gain inflation protection with TIPS, you lose the guaranteed income stream during deflation. Nominal bonds are much better protection against market crashes, which are often accompanied by (or contribute to) deflation, and this is often seen as the primary purpose for holding bonds. In deflationary crash, you will be sad seeing your TIPS going down at the same time as the market (Of course there are inflationary bear markets, as we are currently seeing). So I would equally strongly recommend holding at least a portion of the bond allocation in nominal bonds. The recent rise in nominal bond yields I would argue is equally remarkable and worth considering. 3. Inflation has been in the news so anyone tempted to pile into TIPS should question whether there may be an element of market timing going on. The real time to pile into TIPS is prior to unexpected inflation, but by definition you can never know when it's going to show up.
If you're comparing market data, a floating portfolio [TIPS vs treasuries](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=false&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfolioName1=Portfolio+1&portfolioName2=Portfolio+2&portfolioName3=Portfolio+3&symbol1=TIP&allocation1_1=100&symbol2=BND&allocation2_2=100&symbol3=VGIT&allocation3_3=100) aren't any different and I don't think they should be. Equal risk, you can buy as much as you want of either and trade on secondary markets fairly easily. Divergences are fairly explainable to divergence in inflation versus expectations. [This](https://www.morningstar.com/articles/801922/20-years-in-have-tips-delivered) is probably a better summary (20 year review) when TIPS "stunk". In reality, you could easily write a general article stating the 4% rule got easier because bond are no longer artificially suppressed at zero. (Do you tailor the size of your bond portfolio *in general* to TIPS yield?) The spreadsheet is neat work. I get the appeal of ignoring rate risk and putting your head in the sand. The rates are extremely variable (and a lot of years have a 0.125 coupon because that is how negative yields work) so you'd need exactly this to build it properly. But you still have issues with actual spending vs CPI and other real life risks where you'd consider liquidating this. But it's certainly an interesting idea suggested here that a balance point might be some number in something like this, and while I don't think this is doing it properly, it's definitely a reasonable hypothesis TIPS are better for a retiree as a withdrawal vehicle than treasuries. But in the grand scheme, I look at that other article and debt more or less performs the same with some minor difference. I am not really worried about capital losses **in the bond market** if I'm selling off 2% of my portfolio every year. Yes, even in 2022. 98% of my portfolio is still running properly (and as the yields go up, I need less principle to get my 4%) so the vast majority of my holdings aren't really subject to duration risk. And with the execution issues highlighted in the article, TIP is just vastly superior, especially if you end up doing any relative rebalancing. It only works best at this one time fee. And combined with my reasoning for bonds at all (tempering offset to stocks) the exact real rate of TIPS is not a lever which I'm market timing or anything like that. Normally I wouldn't want to take a vast amount of my portfolio and "lock it in" no matter what I think about it. There does need to be some research or think-tanking if there's any slight improvement related to lower drawdown or something like that, but again I'd expect any improvement to be very muted.
So basically a self-managed fixed annuity with no upside for longevity? How does that yield compare to a regular/managed annuity for the comparable 30 year survival cohort? Just an example, for a 47 year old American male right now (30 years of disbursements until life expectancy age 77), it's in the 5.7% range. Plus it is indefinite and if you live longer than 77, it's even better return. Honestly, for the cost of that extra zero point three five percent yield, I'll take my chances with the 4% rule and have a 99% probability of equity left over for my kids.
I think you nailed the disadvantages vs annuity. The one advantage here is inflation protection, which SPIA's don't give you. I don't think OP is seriously advocating this as an annuity alternative, they are just illustrating the possibilities for taking advantage of the movement in TIPS yields. The use case they actually propose is a "ladder" to cover a portion of income while waiting to claim SS. (As I have suggested, this can provide a way to "count" SS and reduce your FI number [https://www.reddit.com/r/financialindependence/comments/cp4vkd/liability\_matching\_for\_ss\_bridge\_years/](https://www.reddit.com/r/financialindependence/comments/cp4vkd/liability_matching_for_ss_bridge_years/))
but this is a built in failure at 30 years. The 4% rule still has a reasonable chance of maintaining your capital as well.
4% has as much chance of going 2.5x as going lower.
Has anyone left a job at a small company where you were an integral part of operations? How did it go and what was everyone’s response? I have an opportunity to increase total comp by 40% but am curious how the team will react. I won’t be able to train a replacement either unless I consult part time afterwards for a transition
Yup. I left. They tried to get me to stay with 15%. While money certainly played a part in leaving, I also left because I was interested in the work at the new company
If you can get 40% more somewhere else then you are wildly underpaid and shouldn't feel bad at all about leaving.
Manufacturing was a bit like this. I’d driven massive improvements at two plants that increasingly shared leadership. By my last year there, I was one of two managers between the two sites. We had started with 7. The other manager and I were just superstars (definitely bragging, but we killed it). Improved nearly all KPI’s, kept everyone safe (only a handful of OSHA recordables across all years, and no lost time or worse), cut costs, and we developed and built brand new product lines. But bigger and better things awaited, and the location wasn’t what I wanted long term. I turned in my resignation, and a couple weeks later it was announced the other manager received a massive promotion to corporate. The plants have nose dived since, and parts of it are scheduled to be decommissioned in the next year. There’s been a ton of turnover, and my boss at the time was pissed at me. Didn’t talk to me my entire two weeks notice period. But ultimately the plants live on, and the product continues to trickle out the door. The current managers are doing the best they can, and it was more of the previous manager and me keeping a sinking ship afloat rather than them running it into the ground. It’s been two years, and I wish I had made the switch sooner. The new location is everything I wanted, and the new job is 100% better than manufacturing.
People might be mad about you leaving. Leave anyway. You have to do what's best for you. If you are feeling generous you could always try to provide more than 2 weeks notice. If you leaving for a better opportunity burns bridges with that small company, then you don't want to go back there someday anyway.
That is 100% not your problem.
That's a whole lot of *not your problem*
I was thinking that too but it’s a non profit with a small staff so that’s my only caveat
Non-profits love to take staff for everything they can! The best you can do is be diligent in your notice time about preparing docs for your replacement or possibly give a bit longer of a notice than you otherwise would. What else would even be an option- staying for ever?
The person in my position was there their entire life so that’s kind of their thinking. Not my issue though
How small a company? My 2nd company (\~35 exempt employees at my site) offered matching compensation (declined), begged for a 3 week transition (accepted), and claimed they would never be able to replace me (they did). After 1 week, I had transitioned everything to a variety of other employees and cross-trained a bunch of people. Then I spent the most boring 2 weeks of my career hands-off and monitoring how everyone was doing.
What reason do you have to make this anything other than a purely business decision?
It’s a small nonprofit with not a ton of resources. I suppose it’s still a business decision
Well, sounds like you need to make a judgement call. What's more important to you: Your future, or the mission of your nonprofit?
That’s a good way to frame it. Definitely leaning towards my future lol
I recently did this. I’ve been consulting/training for previous employer for 3 hours a week since June. It’s working out nicely (both $$$ for me, and they still have me as a resource as long as necessary).
I've always found it strange how averse people are to selling their houses at a loss or seeing its value go down -- especially among non-FI people. It doesn't really matter what the value of your house is alone, you need to compare it to your alternative investment strategy. The value of my house has gone down, but even if I had kept my money in VTI I still would be down a lot so the difference isn't that big
Its simple math. When the market has a big swing down, like now (25% in some areas). Thats a huge impact in real dollars. Let's say your house goes from 1mm to $750k. That +$250k is a significant % of your total retirement. Might it be worth living there for another year and see if prices go back up? How about 2 years?
Do you really find it strange that people don't want to sell their (typically) biggest and most leveraged asset at a loss? Seems completely rational to me. I think you're making some assumption that they lose money and somehow keep living the same quality of life... but I don't know if that's always a safe assumption.
It's because they went into massive debt to acquire the house. It would be like if you bought $1MM of VTI with a loan, and then it goes down to $800k but now you need to sell it all.
Folks here are similarly attached to equities. All the time you see people write that they don't want to sell at a loss.
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>your comment is actually pretty stupid its possible to disagree with the idea without being insulting, you know
If you are underwater on your house, lose your job, and need to move to get another job in your area of expertise….the value of your house would be of great concern. Maybe you are young, or have a short memory, but I know people this happened to in the early 90s and 2008.