Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Free at last!!!!
Old 04-11-2007, 04:40 PM   #1
Recycles dryer sheets
two4theroad's Avatar
 
Join Date: Aug 2006
Location: Texas
Posts: 216
Free at last!!!!

Hello to all, I have not posted into this topic before but am combining some other posts here to introduce my self.

I am 48 and DH is 57. I wanted to quit my job at the first of 07 as my job was ruining my health. Husband wanted to continue until 59.5 even though his job had higher stress level than mine. I was consulting a CPA/planner to doublecheck my firecalc results and get some input into tax repercussions of 72t vs. NUA etc . I had already been squirreling away aftertax money into cds and mm in preparation for the change. I finally talked DH into going in to see the CPA with me hoping that he could convince DH that I could afford to pull the plug as he did not have much faith in the online calculators. I sent all our tax stuff and investments in to him 3 weeks before the appt so he would have all the info. When we got there the meeting went on for about 15 minutes before he said to my husband that with our spending projections and our investments not only could I quit but there was no reason for him to continue to work unless he was really enjoying his job. To make a long story short DH decided that he would continue on for 2 more years. But 3 months later there was a shake up and he was laid off. He was very unhappy at first but now we believe that it was meant to be. We are fine financially and still feel like we are on vacation 6 months later. We are both healthier and feel years younger. It is amazing what stress does to a person! He would not have quit and would probably have wanted me to continue as well so it was a blessing in disguise. It was fortuitous that we were already FI before we were RE a bit earlier than we had planned.

This is what I credit with the ability to retire early for us.
1. Parents who taught me the basics of money.... saving, compounding and the difference between want and need.
2. Starting a job while still young with a new company who had cheap stock, a 401 K and pension plan.
3. Good health, good marriage and 25 years of a uninterrupted work and saving.
4. Company stock that is now worth over 10 times what I paid for it!!!
5. Company pension for him now and mine at 62.
Add all that up and you get early retirement at 48.
I am now setting up the transfer from 401K to Vanguard and will have questions after their phone call.

I specifically have some concerns about the NUA treatment of our company stock as we transition from 401K to Vanguard. What would be the best way to handle it etc.....
__________________

__________________
Women and cats will do as they please, and men and dogs should relax and get used to the idea.<br />-Robert A. Heinlein
two4theroad is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Free at last!!!!
Old 04-11-2007, 05:04 PM   #2
Recycles dryer sheets
 
Join Date: Jul 2004
Posts: 425
Re: Free at last!!!!

If your company stock was in your retirement plan, then you need to be VERY careful with it in order to preserve NUA treatment. Do NOT roll the stock into your IRA at Vanguard. It must be transitioned to a taxable account, but you will only owe taxes on the basis at that time.

Your company can probably help you with this, also there are many articles on the Web that describe this.

Most important thing right now, do NOT rollover the stock into an IRA.
__________________

__________________
gindie is offline   Reply With Quote
Re: Free at last!!!!
Old 04-11-2007, 06:05 PM   #3
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,563
Re: Free at last!!!!

Welcome to the board, 2Fer.

You need to seek professional help for NUA issues... if you don't do it right then the IRS professionals will confer their own brand of "help" upon you.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: Free at last!!!!
Old 04-11-2007, 06:32 PM   #4
Thinks s/he gets paid by the post
DangerMouse's Avatar
 
Join Date: Jan 2007
Location: Silicon Valley
Posts: 1,812
Re: Free at last!!!!

Congratulations on making a sucessful transition to RE. Sometimes things work out better if the ability to determine our own future is taken away from us.
__________________

I be a girl, he's a boy. Think I maybe FIRED since July 08. Mid 40s, no kidlets. Actually am totally clueless as to what is going on with DH.
DangerMouse is offline   Reply With Quote
Re: Free at last!!!!
Old 04-12-2007, 03:32 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,075
Re: Free at last!!!!

Congrats.
__________________
chinaco is offline   Reply With Quote
Re: Free at last!!!!
Old 04-12-2007, 03:59 AM   #6
Recycles dryer sheets
 
Join Date: Nov 2004
Posts: 107
Re: Free at last!!!!

I have not run into the acronym NUA. Translation?
__________________
polloloco is offline   Reply With Quote
Re: Free at last!!!!
Old 04-12-2007, 07:22 AM   #7
Recycles dryer sheets
two4theroad's Avatar
 
Join Date: Aug 2006
Location: Texas
Posts: 216
Re: Free at last!!!!

NUA = Net Unrealized Appreciation

This is a specialized treatment of company stock held within your 401K which allows you to pay income tax (and penalities if applicable) on only the cost basis of the stock.

My specific decision is how much of the stock should I use for this as it will remove the money from the tax deferred account and put it on the taxable side of the portfolio. We currently have about 90% of our portfolio in before tax accounts.
__________________
Women and cats will do as they please, and men and dogs should relax and get used to the idea.<br />-Robert A. Heinlein
two4theroad is offline   Reply With Quote
Re: Free at last!!!!
Old 04-12-2007, 09:12 AM   #8
Recycles dryer sheets
 
Join Date: Jul 2004
Posts: 425
Re: Free at last!!!!

Quote:
Originally Posted by two4theroad
My specific decision is how much of the stock should I use for this as it will remove the money from the tax deferred account and put it on the taxable side of the portfolio.
Yes, but t will be a significantly "reduced" tax portfolio. The only fully-taxable part will be on the basis, any other taxes you pay in the future will be at capital gains rate (currently no more than 15%). And you won't have to pay it until you sell the shares. So, in essence, it still remains "tax-deferred".

If you were to rollover the stock into the IRA, then it would ALL be taxed at your maximum rate.
__________________
gindie is offline   Reply With Quote
Re: Free at last!!!!
Old 04-12-2007, 12:57 PM   #9
Recycles dryer sheets
 
Join Date: Nov 2004
Posts: 107
Re: Free at last!!!!

Thanks for the info.
I will be running into this situation myself in a couple of years.
__________________
polloloco is offline   Reply With Quote
Re: Free at last!!!!
Old 04-12-2007, 03:39 PM   #10
Dryer sheet aficionado
 
Join Date: Jun 2005
Posts: 27
Re: Free at last!!!!

How does one determine the NUA on company stock that has been added incrementally (weekly) into a 401K for years?
__________________
aggie is offline   Reply With Quote
Re: Free at last!!!!
Old 04-12-2007, 04:00 PM   #11
Recycles dryer sheets
 
Join Date: Jul 2004
Posts: 425
Re: Free at last!!!!

The administrator of your 401K should be able to give you the basis of your stock.
__________________
gindie is offline   Reply With Quote
Re: Free at last!!!!
Old 04-13-2007, 02:37 PM   #12
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 18,731
Re: Free at last!!!!

Congratulations, I'm sure every thing will work out great for you. I'm 35 months short of ER and I wish my company would lay me off. I know I would be just fine but am holding on to ER age mainly so that I can get the Health Insurance benefits. DW retired over 3 years ago and that helped my situation a lot. It's great having an RE'd spouse at home.

Stress levels fluctuate for me. Pretty high at present as I sit in JKK waiting 5 hours for my first flight to India (business of course, not pleasure). A few weeks ago I had trips to England and Spain and DW came along with me which was great - she didn't fancy Bombay :P
__________________

__________________
Retired in Jan, 2010 at 55
Now it's adventure before dementia
Alan is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Did you find that the endless free time wasn't really that way? Surfdaddy Life after FIRE 26 05-15-2007 11:27 PM
Why isn't e-filing free for everyone? samclem Other topics 12 04-16-2007 09:33 AM
Almost free tax software, etc. cute fuzzy bunny Other topics 3 01-11-2005 08:07 AM
Free Spyware detection and removal Paul Other topics 4 12-06-2004 03:55 AM
Fake Free Registration Accounts BigMoneyJim Other topics 2 09-06-2004 06:12 PM

 

 
All times are GMT -6. The time now is 06:15 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.