Join Early Retirement Today
Thread Tools Search this Thread Display Modes
No such thing as too late
Old 01-12-2019, 03:16 PM   #21
Full time employment: Posting here.
Mdlerth's Avatar
Join Date: Oct 2016
Location: The Shire
Posts: 810
No such thing as too late

I will add my voice to the chorus of "you aren't too late". You're only 34! Wind your clock forward eight or ten years; that's how old I was when my monthly statement from Gringott's showed a balance of two galleons, five sickles and a knut. After twenty years in the workforce, I had about enough saved to buy one large bag of Bertie Bott's beans.

But... then I got more serious about saving and investing. Every year I inched up my 401k, put a bit more toward the mortgage, and took the odd staycation instead of more exotic locales. A bunch of small changes amounted to a large boost to our investment rate. Put dough into both pretax and taxable accounts.

Wind the clock forward another twenty years and we are FI enough to RE whenever we feel like it. I'm going out this year, and she's planning to punch out in 2020.

You might not be looking at retiring at 35, but if your experience is anything close to mine, you could be sitting pretty at 55. In my book, that's still pretty early.

Paying it forward is the best investment.
Mdlerth 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 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!

Old 01-12-2019, 04:11 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 6,154
Originally Posted by claudefergus View Post
Hi everyone.

I went through several brushes with completely losing everything (this involved cashing out previous retirement money for a family medical emergency and narrowly avoiding bankruptcy).


Too bad you didn't come here earlier, could have probably saved $$$$.

I don't know your specifics, but cashing out retirement savings to pay off a debt is (IMHO) bad.
Especially a medical bill as those are generally high and unavoidable.
Instead pay the medical bill via cash and credit card or loan, if you still owe them money. Then declare bankruptcy as your retirement money cannot be touched (Varies by State).

Sure you end up with a bad credit rating, but you save your retirement.

Too many people pay their debt with all their cash, and their retirement money and then declare bankruptcy. They have nothing, and still their credit rating ends up bad.

Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Old 01-12-2019, 11:12 PM   #23
Confused about dryer sheets
Join Date: Jan 2019
Location: Los Angeles
Posts: 5
I can't believe how much time and effort you all put in to not only welcoming me here but giving me hope and encouragement and actionable advice.

Thank you all so much. I have definitely found the right place
claudefergus is offline   Reply With Quote
Old 01-12-2019, 11:30 PM   #24
Confused about dryer sheets
Join Date: Jan 2019
Location: Los Angeles
Posts: 5
To clarify the wife/tax/emergency fund situation:

Our current emergency fund is mostly comprised of her money. We only had a couple months of expenses while we've been paying down debt.

She has put padding in there during her current freelance job (which ends in March) because she did estimated taxes the last two years and had a fairly large liability in 2017. For that reason, she decided to have more cash available in case she has liability in 2018 on her self-employed tax.

I told her we should still consider liquidating that account to throw at debt but since she is now W2 freelance and this should be the last time she deals with this for a while I decided to let it slide.

I think I'm going to do what someone suggested above and tell her that we should take whatever is leftover after she pays her liability and put it right on credit card debt.

I'm not sure what she had done incorrectly on those estimated tax worksheets but what's done is done now and thankfully she will be W2 moving forward so this won't be an issue again.

I appreciate the advice regarding this issue though. She is more conservative about emergency funds than I am as well and I do my best to find a middle ground with her.

It's understandable because just 4 years ago or so she went through a dry spell of not being able to get a gig for half the year.

She is coming around to the idea of having 3-6 months of expenses, once debt is paid off, and being more aggressive with investing.

This whole educational experience that this community and the FIRE community at large has provided me is rubbing off on her too so I'm optimistic that once we're past these psychological hurdles immediately in front us it will be easier to have her all in on this with me.

Originally Posted by LOL! View Post
I'll focus on one thing: The $10,000 in taxes. I realize it include FICA/medicare/income, but perhaps also state. Nevertheless, to get that amount of taxes requires a lot of income or very poor tax planning. Can you hint at which one it is please?
claudefergus is offline   Reply With Quote
Old 01-12-2019, 11:39 PM   #25
Confused about dryer sheets
Join Date: Jan 2019
Location: Los Angeles
Posts: 5
This is something that I need to learn more about for my situation.

The vast majority of the time neither me or my wife has access to employer 401k.

So the baskets we'll be investing in will have to be 100% from our own after tax take home money.

We are in the 22% tax bracket filing jointly in California.

I'm not sure what the best investment vehicles are for us and in which order.

As of now we do have the Roths. Should I be prioritizing a traditional IRA?

Should I open my own self-funded 401k?

On the other side of debt I am trying to figure out how to allocate dollars to Roth, brokerage, traditional IRA, what have you.

Any advice on how to approach this from our employment situation would be great.

Because of the nature of work, sometimes we have health care coverage and sometimes we have to buy in the marketplace so that's always a consideration as well.

Originally Posted by pjigar View Post
Go cash only if you really want to control spending. And track every expense by category. Once the spending is under control and credit card is paid off then you can start using credit card for ease of tracking expenses. But always pay off card in full every month!!

Set savings target that is substantial percent of your income (which should hurt) like 50%. FYI: We save 60% of net income.

Once debt is paid off, you should fund in this order:
1. 401K up to company match (if you qualify)
2. HSA (if you qualify). DO NOT withdraw this money but rather invest it.
3. IRA and Roth IRA (Same order but maximize both before moving down the list)
4. 401K up to deductible limit
5. If you have kids and live in a state with tax benefits then fund collage savings account at this point.

If you have any money left:
6. Brokerage and 401K after-tax (Same order but I prefer 401K after-tax over brokerage)
7. Private equity
claudefergus is offline   Reply With Quote
Old 01-12-2019, 11:57 PM   #26
Confused about dryer sheets
Join Date: Jan 2019
Location: Los Angeles
Posts: 5
I'm considering a career change that doesn't involve school. I am pretty tired of relying on two inconsistent incomes, not to mention benefits. Still a work in progress.

Originally Posted by splitwdw View Post
Welcome to the forum. Maybe one (or both) of you should stop freelancing for now and find an employer with good benefits. Don't know if you are freelancing by choice but it sounds like you need a steady income.
claudefergus is offline   Reply With Quote
Old 01-13-2019, 07:06 AM   #27
Gumby's Avatar
Join Date: Apr 2006
Posts: 11,185
Originally Posted by claudefergus View Post
I'm not sure what the best investment vehicles are for us and in which order.

As of now we do have the Roths. Should I be prioritizing a traditional IRA?

Should I open my own self-funded 401k?
I think the intermittent employment situation may affect your decision here.

With an IRA or 401k, if you put money in, you generally can't get it back out before age 59.5 without a penalty. Not so with a Roth. There, you can pull out your contributions without negative effect, just not the earnings generated within the Roth. Thus, in a monetary emergency, it is better to have money in a Roth than a traditional IRA or 401k.

If you choose to invest in a straight after tax account, you can, of course, always take the money and the earnings at any time. An additional benefit is that in any year when your employment dries up and you are pushed down into the 12% marginal bracket, you could harvest capital gains in your taxable account at a 0% tax rate on them.
Living an analog life in the Digital Age.
Gumby is online now   Reply With Quote
Late start in semi-crisis. Better late than never?
Old 01-13-2019, 06:02 PM   #28
Full time employment: Posting here.
HNL Bill's Avatar
Join Date: Dec 2017
Location: Honolulu
Posts: 761
Late start in semi-crisis. Better late than never?

Being in the 22% tax bracket means you have modestly high combined income. If so, investing in a traditional IRA means you could lower your taxable income by up to $5K each, which would save you $2200 in federal income tax.
HNL Bill is offline   Reply With Quote
Old 01-13-2019, 10:26 PM   #29
Full time employment: Posting here.
VanWinkle's Avatar
Join Date: Oct 2017
Location: Brighton
Posts: 887

You might read about one of these for you and one for your wife. Better to save tax deferred is if you can.

Also read the "If you Can" about investing inside your 401K or taxable account.

Best to you,


Retired May 13th(Friday) 2016 at age 61.
VanWinkle is offline   Reply With Quote

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
Merry Digital Christmas (better late than never)... Midpack Other topics 2 01-02-2013 07:34 PM
An intro is better late than never?? panacea Hi, I am... 19 10-06-2011 12:59 PM
Better later than never RedHawk Hi, I am... 6 01-21-2007 12:50 PM

» Quick Links

All times are GMT -6. The time now is 10:03 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.