Cool FIRE article in MSN Money

[adrift]

wish I could side with you dude, when I retire I was entitled to 5 weeks earned vacation, plus you were allowed to purchase a week and I got unlimited sick days.
6 weeks was the max for my megacorp but you had to be there 35 years to get that.
you could also bank vacation.
I had 6 weeks vacation my last year.

I was also getting 5 weeks of vacation when when I left my megacorp. Initially, we could bank vacation days. But, corporate tax laws changed at some point so that this counted as a liability on the company's balance sheet. So, we had to use them up over time.

I was once was able to take off just over 3 months bumming around SE Asia all on vacation time.

I FIREd when I was 45.

 

[photoguy]

You forgot that they likely have to pay 15% taxes on their dividend income and that yield is more like 2.5%... So more like $20k net of federal and state investment income tax

Air BnB income is also taxable. So figure 20 % tax on that income between 15% federal and some state taxes. So that falls to 9k

I don't think taxes are going to be as high as you suggest ($10k).

Between qualified dividends, capital gains, and personal exemptions it's possible to pay nothing at the couple's hypothetical income level. This past year, turbo tax actually reported a negative federal rate for me.

We don't know how much of their assets are in taxable vs tax-deferred (accessible by roth conversions). But if you put $40k in income in taxcaster, you get $2k of federal taxes. This is worst case (i.e. they have no taxable divs/cg that qualify for the 0% tax rate). While $2k isn't nothing, I don't think it's material for the discussion.

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

Then there's that pesky thing called inflation which runs 2% per year, which could run more than that and squish their income and portfolio to smithereens.

...

Market has been flat for the last couple years. Sequence of return risk to contend with.

This is already accounted for in the 3% withdrawal rate assuming a FireCalc like approach (i.e. spending is increased by inflation every year and portfolio is subject to variable returns). See also the trinity / bengen studies which are the basis for FIREcalc's approach.

 

[FUEGO]

DW got 4 weeks, unlimited sick leave, plenty of floating holidays, every Friday off, and paid 5-12 week summer vacations her last two years of work.

But I still don't think it's possible Purplesky has 7 weeks of vacation time because no one can get that. It's unrealistic.

 

[Sarah in SC]

DW got 4 weeks, unlimited sick leave, plenty of floating holidays, every Friday off, and paid 5-12 week summer vacations her last two years of work.

But I still don't think it's possible Purplesky has 7 weeks of vacation time because no one can get that. It's unrealistic.

I'm not sure that everyone recognizes sarcasm without the proper sarcasm font used, Fuego

Cough, cough: 8 or 9 weeks are what I've gotten the past few years.

 

[MichaelB]

What's a vacation?

Edit: oh, sorry, now I remember. It's been so long - a vacation is one of those things for people that w*ok.

 

[FUEGO]

I'm not sure that everyone recognizes sarcasm without the proper sarcasm font used, Fuego

Cough, cough: 8 or 9 weeks are what I've gotten the past few years.

It's a lost art. No matter how thick one spreads it, it goes unnoticed.

 

[MichaelB]

It's a lost art. No matter how thick one spreads it, it goes unnoticed.

Not lost, just under-appreciated - by some.

 

[FUEGO]

Not lost, just under-appreciated - by some.

If the still working had more than 4 weeks vacation time, then surely they could appreciate the more subtle arts.

 

[2017ish]

DW got 4 weeks, unlimited sick leave, plenty of floating holidays, every Friday off, and paid 5-12 week summer vacations her last two years of work.

But I still don't think it's possible Purplesky has 7 weeks of vacation time because no one can get that. It's unrealistic.

Setting the sarcasm fount aside....

I think DW and I both have "unlimited," or "discretionary" vacations. Doesn't make much difference. To do things properly, we still take three weeks. (And, if you add the weekend/holiday work back in, the result is uglier.)

All the more reason to jettison the work world soon.

 

[Bestwifeever]

Not lost, just under-appreciated - by some.

And of course some people are better at it than others, both the writing and the appreciating. And as my dear mother used to say, a little goes a long way. But perhaps all the posts in this thread are meant to be sarcastic.

Irony, now that's a lot more fun than sarcasm. And pity.

 

[AnonEMouse]

Maybe we should just start giving 30 year olds a pension check for life so they can go out in the world and do good things instead of actually working.

Because working the 10 years through your 20s is such a big waste of time and it's so damn exhausting.

And we are suggesting the work ethic of "not working" on this generation is a good thing. Not cool.

You might want to sit down (if you're not already). There are movements afoot to do exactly that from Canada to Switzerland, except you don't even have to be 30 to get a "basic income" - a government provided stipend to all adults. The measure is likely to fail in Switzerland, but Ontario is set to begin its experiment with basic incomes soon.

 

[Sarah in SC]

Oh yeah, I remember reading about the Canadian "Mincome" experiment from way back, that was very interesting. Thanks for bringing it up, Anon. Should cause a cataclysm of sputtering...

 

[FUEGO]

 

[rodi]

Oh yeah, I remember reading about the Canadian "Mincome" experiment from way back, that was very interesting. Thanks for bringing it up, Anon. Should cause a cataclysm of sputtering...

LOL!!!!

 

[Major Tom]

Some people are such troublemakers.......

 

[tulak]

For those that are interested, here's a recent article regarding basic income from fivethirtyeight: http://fivethirtyeight.com/features/universal-basic-income/

They also did a follow-up video on the article: http://fivethirtyeight.com/features/could-basic-income-really-work-a-video-chat/

Work is so yesterday...

 

[karen1972]

I am really getting sick of these "millennial saved big money and retired early stories."

So 2 middle class income earners supposedly stashed 1 million away and are now retired. Yes sure. Happens every day in America.

Seriously. The math does not work. Sorry, just not buying another early 30's millennial retired early story on the internet.

So they spent $270k on a house. WOW! And its near cool craft breweries and awesome art galleries. How neat!

Also, they are going to rent out their new house on AirBnB and travel in the summer.

Do not buy into this early retirement fantasy that is being sold to the millennial generation. This is fake crap.

well I don't think its fake crap if your software engineers.. I have tons of friends that by their late 30s they were easily in the $3M+ category. They had their kids late which means they could accumulate early and stay home after they had their money banked. One of the keys.. bonuses and stock options. I have friends making $700k in a given year on those 2 items.. it really is a whole other world. I cashed in $200k by the time I was 30 and had to because they expired (very bad tax year).

Other friends kids are now fresh out of college, starting 6 figures the day they walk out (even in Boulder, CO.. ie so we are not talking New York or San Fran costs)...if they make even modestly smart choices it would not be that difficult. They have zero student loans because their parents did the prepay college plan Illinois offered.

Its certainly not for everyone, but there is still ways to accumulate wealth in specific industries.

 

[Major Tom]

The Universal Basic Income idea is a very interesting one. All sorts of possible benefits and drawbacks come to mind. One of the first concerns that came into my head, which is mentioned in the article that tulak linked, was that if UBI replaces all other benefits, there could be many people (SSDI recipients in the US, for example) who would be faced with the prospect of a drastically lower benefit under the UBI program. How does a disabled person living on his/her own go from an income of, say $1800/month to $1000/month?

I would love to see the debates, general hoopla, and political grandstanding that would accompany a proposal of this idea. Can you imagine?

 

[retire2020]

Well now we know. Purplesky is envious. And he's still working with millennials which really pisses him off because he thinks they'll be retiring before he does.

Who cares?

+1

Purplesky....This is early retirement forum with no minimum age requirement. I am happy for BrunoFamily that they figured out and living the dream...even if it turns out that they may need to find work someday...who cares? They then had long sabbatical...and enjoyed it.

If I were a Milenial, I would be inspired by their story and would save aggressively to be FI asap

 

[papadad111]

I don't think taxes are going to be as high as you suggest ($10k).

Between qualified dividends, capital gains, and personal exemptions it's possible to pay nothing at the couple's hypothetical income level. This past year, turbo tax actually reported a negative federal rate for me.

We don't know how much of their assets are in taxable vs tax-deferred (accessible by roth conversions). But if you put $40k in income in taxcaster, you get $2k of federal taxes. This is worst case (i.e. they have no taxable divs/cg that qualify for the 0% tax rate). While $2k isn't nothing, I don't think it's material for the discussion.

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/



This is already accounted for in the 3% withdrawal rate assuming a FireCalc like approach (i.e. spending is increased by inflation every year and portfolio is subject to variable returns). See also the trinity / bengen studies which are the basis for FIREcalc's approach.

Turbotax caster is a Great link.

Yes my presumption is that they are also netting 40-50k per year on their blog. Removing that and you're right the dividend income and the BnB income likely are closer to 4K in federal and state taxes ..

 

[RobbieB]

Really? You can make forty five grand a year blogging?

That's more than half of what I was making before I retired.

I've been doing this all wrong. Millennials Rock!

Mr. Money Mustache must really be stacking it up!

 

[teej1985]

Really? You can make forty five grand a year blogging?

That's more than half of what I was making before I retired.

I've been doing this all wrong. Millennials Rock!

Mr. Money Mustache must really be stacking it up!

I believe it was reported that MMM is pulling in 7 figures.

 

[RobbieB]

Amazing. I give up. Well I did give up -

A million a year blogging. Cool. Whass uppp?

Go figure. Social media. The new machine.

 

[Fedup]

well I don't think its fake crap if your software engineers.. I have tons of friends that by their late 30s they were easily in the $3M+ category. They had their kids late which means they could accumulate early and stay home after they had their money banked. One of the keys.. bonuses and stock options. I have friends making $700k in a given year on those 2 items.. it really is a whole other world. I cashed in $200k by the time I was 30 and had to because they expired (very bad tax year).

Other friends kids are now fresh out of college, starting 6 figures the day they walk out (even in Boulder, CO.. ie so we are not talking New York or San Fran costs)...if they make even modestly smart choices it would not be that difficult. They have zero student loans because their parents did the prepay college plan Illinois offered.

Its certainly not for everyone, but there is still ways to accumulate wealth in specific industries.

The stock options are different. My neighbor got $5 million in their 30s, but they are still working in their 50s. And very frugal still. The most expensive care they have is a low end Lexus.

 

[Fedup]

+1

Purplesky....This is early retirement forum with no minimum age requirement. I am happy for BrunoFamily that they figured out and living the dream...even if it turns out that they may need to find work someday...who cares? They then had long sabbatical...and enjoyed it.

If I were a Milenial, I would be inspired by their story and would save aggressively to be FI asap

Let's called that a sabbatical and not retirement. Same with taking a gap year, let's not called everything retirement.