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Re: Good Time to Retire ?
Old 05-30-2004, 07:03 AM   #21
 
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Re: Good Time to Retire ?

GDER.........good post! MY situation is exactly the same
vis-a-vis working. My type A-ism will not allow just dabbling. I would be right back in the soup, like you said,
16 hour days and weekends. If you can do it and enjoy it, that's fine. I can't do it. It's all or nothing for me and I choose nothing.

Wabmester............ re. the corporate shield, I was not implying
it is not a danger, just that I never personally saw it happen. But, thanks for your "summary" as the reasons
given increasing the chances it will be pierced are exactly right to the best of my knowledge.

John Galt
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Re: Good Time to Retire ?
Old 06-08-2004, 10:19 AM   #22
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Re: Good Time to Retire ?

Wab- you guys are probably right on the sole proprietorship -- I started quizzing my accountant after these posts, and he said we were only S-Corped because I had set up one years ago and as long as I had it, he was figuring out how to maximize some of the tax benefits once I decided to resuscitate it for some part-time work. He tells me that a sole proprietorship is just as good, especially in the short term.

There is one 'on the qt' point about S-corps though: you can pay yourself as a shareholder for a long time and avoid paying the 'self employment tax' of 15.3% for SS and Medicare on your withdrawals. In a sole proprietorship, all your income automatically goes through the Self Employment Tax planer and comes out thinned down. You won't find this in the tax code anywhere so don't look, but it is one of those things that works out in practice: s-corp profits can be paid to shareholders (that's you!). At some point they might bounce on you and tell you it is really income but the line is fuzzy about when or if.

GDER -- yeah, I can see how work can be like an alcoholic taking one drink -- but fortunately for me it isn't a problem. I have been doing the 10-hour to 15-hour a week thing now for 3 years and have no problem ignoring the work and doing what I want, when I want. In fact, the problem may be that I starve the work stuff and keep it in first gear, but I do that to keep it all in balance. People I work with 'get it' or else I don't work with them.

Basically, work at those levels is just like one more 'activity' that an ER does to fill up his days. But I am not going to try to convert anybody on this point -- I am here out of necessity (I though a 5% SWR was sustainable 4 years ago, because I had never found the Cooley Hubbard/Trinity stuff or any other SWR analysis at that point), and I have found it very difficult to cut our spending by the requisite 20% to bring things back to a 4% SWR, so this has been a way to make it all work. I do enjoy the work, though -- I think it keeps my brain fresh and keeps my self-esteem up -- I am actually doing something useful for people out there on occasion -- and it gives me a reason to shave and shower from time to time.

"Work" for an ER is kinda vague, too. Some of my 'work' this year has been writing a book on ER which might find a publisher and might sell and might not, but has been a lot of fun. Was it work? I dunno-- its a lot like posting here, actually. "Work" for other ERs is rehabbing rental real estate or puttering around with little angel investments in private companies, or tutoring kids in math or teaching yoga classes or making some crafts and selling them at antique/craft fairs or whatever. If you only need to make 5 or 10k a year, then you can be in a completely different work mode and not get sucked back into the old rat race. Still, I've seen people make themselves miserable in seemingly ideal avocation/ jobs, (minister, naturalist, explorer) so I'll never underestimate our ability to screw up a good thing...!

ESRBob
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Re: Good Time to Retire ?
Old 06-08-2004, 11:31 AM   #23
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Re: Good Time to Retire ?

Re: Part time working for self.

This is something I've thought about for preretirment, or perhaps even a very long semiretirement. Usually when thinking about starting my own business I think it's too much trouble and that I'm bad at selling myself--although people quickly learn I'm good at what I do and appreciate me when I start working for them. By trouble I mean the extra bookkeeping and taxes and such--I hate paperwork and tend to procrastinate a lot.

But now I'm wondering if I can ratchet my working hours up and down as I desire. I'm not a workaholic, so my problem would more likely be I'd work just enough to pay my bills and travel but not enough to save and fully retire before 60 or later. But then the very early semiretirement may be worth it.

I'm a computer guy and would likely consult by supporting individual PCs, networks and small-to-medium business software and servers. If there is still money in it I would host web services, too. Any thoughts on the viability or paperwork toughness of working for myself in this manner?

By the way, my current idea is to move back to familiar territory (North Texas) with a "normal" job and start work on the side to build up experience and clients.
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Re: Good Time to Retire ?
Old 06-08-2004, 11:58 AM   #24
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Re: Good Time to Retire ?

Big Money Jim;
Paperwork for a self employment company is not onerous. Your accountant (do you use one?) can easily add it on to your existing personal returns work. If you use software, I bet it isn't bad either, at least for a schedule C sole proprietorship.

There are some pretty good books on self employment corp options which it is probably worth browsing at your local bookstore (an old ER trick!) and then buying if you think it is really worthwhile.

Bottom line, though, is don't be put off by paperwork -- it really is not onerous.s

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Re: Good Time to Retire ?
Old 06-09-2004, 11:11 PM   #25
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Re: Good Time to Retire ?

Quote:
A few years in you'll wonder where your days disappear to ... you have the chance to do some little bit of something on the side and you'll find some pretty tasty deductions there, too. *It will allow you feel like you are keeping a hand in and fend off fears about nuclear jitters trashing your portfolio etc on some of those bad days. ...At some point you'll assemble a new set of interests and activities that give you the right blend of challenge and pleasure and downtime. *You'll discover new interests, make new friends, find new ways to contribute in your community. *
I TOTALLY agree! Within a few weeks {not years}, I was left wondering how I ever managed to find time to work! Your days will fill up and you will redefine yourself as a person instead of the job that you hold. The only work I do is as a paid tax preparer from home about 10 wks a yr. Not an S-Corp, just a registered / bonded tax preparer. And definitely not my 'identity.'

My biggest disappointment was when all the 'old' friends continually asked me what I did all day, like I have time to sit around watching TV eating bonbons. New friends who are also RE are filling that void. We have plenty to do:!
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Re: Good Time to Retire ?
Old 06-10-2004, 01:52 AM   #26
 
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Re: Good Time to Retire ?

Hi Gayl,

I'd love to hear more about your work as a tax preparer. Did you start the business yourself? What kind of training did you need? Is it a good income generator?

Thanks!
Travis
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Re: Good Time to Retire ?
Old 06-10-2004, 05:11 AM   #27
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Re: Good Time to Retire ?

A lot of my neighbors take their taxes to a 'little old lady' who specializes in commercial fishermen. She's training at least one daughter in the biz. Be at it at least twenty years.
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Re: Good Time to Retire ?
Old 06-10-2004, 08:21 AM   #28
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Re: Good Time to Retire ?

Quote:
Hi Gayl,

I'd love to hear more about your work as a tax preparer. *Did you start the business yourself? *What kind of training did you need? *Is it a good income generator?

Thanks!
Travis
I live in California so I have to be registered with the CTEC (California Tax Education Council) as a CRTP (Ca Registered Tax Preparer) in order to do it for pay. They have an online site at http://www.ctec.org/internal.asp?pid=1, which will give you all the info if you are also in CA. Basically, you:
  • take a course,
  • pass their exam,
  • purchase your bond,
  • obtain a city business permit,
  • pass the FBI clearance for becoming an ERO (electronic return originator) if you are going to do more than 99 returns,
  • buy the software,
  • and then annually complete an updating course
It's a lot easier to set up than a lot of other businesses. I:
  • printed up flyers & business cards,
  • passed them out at my old job,
  • took 2/24 - 5/9 off for surgery,
  • and still about 20 clients rolled in -- only 4 were county employees (I'm a retired county employee).
I had a slight postive net cash flow, but the satisfaction was large. *In 2 more years I can take the EA exam (enrolled agent) and charge more. EA's in the business for 3 years can sit for the CFP exam. I won't take it because that is too much like work and I really just want to bring in a little extra once a year. One more thing, there are a number of updating courses offered in vacation spots (by the IRS and others) so travel expenses are a possibility. Maybe I'll do the IRS one in Boston
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Re: Good Time to Retire ?
Old 06-10-2004, 11:06 PM   #29
 
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Re: Good Time to Retire ?

Gayl,

Thanks so much for the detailed info. I checked out the CRTP page, as I also live in California, although I have thought of moving to another state for retirement.

I have thought about doing tax preparation in semi-retirement; my dad (an EA) does this full-time. I figured to become an EA first while still doing my full-time job. Why do you have to wait to do your EA?

I always worry that the fact that I don't have any accounting background will hurt me a bit, but the business can be small and part-time, like you said. My dad does accounting for small businesses and derives much of his tax business from that. Lots of middle class folks use Turbo Tax now, too. But I certainly enjoy doing this kind of thing. I think to make the economics work for part-time, you have to do it out of your home, like you said.


Quote:
EA's in the business for 3 years can sit for the CFP exam.
I had no idea! I will check this out.

Thanks,
Travis
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Re: Good Time to Retire ?
Old 06-11-2004, 05:15 AM   #30
 
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Re: Good Time to Retire ?

No accounting background is a major disadvantage
in starting a small tax preparation business. Also,
the competition is fierce. Being an enrolled agent and
having accounting/bookkeeping clients to feed you
tax work can help. I would look for something else to do.

John Galt
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Re: Good Time to Retire ?
Old 06-11-2004, 07:49 AM   #31
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Re: Good Time to Retire ?

Travis,

I'm not sure where I heard that you had to be a CRTP for a while before becoming an EA. I may be wrong ... if so, please share that info. As to clients, the business is here in CA. As to size of the business, it just depends on how you define "small and part-time." I define it as minimal work and don't really care if I make a profit as long as I break even. Otherwise it seems too much like work and I left that rat race 2/18/04.

With your interest is pursuing a 2nd career (EA to CFP), are you sure you are really looking forward to retirement? I struggled with that a lot until I finally decided to take the leap. It is not an easy decision to leave what may be a high paying position with a nice title to a relatively unknown future. But it is worth it ... as long as you don't tie yourself up too tightly in committments. IMHO.

"I think to make the economics work for part-time, you have to do it out of your home, like you said. " I do it out of my home because I am not running into an office again. I would be too tempted to make it into more of a full time business, and that would be work. I like being unconfined. For so long, my job title was my identity. Now it is time to reinvent myself
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Re: Good Time to Retire ?
Old 06-11-2004, 08:57 AM   #32
 
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Re: Good Time to Retire ?

Geez, I leave this thread for a couple days and folks are talking about WORK
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Re: Good Time to Retire ?
Old 06-11-2004, 02:03 PM   #33
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Re: Good Time to Retire ?

Quote:
Geez, I leave this thread for a couple days and folks are talking about WORK
becoming an ER is a mental shift. I'm still trying to get there ... volunteer work might help but then I'm still tied to a schedule. I don't want one ... I am trying to learn how to play after being a type A for so very long
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Re: Good Time to Retire ?
Old 06-12-2004, 05:48 AM   #34
 
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Re: Good Time to Retire ?

I agree with GDER 100%.. Just do it and don't look
back. We type A entreprenuerial types tend to be constantly tempted. For example, the other day I was
traveling to Dallas. I had been ailing a bit but felt
quite perky at that time. First thing I know I am contemplating a return of my little personal holding company to active
status. I discarded the idea in about 2 minutes but I need to continuously be on guard. BTW, I tried
(again) to listen to Bob Brinker while I was in the
truck. The average poster here knows twice as much as that guy on his best day.

John Galt
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Re: Good Time to Retire ?
Old 06-13-2004, 01:45 PM   #35
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Re: Good Time to Retire ?

Quote:
Question is: Is this a good time to retire ... with inflation rearing its ugly head ... *I guess I'll just have to be careful about my expenditures.
These are the same concerns I voiced on another post although we don't all want to be careful with our expenditures. I know I saved religiously to get here and don't want to ever go back (I meet ex-coworkers for lunch once a month).
Quote:
Hopefully, any losses in buying power to inflation will be accompanied with declining living expenses. *SS at 62, will be a windfall and should make up for any 'losses' to inflation. *Just enjoy and relax - whatever will be - will be.
Quote:
Look on the bright side the world could blow up tomorrow and you'll have more money than you'll ever need.
SSA will be there relative soon (4.5 yrs for you) and that'll be a guaranteed income stream. Then 3 yrs later, you'll have Medicare so health insurance worries will lessen. Invest for the long term through asset allocation (I also have index funds) and you'll be fine. For us newby ER's, giving up the planning mentality seems to be the hardest. Good luck on your mental shift, apparently still working on mine. :P
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Re: Good Time to Retire ?
Old 06-13-2004, 04:26 PM   #36
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Re: Good Time to Retire ?

The perfect time to retire is July 2, 2004.

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Re: Good Time to Retire ?
Old 06-13-2004, 04:39 PM   #37
 
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Re: Good Time to Retire ?

Why July 2nd? That date has special significance for me.

John Galt
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Re: Good Time to Retire ?
Old 06-13-2004, 04:48 PM   #38
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Re: Good Time to Retire ?

John,

That's the date my wife are retiring. YEAAAA
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Re: Good Time to Retire ?
Old 06-25-2004, 02:48 AM   #39
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Re: Good Time to Retire ?

Trying to pull the topic back to the forefront...

If you sleep with dogs then its never a good time to retire...(nudge nudge wink wink).


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Re: Good Time to Retire ?
Old 06-25-2004, 04:39 AM   #40
 
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Re: Good Time to Retire ?

One more thought for gayl re. Type A behavior.
IHMO it's in your genes and retiring won't make it go away. In my case, I tried to channel all that nervous
energy into fun stuff. It's a struggle though.
If all else fails, you can always start cocktail hour
early

John Galt
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