Good Time to Retire ?

[guest]

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

 

[unclemick]

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.

 

[gayl]

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

 

[guest]

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.

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

 

[John Galt]

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

 

[gayl]

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

 

[Cut-Throat]

Geez, I leave this thread for a couple days and folks are talking about WORK

 

[gayl]

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

 

[John Galt]

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

 

[gayl]

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).

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.

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.

 

[riverrat]

The perfect time to retire is July 2, 2004.

 

[John Galt]

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

John Galt

 

[riverrat]

John,

That's the date my wife are retiring. YEAAAA

 

[BUM]

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).


BUM

 

[John Galt]

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

 

[gayl]

GDER, I was trying to quote you when reminding bennevis that he is only 4.5 yrs from early SSA. I really need to proof read more.

John, the city business license fee is due today. Maybe I'll write the check when I get back from Lake Tahoe on 7/8 or maybe not. I just don't feel the need / motivation to do so now. Too busy playing

RE is becoming so comfortable. I think the posters were right when someone said just quit cold turkey [forgot who that was]. Although I've always enjoyed investing & taxes, the farther I am from it the less I want to return.

 

[John Galt]

Hi gayl...........re. "cold turkey", that would be me.
I did it, and while I know not everyone can, it worked
great for me. Paul Terhorst (kind of my ER guru)
never looked back. Worked out for him also, obviously.

John Galt

 

[Billy]

Is Early Retirement Right for You?
http://www.geocities.com/ba264/is_er_right_for_you.htm


Billy
Web-site www.geocities.com/ba264

 

[gayl]

Billy, your world travels sounds great. I was just wondering ... are you able to remain in close contact with your kids / grandkids? I would travel more but I hate to spend a lot of time away from them. They keep me 'home based'

 

[Billy]

Hi gayl,
You bring up and excellent question...though we do not have children. That said, we do keep in touch daily with my mother and others. The internet, and messengers (Yahoo) allow us to do this anywhere in the world. Then when we are in the states, we usually visit her for a month or two, allowing both of us to get tired of each other...ha, ha..just kidding.

I hope that helps.
Billy
Web-site www.geocities.com/ba264