Reddit - Financial independence / Early retirement
This is a place for people who are or want to become Financially Independent (FI), which means not having to work for money. Financial Independence is closely related to the concept of Retiring Early (RE) - quitting your job/career and pursuing other activities with your time. This subreddit deals primarily with Financial Independence, but additionally with some concepts around "RE".
I know this is more of a personal finance question but I resonate more with the individuals here so thats why Im asking this in the FIRE sub.
I am currently looking at a 300k house and have never had a mortgage before so I am kinda weary. LCOL
Total payments with property taxes and insurance would be 1800 a month with 20% down. This seems like a lot to me since I don't NEED to move but I do want something nicer. Everyone who knows my financial situation says Im scared for no reason but I can't help feeling like 1800 a month is a lot of money. Thats why Im wondering how much the average house to income ratio is here.
Current financial situation
180k (220k household) income past 2 years, but its not the most stable. 90k (130k hh) income is guaranteed though. 26 years old 150k cash 70k equity in paid off house 30k in other assets no debt (250k nw)
Soon to be wife 24 years old 45k income (90k in 1 year after masters in a medical field) 17k cash 30,000 student debt
I would like to be closer to 1x income for a house but in the area I want to move to a 200k house wouldn't be much different than what I live in now. Thus the question, what do you guys/ladies think is a good FIRE ratio?
I'm 22, about to turn 23, and I'm graduating in December of this year with about 25k worth of student loans. I am currently paying off all of my accrued interest from unsubsidized loans, so hopefully I will have right at 25k or less whenever I graduate. My highest interest rate is 4.6%. My goal is to retire around 55, so I'm wondering what I should do.
My question is, should I pay them off super aggressively (2ish years) so I'm able to start saving for a house quicker? Or should I pay them off a little bit slower (4ish years) and contribute more towards investments and such along the way? I already have a Roth IRA that I've started, and I'm contributing to it very slowly.
I have a summer internship that will get me around 6k before taxes, and will receive a full time offer if both parties are interested. I am not sure of what my income will be after I graduate, but I know that it will be between a gross of 45k-55k. Obviously that will have a big impact on what I'm able to do, but I'm still wondering if I should aggressively pay off the debt or not.
The company offers tuition and continuing education reimbursement, however I do not know the details of it. I'd like to ask, but feel as if it would be rude before I was extended an offer. Should I ask anyways? I chat with the recruiter every so often so I could ask her, but I don't want to rub her the wrong way.
As a side note, I'm married with a child who's a little over a month old. My wife is a SAHM, and most likely will be for the forseeable future. We are both very debt averse so she would be fine with me paying loans off aggressively.
Thank you for suggestions and any help you guys can give! :)
I'm a lurker of this sub, and a Dave Ramsey believer. My wife and I have been living on a budget since we got married 10 years ago, and have debt snowballed my student loans, two cars, and multiple giant medical bills. For the last two years we have been putting money in to our emergency fund and 401k, and simply making the monthly payments on my wife's car.
Today we looked at what is in our E fund and decided that we can take money out of it and pay off my wife's car. In a few months we'll be back up to a full 6 months expenses saved in the E fund.
After plugging everything in to the budget spreadsheets we've been using and calculating our savings rate for the first time, we couldn't believe it. 43%! Knew we were saving a decent amount, but that was impressive to us.
Now that we know how much we are saving (compared to just having a notion of how much it is), we know how much we can attack our mortgage with, and that we can be absolutely debt free in under 7 years, plus a rocking retirement outlook. A rocking EARLY retirement outlook!
tl:dr Been saving dilligently, paid off last consumer debt today, finally calculated SR and knowledge is FI power
Hi all, I’ll try to keep this short. I grew up poor and don’t want to ever stress about paying bills again. My dad inherited a decent chunk of money a few years ago and basically said “live here rent free, save, set yourself up for a comfortable life.”. I’m in a very fortunate position where I have almost no expenses and will not have to get my own place until I can comfortably afford it.
Apple store repair technician
Take home $2350 per Month
Spend $700 per month
1 year away from completing BS in Business
1 year away from $12k in student loans
$24k saved (AAPL stocks, index funds, 401k, cash, small amount in cryptocurrency).
1-3 year plan:
Work up to Genius, $28-30/hour
Save up $12k cash and pay off loans
Save at least 50% of my income.
I plan to save 1500-2k per month for the next 3 years.
Should Bring total savings to ~$70k, after student loans are paid.
3-5 year plan
Get into Apple Corporate, positions I’m looking at pay $120k starting.
Move in with girlfriend, working in radiology, making $50-70k by this point, omitting her income because involving another person brings in more moving parts that could change, hard to predict.
Bump savings to $4k/month.
Over two years, should bring savings to >$150k, excluding 401k.
Down payment on a property in developing outskirts of Bay Area. Rent it out.
Plan gets foggy here, too many moving pieces to try to predict anything beyond this point.
10 year goal: Comfortable house, a couple streams of income, start a family.
Short term ideas for bumping earnings:
I love being busy, I am happy when I’m being productive, and I don’t really get burnt out from too much work. I enjoy it. So I’m always looking for ways to bump my income.
May start teaching beginners Jiu Jitsu. $40 for an hour class. Could fit 3 classes per week into my schedule. Would give me a free membership to my gym ($80/month) and bring in $360/month.
Possibly do some paid writing work, doesn’t seem to be the best freelance work as there are a lot of competent writers out there.
I am a middle aged high income earner with very little retirement savings. This year I am trying to put my financial house in order: (1) Fix IRA. I have an existing IRA which contains some after-tax contributions that I’d like to fix; (2) Mega Backdoor Roth. I am making after-tax contributions to my 401K that I’d like to convert to a Roth; and (3) Backdoor Roth. I’d like to make a Backdoor Roth conversion as well.
(1) Fix IRA. In December 2016, I contributed $1K after-tax directly into a Schwab Roth IRA, before I realized I was over the income limit. I then recharacterized the contribution as an IRA, not knowing that I could do a Backdoor Roth (IRA -> Roth IRA transfer). Since then, it has earned interest. Last month, I rolled over an old 401K into that IRA.
I want to roll this IRA into my current 401K (to avoid the pro rate rule when I do future Back Door Roths). Is it too late to convert the $1K after-tax contribution to a Roth IRA? What about the interest that the $1K has earned? I also intend to do a Backdoor Roth this year. If I convert the $1K to a Roth IRA, will this limit how much I can contribute to a Backdoor Roth this year? Ideally I’d like to roll over everything but the $1K + interest its earned to my 401k, and transfer that $1K + earned interest to Roth IRA. This feels too good to be true, and think I can probably only convert $1K to Roth.
(2) Mega Backdoor Roth. I have maxed out my pre-tax 401k contributions, and am also contributing $3K after-tax per month. I can take two in-service distributions per year. Ideally I’d take a distribution in July and December into a Roth IRA. My questions are as follows: 1) Can I roll over the “after-tax contributions” + “interest earned on after-tax contributions” to my Roth IRA tax-free? Or will I have to pay taxes on the interest? 2) If “interest earned on after-tax contributions” is taxable upon a Roth rollover, could I just roll over my “after-tax contributions”? Leaving the interest earned thereon in my 401k? I’ve read online that some people roll over interest to an IRA - it’s unclear to me if this interest is from pre-tax or after-tax contributions, and rolling over to an IRA would just screw up your normal Backdoor Roth IRA with the pro-rate rule, so I’m not clear why anyone would do this.
(3) Backdoor Roth. Once I clean up my existing IRA, dumping most or all of it into my 401k and possibly converting some portion to a Roth, I’d like to do a Backdoor Roth. With steps (1) and (2) above in mind, do you foresee any issues?
Thank you so much for reading through this. Happy to answer any questions you may have.
Andrew McCabe is in the news having been fired less than 48 hours before he was due to vest in a pension. He had given advance notice of his intention to retire, and that may have been a large factor in accelerating the firing process in order to stop that pension.
If you are FI, great. But when you give notice that you intend to leave an employer, be sure that any bonus or benefit that is due to you has actually reached you. I have seen senior managers veto bonuses after they were communicated to staff in cases where an employee was resigning or retiring. Employees view bonuses as a reward for a job well done, but many employers regard bonuses as a retention tool. People who are leaving have no need for retention.
Some organizations are worse with this than others, but it's YOUR money and matters more to you. It's a good idea to give notice only after a bonus is deposited in your account or only after a pension is actually vested. Likewise, some employers will pay out PTO and some will not. Know the rules before you trust they will pay you what you have accrued.
To start, I do not have a plan. I have been working Full-Time for about 2 years now. I worked a lot, 8 months of the year consisted of around 70 hour work weeks between my two jobs. Last year made about $38K gross. I have just moved back in with my parents. Lived 8 months with a few roommates, got a little sketchy to say the least. Currently reduced my work load and am focusing on getting my diploma before I am 20. There was a rough patch for me in High School, effectively dropped out to work and pay rent. My family is big on education, so I have "compromised" if I can even say that. If I finish by this July, which is what I am doing right now I get $5000 from my Grandparents and 6 months rent reimbursed ($3000). I also sell books on Amazon, I have a business partner that helps a lot with that. The plan for after getting my diploma is work 40 hours/week and then also go full time into books with my partner. Just for reference we have done $12000 in gross sales over the last 6 months. Ultimately looking for resources to help me plan, as well as any tips for saving more right now.
My Financial Situation: Chequing/Savings = $3400 TFSA(WealthSimple) = $4750 Personal Investing Account = $1200 Emergency Fund (CASH) = $1000
Expenses: Rent = $500/month Phone = $115 (made the mistake of a contract) Car Insurance = $295/month (accident within a year of licence) Car Repairs/Gas = $200/month Various Subscriptions = $50/month (Haven't taken time to cancel a few) Amazon Prime $90/year