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[quote=gzz]“ At least with stocks you sell a smaller amount each year to avoid the highest 23.8 rate. You could probably get the 0 or 15 rate when retired and 15 or 18.8 rate when working.”

Exactly. And wait to move out of CA to sell stock.[/quote]

I like San Diego so not planning on moving out. Problem with CA taxes is that it is very progressive. If I retire early, long term gains of 80K to 250K results in fed taxes of 0 to 9 percent and CA taxes of 3 to 7 percent. Not bad and definitely not worth dying over.

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Real estate taxes are still outrageous if people prefer to die instead of paying the tax.

At least with stocks you sell a smaller amount each year to avoid the highest 23.8 rate. You could probably get the 0 or 15 rate when retired and 15 or 18.8 rate when working.

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[quote=Coronita][quote=plm]By cashing out my trading account, I meant doing it slowly not all at once, first 80K in long term capital gains is tax free each year. And even if I need more each year, its only taxed at 15 percent. Now if only the plan for CA free health care passes, my expenses will drop considerably.[/quote]

https://www.marketwatch.com/story/i-retired-at-50-went-back-to-work-at-53-then-had-a-major-medical-issue-that-left-me-unemployed-theres-no-such-thing-as-a-safe-amount-of-money-for-retirement-11642133454?siteid=yhoof2

“I retired at 50, went back to work at 53, then had a major medical issue that left me unemployed – ‘There’s no such thing as a safe amount of money’ for retirement”[/quote]

Not much you can do to prevent major medical issues. But not going back to the office and getting exposed to Covid and retiring so you have time to exercise again actually makes more sense to avoid medical issues.

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By cashing out my trading account, I meant doing it slowly not all at once, first 80K in long term capital gains is tax free each year. And even if I need more each year, its only taxed at 15 percent. Now if only the plan for CA free health care passes, my expenses will drop considerably.

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[quote=Coronita][quote=svelte][quote=Coronita]
I’ve been running my F.I.R.E. calculators as of the late….Just in case.[/quote]

lol, yeah I wonder how many FIRE folks are getting a little frightened right now with inflation taking off. Some of them may have used questionable assumptions.

I still think it is folly for a 30- or 40- something to think they can project out 40 to 50 years. The world changes fast![/quote]

for me it’s not really just F.I.R.E. it’s slightly modified.

For my retirement will be partly funded by rental income and a return on after tax investments before I’m 65.

after 65, it would be funded by my rental, after tax investments, and IRA/401k.

I think I can pull this off with about a 4% return on investment on the investment of after tax cash. Including the cash out refi.

it’s a fun exercise of futility because it’s unlikely I will retire early now. since I missed my early retirement goals at 40 might as well wait 3 more years and round up to the nearest power of 10[/quote]

Next Power of 10 would be 100. Just found out about rule of 55, can withdraw from last 401k without penalty now. So if I need more money then I expect, I can take out from 401k as well. But I think rental income, dividend income and cashing out my trading account should be enough.

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Well an early death from Covid is what I want to avoid if they make me go back in to the office. So I will take my chances with retiring early once that day arrives. At this rate, I may never retire, they seem to keep pushing the date out because Covid is so bad now. I will just adjust my expenses to match my passive income. Taxes are incredibly low if you don’t make much in retirement. But 2022 has not been a good year so far in the stock market. Hope it gets back to its upward trajectory.

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401Ks are so overly complicated. Being a max out saver myself, my understanding is that most companies offer the true up but that is calculated at the end of year and paid beginning of next year. For me the matching contribution stopped but the non matching contribution continued.

Also Christmas might have came twice for you as well as early. For me the 401k contribution applies to bonuses as well as salary so the true up should take that into account so you should get a true up of your bonus as well. Merry Christmas!

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Nice website, I put in a request to get a replacement social security card as well. The actual statement and the calculator for retiring showed only about a $300 difference. The difference being the actual statement assumes you keep working till 62. So no real point in working till 62 unless you care about the $300/mo. I figure the amounts are going to be less anyhow as it will be out of money by 2034 and demographics says there isn’t much hope that there will be more people paying in to keep it afloat.

You would think the Democrats would use some of that 3.5 trillion to shore up social security. That would let them keep control forever as all the seniors will remember that and vote for them.

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[quote=Coronita][quote=plm]21.65% YTD is very good until you see that sp500 is doing 22.56% But its all relative, 21.56% is better than what I’m doing so far. At least I’m no longer negative like I was back in March.

I just don’t have any control of my account. Being a long term holder I don’t want to sell anything and pay the taxes on the gains. So only tiny changes from buying different stocks with the dividend payouts. So I’m a passive investor but not with an index fund.[/quote]

I think long term I can’t beat the indexes. But even so, I don’t think I want to camp out in just one or a few indexes. Indexes are great when the markets are moving up. But I’m trying to move stuff so it’s more balanced.. That said, some of my other funds have a large overlap with what’s inside the index funds.

Like some of the “income” funds invest mainly in dividend paying stock that also happens to be part of the S&P500 index or others. So my understanding is that one got to be careful that even if your goal was to allocate away from what’s contained in index funds, you got to make sure what you pick up doesn’t end up picking some of the same stocks.

Fidelity contrafund is similar, and does investments in a lot of high flyers. Contrafund is pretty popular among Fidelity 401k plans, along with the Magellan funds, which I think are now closed.

So in my 401k I have allocations to contrafunds, but since there’s so much overlap with some index funds, I’m light on indexes in those 401k accounts…I’m in a unique situation that I negotiated with Charles Schwab, so I can pretty much buy any Vanguard fund inside Charles Schwab and they’ll waive all fees they normally charge for funds not theirs….I wasn’t able to get them to waive the fees for Fidelity funds. The issue is Schwab doesn’t have access to Vanguard voyager class shares. So that’s why I still keep around a Vanguard accounts along with Fidelity and Schwab.

I guess things matter less now that everything is trying to move to an ETF. and all three are $0 commission.[/quote]

Just going to stick with SP500 index fund for my 401k. I don’t know enough to choose different funds, I figure the top 500 US companies would be better than most funds. As for my brokerage account, not trying to diversify, just buy stocks that go up the most. Doesn’t matter much if you don’t sell. It’s more praying that the stocks you own do well.

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21.65% YTD is very good until you see that sp500 is doing 22.56% But its all relative, 21.56% is better than what I’m doing so far. At least I’m no longer negative like I was back in March.

I just don’t have any control of my account. Being a long term holder I don’t want to sell anything and pay the taxes on the gains. So only tiny changes from buying different stocks with the dividend payouts. So I’m a passive investor but not with an index fund.

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[quote=Coronita]I am looking at one of my Vanguard accounts I had since 2002. I think it’s the oldest one out of the 26 accounts and it is consistently invested on index funds. Average return has been 7.1%…But there were years that it looked awful, like a deep downturn. Personally, that’s what I’m trying to avoid. Those deep downturns don’t matter if you have another 10-15 years to wait it out. But it would suck if you are drawing from it right after a downturn. I’ve been talking a lot more with people who are seriously considering early retirement. just thinking….

I guess it’s part of the ongoing The Great Resignation….lol…[/quote]

Problem with Covid is that it changes your thinking about life. Why keep working, risk dying or long term covid to make more money. If you have enough, why take risks? That 7.1% return worried me for a little but then I found this calculator https://dqydj.com/sp-500-return-calculator/ and those numbers were much better. Most likely it’s going to be 9% or much higher going forward.

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If you believe in past performance:

Data from Vanguard:

Years Average 401(k) return
1 year (2020) 15.1%
3 years (2017-2020) 9.7%
5 years (2015-2020) 11.0%

And another:
The average rate of return on 401(k)s from 2015 to 2020 was 9.5%, according to data from retirement and financial service provider, Mid Atlantic Capital Group.

Not inflation adjusted but inflation was very low during that time frame. You could argue that it was quite the bull market but this is for average 401k which would also include bonds so I think an all stock investment return of 9 percent is conservative.

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If you believe in past performance:

Data from Vanguard:

Years Average 401(k) return
1 year (2020) 15.1%
3 years (2017-2020) 9.7%
5 years (2015-2020) 11.0%

And another:
The average rate of return on 401(k)s from 2015 to 2020 was 9.5%, according to data from retirement and financial service provider, Mid Atlantic Capital Group.

Not inflation adjusted but inflation was very low during that time frame. You could argue that it was quite the bull market but this is for average 401k which would also include bonds so I think an all stock investment return of 9 percent is conservative.

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[quote=scaredyclassic]I’d agree with the first sentence, but just strike the last four words.

All decisions must be made entirely future looking. Past performance is absolutely irrelevant.[/quote]

All the chartists would disagree with your statement as that is what they do, chart the past to predict the future.

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[quote=scaredyclassic][quote=plm][quote=scaredyclassic]in spite of the fact that every prospectus warns you that past performance does not predict future results, we all kinda believe that past performance predicts future results and the prospectus is just saying that cause the dumb old stodgy SEC makes them.[/quote]

You sort of have to go by past performance. It might not match but that is the best guess. If not, my planning on getting 9 percent returns and being able to retire early is a bad decision.[/quote]

Why is past performance the best guess?[/quote]

Because you can’t know future performance without a time machine?

Took years for me to know something about stocks to not make so many mistakes investing although I don’t know options yet. Don’t know anything about bonds really. But from researching what a Bond fund does, it does seem like a really bad time to buy bonds if you think Interest rates are going to go up. If it goes up then the existing bonds lose value and I would guess that rates are probably going to go up. So staying 100 percent in stocks is probably the best thing to do. Stock market just seems to go higher and higher.

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