Author Topic: Young Savers Trying to Improve  (Read 6534 times)

Millenial Stache87

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Young Savers Trying to Improve
« on: October 07, 2022, 11:12:35 AM »
Life Situation: MFJ no kids in mid 20s. Low-Mod cost of living area. Both are content at current jobs, but open to other opportunities if something great comes up.

Goals: Would like to eventually move to wife's home country in EU either before or at retirement. We love both where we live and that country, so perhaps we would live part of the year in each place in retirement. Primary reasons to seek FI are greater flexibility, more time to see family abroad, and peace of mind from financial security. Additional travel time doesn't hurt as well. Don't envision the 'RE' part until at least 40s.

Gross Salary/Wages: ~176k combined

Deductions: 20.5k to 401k #1.
                  10k to 401k #2 (10.5k to Roth 401k)
                  5.7k to HSA - rest covered by employers to max all 7.3k.
                  Roth IRAs - Try to put in 6k each annually. Sometimes fund this via transfers from brokerage acct holdings.

All in, after-tax income works out to about 140k (including traditional 401k deferrals, hsa deferrals, etc.).
We receive about 10k in employer matches and small amounts contributed to HSA accounts by employers.
One earner has a vested pension. Would require decades more of work at this employer to have a big impact on financial planning.

~150k available to spend or save after-tax including deferrals and company matches.

Current expenses:

Home
Mortgage w/ P&I - 1,775 - ($950 P/$825 I) - 15 year @4.25%
Property Taxes - 275 (don't escrow T/I so comes in lump sums)
HOA - 420 (high, but includes w/t/s, lawn/snow, heating/cooling, plumbing, most home insurance costs, etc.)
Home Insurance - 40 (most covered by HOA)
Utilities - ~260 (70 internet, 30 phone, 100 electric, 60 gas) 
Maintenance ~200 (not much - nearly every major component/thing that can go wrong is covered by HOA)
Total Home Cost = $2,970

Health/Dental Plans - ~$125

Vehicle Costs
Gas - 100 (actually has been below this most months. We purchased a bit more expensive home, but in a great location with <15min commutes.)
Car Insurances - 200
Car repairs and personal property taxes - 200
Total Car Cost = $500

Food and Fun
Groceries - 250
Food Out - 150
Travel - 600 (4 weeks of travel a year. mostly international. travel and the dog are very important to us)
Dog - 150 (includes boarding costs, which are brutal @$35 a day. Wish boarding costs could be lower)
Misc shopping/spending/entertainment - 250
Total Food/Entertainment = $1,400

Total Spend = ~$5000 monthly or ~$60k annually. Budget items above are very close from our tracking, but perhaps slightly conservative.

Annual Savings:
$41k 401ks (10.5k roth 401k)
$10k matches
$7.3k HSAs
$6k Roth - Fund other through brokerage account stock transfers lately
$25k - After-Tax 401k - convert twice a year to Roth 401k.
~89k total.

MMM Savings Rate - ~59-60% - 89k/150k

Assets:
I-bonds - $20k+
529: $20k
HSAs - $15k
Traditional 401ks - $140k
Roth 401ks - $120k
Roth IRAs - $110k
Brokerage Acct - $30k
Checking Account - $20k - need to deploy the emergency fund part of this better - short-term t-bills, 3 mo cds at schwab? not sure
Pension - tbd?

Retirement accounts are essentially all equities (~70% s&P - ~10% international, ~20% allocated between med cap, small cap, and REIT).

Liabilities: CCs paid in full monthly.

Net Worth: ~$475k
We don't count it in NW, but home is worth about $300k and we owe ~$230k.

ER Expenses: No clue - too far out and too many variables at this point. Safe to say at least 60k in today's dollars with how much travel we will want + healthcare costs.


Specific Question(s):
1) Any areas for spending face punches?

2) We have considered reducing after-tax 401k contributions in favor of additional mortgage payments. Probably wouldn't reduce by the full $25k, but maybe add an additional $500-1000 a month to the mortgage payment. 4.25% after-tax return seems decent when we already putting a lot in the market. On the other hand, perhaps this is a good bear market buying opportunity. Thoughts on this?

3) We elected for a 15 yr mortgage when we purchased the house this year. Part of us looks at the ~500 difference between the 30- and 15-year payment as part of our "annual savings" toward our savings rate calculation since most consumers choose a 30 yr mtg. Is this a flawed way of looking at the 15 yr mtg?

4) Any short-term deployment options for cash/checking that you recommend?

Open to any other advice as well. Thanks :)
« Last Edit: October 07, 2022, 11:15:24 AM by Millenial Stache87 »

Aardvark

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Re: Young Savers Trying to Improve
« Reply #1 on: October 07, 2022, 11:19:03 AM »
Posting to follow replies to this.

RWD

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Re: Young Savers Trying to Improve
« Reply #2 on: October 07, 2022, 12:10:53 PM »
2) Don't pay extra on a 4.25% mortgage. Invest in equities and/or I-Bonds.

3) Yes, this is the wrong way to look at it. The entire amount that goes towards principal can be considered savings for the purposes of savings rate (how your net worth grows).

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Re: Young Savers Trying to Improve
« Reply #3 on: October 07, 2022, 12:11:49 PM »
Why are you putting so much in Roth 401k's? I understand the 25k additional then convert to a Roth 401k, but why not maximize your traditional 401k? Your combined tax rate during retirement is going to be less than your top tax rate today.

A mortgage is your best hedge against inflation and you already went with a 15-yr over a 30-yr. You have a mortgage paying you 5% in real terms right now (9.25% inflation - 4.25% rate). Don't add any additional money here; open a treasury direct account and buy I-Bonds instead.

Add LT treasuries and gold to your investment mix and rebalance. You are not diversified enough with only equities.   

Millenial Stache87

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Re: Young Savers Trying to Improve
« Reply #4 on: October 07, 2022, 12:30:44 PM »
Why are you putting so much in Roth 401k's? I understand the 25k additional then convert to a Roth 401k, but why not maximize your traditional 401k? Your combined tax rate during retirement is going to be less than your top tax rate today.

A mortgage is your best hedge against inflation and you already went with a 15-yr over a 30-yr. You have a mortgage paying you 5% in real terms right now (9.25% inflation - 4.25% rate). Don't add any additional money here; open a treasury direct account and buy I-Bonds instead.

Add LT treasuries and gold to your investment mix and rebalance. You are not diversified enough with only equities.

Great advise. Roth 401k contributions at least in our mind are in part a hedge to a future move to EU. Country in question has much higher tax rates than the states on earned income, and traditional 401k would be taxed as such there. We have talked about increasing some of the traditional 401k amount some though, but maybe not to the full 20.5k.

Maxed out on i-bonds for this year already but will resume in 2023 if conditions persist.

Will look into LT treasuries and commodity markets for perhaps a small rebalance to reduce portfolio stddev. 





JGS1980

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Re: Young Savers Trying to Improve
« Reply #5 on: October 07, 2022, 02:21:14 PM »
1. Agree max out your 401K. I see no reason for Roth 401K at your current income levels.
2. You are already "paying the mortgage off early" by opting for the 15 year mortgage. Well done. Invest the extra in equities long term.
3. Max out 20K Ibonds per year until market conditions change. This is a form of diversification or your portfolio.
4. I think your equity asset allocation is very reasonable for long time horizons >20 years.
5. You are WAYYY ahead of your peers. Take some time to smell the roses. Travel more. Do that adventure you always wanted. Take care of each other and maintain your relationship. That's really the most important part of this whole life thing.

JGS

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Re: Young Savers Trying to Improve
« Reply #6 on: October 08, 2022, 03:41:29 AM »
Your combined tax rate during retirement is going to be less than your top tax rate today.
Traditional 401k contributions now may work out better than Roth contributions, but that would have to be because the marginal rate paid on future withdrawals is less than the marginal rate saved by current contributions.

See Common misconceptions.

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Re: Young Savers Trying to Improve
« Reply #7 on: October 08, 2022, 05:38:55 PM »
Your combined tax rate during retirement is going to be less than your top tax rate today.
Traditional 401k contributions now may work out better than Roth contributions, but that would have to be because the marginal rate paid on future withdrawals is less than the marginal rate saved by current contributions.

See Common misconceptions.

I see the point of the wiki. I think with some planning a roth is very rarely superior to a traditional. The op is making 180k, spending 60k, and gunning for an early retirement the chance of them being in the same tax bracket durring ER is nil. I have no idea about the expat component.  I've thought about Central America as a possible ER location and never considered the tax treatment on US retirement accounts.

OP, how does it work in the country you are considering in the EU?

zolotiyeruki

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Re: Young Savers Trying to Improve
« Reply #8 on: October 10, 2022, 08:37:05 AM »
I threw together a spreadsheet, with a few assumptions: you continue $89k/year contributions, you get 7% returns, you're currently 23, and plan to retire at 40.

The amount you'll likely have at age 40?  $4.2 million.  That's more than triple the amount you'll need to retire.  At a spend rate of $60k, the 4% rule says you only need $1.5 million.  If you change nothing, you'll hit that point in 7 years, give or take.

On the spending side: you're paying a LOT for car insurance--$2400/year.  Do you have full coverage on very expensive vehicles?  We have three vehicles and four drivers in our family, including two teenagers, and our total car insurance is considerably lower than that.  Other than that, nothing stands out as particularly outlandish, although there's always room for tightening the belt here and there.

Deploying cash/checking:  at this point, that's a level of optimization that frankly won't move the needle much.  Let's say you got 3% interest on that $20k.  That's $600/year.  And while $600 is nothing to sniff at, you're saving nearly 150 times that much elsewhere.  I'd just leave it in the bank

reeshau

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Re: Young Savers Trying to Improve
« Reply #9 on: October 10, 2022, 11:35:49 AM »
Alert, @Millenial Stache87 !  Most tax treaties do *NOT* recognize Roth instruments.  Meaning, they will be treated as untaxed by the US when withdrawn, and subject to full taxes locally.  This may change, of course, as tax treaties change.  In fact, most tax treaties don't even recognize defined contribution pensions.  (Canada and the UK being notable exceptions)

Understand the specific tax treaty between the US and your target country--meaning *read it*.  Yes, it will be boring.  And it will be key to planning correctly in your situation.

https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z

For IRA's/401k's, it can actually be better to defer to US taxes, particularly if they are lower.  But there are often pension clauses, separate from income tax treatment.  Generally, though, if a treaty exists, you could claim that a trad IRA has been taxed by the US in the year you are living in the EU, so shouldn't be double-taxed.  (You might get taxed the difference, anyway--that's how the US treats the opposite situation)

The best thing to do would be to connect with a financial planner familiar with your specific situation.  Usually, that would mean looking in your target country for a lawyer / accountant / CFP that works with US ex-pats.

You are doing great, and following general advice.  But you have a very specific, and not common, goal in mind.

Millenial Stache87

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Re: Young Savers Trying to Improve
« Reply #10 on: October 10, 2022, 12:29:03 PM »
Thanks everyone.

5. You are WAYYY ahead of your peers. Take some time to smell the roses. Travel more. Do that adventure you always wanted. Take care of each other and maintain your relationship. That's really the most important part of this whole life thing.

JGS
Really appreciate this advice. Perhaps sometimes we (me especially) are a bit too focused on optimizing.

Country in question has a much flatter and higher rate tax system. Think rates of ~30+%- to high 40%s pretty early on. To the last commenters point, they treat traditional 401k/ira withdrawals as pension income withdrawals. Roth accounts are not recognized and are subject to annual wealth tax. Traditional accounts are not subject to the wealth tax but face the high tax rate when the money is needed. All in, it creates a complicated scenario which is why we have tried to hedge a bit between roth and traditional to this point. In addition, there are possibly some large tax changes occurring there soon and we are a long way away. After receiving advice, we are planning to slightly increase our allocation to traditional 401k for next year.

Car insurance does indeed seem high. I put the pre-dividend cost, including umbrella insurance, in the $200/mo estimate. Post-dividend (not guaranteed) it works out to closer to $160/mo. Both cars have full coverage and pretty high coverage amounts. Being age 27/25 does not help with rates... :(

Deploying cash/checking:  at this point, that's a level of optimization that frankly won't move the needle much.  Let's say you got 3% interest on that $20k.  That's $600/year.  And while $600 is nothing to sniff at, you're saving nearly 150 times that much elsewhere.  I'd just leave it in the bank
After the advice, we think we will probably put a bit more in I-bonds at the beginning of 2023 and leave the rest in the bank for liquidity needs.



zolotiyeruki

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Re: Young Savers Trying to Improve
« Reply #11 on: October 10, 2022, 12:56:58 PM »
If you're thinking of moving to a country with taxes that high, you'll need to account for that.  If you're expecting a 12% tax rate in the US and will pay 3x that over there, you'll need 20% more saved up.

How much time could you spend in Europe without being considered a resident and having to pay those taxes?  Could you officially maintain a residence stateside?

Millenial Stache87

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Re: Young Savers Trying to Improve
« Reply #12 on: October 10, 2022, 01:14:50 PM »
If you're thinking of moving to a country with taxes that high, you'll need to account for that.  If you're expecting a 12% tax rate in the US and will pay 3x that over there, you'll need 20% more saved up.

How much time could you spend in Europe without being considered a resident and having to pay those taxes?  Could you officially maintain a residence stateside?

We could stay a bit under half the year is our understanding. May maintain US residency, live their part of the year, and travel part of the year for tax reasons. The world will probably change a lot in the decade+ until we are ready for a move anyways.

Freedomin5

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Re: Young Savers Trying to Improve
« Reply #13 on: October 20, 2022, 04:04:42 PM »
No facepunches from me. You have great incomes, and your expenses are reasonable. Youíve picked all the low hanging fruit ó congratulations!

I would not pay off the mortgage early. Rate is reasonable, and it makes more sense to invest the money given the current bear market.

I also have no recommendations for short-term deployment of funds. I donít do short-term investments. However, you may want to keep an eye on the interest rates on 1-year or 2-year government bonds. Why are you looking for short-term investments?

Now, if you want to dial up the optimization even more, consider cycling to work to bring down car costs even more, since you both live less than 15 minutes from work. Also consider whether you can make your home earn money for you (eg, roommate, etc.).

Beware of lifestyle creep. Itís easy to say to yourself, ďWell, this thing is just $20, and we have a monthly income of $10,000Ē, and before you know it, itís death by a thousand papercuts. Yes, take time to smell roses, but donít become so distracted by buying roses that you wake up one day and wonder where all your moneyís gone. When we suddenly started earning high incomes, we set a savings goal for ourselves, a dollar amount that we wanted to sock away each year. The rest of the money was left for daily living expenses and rose-smelling.
« Last Edit: October 20, 2022, 04:12:03 PM by Freedomin5 »

Millenial Stache87

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Re: Young Savers Trying to Improve
« Reply #14 on: October 26, 2022, 02:02:33 PM »
I also have no recommendations for short-term deployment of funds. I donít do short-term investments. However, you may want to keep an eye on the interest rates on 1-year or 2-year government bonds. Why are you looking for short-term investments?

Thanks. Mainly interested just to optimize short-term "emergency fund" cash. We ended up putting most of our cash position into 3-month t-bills recently. While it doesn't really move the needle much, it helps out a little. Will look to reposition some of this to i-bonds or into IRA contributions in January.

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Re: Young Savers Trying to Improve
« Reply #15 on: October 26, 2022, 02:22:01 PM »
I love your plan to split time between the US and the EU. I'm currently working on options for that myself. You are waaaaaay ahead of me there.

The only hole I see in your savings is in taxable investments. For people planning to retire so young you would be much better off putting money into a brokerage account than paying down your mortgage even earlier.

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Re: Young Savers Trying to Improve
« Reply #16 on: October 29, 2022, 08:08:54 PM »
Off topic, and Iím outing myself, but I literally have no idea how you spend that little on groceries. What serious magic am I missing? (Having said that, my partner is a food activist so we eat virtually 100% organic. We spend 3.5 times that amount in HCOL area.)

Millenial Stache87

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Re: Young Savers Trying to Improve
« Reply #17 on: October 31, 2022, 11:12:50 AM »
Off topic, and Iím outing myself, but I literally have no idea how you spend that little on groceries. What serious magic am I missing? (Having said that, my partner is a food activist so we eat virtually 100% organic. We spend 3.5 times that amount in HCOL area.)

90% Aldi shopping. No organic, one of the lower parts of the country for food, and we don't eat much beef (mostly chicken and fish).

I love your plan to split time between the US and the EU. I'm currently working on options for that myself. You are waaaaaay ahead of me there.

The only hole I see in your savings is in taxable investments. For people planning to retire so young you would be much better off putting money into a brokerage account than paying down your mortgage even earlier.

Good point. Brokerage used to look a lot better, but we used it to fund 20% down on our home purchase. Will try to rebuild it, although withdrawing roth contributions/after-tax roth conversion contributions create a lot that could be taken out potentially if we stay in the US and limits current taxes on dividends.



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Re: Young Savers Trying to Improve
« Reply #18 on: December 21, 2022, 12:48:49 PM »
Is the 529 for yourself, a relative, or future children?  (can you even do that?).

joe189man

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Re: Young Savers Trying to Improve
« Reply #19 on: December 21, 2022, 02:28:05 PM »
Life Situation: MFJ no kids in mid 20s. Low-Mod cost of living area. Both are content at current jobs, but open to other opportunities if something great comes up.

Assets:
I-bonds - $20k+
529: $20k
HSAs - $15k
Traditional 401ks - $140k
Roth 401ks - $120k
Roth IRAs - $110k
Brokerage Acct - $30k
Checking Account - $20k - need to deploy the emergency fund part of this better - short-term t-bills, 3 mo cds at schwab? not sure
Pension - tbd?


You guys are doing great, almost too great. I apologize for my tinfoil hat wearing, but...

to get to those approximate numbers in a 401k, both of you would have to have about 6 years maxing them out assuming 7% interest, maybe less with company matches

and ~8 years of you both maxing IRAs out at historic IRA contribution limits, assuming 7% interest

all this by your "mid" 20's along with $15k in HSA funding, $30k in a brokerage and $20k in a 529

if this is real you guys should have a youtube channel or Neftlix show talking about how you did it, @zolotiyeruki is right you guys are nearly done

Again, i apologize if i am the A-hole,



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Re: Young Savers Trying to Improve
« Reply #20 on: December 22, 2022, 07:59:00 AM »
If you're thinking of moving to a country with taxes that high, you'll need to account for that.  If you're expecting a 12% tax rate in the US and will pay 3x that over there, you'll need 20% more saved up.

How much time could you spend in Europe without being considered a resident and having to pay those taxes?  Could you officially maintain a residence stateside?

We could stay a bit under half the year is our understanding. May maintain US residency, live their part of the year, and travel part of the year for tax reasons. The world will probably change a lot in the decade+ until we are ready for a move anyways.
You mention "wife's home country" in the EU: have you looked into whether she has any citizenship options?  EU citizenship is a valuable right if it can be obtained, and if she can get citizenship then as her spouse you are entitled to the same EU rights (not necessarily the same rights as she has in her home country but the same rights as she would have to travel, live and work in the rest of the EU).

You mention being able to stay for half the year.  Within the Schengen zone a standard visa will get you two stays of 90 days each year.  For EU countries outside the Schengen zone the rules may be different.

One thing you might look at in due course (if they are still around) are Golden Visa options for people who invest a certain amount in an EU country, such as Portugal or Greece.  This might not only give you more options for staying longer in the EU but would also be a hedge against currency movements - if you are spending half your money in the EU then it might be a good idea to have some of your investments in Euros, or in the currency of your wife's home country if not Euros, rather than all in US dollars.


Millenial Stache87

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Re: Young Savers Trying to Improve
« Reply #21 on: December 26, 2022, 02:40:21 PM »
If you're thinking of moving to a country with taxes that high, you'll need to account for that.  If you're expecting a 12% tax rate in the US and will pay 3x that over there, you'll need 20% more saved up.

How much time could you spend in Europe without being considered a resident and having to pay those taxes?  Could you officially maintain a residence stateside?

We could stay a bit under half the year is our understanding. May maintain US residency, live their part of the year, and travel part of the year for tax reasons. The world will probably change a lot in the decade+ until we are ready for a move anyways.
You mention "wife's home country" in the EU: have you looked into whether she has any citizenship options?  EU citizenship is a valuable right if it can be obtained, and if she can get citizenship then as her spouse you are entitled to the same EU rights (not necessarily the same rights as she has in her home country but the same rights as she would have to travel, live and work in the rest of the EU).

You mention being able to stay for half the year.  Within the Schengen zone a standard visa will get you two stays of 90 days each year.  For EU countries outside the Schengen zone the rules may be different.

One thing you might look at in due course (if they are still around) are Golden Visa options for people who invest a certain amount in an EU country, such as Portugal or Greece.  This might not only give you more options for staying longer in the EU but would also be a hedge against currency movements - if you are spending half your money in the EU then it might be a good idea to have some of your investments in Euros, or in the currency of your wife's home country if not Euros, rather than all in US dollars.

Spouse is EU citizen. Country is Schengen.

Millenial Stache87

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Re: Young Savers Trying to Improve
« Reply #22 on: December 26, 2022, 02:46:29 PM »
Life Situation: MFJ no kids in mid 20s. Low-Mod cost of living area. Both are content at current jobs, but open to other opportunities if something great comes up.

Assets:
I-bonds - $20k+
529: $20k
HSAs - $15k
Traditional 401ks - $140k
Roth 401ks - $120k
Roth IRAs - $110k
Brokerage Acct - $30k
Checking Account - $20k - need to deploy the emergency fund part of this better - short-term t-bills, 3 mo cds at schwab? not sure
Pension - tbd?


You guys are doing great, almost too great. I apologize for my tinfoil hat wearing, but...

to get to those approximate numbers in a 401k, both of you would have to have about 6 years maxing them out assuming 7% interest, maybe less with company matches

and ~8 years of you both maxing IRAs out at historic IRA contribution limits, assuming 7% interest

all this by your "mid" 20's along with $15k in HSA funding, $30k in a brokerage and $20k in a 529

if this is real you guys should have a youtube channel or Neftlix show talking about how you did it, @zolotiyeruki is right you guys are nearly done

Again, i apologize if i am the A-hole,

I lived at home for several years with a pretty good starting income and maxed out a mega-backdoor 401k. It is worth researching if you are not aware of it. Spouse has maxed out 401k since beginning work including in a half year time horizon for one year.

Some IRA amount came from transfer outside of work plan to Roth IRA from the megaback door and my first contributions to the IRA were at 16 at my first job.

529 transferred to my name. I had an academic scholarship to university and did not use it.

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Re: Young Savers Trying to Improve
« Reply #23 on: December 26, 2022, 04:02:16 PM »
If you're thinking of moving to a country with taxes that high, you'll need to account for that.  If you're expecting a 12% tax rate in the US and will pay 3x that over there, you'll need 20% more saved up.

How much time could you spend in Europe without being considered a resident and having to pay those taxes?  Could you officially maintain a residence stateside?

We could stay a bit under half the year is our understanding. May maintain US residency, live their part of the year, and travel part of the year for tax reasons. The world will probably change a lot in the decade+ until we are ready for a move anyways.
You mention "wife's home country" in the EU: have you looked into whether she has any citizenship options?  EU citizenship is a valuable right if it can be obtained, and if she can get citizenship then as her spouse you are entitled to the same EU rights (not necessarily the same rights as she has in her home country but the same rights as she would have to travel, live and work in the rest of the EU).

You mention being able to stay for half the year.  Within the Schengen zone a standard visa will get you two stays of 90 days each year.  For EU countries outside the Schengen zone the rules may be different.

One thing you might look at in due course (if they are still around) are Golden Visa options for people who invest a certain amount in an EU country, such as Portugal or Greece.  This might not only give you more options for staying longer in the EU but would also be a hedge against currency movements - if you are spending half your money in the EU then it might be a good idea to have some of your investments in Euros, or in the currency of your wife's home country if not Euros, rather than all in US dollars.

Spouse is EU citizen. Country is Schengen.
In that case your spouse can stay in the EU as long as they like, no restriction on their stay in any EU country, including their home country.  Your rights to stay in your spouse's country depend on the laws of that country regarding spouses.  But as the spouse of an EU citizen you have the right under EU law to stay as long as you like in any EU country other than your spouse's home country.

If you are looking to stay in your spouse's home country it would be worth your looking into your visa and/or citizenship rights through your spouse's citizenship.  But otherwise you are free to travel or work in any other EU country without worrying about the usual visa restrictions which apply to non-EU nationals.

Millenial Stache87

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Re: Young Savers Trying to Improve
« Reply #24 on: December 26, 2022, 07:38:38 PM »
If you're thinking of moving to a country with taxes that high, you'll need to account for that.  If you're expecting a 12% tax rate in the US and will pay 3x that over there, you'll need 20% more saved up.

How much time could you spend in Europe without being considered a resident and having to pay those taxes?  Could you officially maintain a residence stateside?

We could stay a bit under half the year is our understanding. May maintain US residency, live their part of the year, and travel part of the year for tax reasons. The world will probably change a lot in the decade+ until we are ready for a move anyways.
You mention "wife's home country" in the EU: have you looked into whether she has any citizenship options?  EU citizenship is a valuable right if it can be obtained, and if she can get citizenship then as her spouse you are entitled to the same EU rights (not necessarily the same rights as she has in her home country but the same rights as she would have to travel, live and work in the rest of the EU).

You mention being able to stay for half the year.  Within the Schengen zone a standard visa will get you two stays of 90 days each year.  For EU countries outside the Schengen zone the rules may be different.

One thing you might look at in due course (if they are still around) are Golden Visa options for people who invest a certain amount in an EU country, such as Portugal or Greece.  This might not only give you more options for staying longer in the EU but would also be a hedge against currency movements - if you are spending half your money in the EU then it might be a good idea to have some of your investments in Euros, or in the currency of your wife's home country if not Euros, rather than all in US dollars.

Spouse is EU citizen. Country is Schengen.
In that case your spouse can stay in the EU as long as they like, no restriction on their stay in any EU country, including their home country.  Your rights to stay in your spouse's country depend on the laws of that country regarding spouses.  But as the spouse of an EU citizen you have the right under EU law to stay as long as you like in any EU country other than your spouse's home country.

If you are looking to stay in your spouse's home country it would be worth your looking into your visa and/or citizenship rights through your spouse's citizenship.  But otherwise you are free to travel or work in any other EU country without worrying about the usual visa restrictions which apply to non-EU nationals.

Thanks for the info!

Millenial Stache87

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Re: Young Savers Trying to Improve
« Reply #25 on: January 14, 2024, 12:16:58 PM »
1+ year update

2023 spending was just over 63k. Fun year with controlled spending. Incomes improved a bit.

Net Worth with stock market runup is now about $725k inclusive of ~$80k in home equity. Excludes college fund.

Well on track to $1M in low 30s and are happy to be in the situation we are in.

One of us has an opportunity to potentially jump employers for a ~40k raise, but the new employer would be less stable and we are both very happy in our jobs. No sure it is worth leaving jobs we are very happy at when our needs are being met, but the higher pay is nice.

NorthernIkigai

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Re: Young Savers Trying to Improve
« Reply #26 on: January 27, 2024, 01:07:00 PM »
Well done!

I didnít read this thread a year ago, but reading it now compels me to comment on the whole freedom of movement in the EU thing mentioned above. This is NOT how it works.

There is freedom of movement within the EU for EU citizens who can support themselves, typically defined as being employed, a student, or (officially) retired. Each country has its own rules. If you are not in one of these categories (which I guess you wonít be if you plan to FIRE), you can stay max 3 months in another EU country. Of course you may set something up with your stash that satisfies the criteria of supporting yourself, but you will have to really look into what works in the country or countries you are interested in.

Also your role as the spouse of an EU citizen varies from one country to another. Anecdotally, itíll be easier to at least start out in the country where your spouse is a citizen rather than in some other EU country, get you that citizenship and then move on if you want. If this is what you decide to do, and the citizenship criteria in your spouseís home country require a language test in a language you donít currently speak, start learning it now, itíll be much less painful that way. Andt citizenship criteria can and do change at political whims.

Also remember that itís annoying to be a US (including dual US and EU) citizen in the EU nowadays: banking used to be pretty close to impossible back when FATCA first came into force, and I donít know if itís gotten any easier since.

Millenial Stache87

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Re: Young Savers Trying to Improve
« Reply #27 on: February 19, 2024, 01:15:57 PM »
Thanks! I believe facta is still a big issue in the EU, including in spouse's home country. Focus for now is to just accumulate wealth and see where life takes us location wise.

 

Wow, a phone plan for fifteen bucks!