Author Topic: Is there anything you recommend doing in the year before FIRE?  (Read 1478 times)

MelodyG

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I've been working abroad (in Canada, so not that far abroad) and my contract is up in May 2021.  I don't want to go back to my old job in Portland, OR, so after 7 years of diligent saving toward FIRE, I'm quitting.  I have all my liquid savings in mutual funds, and I have a rental house that needs a bit of a remodel.  I will be doing the remodel myself after I quit my job (I have accounted for this in my 'stache).  After that I plan to move to my other property, a farm in Montana, that I own with a friend.  I have what I feel is a pretty solid post-FIRE plan that I'm really looking forward to.

My question is:  Is there anything you have done, or wish you had done, in your last year of being a corporate slave?

MelodyG

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Re: Is there anything you recommend doing in the year before FIRE?
« Reply #1 on: May 02, 2020, 10:31:29 AM »
Never mind!  I just noticed the sticky post above this post that answers all my questions.  Sheesh.

Fishindude

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Re: Is there anything you recommend doing in the year before FIRE?
« Reply #2 on: May 02, 2020, 12:33:58 PM »
If you have any big ticket purchases such as automobiles, equipment, etc. that you know you are going to make, why not do it now while you are working and have that income coming in.

marty998

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Re: Is there anything you recommend doing in the year before FIRE?
« Reply #3 on: May 02, 2020, 07:16:47 PM »
The timing of when you leave matters - there's a lot of tax planning you can do in your final year.

Say if you work 6 months during the year, your marginal tax rate might be different. This might change how much you can put away in tax sheltered accounts for example, or in Australia you can take annual leave and long service leave at half pay and therefore get taxed less on those balances too.


ender

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Re: Is there anything you recommend doing in the year before FIRE?
« Reply #4 on: May 02, 2020, 09:45:09 PM »
The timing of when you leave matters - there's a lot of tax planning you can do in your final year.

Say if you work 6 months during the year, your marginal tax rate might be different. This might change how much you can put away in tax sheltered accounts for example, or in Australia you can take annual leave and long service leave at half pay and therefore get taxed less on those balances too.

This can have a very significant impact on a lot of things.

Definitely consider the timing in the year!

MelodyG

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Re: Is there anything you recommend doing in the year before FIRE?
« Reply #5 on: May 11, 2020, 07:59:10 AM »
Well, my contract is up on May 31st.  I have 5 weeks of vacation, so I'm planning to take that after that, then be done.  I'll be getting paychecks up to mid July.

Do you guys have a good calculator you recommend?  Did you adjust your deductions so more tax was taken out so you didn't owe, or do you have another strategy that worked for you?

ItsALongStory

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Re: Is there anything you recommend doing in the year before FIRE?
« Reply #6 on: May 23, 2020, 09:24:46 AM »
Tax planning is top of mind for us as well, I will either have left the US for a job abroad or left the workforce altogether. I didn't adjust my tax withholdings at all and look at the future refund as a bit of a cash windfall early 2021. i did adjust my pre-tax withholdings to maximize my 401k (done) and HSA (about halfway there) in the first half of the year and am currently putting some extra cash in my after tax 401k.

I understand many of those tax vehicles don't necessarily apply to your canadian contract but perhaps you could max out your contributions here in the US while you're collecting on your leave. our max contribution is 65% so that adds up very quickly.

Much Fishing to Do

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Re: Is there anything you recommend doing in the year before FIRE?
« Reply #7 on: May 27, 2020, 07:48:47 AM »
Well, my contract is up on May 31st.  I have 5 weeks of vacation, so I'm planning to take that after that, then be done.  I'll be getting paychecks up to mid July.


I'm sure you already have...but make sure that vacation is still good after May 31st ;-) , that sounds like the kind of mistake I'd make and figure out on May 29th....