Author Topic: Race from $2M to $4M...and Beyond!  (Read 518740 times)

Bateaux

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Re: Race from $2M to $3M.....and beyond!
« Reply #1200 on: June 19, 2019, 01:27:36 PM »
For those of us with significant assets outside of retirement accounts (taxable brokerage, home equity, a business), FAFSA is a very difficult system to game, especially if we like our dividends, interest, and capital gains income.  I'm also interested in what your strategy is @Much Fishing to Do ...

ACA subsidy is the larger opportunity for ERs since you can have significant income and unlimited wealth and still receive a subsidy.

My strategy is to try to get income below $50k (for at least some years) and meet other criteria so I can use the simplified assets test and they be assumed as $0.  It will not be easy and maybe not worth it, but looks possible.

Getting income low enough is another reason we're having to work a bit longer.  There are some expenses we need to knock out first.  Then we can live pretty cheap.

JoJoP

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Re: Race from $2M to $3M.....and beyond!
« Reply #1201 on: June 19, 2019, 01:56:42 PM »
We didn't try to game the FASFA, just focused on Merit scholarships, etc.  We had too many assets since the rentals and personal banking counted. 

Car Jack

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Re: Race from $2M to $3M.....and beyond!
« Reply #1202 on: June 19, 2019, 06:41:59 PM »
My first son is finishing up a few courses right now at his private college.  Along with FAFSA and CSS only the first year, there was a college application for college aid.  Things on either CSS or the college form included:

Insurance with cash value.
Value of home.
Value of cars.
Value of boats, motorcycles, snowmobiles, jet skis or any other vehicles.
Value of collectibles.
Any 529 owned by anyone with son as beneficiary.
Any money already paid towards college by anyone other than parent or student.

They certainly catch the loop holes where FAFSA is easy to game.

My younger son starts college in the fall.  I've let him and my wife know that they're welcome to fill out FAFSA.  I'm done with all that work for literally zero.  Getting EFCs of $93,000 every year drives it pretty hard that I've simply been wasting my time with it.

BeanCounter

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Re: Race from $2M to $3M.....and beyond!
« Reply #1203 on: June 21, 2019, 11:55:44 AM »
Iíve got a lot of reading to do on the FAFSA, but I donít think there is much hope for us. Weíve got $1.3in retirement and $1M in cash. And kids ages 10 and 6 have $30k and $20k respectively in their 529s. Our home equity is only about $100k. If DH keeps working he will have tuition covered at the University he works for. Of course that benefit can never be considered guaranteed so at some point I should probably do some research to see if there is anything we can do to shelter some assets.

pecunia

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Re: Race from $2M to $3M.....and beyond!
« Reply #1204 on: June 22, 2019, 02:59:01 PM »
Iíve got a lot of reading to do on the FAFSA, but I donít think there is much hope for us. Weíve got $1.3in retirement and $1M in cash. And kids ages 10 and 6 have $30k and $20k respectively in their 529s. Our home equity is only about $100k. If DH keeps working he will have tuition covered at the University he works for. Of course that benefit can never be considered guaranteed so at some point I should probably do some research to see if there is anything we can do to shelter some assets.

It's also possible that the rules will change in 6 or 7 years making it easier for your children to get an education.  No reason to be too pessimistic.

soccerluvof4

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Re: Race from $2M to $3M.....and beyond!
« Reply #1205 on: June 24, 2019, 06:09:53 AM »
Iíve got a lot of reading to do on the FAFSA, but I donít think there is much hope for us. Weíve got $1.3in retirement and $1M in cash. And kids ages 10 and 6 have $30k and $20k respectively in their 529s. Our home equity is only about $100k. If DH keeps working he will have tuition covered at the University he works for. Of course that benefit can never be considered guaranteed so at some point I should probably do some research to see if there is anything we can do to shelter some assets.


Were a bit above that and still my kids always have qualified for minimum 5k so still worth filling it out. Usually its been 5-8k but still better than taking on other loans.

Car Jack

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Re: Race from $2M to $3M.....and beyond!
« Reply #1206 on: June 24, 2019, 10:33:51 AM »
For those of us with significant assets outside of retirement accounts (taxable brokerage, home equity, a business), FAFSA is a very difficult system to game, especially if we like our dividends, interest, and capital gains income.  I'm also interested in what your strategy is @Much Fishing to Do ...

ACA subsidy is the larger opportunity for ERs since you can have significant income and unlimited wealth and still receive a subsidy.
I thought home equity was sheltered also. Am I mistaken?

Net home equity is not sheltered - http://www.finaid.org/calculators/finaidestimate.phtml (but, like many FAFSA issues, it is a complicated situation.  It IS sheltered for Federal purposes apparently, so you can get the federal loans, but is not sheltered for institutional purposes, so you'll get less financial aid.  I mostly focus on the financial aid part.)

I think I'm confused about what you're referring to.  For FAFSA-only colleges, home equity isn't looked at.  This is why one strategy is to move any "available assets" to pay down any mortgage.  This converts available assets to invisible assets.

For private colleges, absolutely...many look at everything.

Also be aware that many colleges give zero merit aid for students transferring in.  So in some cases a strategy of going 2 years to community college, then transferring into a 4 year school can blow up on you financially.  Especially transferring into an expensive, private college.  (been there, done that)

EscapeVelocity2020

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Re: Race from $2M to $3M.....and beyond!
« Reply #1207 on: June 24, 2019, 11:10:32 AM »
@Car Jack - I admit that it is complicated and I'm not at the point that I've brushed up on all the details, but my back-up is included in the link and the hedging statement I made in parenthesis that there are different situations.  You are correct that home equity is not always counted, but it looked more like hiding assets only helps you get a loan, not direct financial aid from the school.  I appreciate all of the anecdotes people have contributed - I had considered the local college then transfer trick (just had a niece drop out Freshman year at a 40k private college), so it's good to be aware it blows up chances for merit based aid.

JoJoP

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Re: Race from $2M to $3M.....and beyond!
« Reply #1208 on: June 24, 2019, 08:44:36 PM »
@Car Jack - I admit that it is complicated and I'm not at the point that I've brushed up on all the details, but my back-up is included in the link and the hedging statement I made in parenthesis that there are different situations.  You are correct that home equity is not always counted, but it looked more like hiding assets only helps you get a loan, not direct financial aid from the school.  I appreciate all of the anecdotes people have contributed - I had considered the local college then transfer trick (just had a niece drop out Freshman year at a 40k private college), so it's good to be aware it blows up chances for merit based aid.

Perhaps for SOME merit based aid, but this strategy worked for us.  We (my daughter) received many (6?) scholarships that totalled about 1/2 of her tuition.   Our son is going the Community college for 2 years route.  He got one small scholarship and was not as motivated as she was to apply for more.   We consider both strategies viable.  Both reduced our costs by about 50%.   The community college route will save money on tuition for those first 2 years, and so is a more sure bet. 

Car Jack

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Re: Race from $2M to $3M.....and beyond!
« Reply #1209 on: June 25, 2019, 06:59:16 AM »
@Car Jack - I admit that it is complicated and I'm not at the point that I've brushed up on all the details, but my back-up is included in the link and the hedging statement I made in parenthesis that there are different situations.  You are correct that home equity is not always counted, but it looked more like hiding assets only helps you get a loan, not direct financial aid from the school.  I appreciate all of the anecdotes people have contributed - I had considered the local college then transfer trick (just had a niece drop out Freshman year at a 40k private college), so it's good to be aware it blows up chances for merit based aid.

Perhaps for SOME merit based aid, but this strategy worked for us.  We (my daughter) received many (6?) scholarships that totalled about 1/2 of her tuition.   Our son is going the Community college for 2 years route.  He got one small scholarship and was not as motivated as she was to apply for more.   We consider both strategies viable.  Both reduced our costs by about 50%.   The community college route will save money on tuition for those first 2 years, and so is a more sure bet.

No disagreement.  My younger son starts community college in the fall and plans to transfer after 2 years to an in state public college.  He would not qualify for merit aid anyways.


BeanCounter

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Re: Race from $2M to $3M.....and beyond!
« Reply #1210 on: June 25, 2019, 08:12:55 AM »
Iíve got a lot of reading to do on the FAFSA, but I donít think there is much hope for us. Weíve got $1.3in retirement and $1M in cash. And kids ages 10 and 6 have $30k and $20k respectively in their 529s. Our home equity is only about $100k. If DH keeps working he will have tuition covered at the University he works for. Of course that benefit can never be considered guaranteed so at some point I should probably do some research to see if there is anything we can do to shelter some assets.


Were a bit above that and still my kids always have qualified for minimum 5k so still worth filling it out. Usually its been 5-8k but still better than taking on other loans.

So do they count brokerage investments and 529 money but NOT retirement?
Anyway, it is all interesting to note but we do still have 10 years to go before the first child is college bound. I'm sure lots of stuff can and will change.

BeanCounter

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Re: Race from $2M to $3M.....and beyond!
« Reply #1211 on: June 25, 2019, 08:21:39 AM »
So we just got back from our big trip out West to Yellowstone and Grand Teton. It was amazing. And it gave me so much clarity on my decision to RE spring of 2020.
The trip in combination with the Go Curry Cracker post on "Worst Retirement Ever" that someone posted up thread really boosted my positive thinking about RE. That was a really good read and it helped me to realize that we have plenty of money and are young enough to be very flexible. In fact while we were in Yellowstone both DH and I had several people recommend that we consider applying to do seasonal work there. And we both thought it was a great idea.
Anyway, travel,  man it really opens the mind. I've never felt so relaxed as I did on that trip. So while before I was really worried about how to RE with kids, I'm now feeling like we can totally figure this out.

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1212 on: June 25, 2019, 12:18:32 PM »
@BeanCounter Good for you.. It takes a while to get this straight in your head.. Like several years of doing this and lo and behold its just fine.. My NW has doubled in the 5 years since RE and sure, there was some earning during that time but "only" $150k or so which is trivial compared with the market growth.

It will be awesome..:)

pecunia

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Re: Race from $2M to $3M.....and beyond!
« Reply #1213 on: June 25, 2019, 04:53:53 PM »
@BeanCounter Good for you.. It takes a while to get this straight in your head.. Like several years of doing this and lo and behold its just fine.. My NW has doubled in the 5 years since RE and sure, there was some earning during that time but "only" $150k or so which is trivial compared with the market growth.

It will be awesome..:)

Maybe so - awesome - Dow Jones edged down today, but hit a new record high a few days ago.

I do note inflation seems to be edging the prices of things up.  The price of real estate seems to have rebounded and home prices are rising in my area.  The dollar has been holding its own against the Euro.

Times seem good in the near horizon.  Donald had the good sense to avoid a war despite his buds urging him on.

That National Park gig noted by the Beancounter sounds like a mighty fine deal.  If I set myself free at the end of the year, I may look into that one myself.  Seems like a fitting place for riding into the sunset.

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1214 on: June 25, 2019, 05:24:52 PM »
Yup and don't forget to keep a few years in bond funds to draw on during the down years.

for example.. a 60/40 split on a 4% WR will give you 10 years worth of bonds. This will be enough to ride out all but the very worst of recessions.

If you like a little more risk/ capital growth.. an 80/20 split would give you 5 years. Still enough to ride out most recessions.

The above assumes bonds do not change in value during down years of course which is plainly untrue.

itchyfeet

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Re: Race from $2M to $3M.....and beyond!
« Reply #1215 on: June 26, 2019, 02:45:42 AM »
I too have dived into post FIRE planning buying up a few tickets for the Olympics in Tokyo next year. It will make for something fun to do when not working..... 😁

Of course, being the indecisive clown that I am, there remains a small chance that I take a job offer in the US for one final fling before FIRE.

pecunia

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Re: Race from $2M to $3M.....and beyond!
« Reply #1216 on: June 26, 2019, 07:14:15 AM »
Yup and don't forget to keep a few years in bond funds to draw on during the down years.

for example.. a 60/40 split on a 4% WR will give you 10 years worth of bonds. This will be enough to ride out all but the very worst of recessions.

If you like a little more risk/ capital growth.. an 80/20 split would give you 5 years. Still enough to ride out most recessions.

The above assumes bonds do not change in value during down years of course which is plainly untrue.

Good advice about the bonds.  A re-balance may be in order as I can't see this upward trend continuing for too much longer.  The saturation point may soon be upon us.

markbike528CBX

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Re: Race from $2M to $3M.....and beyond!
« Reply #1217 on: June 26, 2019, 10:37:18 AM »
Yup and don't forget to keep a few years in bond funds to draw on during the down years.

for example.. a 60/40 split on a 4% WR will give you 10 years worth of bonds. This will be enough to ride out all but the very worst of recessions.

If you like a little more risk/ capital growth.. an 80/20 split would give you 5 years. Still enough to ride out most recessions.

The above assumes bonds do not change in value during down years of course which is plainly untrue.

Good advice about the bonds.  A re-balance may be in order as I can't see this upward trend continuing for too much longer. The saturation point may soon be upon us. The TOP IS IN!
Fixed that for you.

Edit: Link to the referenced thread as noted by @soccerluvof4 in the comment just following.
https://forum.mrmoneymustache.com/investor-alley/top-is-in/
« Last Edit: June 27, 2019, 10:42:26 AM by markbike528CBX »

soccerluvof4

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Re: Race from $2M to $3M.....and beyond!
« Reply #1218 on: June 27, 2019, 04:10:55 AM »
Yup and don't forget to keep a few years in bond funds to draw on during the down years.

for example.. a 60/40 split on a 4% WR will give you 10 years worth of bonds. This will be enough to ride out all but the very worst of recessions.

If you like a little more risk/ capital growth.. an 80/20 split would give you 5 years. Still enough to ride out most recessions.

The above assumes bonds do not change in value during down years of course which is plainly untrue.

Good advice about the bonds.  A re-balance may be in order as I can't see this upward trend continuing for too much longer. The saturation point may soon be upon us. The TOP IS IN!
Fixed that for you.



I believe there is a whole thread dedicated to the top is in that started several years ago.

PhrugalPhan

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Re: Race from $2M to $3M.....and beyond!
« Reply #1219 on: June 27, 2019, 11:15:29 AM »
Something only people here in this group would understand.

Uh oh, I figured out something bothersome (or first world problem-ish == depends on your view point) last night about my retirement balances.  I'm trying to stay in the 22% tax bracket today without going into higher brackets when I retire and hit 70 and must take RMDs (or 72 if the bill in congress passes).  As well I would like not to have to be punished with IRMAA tax hits as well.

So with a ton of assumptions I figured out an expected yearly income with pension, SSI & dividends if I wait for SSI until 70 (13 years from now).   And then figured out how much I could have in my 457 plan as pre-tax amounts with the required RMD percentages before my RMDs would kick me into a tax bracket above 22%.  What I found is I am right at that tipping point now!  I can put in money as Roth today, and am doing so now with 90% of my contributions.  So what's the problem?  I can up it to 100%, but I am going to be close this year with my dividends where I may go into the 24% bracket as is.  And I am getting an extra 4% raise in July, so any tax headroom in the 22% bracket this year is pretty much gone (unless I go pre-tax).   

I could sell losers out of my brokerage, but I only have two, and they aren't that much of a loss.  And yes, I plan on doing Roth conversions once I retire but I won't have many years where that will be substantial.  (I will not only get a pension but a supplement until I am 67 so I am not going to have many years or much room to convert even at 22% tax rate)

Yeah, first world problems.  My GF said to just suck it up and pay the 24% today if needed.  I am thinking I will try to stay just within the 22% bracket, and hope I can convert more to Roth at 22% in retirement than I am expecting.

DavidAnnArbor

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Re: Race from $2M to $3M.....and beyond!
« Reply #1220 on: June 27, 2019, 01:42:10 PM »
At least you saved taxes by not having to pay the old 25% tax bracket.

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1221 on: June 27, 2019, 03:06:48 PM »
You better move to a non income tax state as well.

As @lhamo pointed out.. the ACA subsidies are a huge benefit if you can keep your income low. Personally I have chosen to kick the can down the road and make our MAGI roughly $30k which means we pay almost nothing for our Bronze plan (About what its worth IMHO).

This means I will only have between 65 and 70  to do Roth conversions. The end result is I will be paying a ton of taxes at 70 and my "poor" Wife will get hit even harder when I fall off the perch and she can no longer do MFJ.

(Note she has mentioned marrying the "pool boy" after I croak).

I guess for me at least taxes are really not that big of a deal.. Taxes 13 years from now even less so.. I mean assuming 8% growth, if you have $2M now, you might be hitting around $5.5 million by then.. Roth converting your way out of that might be a challenge.


PhrugalPhan

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Re: Race from $2M to $3M.....and beyond!
« Reply #1222 on: June 27, 2019, 03:41:23 PM »
You do understand how marginal tax rates work, right?  You are only paying the extra 2% tax on whatever you earn/convert over the top of the 22% bracket.  Nothing worth getting your knickers in a twist over.

Also, assuming you are still working and have health insurance through work, it is probably WAAAAY better to pay those taxes now.  Because if/when you are on an ACA plan you have to be MUCH more careful not to fall off the various subsidy cliffs -- the hit from those can be huge, much worse than a 2% marginal tax increase.
Oh I understand how the taxes work.  Just the principle of the thing, I want to avoid the next bracket if I can.

As for ACA, I plan on marrying my GF who is a Fed retiree and when I do that I will be able to get her health insurance, so I'm not looking to the ACA for anything.  I can get retiree health insurance through my employer, but its probably about the same as going onto the ACA, so I'll be ok in any case.

As for taxes, yeah we will be looking into where to live to minimize state taxes.  Some will exempt pensions so its hard to say at this point where we will end up.

I just was trying to optimize things and found it will be harder than I thought.  So goes life.

Dicey

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Re: Race from $2M to $3M.....and beyond!
« Reply #1223 on: June 27, 2019, 04:47:09 PM »
(Note she has mentioned marrying the "pool boy" after I croak).
Wait! I thought you were the pool boy! What the hell?

JoJoP

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Re: Race from $2M to $3M.....and beyond!
« Reply #1224 on: June 27, 2019, 05:36:20 PM »
(Note she has mentioned marrying the "pool boy" after I croak).
Wait! I thought you were the pool boy! What the hell?

This is, after all, MMM.  Rich or poor, we clean our own pools around here.

ysette9

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Race from $2M to $3M.....and beyond!
« Reply #1225 on: June 27, 2019, 05:47:05 PM »
Wait, we are allowed to have pools around here?

Or are you talking about this kind of pool?

soccerluvof4

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Re: Race from $2M to $3M.....and beyond!
« Reply #1226 on: June 28, 2019, 05:32:31 AM »
Wait, we are allowed to have pools around here?

Or are you talking about this kind of pool?



who needs Sea World with a pool like that!?! haha

Fomerly known as something

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Re: Race from $2M to $3M.....and beyond!
« Reply #1227 on: June 28, 2019, 05:59:54 AM »
You do understand how marginal tax rates work, right?  You are only paying the extra 2% tax on whatever you earn/convert over the top of the 22% bracket.  Nothing worth getting your knickers in a twist over.

Also, assuming you are still working and have health insurance through work, it is probably WAAAAY better to pay those taxes now.  Because if/when you are on an ACA plan you have to be MUCH more careful not to fall off the various subsidy cliffs -- the hit from those can be huge, much worse than a 2% marginal tax increase.
Oh I understand how the taxes work.  Just the principle of the thing, I want to avoid the next bracket if I can.

As for ACA, I plan on marrying my GF who is a Fed retiree and when I do that I will be able to get her health insurance, so I'm not looking to the ACA for anything.  I can get retiree health insurance through my employer, but its probably about the same as going onto the ACA, so I'll be ok in any case.

As for taxes, yeah we will be looking into where to live to minimize state taxes.  Some will exempt pensions so its hard to say at this point where we will end up.

I just was trying to optimize things and found it will be harder than I thought.  So goes life.

Make sure you marry 5 years before she retires.

I actually had the same discussion with my Financial Advisor except I am trying to avoid the 32% tax bracket.  He helped me to see with deductions that is not going to be an issue with me.  Another reason to be in the Don't pay off your mortgage club, the $6,000 in interest helps keep me below that threshold while my income is high.

Dicey

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Re: Race from $2M to $3M.....and beyond!
« Reply #1228 on: June 28, 2019, 06:09:20 AM »
You do understand how marginal tax rates work, right?  You are only paying the extra 2% tax on whatever you earn/convert over the top of the 22% bracket.  Nothing worth getting your knickers in a twist over.

Also, assuming you are still working and have health insurance through work, it is probably WAAAAY better to pay those taxes now.  Because if/when you are on an ACA plan you have to be MUCH more careful not to fall off the various subsidy cliffs -- the hit from those can be huge, much worse than a 2% marginal tax increase.
Oh I understand how the taxes work.  Just the principle of the thing, I want to avoid the next bracket if I can.

As for ACA, I plan on marrying my GF who is a Fed retiree and when I do that I will be able to get her health insurance, so I'm not looking to the ACA for anything.  I can get retiree health insurance through my employer, but its probably about the same as going onto the ACA, so I'll be ok in any case.

As for taxes, yeah we will be looking into where to live to minimize state taxes.  Some will exempt pensions so its hard to say at this point where we will end up.

I just was trying to optimize things and found it will be harder than I thought.  So goes life.

Make sure you marry 5 years before she retires.

I actually had the same discussion with my Financial Advisor except I am trying to avoid the 32% tax bracket.  He helped me to see with deductions that is not going to be an issue with me.  Another reason to be in the Don't pay off your mortgage club, the $6,000 in interest helps keep me below that threshold while my income is high.
Love it!

Fomerly known as something

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Re: Race from $2M to $3M.....and beyond!
« Reply #1229 on: June 28, 2019, 07:25:09 AM »
You do understand how marginal tax rates work, right?  You are only paying the extra 2% tax on whatever you earn/convert over the top of the 22% bracket.  Nothing worth getting your knickers in a twist over.

Also, assuming you are still working and have health insurance through work, it is probably WAAAAY better to pay those taxes now.  Because if/when you are on an ACA plan you have to be MUCH more careful not to fall off the various subsidy cliffs -- the hit from those can be huge, much worse than a 2% marginal tax increase.
Oh I understand how the taxes work.  Just the principle of the thing, I want to avoid the next bracket if I can.

As for ACA, I plan on marrying my GF who is a Fed retiree and when I do that I will be able to get her health insurance, so I'm not looking to the ACA for anything.  I can get retiree health insurance through my employer, but its probably about the same as going onto the ACA, so I'll be ok in any case.

As for taxes, yeah we will be looking into where to live to minimize state taxes.  Some will exempt pensions so its hard to say at this point where we will end up.

I just was trying to optimize things and found it will be harder than I thought.  So goes life.

Make sure you marry 5 years before she retires.

I actually had the same discussion with my Financial Advisor except I am trying to avoid the 32% tax bracket.  He helped me to see with deductions that is not going to be an issue with me.  Another reason to be in the Don't pay off your mortgage club, the $6,000 in interest helps keep me below that threshold while my income is high.
Love it!

I admit, I knew you would as I was writing it.

BeanCounter

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Re: Race from $2M to $3M.....and beyond!
« Reply #1230 on: June 28, 2019, 08:45:28 AM »
You do understand how marginal tax rates work, right?  You are only paying the extra 2% tax on whatever you earn/convert over the top of the 22% bracket.  Nothing worth getting your knickers in a twist over.

Also, assuming you are still working and have health insurance through work, it is probably WAAAAY better to pay those taxes now.  Because if/when you are on an ACA plan you have to be MUCH more careful not to fall off the various subsidy cliffs -- the hit from those can be huge, much worse than a 2% marginal tax increase.
Oh I understand how the taxes work.  Just the principle of the thing, I want to avoid the next bracket if I can.

As for ACA, I plan on marrying my GF who is a Fed retiree and when I do that I will be able to get her health insurance, so I'm not looking to the ACA for anything.  I can get retiree health insurance through my employer, but its probably about the same as going onto the ACA, so I'll be ok in any case.

As for taxes, yeah we will be looking into where to live to minimize state taxes.  Some will exempt pensions so its hard to say at this point where we will end up.

I just was trying to optimize things and found it will be harder than I thought.  So goes life.

Make sure you marry 5 years before she retires.

I actually had the same discussion with my Financial Advisor except I am trying to avoid the 32% tax bracket.  He helped me to see with deductions that is not going to be an issue with me.  Another reason to be in the Don't pay off your mortgage club, the $6,000 in interest helps keep me below that threshold while my income is high.
How is this possible given the new standard deductions?
I'm in the don't pay off your mortgage club, but with the new standard deductions it did not provide us enough to itemize in 2018.

For 2019 I set up a charitable foundation in our name with Fidelity. I'm going to donate some appreciated stock of about $16k and that plus my mortgage and property taxes will get us over the standard deduction amount. Then in the coming year(s) we can do all our donating out of that account instead of writing personal checks.

Fomerly known as something

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Re: Race from $2M to $3M.....and beyond!
« Reply #1231 on: June 28, 2019, 09:44:19 AM »

Make sure you marry 5 years before she retires.

I actually had the same discussion with my Financial Advisor except I am trying to avoid the 32% tax bracket.  He helped me to see with deductions that is not going to be an issue with me.  Another reason to be in the Don't pay off your mortgage club, the $6,000 in interest helps keep me below that threshold while my income is high.
How is this possible given the new standard deductions?
I'm in the don't pay off your mortgage club, but with the new standard deductions it did not provide us enough to itemize in 2018.

For 2019 I set up a charitable foundation in our name with Fidelity. I'm going to donate some appreciated stock of about $16k and that plus my mortgage and property taxes will get us over the standard deduction amount. Then in the coming year(s) we can do all our donating out of that account instead of writing personal checks.

I am single, new standard deduction is $12,000 for me.  My SALT taxes (State income plus property) are slightly more than $10,000 after my first $2000 to charity or mortgage interest takes me past the standard.

Dicey

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Re: Race from $2M to $3M.....and beyond!
« Reply #1232 on: June 28, 2019, 10:14:30 AM »
You do understand how marginal tax rates work, right?  You are only paying the extra 2% tax on whatever you earn/convert over the top of the 22% bracket.  Nothing worth getting your knickers in a twist over.

Also, assuming you are still working and have health insurance through work, it is probably WAAAAY better to pay those taxes now.  Because if/when you are on an ACA plan you have to be MUCH more careful not to fall off the various subsidy cliffs -- the hit from those can be huge, much worse than a 2% marginal tax increase.
Oh I understand how the taxes work.  Just the principle of the thing, I want to avoid the next bracket if I can.

As for ACA, I plan on marrying my GF who is a Fed retiree and when I do that I will be able to get her health insurance, so I'm not looking to the ACA for anything.  I can get retiree health insurance through my employer, but its probably about the same as going onto the ACA, so I'll be ok in any case.

As for taxes, yeah we will be looking into where to live to minimize state taxes.  Some will exempt pensions so its hard to say at this point where we will end up.

I just was trying to optimize things and found it will be harder than I thought.  So goes life.

Make sure you marry 5 years before she retires.

I actually had the same discussion with my Financial Advisor except I am trying to avoid the 32% tax bracket.  He helped me to see with deductions that is not going to be an issue with me.  Another reason to be in the Don't pay off your mortgage club, the $6,000 in interest helps keep me below that threshold while my income is high.
Love it!

I admit, I knew you would as I was writing it.
Way to make my day!!

pecunia

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Re: Race from $2M to $3M.....and beyond!
« Reply #1233 on: June 28, 2019, 04:55:36 PM »
The Dow shot back up today.
S&P went up today.
Nasdaq composite went up today.

It is the best of times.  It is the worst of times.

When I retire, I'm going to finally read that book.

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1234 on: June 28, 2019, 05:20:59 PM »
Doesn't matter.. Roger the pool boy is going to spend it all anyway!

DavidAnnArbor

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Re: Race from $2M to $3M.....and beyond!
« Reply #1235 on: June 28, 2019, 05:44:08 PM »
I had the same experience with Zillow so now I have to discount it.

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Re: Race from $2M to $3M.....and beyond!
« Reply #1236 on: June 28, 2019, 06:57:27 PM »
I poked my address into Zillow and got $155,900. I'm pretty sure that is about 25% low, maybe even more, and it actually went down $2,334 in the last 30 days. Also they say it will rent for $1,975 per month and that went up $180 in the last 30 days.
 Also noted the picture they have is not long after the hurricane, roof is cover in blue plastic, the 100ft of road frontage is either covered with tree debris or construction debris.
 Oh well, I'm not selling, and just about done with repairs.

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Re: Race from $2M to $3M.....and beyond!
« Reply #1237 on: June 29, 2019, 03:20:01 AM »
So you peaked my interest and though its states market VERY HOT mine dropped 5k but still slightly over 300k and know that is low but 300k is what I use anyhow.

BeanCounter

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Re: Race from $2M to $3M.....and beyond!
« Reply #1238 on: June 29, 2019, 04:52:08 AM »
Interesting. Mine went up $10k too. I donít count our home in our NW. Weíve got to live somewhere!

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Re: Race from $2M to $3M.....and beyond!
« Reply #1239 on: June 29, 2019, 08:50:36 AM »
Huh, mine went up by over $100k in a couple of days. This means it is only $200k lower than Redfin. ;-)

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Re: Race from $2M to $3M.....and beyond!
« Reply #1240 on: June 29, 2019, 08:53:45 AM »
Huh, mine went up by over $100k in a couple of days. This means it is only $200k lower than Redfin. ;-)
Looking into their algorithm more I looked at the list of nearby recent sales that influence the estimate. One is from a house sold in 2002. Another is of a house in an entirely different city far away.

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Re: Race from $2M to $3M.....and beyond!
« Reply #1241 on: June 29, 2019, 10:07:36 AM »
Well, you guys inspired me to look up the flip house on Zillow. Oops. We bought it for $725 a year ago. I updated the property facts on Zillow, and the Zestimate jumped to $1M. When I just looked, the Zestimate was...wait for it...$731k. Wut?
It's the second biggest house on the court. All the other Zestimates on the street are from $1-$1.5M. There are two very recent comps in the neighborhood that are pending at $1.2, but both of them still  need work and ours is turnkey.  I'm not really worried, but WTF, Zillow?

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Re: Race from $2M to $3M.....and beyond!
« Reply #1242 on: June 29, 2019, 12:33:28 PM »
    Have had that happen also, Meh it is Zillow.

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Re: Race from $2M to $3M.....and beyond!
« Reply #1243 on: June 29, 2019, 12:55:03 PM »
Just ran our mid-year NW numbers.  Net of expenses we are up 10% YTD. 

Our investment accounts are up 18 to 23% by category, but cash and home value (per Zillow) are down. 

Fomerly known as something

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Re: Race from $2M to $3M.....and beyond!
« Reply #1244 on: July 01, 2019, 05:04:45 AM »
Zillow dropped my house below what I paid for it to $271,000, in the same month that my same floor plan with a few different features sold for $72,000 more than I paid for my house at $352,000.  I should mention this was also in the middle of winter so not during peak buying season.  This month it appears they have decided that I guess it's back up over $300,000 again.

For net worth purposes, I use a completely arbitrary number of $300,000 I'm not sure at what point I will change that number up but it won't be based on zillow.

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Re: Race from $2M to $3M.....and beyond!
« Reply #1245 on: July 01, 2019, 07:24:13 AM »
Well, you guys inspired me to look up the flip house on Zillow. Oops. We bought it for $725 a year ago. I updated the property facts on Zillow, and the Zestimate jumped to $1M. When I just looked, the Zestimate was...wait for it...$731k. Wut?
It's the second biggest house on the court. All the other Zestimates on the street are from $1-$1.5M. There are two very recent comps in the neighborhood that are pending at $1.2, but both of them still  need work and ours is turnkey.  I'm not really worried, but WTF, Zillow?

Just the concept of a house worth more than $1M staggers me!

The fact its your "fixer upper" even more so.. You have a disposable house worth a million bucks!.. Gosh..:)

Exflyboy

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Re: Race from $2M to $3M.....and beyond!
« Reply #1246 on: July 01, 2019, 08:50:38 AM »
If the rally holds today I think I will sell some VTSAX to top up the cash pot/set our "income" for the year.

I'm guessing the market is getting a little too optimistic in the light of deteriorating fundamentals so this seems like a good time to cash in a tiny proportion of the chips.

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Re: Race from $2M to $3M.....and beyond!
« Reply #1247 on: July 01, 2019, 09:13:14 AM »
Between Friday and so far today....ticked over $2.5M invested.  That's my target of 50X expenses, not counting college for the kids.  Son #1 is finishing up and will be done in October.  Nice that summer courses are all discounted.  Son #2 starts community college in the fall, which is under $10k a year plus we'll buy a car for him to use.  That's mouse nuts compared to the now $70k that Son #1's college is charging.  He may go to grad school but plans to work for a bit first as he prepares his application, takes the GRE and gets in sync for a fall entry.  Looking only at in state colleges (because I've said I'm done paying for private college), so it'll be a lot easier to pay for.

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Re: Race from $2M to $3M.....and beyond!
« Reply #1248 on: July 01, 2019, 09:15:15 AM »
Between Friday and so far today....ticked over $2.5M invested.  That's my target of 50X expenses, not counting college for the kids.  Son #1 is finishing up and will be done in October.  Nice that summer courses are all discounted.  Son #2 starts community college in the fall, which is under $10k a year plus we'll buy a car for him to use.  That's mouse nuts compared to the now $70k that Son #1's college is charging.  He may go to grad school but plans to work for a bit first as he prepares his application, takes the GRE and gets in sync for a fall entry.  Looking only at in state colleges (because I've said I'm done paying for private college), so it'll be a lot easier to pay for.
50x expenses!!!! Why???
I'm shooting for 33.33 (which is $2.5-not including house value) and I thought that was too conservative.

Dicey

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Re: Race from $2M to $3M.....and beyond!
« Reply #1249 on: July 01, 2019, 09:50:07 AM »
Well, you guys inspired me to look up the flip house on Zillow. Oops. We bought it for $725 a year ago. I updated the property facts on Zillow, and the Zestimate jumped to $1M. When I just looked, the Zestimate was...wait for it...$731k. Wut?
It's the second biggest house on the court. All the other Zestimates on the street are from $1-$1.5M. There are two very recent comps in the neighborhood that are pending at $1.2, but both of them still  need work and ours is turnkey.  I'm not really worried, but WTF, Zillow?

Just the concept of a house worth more than $1M staggers me!

The fact its your "fixer upper" even more so.. You have a disposable house worth a million bucks!.. Gosh..:)
Lol, we have three rentals in the same resort community, with amenities up the wazoo.. They're single family homes, solidly built with quality materials, and about the same size. Collectively, they're worth less than the flip house will go for. Location, location, location, baby.

In related news, I emailed Zillow over the weekend about the flip house Zestimate.. I'll report back when they respond.