That’s fair! I was never taught anything tools-related by my dad, was the typical “you got the wrong kind of wrench, I’ll just do it all” father, so YouTube has been my friend. But my skills max out around the area of “replace the P-trap under the sink” or “replace an out-of-production recessed lightbulb with a newer, differently-wired model”. Anything requiring wires run beyond hooking them into a fixture or piercing our walls much more than nail holes, I start thinking whether to pay for it.
Yes, we will be freeing up about $21,000/year once the mortgage is paid. At our current payments of 229% the minimum our mortgage should be completed from 2018-2032 if we don’t lump-sum it, which will depend on our 2027 ARM adjustment. While I realize we’re missing out on the arbitrage from investing, it’s nice to have it on set-and-forget mode. Especially when 229% only means $1776 on a mortgage of $776 - we’re not exactly doubling a $3,000 mortgage.
My mortgage is around $1600. I haven’t been paying extra, but just accumulating extra income/bonus to the side for about 6-7 years now. I haven’t changed my spending materially during that time, so you could think about it as the 1600+7 years of annual merit increases+SOs debt repayment+20% salary (promotion adjustments for both of us) all becoming disposable income at once. I hadn’t really thought about it previously, but that’s upwards of 10k per month… probably more than we currently spend on top of what we are already saving.
My DIY skills are mostly limited to the stuff you can see, which is good and bad. Paint/ flooring/ trim is all easy to understand, but I’m sure a pro would call out all sorts of “opportunities”. I can see many of these as well, I’m not sure how obvious they may be to random guests, probably some subset.
I’ll take apart the dryer to replace the heating element. Maybe build a basic chair. Car stuff…i can replace brakes and rotors as long as the crap isn’t so rusted i need a air wrench that i don’t have, although i did consider buying one when i came across that once.
It’s so far off in the future, I’m not even going to worry about it right now. Laws might be dramatically different by then. Now that I’ve been thinking harder about it, the status of paying for that or not might only affect my decision by about 1 year.
It’s 2025 when the changes are effective. TL;DR is you won’t pay more than about $3k per year for Part D OOP costs. That will index with inflation, specifically with the inflation observed in Part D costs.
Now, these changes were part of the Inflation Reduction Act, so there’s obvious risk that these changes could get unwound by a future administration.
Feel like we need a Random Financial Thoughts thread perhaps.
Just noticed that Amazon is offering 6% cashback instead of 5% if you choose Amazon Day Delivery, which is slower. Seems typically worth it, usually I can wait.
PSA: For Amazon credit cards, always use the cashback option rather than spending your points through Amazon orders. Cashback gives you full value, whereas using points via Amazon doesn’t give you cashback for the amount redeemed.
When I’m in Walmart, my Citibank Double Cash (2% back on everything) card tries to get me to spend my reward points to pay for a purchase at about 80% of their cash value. Hmmm I just spent $100 I could either charge it to my card and gain another $2 or lose $20+ using rewards points to pay for [a portion of] it. Hmmmm tough decision.
My employer offers after-tax 401k contributions. Given that I’m hoping to be in a lower tax bracket when I retire than I am right now, it wouldn’t make sense for me to max out at $23k this year with any kind of Roth 401k contributions when I can max out with pre-tax, right? I should instead contribute up to $46k (less employer match) in after-tax 401k contributions, right?
I’m not looking for financial advice, just seeing if there’s anything I’m missing.
Don’t think you are missing anything. There is obviously the chance that rates will go up…the 22-24% brackets seem sufficiently wide enough that it might cover both your current and retirement marginal income levels and having some tax diversification might be beneficial.
It’s not a back door, I believe you need to contribute to a traditional IRA and then immediately convert to a Roth IRA (or do it whenever, but if it’s not immediate, then you risk having to pay tax on gains). This is a 401k, not IRA, so I don’t think it qualifies…I don’t think I can move this money while I’m still employed here.
You’re describing a regular back door. The mega version is making the post-tax contributions to the 401k up to the total limit and then Roth-ifying along the way, if allowed, or after employment termination.
You might be able to make an in service back door conversation from after tax 401k to Roth 401k while still employed. Check with HR/benefits at your company or with your 401k administrator
I’m not sure I ever had this option, and last night I was trying to figure out if I would select it. I might be hesitant to lock all that money away just for the tax advantage but I did read on some site somewhere that:
After-tax 401(k) contributions can be withdrawn at any time with no tax or penalty. Unlike the rigid rules on withdrawals in a core 401(k), the after-tax 401(k) allows you to withdraw contributions at any time without tax or penalty, giving you a lot of flexibility.
In which case, heck yeah I would stash $$ away there although I don’t see what is the point of introducing a Roth into the equation. My money is post-tax and tax-advantaged, why would I put it in a similar fund with a 5-yr waiting period? I’m not a baller actuarial making $250K+ so stashing money away always seemed straightforward to me.
Strange that some people would have access to this thru company A and others would not thru Company B. Otherwise I would have done so and not had a chunk of $$ sitting around non-tax-advantaged.
