2024 Financial Planning

To be fair I’m sure you guys could be doing a kitchen renovation and a pergola and then some each year to get down to what I was making. Mathman is being kind to over-hype my “home-included double-Klaymen” which I imagine is or will soon be chump change for a lot of you.

Hey now! :rofl: I’m not mad, but as for the RoI of the pergola:

My partner has been enjoying it almost every sunny day, drawing out there in the baffled sunlight. While the lawn irrigation goes, lightbulbs strung from the pergola to the trees, deck furniture, and a trellis that will have a Morning Glory flowering eventually. Fruit orchards for a mile behind, and just a slight view of one neighbor’s backyard.

We threw up a 150" projector screen draped from hooks opposite the house-side and played a movie outdoors last week.

I’m happy with the expenditure, overall. Probably still would not choose it for myself, but I like it, and my partner is very happy.

I’ll probably throw a picture into “I bought this today” later, but there’s still a couple finishing pieces like the flower-boxes being installed this week.

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Did I miss the pergola discussion? I vaguely recall a bit of mentioning it back with Mathman and his patio rebuild. I need to decide if the extra month of incarceration will be worth it.

It was part of my goals and came up a couple times, and I’m pretty sure I made a couple mentions in I’m Buying This Today (or maybe Annoyed Thoughts with some woes we had.)

I think it cost us around $4,200-4,700 all told with labor and materials. Didn’t keep close track as the expenses rolled in, each purchase was handed to me with a receipt for payment and I paid the $338.12 or whatever it was that day + labor. Included a lattice on one side, two flower boxes attached to the side of our deck, a bartop with LED underlighting added to the combo deck/pergola, and the strung solar lights.

$2M is not chump change in my book. It hasn’t been that long since I first joined the two comma club myself. And yeah, the Lambo comment was a joke, but anyone who can retire early on their terms… that’s an accomplishment to be proud of, and I hope to join you in 3-5 years!!!

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I haven’t made any big changes to my standard of living in about 15 years and 2 promotions, college tuition is really the last big variable on when when I may be released from incarceration. I don’t hate work for now, and I will get enough PTO to take a nice vacation each quarter, so there could be a few years of optional work that funds fancy travel in my early 50s.

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We’ve got this, plus paying off the house ($180k).

I’ve considered working an extra six months and banking every nickel so my wife and I can circle the globe for six months. And buy an Eames chair so I can sit around and think about the meaning of life in great comfort.

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I did a round the world trip in 6 weeks over 20 years ago. Might do again.

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I get a six week sabbatical in about 20 months and I’ll probably go somewhere for that. Might be my time to see Patagonia since my wife does not understand at all how going somewhere and walking around for weeks on end counts as vacation, lol.

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Me too.

When I told folks I was retiring, I heard a lot of “you’ll get bored in no time.” Not at all.

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There are a few problems with “working part time” when you are older that I did not expand upon.

  1. Hours creep

You will continually be asked to “work more” which will move your hours closer to FT vs PT. Same pay. I have seen people get angry by this over time (as you are effectively being asked to work overtime for free).

  1. Pay

PT pay is not 50% of FT pay, even if you work 50% of the hours. Its more like 40%, and your benefits are worse as well (bonus, pension etc)

These are the main reasons why people prefer being contractors vs permanent when older workers. With contracting, you get paid a per day rate ($1,000/day or so) and don’t have to deal with the inequities of PT or being asked to “do more”.

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My brokerage will cover my mortgage (350k) in a year from now, with about 70k per kid for tuition. Obviously college could be another 100k on top of that, but a reasonable state school should be mostly covered with a few more years of modest additions and growth.

I’ll be piling away about half my take home between then and whenever I retire on top of the tax deferred savings. But I don’t have a new kitchen, and I might buy a pergola. Or whatever else comes along that seems worth the extra months of work until I actually retire.

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love the broad retirement planning comments. lots to cover. but how much is covering a 2024 plan!

old man yells at cloud.

maybe we need a retirement planning checklist discussion thread

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I have enough to cover my mortgage, but at 2.625% I’ll wait. I will pay it off before I retire - having zero mortgage will let me keep my income low enough for ACA subsidies.

This is the expectation we’ve set - we will fully pay for school at ~$20k/yr. If you want to go to MIT at $50k/yr and don’t get scholarships, you’re gonna have some loans there.

Sweet! I saved 50% or very close in 2018 through the first half of 2020. Once we knock out the porch and the windows we’ll get back to a 50% savings rate.

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I did the above early in the year, checking off one item on the 2024 Financial Planning list.

Next on the list is converting some of my IRA into a Roth (mentioned earlier in this thread). I want to do a ladder converting a chunk annually until I start drawing SS. I need to put a little more thought into the annual amounts and possibly what other items I might need to liquidate to pay the corresponding taxes.

One thing I might do: I have a small amount of money tied up in a state pension fund. I didn’t work there long enough to become vested in a pension. I can get my share of the contribution refunded to me. I intentionally left it sitting there in case I ever wanted to work again and qualify for a state pension + healthcare. I’d need to work 6-7 years to vest I think, and I don’t plan on doing that but it was a fallback option. Once you ask for your share back, you’d be starting over from scratch wrt vesting. I should probably just cash out now.

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Thats a hard one because of the interest rate on the loans.

Its a big impediment for kids starting out.

I would definitely go “all in” for MIT. But I wouldnt do it for some tiny liberal arts school like Sarah Lawrence. Forget it.

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Fair, if the story was ‘I want to be a robotics engineer and change the world and MIT is the best place yada yada yada,’ I’d try to help with that. Not sure I’d cover $200k but I’d step up and cash flow some of that. And totally agree if it’s $200k for a liberal arts degree with no real direction forward, hard no.

Same when they buy a house, if they’re working hard and making good money but home prices are still what they are now, I’d be willing to help with buying a home.

3% here. I am still thinking there might be a new/different house in the next few years, but would likely be at the same price point, so it might force a payoff. It would need to be the right opportunity.

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Mid-Year update

  1. Max 401ks - on track. Wife got a significantly higher raise than we thought so we’ll be putting away a little more than we thought here.
  2. Max HSAs - on track
  3. Add to brokerage - on track, automatic monthly deposits from both of us.
  4. Get married - complete. Came in right at budget, surprisingly.
  5. Build pergola - In progress. Realizing pre-fabricated is a lot more expensive than I thought.
  6. Honeymoon trip - converted from International to multiple domestic trips. The U.S. is so diverse and we have a lot of places we’d like to visit.
  7. Maintain charitable contributions - on track, maybe slightly higher than last year with a few one-off donations.
  8. Leftover to brokerage for future down-payment - haven’t tracked this but know the wife and I have each made manual deposits in addition to #3 automatic deposits.
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Agree with both of your philosophies here.

I know the pain of having student loans on a mediocre (for an actuary) salary. I don’t want my kid(s) to be hindered because of that. At the same time, I think having a small amount of debt can help teach proper budgeting and financial decision making. It will depend on the school/cost, like you both said, but I think telling them we’d pay for something like 3/4 is fair.

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