Here’s our latest interview with a millionaire as we seek to learn from those who have grown their wealth to high heights.
If you’d like to be considered for an interview, drop me a note and we can chat about specifics.
This interview took place in September.
This is another long interview (which seems to be a trend lately), so I’ll break it into two parts.
My questions are in bold italics and their responses follow in black.
Let’s get started…
How old are you (and spouse if applicable, plus how long you’ve been married)?
The love of my life is just about a year older than me. I am currently forty-seven years young. We were married on a beach in MD in 2011.
If I were to sum up her life with one hashtag each, hers would be #LivingThePlantLife, mine would be #LivingTheDiveLife.
More on these later.
Do you have kids/family (if so, how old are they)?
We decided not to have children but have chosen to offer a loving and supporting role in our nieces and nephew’s lives instead.
We are guardians and host a zoo full of rescued pets. We are constantly amused by our three dogs, two cats and one little bird.
What area of the country do you live in (and urban or rural)?
My wife and I met while living in the Washington, D.C., capital area. She was a city girl and I was fine living just outside of the city in a popular multifamily HOA suburb lifestyle.
We now reside in a quiet rural neighborhood located down south in the gold coast area of Florida.
What is your current net worth?
We are currently blessed with a 1.7M+ portfolio.
It is comprised of 70% stocks and 30% real estate.
What are the main assets that make up your net worth (stocks, real estate, business, home, retirement accounts, etc.) and any debt that offsets part of these?
Total investments are currently at 1.2M+
- 94% total stock market/ international; 6% total bond market
- Pre tax combined 401K – 638K
- Pre tax combined SEP – 60K
- No tax combined Roth – 382K
- No tax combined HSA – 22K
- Post tax combined brokerage – 105K
- Combined Cash – 30K
- Whole Life Insurance cash value – 30K
- Primary residence equity – 215K
- DC condo rental equity – 230K
Less than 250K remains on the combined mortgages (our only debt). Credit cards are paid off each month- $0 balance. Education loans were paid off years ago.
We also have two modest depreciating assets – the cars are always paid in full since 2011/2013 (no value calculated in NW). I offer a recommended strategy below.
What is your job?
I have already left corporate America in 2018. I took a year off to decompress, evaluate and plan our next move.
I decided to take a 75% pay cut to work two part time side hustles/hobbies in the hospitality and boat repair industries. Both are 1099 cash based LLC incomes. They are individual contributor roles by choice in order to simplify my life.
My wife remains fully engaged with corporate but works from our home office in the publishing industry. She does not have a daily commute or do any travel for work.
What is your annual income?
By choice, I have set up a current budget of about 30K moving forward until I get the itch to do otherwise.
Hers is in the low 6 digits.
Tell us about your income performance over time. What was the starting salary of your first job, how did it grow from there (and what you did to make it grow), and where are you now?
Since twelve years old I have worked. Initially I mowed lawns, did paper routes, shoveled snow and babysat every chance that I could get.
I worked through high school at the local donut shop starting at $4 something an hour. I also painted houses through college summers and breaks.
My first job after receiving a BS in college was at McDonald’s earning less than 21K in 1997, LoL.
I worked in retail after that for a few years. While there, I fell in love with the staffing and interviewing portion of those jobs while working in middle management.
I took the big leap to recruiting in 2000 and remained in that field until 2018. I helped 1000’s of people find new careers as well as led teams of recruiters who supported multi-million contract deliveries that lasted multiple years for commercial clients as well as the Federal Government.
According to the Social Security website, below is my earning history after pre tax retirement contributions have been taken out.
- 1989 – $350
- 1990 – $1,522
- 1991 – $4,412
- 1992 – $4,511
- 1993 – $3,617
- 1994 – $629
- 1995 – $0
- 1996 – $5,353
- 1997 – $20,627
- 1998 – $29,085
- 1999 – $31,138
- 2000 – $32,188
- 2001 – $43,531
- 2002 – $26,558
- 2003 – $39,445
- 2004 – $35,581
- 2005 – $35,849
- 2006 – $47,223
- 2007 – $39,215
- 2008 – $53,963
- 2009 – $57,770
- 2010 – $74,766
- 2011 – $89,497
- 2012 – $87,017
- 2013 – $91,086
- 2014 – $103,960
- 2015 – $39,432
- 2016 – $118,500
- 2017 – $127,200
- 2018 – $25,614
- 2019 – $0
- 2020 – $6,023
I prefer not to disclose my wife’s salary history.
What tips do you have for others who want to grow their career-related income?
Employers do not over compensate you for doing what you were hired to do. Bonuses are paid for doing the work that is not asked of you and for helping to make your direct boss look good.
Create and track your performance with stated and measurable goals in January of each year or at the start of your fiscal calendar year. Review your deliverables on a quarterly basis at a minimum with your direct boss. If you wait until a few months before your annual review time; it is too late to do more of something that you are doing well or possibly curtail behavior if it needs to be adjusted.
Always give your boss a solution if you identify a problem. If they are unwilling to do something or you don’t have the autonomy to make the change happen yourself, always give them a chance to respond prior to going to the next level of management to make your recommended changes.
Finally, participate in company events and make it seem like you are having fun. This includes going out for lunch with your colleagues on a semi regular basis as well. You don’t have to be bff’s or anything, just fake it until you make it if need be.
Volunteer in your industry. Identify social media moderator or online admin roles that you can use to help the industry flourish that you support. It could be conferences, after work social meetups or even produce short video tips and tricks on YouTube and become the influencer that you always dreamed of becoming. Become a trusted advisor in your space.
I did not apply to the last three career moves that I made. I was invited in for a meeting and took a solutions selling approach. I asked detailed questions to uncover problems in their work flow and offered a few solutions. After each meeting (usually 5-7 before an offer was made) the content deliverables became more and more detailed.
What’s your work-life balance look like?
My wife has always held the traditional 40 hour work week, home on the weekends.
I used to live in front of a laptop answering 250+ emails a day 6 days a week. Most weeks I had my 40 hours in before taking lunch on Wednesday.
After burning out in 2018, life has gotten so much simpler for me professionally allowing so much more time to focus on family and friends.
Do you have any sources of income besides your career? If so, can you list them, give us a feel for how much you earn with each, and offer some insight into how you developed them?
Before leaving corporate, I started to work part time on evenings and weekends teaching scuba diving for about five years earning about 4-6K annually. I was not concerned about the compensation rather than the chance to buy gear at cost and or barter for services and learn how to be an instructor.
I wanted to see if there was a legitimate chance to turn the part time hobby into a full time lifestyle change which included a relocation to a lower cost area of the country with a warmer climate. The second phase of that plan went into effect in 2018 when we downsized and relocated to Florida so I could turn that PT side hustle into FT play time.
I also had other types of work fall into my lap. I started boat painting and repair work after working on my boss’s boat for a few months last year. After that boat was ready to sail several people have approached me to help me with their projects as well. There is nothing like meeting an outstanding craftsman willing to teach, willingness on my part and on the job training to turn inexperience into deliverable results.
What is your annual spending?
Currently we spend about 85K of our combined earnings of 137K.
What are the main categories (expenses) this spending breaks into?
By far the largest expense is paying ourselves first with over 47K towards our financial future.
The second is the primary mortgage at $9,000/750 a month. Tenants have mostly paid a condo loan down to less than a dozen years.
Line items 3-4 are our grocery bill and vet/pet food for our fur babies at about 12K annually for both.
Insurance of all types (umbrella, liability, auto, home, and health) at about 4K annually would round off the top five list.
We carve out volunteer time for several different causes which have no financial incentive or burden, but we firmly believe in giving back to less fortunate causes or folks than ourselves.
Do you have a budget? If so, how do you implement it?
I like to know where the income and expense goes, so technically yes but it has been on autopilot for years.
I mostly use Personal Capital by logging in twice a month to double check if the correct categories are assigned.
We have a quarterly wine, seltzer and pizza party to financially check in with each other. I give her a quick debrief of our progress since she has given me complete fiduciary access to all of her financial information. She has no desire or interest to manage this minutia but trusts me to have our best interests at heart.
I also run an annual Pralana Gold Retirement Calculator (PRC) audit and update our totals from the previous year around the first of each year just for my own consideration. This type of granularity would put her to sleep.
Besides the pizza and a bottle of red “bribe” is well worth it to ensure that our goals remain on the same page. 😉
What percentage of your gross income do you save and how has that changed over time?
Currently we save a combined total of 35% of our gross income. I save 53% and she saves 30% of our respective earned incomes.
We max out her 401K at $19,500. Our Roths at 12K. Our SEPS at 3K. Our HSAs at $7K+ and finally we add an extra 6K towards the principal on the investment property. The last few years’ savings has been about 47K annually.
When I was working in corporate America, the savings percentages were a bit higher than 45% along with the principal payment amounts on both mortgages.
Seeing John mention over the years that he either over-saved or could have retired earlier gives me pause to not fall into that same trap.
We plan on allowing our invested assets the chance to double prior to initiating the drawdown at about 3.25%.
Simply having enough to cover our expenses, help family members if and when needed and give away the extra at the end is enough of a solid goal for both of us.
What’s your best tip for saving (accumulating) money?
Good old Nike said it best. Just Do It!
I remember getting one of my first apartments after college for $600 a month. It was important for me to budget $167 a month for Roth (2K back then) and receive the company 401K match at 5% of my small salary. I bought my first town home at the age of 23. No way was I going to let a landlord get rich off of me. I wanted to start earning equity ASAP.
After selling the first home, I have no longer had to pay PMI since I was putting down more than 20% each time. Since then, I have bought and sold two other properties by myself. I could have afforded larger places or nicer cars but what would I have to show for all my hard earned dollars? I always bought starter sized homes since I know they always sell quickly and appreciate 4-6% annually. As for the recently bought hopeful forever home, I put down more than 50% at closing but rented for a year prior to doing so.
My wife’s experiences are very similar to mine which has impressed me since meeting her in 2009.
If you have a spouse and access to an HSA account, open up two accounts, put in equal amounts to get the current 2021 annual max of $7,200.
When the first spouse turns 55, you can add an additional 1K into both accounts to sock away 9K+ annually. Most FI bloggers fail to mention this little additional 1K tip. We do not plan on using ours until the age of 65 to help keep our AGI down.
After tax accounts are so precious to us. Having long term capital gains over multiple decades with no tax liability are the key for us to solving a large portion of our healthcare conundrum.
We plan on paying for our co-pays, any medication or any other healthcare related costs with a credit card so we can receive the points. The HSA account will then pay the credit card off.
What’s your best tip for spending less money?
If you aren’t going to be your biggest advocate then who will?
Since I received a bi-monthly paycheck for most of my career, I paid my main credit card twice a month. I first paid $200 every 2 weeks towards my main credit card.
As my career income grew, so did some of my lifestyle creep but not by much. Sometimes I received a credit card bill and it listed a credit, sometimes I had a small amount due. If I “needed” to buy a large item, I tightened up the spending for a few months prior. Once I had enough credit on my credit card, then and only then did I make the purchase.
Before downshifting my employment, I used to run everything through my card. I have earned more than 3K in lifetime cash back points. Since 1992, I have paid less than $10 in interest charges on my primary credit card with this strategy. If I could do it, then surely you can as well with proper planning.
My wife and I have both agreed that we do not need to consult with each other for a purchase less than $500. We run things past one another prior to the purchase if it is above this threshold.
There is a big difference to needs versus wants. The sooner you learn this, the easier your FI journey will be.
What is your favorite thing to spend money on/your secret splurge?
Fresh cut flowers for my bride. She does not have to wait for a special occasion or event in order to receive them from me for us both to enjoy. Usually they show up on or around our wedding anniversary date on the 18th or was that the 28th? LoL
We also enjoy landscaping as well as gardening. This is where my wife gets her #LivingThePlantLife. I taught her everything that I knew from my grandfather’s teachings. He raised more than 5 acres of crops for personal consumption to support two households as I was growing up. That teaching rubbed off on me, and now in turn I have shared my love of slowing down in life to let my wife and I admire plants in their respective bloom cycles together. While living at the DC area townhome that was sold in 2018, we had 7 different bloom cycles incorporated into the landscape.
This is the second summer that we have been at our hopeful forever home and have been buying native plants at our local nurseries left and right to incorporate into our oasis.
What is your investment philosophy/plan?
“When others are fearful, be greedy. When others are greedy, be fearful.” – Warren Buffett
“The time to buy is when there’s blood in the streets…even if the blood is your own.” – Baron Rothschild
Both of these quotes resonate with me. I forgot where and when I read these but keep them on my personal finance long-term memory jogger Google sheet. I started it in 2018 while I was recovering from burnout from corporate. Currently the document has over 7000 words on 14+ pages.
Each time I read something that I might want to implement, I take a mental note, do more research and write more “homework” notes to myself to save for future reference or potential implementation. I talk about my findings on occasion to others and sometimes share the 30,000 foot concept with my wife for consideration to green light and implement.
Learn to invest small amounts of money for longer periods of time. For example, I pay a small monthly “car payment” to myself but it is an actual investment added to my brokerage account for the life of the use of the car, usually around 10-12 years. I get the quarterly dividends and stock appreciation over the duration of driving the car. So far since my 20’s I always cash in long-term capital gains when it is time to get a new or used ride. Rinse and repeat.
Every car dealer says that you can’t use a credit card, but that is hog wash. Every Finance manager who wants to close the sale ends up charging multiple $4,990 transactions to get the cc points, then pay that credit card bill off from the previously mentioned brokerage account. Sign a few papers in front of the finance manager, then mention the small credit card charges. If they balk, stand up and proceed to the door. Not once have I made it to the end of the hallway before being called back into their office.
Most of the time my wife and I are driving “free” cars thanks to Mr. Market minus the small taxes that are owed on the total stock market sale.
What has been your best investment?
In myself by paying myself first. Discipline with savings for my/our future and the art of practicing delayed gratification.
Every raise I received from work after changing jobs, half of that increased income would get invested moving forward. Each career advancement pay increase was treated the same as well.
I never made a career change for anything less than a 15% increase or more. 100% of every bonus received would also get invested as well.
If we could have paid the bills before, what rationalization could change the desire to spend that money on a newly desired something shiny? Sure, an extra nice dinner and the theater night out on the town would happen, but that was the extent of what we did with those large cash infusions for either of our promotions or newly added clients to support.
100% of any side hustle income also gets invested instead of being spent on frivolous items.
As stated before, paying ourselves first in the total stock market VTSAX/FSKAX was crucial to our modest success. I learned to trust the rule 72 formula for quick investment calculations to double within each account. I base that off a very conservative (5.5%) stock market return over 13 years. Your mileage may vary.
I believe installing our own 9.6 kW DC STC solar panel system with net metering also qualifies as income. We believe that it is the socially responsible thing to do as well. We invested 18K cash and are realizing approximately $1,500 a year in savings. We now have a $10 a month electric utility bill.
I did our own install so labor was “free”. I view this mini investment as an inflation protected bond that pays monthly dividends. The cost of power generation will always go up. The break even on this investment is approximately 8-9 years. This year’s Federal credit on our tax return will result in almost 5K off to boot!
With our current negative bond forecast for the next decade, we can continue to keep more of an equity stake in our portfolio. In essence, we have created a synthetic bond. When it is time to replace our cars, we plan on investing in hybrids or EV’s to further take advantage of this small investment.
What has been your worst investment?
Investing during the series A round into a startup. I actually volunteered for over 6 months of free payroll in exchange for more company shares. Once we had 14 employees, I invested 50K to help make an impact towards ongoing expenses. Within a year everything folded. What is even worse, my wife even got involved on the company’s payroll as well.
Those were the most expensive laptops and monitors that we have bought in our lives since they were our parting gifts!
At one point I calculated that we lost over 150K and almost a year’s worth of regular salary working elsewhere. He shoots and doesn’t score. 🙁
Once I bought a tip from a stranger regarding some American funds that were class A shares that came with a 5.75% front end loaded fee. Thank goodness it was for only 20K and stayed in that position for less than 3 years before wising up with that annual .75% ER.
What’s been your overall return?
Between my legacy positions over the last 30+ years held at Sharebuilder, Janus and now everything consolidated at Vanguard, I’d say about 17%.
I remember even buying a CD held at Emigrant Direct. Does that date me or what?
Thanks to Suzie Orman’s 9 Steps To Financial Freedom, I have been investing since I had an account on my 13th birthday. My Dad had to co-sign on the account for me which I later gained full access to manage myself at the age of 18.
My wife has achieved a slightly better return with her accounts since we rolled over the majority of her legacy accounts in 2008 into Vanguard as well.
We have given each other access as a trusted contact with our respective Vanguard accounts. We have also listed each other’s accounts to Transfer on Death (TOD) to hopefully help ease the stress during that trying time in our lives which is hopefully a long time into the future.
How often do you monitor/review your portfolio?
Every 2 weeks or so. Sometimes more on or around our birthdays to calculate our decade+ 72T strategy.
Note that the new IRS single life expectancy table became effective earlier this year. I chose to execute the Substantially Equal Periodic Payments (SEPP) method for us. We have been doing this tax optimization strategy since 2019 that should be continued until at least the ages of 60 in 2032/2033.
Rule 72T allows us to take substantially equal periodic payments (SEPPs) from our 401K accounts early. They are free of IRS early withdrawal penalties as long as we keep them up and pay small amounts of taxes from outside of the account assets and fund our Roths.
We want to keep our pre tax accounts below 500K each so we can easily manage RMDs later on in life in an ongoing tax efficient manner. I do the exchanges each year around our birthdays.
Pretty good story so far, huh? Well, there’s lots more to come!
Stay tuned as I’ll run part 2 of this interview soon and you won’t want to miss it.
HSA catch-up contributions are individual based. Please refer to the example at the bottom of page 6 of IRS pub 969 for this specific example:
Example. For 2020, spouses Ginger and Lucy are both eligible individuals. They each have family coverage under separate HDHPs. Ginger is 58 years old and Lucy is 53. Ginger and Lucy can split the family contribution limit ($7,100) equally or they can agree on a different divi- sion. If they split it equally, Ginger can contribute $4,550 to an HSA (one-half the maximum contribution for family coverage ($3,550) + $1,000 additional contribution) and Lucy can contribute $3,550 to an HSA.
Employer contributions. You must reduce the
Thanks for taking the time to comment. I think part of your thought got cut off.
We are lucky that my wife and I get to reduce our taxable income by the full contribution amount since we do not have an employer match for either HSA account.
You are correct that we can each only put in the extra 1K catchup contribution in the year that we turn 55 but not before. This of course assumes that we are in good health and will want to stay with the HDHPs (High Deductible Health Plans) either through her employer or through the exchange.
By design we do not have any joint accounts as part of estate planning. When one of us goes, the other will receive the full step up basis upon transfer on death.
MI - 296 says
Congrats on having the courage to pull the plug and start doing something you enjoy! Its often really hard for those who have been hyper-workers for years to be able to make that leap, but it sounds like you are happy with your decision. Well done!
Thank you for the good wishes! After reading all of the MI interviews to date, I notice in the low # 30-40 interviews a particular theme. In order to have a successful pretirement, a person should have multiple hobbies (paid or unpaid) that they do solo and with the spouse. I was happy to see John (ESI Money author) highlight this fact during the book review of The Retirement Maze: What You Shold Know Before and After You Retire https://esimoney.com/the-retirement-maze-the-problems-with-retirement/
MI - 296 says
While I have not yet crossed that threshold, into retirement I do sense there is truth in the need for hobbies and non-work habits. Half of the battle (at least?) in stepping away is redefining yourself through a lens not associated with your professional accomplishments. As a good friend once told me, “if I ask you to tell me about yourself and you respond with what you do (for work), then I know you don’t know yourself yet.”
What an excellent reminder MI-296. Funny that you say that, towards the end of the corporate world, when I was asked what I did I would always say I scuba dive and do some recruiting on the side. LoL
HSA and Trip Guy says
Great story so far! A few questions for #293:
1. With 1099 income only and your own HSA that you are contributing to, I’m assuming that you have an ACA plan that is HSA-eligible? I’m not aware of another way to individually contribute, if self-employed (I’ve looked hard at this, but maybe I missed something?). If you are on your wife’s insurance, only she would be able to contribute (for both of you) to hers. More details here would be great.
2. Ironically, I’ve been talking to my wife about making a trip to the Gold Coast/Key West this February. We want some nice, clean, uncrowded beaches and maybe some wildlife, and some good food. Any recommendations for us?? Also, I’d be a snorkeling customer if you can pass along your website (ESI, please feel free to pass along my email to #293).
3. Would love more insight into the kids v no-kids decision process and if you have any regret. My wife and I are childless and struggle with this one. Our window is almost shut.
I’m encouraged by you taking off a year to decompress; I’m a few months away from leaving my high stress/crazy schedule job for the same purpose. With our financial goals met, even with some decent buffer, like you I’m trying to heed advice to not over save and start to enjoy life sooner.
I have so many questions as you list some great strategies and touch on interesting points. I’ll try to keep to three to not bug you to much.
1. I’m interested in DIY’s solar, much for the same reasons as you. Any good resources you found to help you?
2. You mentioned paying medical bills with a credit card, then paying it off with an HSA to optimize points. Great idea! Would you only be using one specific credit card for medical bills, so as to simplify the process? If not, I would love to hear the mechanics of your implementation.
3. Sounds like much of your gardening was taught by your grandfather. I wish I would have had someone like that. Do you have any resources/books/websites that could help build a similar knowledge base?
I still have lots to learn but don’t mind sharing a few tips that I find useful. I figured, if I was intrigued, others in this community would be as well.
Fell free to ask questions, I have the time to respond and do enjoy giving back.
I like the author Fritz from another blog and his mindset, that pretirement or retirement is the “starting line, not the finish line”.
1. I went with Unbound Solar, I can send you a link to save you some $ if you decide. They offer an extensive DIY video series. The sales people are also technicians, so I was able to get pretty technical during Q&A troubleshooting. I was able to do everything online, including getting all of the building, roof load, wind/ uplift (something about hurricane season here in FL) permits.
2. I plan on using the CC to pay for HSA expenses after full retirement for the both of us or until we no longer have paid work or hobbies of any significance. I think that I read that it is possible on the other MMM site or the Go Curry Cracker blog if the govt rules don’t change by then. Don’t forget to hold those medical receipts for your accountant. I view the HSA accounts as one of the last savings vehicles to our drawdown order since they are so valuable. We want them to grow as long as possible to help alleviate some of the future healthcare burden. We have a .02ER with the Fidelity Total Stock Market with no other fees associated with these accounts so we are in no rush to cash out whatsoever. Maybe by the time we get there in 16-17 years, there will be another stipulation and we can then use the HSA funds for Medicare premiums. Fingers crossed!
3. Part of the fun with the relocation to Florida was having to learn new planting zones to grow in. My wife and I rely on https://www.fnps.org/ but I am sure there are other native plant societies in your area. If you watch the documentary on The Pollinators about honey bees, you will see why this is so critical with our eco systems. We do not use pesticides nor lawn treatments. In fact, we are in the process of ripping up the lawn in small batches and add wild flowers. When that section fills in, its off to the next section to fill that area up with color and eye popping appeal. It’s a win win, no chasing the lawnmower or edging is needed AND we can help the honey bees (aka little girls) with fruit, trees, vegetables and flowers to pollinate.
Once my body starts to slow down a bit, I know I will have a sweet hobby making honey for family, neighbors and friends.
I am active on MMM forum if you want to continue the conversation there as well.
Thanks for the reply! I’m in research mode for solar, and those videos are great.
I found my state does have a native plant society too; what a cool resource.
Do you have any tips/resources for making the mental shift from full time work to retirement?
Hey HSA and Trip Guy!
1) One of my wife’s client’s offers for her to flip to W2 last year, so we do in fact have access to a company sponsored healthcare plan. Since her employer does not offer an in-house HSA plan, we can go out and use a self administered plan. We did the same thing back in 2018 when we were on ACA healthcare hence my reported wage drop on my history from this interiew.
“If you are on your wife’s insurance, only she would be able to contribute (for both of you)…” You are correct, but she can also do a spousal contribution, same for Roth and SEP. Remember, money is fungible. I came across this IRS publication, scroll down to the bottom for published direct dial access to IRS staff if you have specific HSA questions. Search online 26 CFR 601.602: Tax forms and instructions.
(Also Part I, §§ 1, 223; Part III § 54.9831-1.) Rev. Proc. 2021-25
2) I look forward to communicating with you offline. I am also active on the MMM forum as well. Feel free to ping me there.
Might I recommend snorkeling the Blue Heron Bridge at Phil Foster Park. It is one of the top 10 shore dive sites in the USA, so if you are in the area, I would recommend to add this stop to your itinerary. More details: https://discover.pbcgov.org/parks/Locations/Phil-Foster.aspx
3) We both had previous marriages and knew what we did and didn’t want in a partner. We had a few medical issues which prevented natural child birth. We even looked at adoption at one point, but it was not in the cards for us. Combined, we have 9 nieces and nephews to spoil. Personally speaking, I realize that we will never know what it is like to raise our own children, but we do know what it is like to offer a loving and supporting home at Aunt & Uncle’s place. The phrase it is what it is comes to mind… the sooner we both accepted this, we had a chance to move on and focus on other areas in our lives instead. Besides, this gives us more time to volunteer supporting beach cleanups, neighborhood block parties, climate initiatives, and other personal causes near and dear to our hearts.
MI 219, I will admit that it was fun to geek out and take the challenge on. The nice icing on the cake will be a decent solar Federal credit on 2021’s return.
Regarding the plants, do you like to plan or fly by the seat of your pants? Have you looked into finding a local plant swap through your neighborhood Facebook group, Nextdoor or local library meetup?
For me, going from 120 mph down to 30, then after a year and a relocation with travel mixed in, it just felt right to go back to 65-70 mph hobby wise. I now work for myself and engage as much or little as needed. No more 2080+ hours doing a hectic pace for someone else. Those days are behind me unless somehing catastrophic happens.
I offer more details in the second half of my interview (1-31-22) regarding the psychological shift from full time work to pretirement. I hope that it reads well and offers you and others entertainment and potentially valuable insight.
My spouse and I remain close to each other and are very happy with the lifestyle change. We have fun at the local dog beach, work in the yard, chillax with neighbors, family and friends often and try not to take ourselves too seriously.
Enjoyed your interview. Will be interested to read the next part of your interview as at end of February I will be starting the pre retirement journey when I step back from full time work
Arie Frasier says
Hello. Thank you for a read on how a middle class couple has saved and invested their way to millionaire status.
I’m curious about the 72T being used for future tax optimization in order to keep the the couple’s taxable retirement accounts below $500k. If I read this right the money from the 72T is reinvested into a brokerage account? Or is it utilized another way?
The reason I asked is because I always thought the Roth conversion was the superior option to plan for tax optimization in the future.
Unlike the 72T it doesn’t require you to take a set amount every year until age 59.5 and it doesn’t have some rather large penalties if a mistake is made.
Can you go into detail on why you choose the 72T over yearly Roth conversions for tax optimization?
Thanks for taking the time to read the interview and comment. Since my wife and I are partially working, we do not need these funds and are rolling the pretax funds over to the Roth.
I like using the minimum distribution method which provides structure based on account balances. It takes a dividing factor from the IRS’s single or joint life expectancy table to use it to divide our retirement account’s balance. Since we are young enough, we can easily do this for over a decade until we are both 59 1/2+.
If we need to make a change in our calculations, we can make one change according to IRS regulations. I enjoy using Excel and only have to enter the Traditional IRA year end balance into our worksheet. The worksheet tells me how many shares to exchange. Exchanging VTSAX to VTI or VOO is pretty simple enough to do, so I don’t see an issue continuing these.
I am aware that when we turn 63, to be keenly aware to review Medicare IRMAA adjustments, impact for any Roth conversions from that point forward (two year lookback on earnings). Medicare premiums will be at stake; so hopefully the IRA balances will be low enough to not be affected too bad. If we have higher premiums, so be it. That would mean we have more assets to put into our future DAF accounts.
MI 101, Thanks for commenting. Do you have an idea of the timeline for your pretirement?
FYI, John posted the other half of my interview here: https://esimoney.com/millionaire-interview-293-part-2/
Hi. Both my wife and I leave our jobs at end of this month (Feb). She is older than me so will most likely fully retire but do some volunteer work to keep active. I will be initially be taking a break then likely to have a job lined up for 3 days a week. If that does not pan out then I will possibly look for other work on part time basis. Whilst I could afford to fully retire not quite ready to do that yet. I do some volunteer work already which I may expand.
Travel is also on our agenda hopefully in 2023 if New Zealand’s borders are open by then
That is super exciting MI 101, less than 30 days for you both! Good luck with wrap up both physically and mentally.
It is good to read that you are retiring to specefic activities rather than away from something.
I hope that you are enjoying your first week of “freedom” from your banking career and that retirent is treating you both healthy and well?!
I hope that you are enjoying your first week of “freedom” from your banking career and that retirment is treating you both healthy and well?!
Hi Scuba Jay.
Yes am thoroughly enjoying the freedom. My wife and I are currently touring around the South Island of New Zealand enjoying our freedom for the next couple of weeks making the most of extended summer here
This was a great interview I missed seeing. Came to check out your interview after our exchange on pups on the forum this am. I haven’t gotten to part 2 yet but looking forward to it. It never crossed my mind to use the 72T proceeds as Roth contributions if not needed. Very interesting.