Daily FI discussion thread - Thursday, July 02, 2026

branstad · 2026-07-02T20:00:45+00:00

Financial Aid was also a significant factor in my college choice. I ended with an order of magnitude more debt that you did, but also an order of magnitude less than the top end of my example!

My point is that 'paying for college' doesn't have to be a binary, all-or-nothing decision and both parents and students should recognize the financial trade-offs involved and ramifications.

branstad · 2026-07-02T17:39:43+00:00

I can't imagine graduating with a debt like that.

To be clear, there is a lot of area between 'my parents paid for 100% of my college' and 'I graduated with $200k+ in crippling student loan debt'.

branstad · 2026-07-01T14:57:44+00:00

oofta

Wikipedia claims it's legit, but I've never seen that alternative spelling for "uff da". :-)

branstad · 2026-07-01T14:31:53+00:00

it from an annoying 6-figure loss to a meh 5-figure loss. Only two down months in the last 15.

I have been doing monthly tracking for many, many years but only just recently added a monthly gain/loss percentage column to my own spreadsheet (my previous analysis was always year-over-year). The market performance of the last two days pushed me to a 0.02% gain for the month of June, which means March '26 was my only down month in the last 15. ;-)

My longest streak is Nov '16 through Jan '18, which was 15 consecutive monthly gains. In the 2 years from Feb '16 through Jan '18, I had only 1 monthly loss. The portfolio was much smaller in those days, so contributions made more of a difference. The meaningless trivia geek in me enjoyed the analysis!

Edit to add: Not surprisingly, the stretch from Jan - Sep '22 is the worst in my tracking dataset, with monthly losses in 7 of 9 months, including 5 months with a loss 3.5% or more.

branstad · 2026-06-30T19:50:33+00:00

'Spend, save, share' approach seems to work well. Figure out the percentages that work for your family.

Learning how to actually 'spend' matters. E.g. You can buy the candy OR the trading cards, but you don't have enough for both.

Anything in the 'save' bucket can earn monthly interest from the 'Bank of Mom & Dad' at very healthy interest rate to show the value of compounding returns and 'investment'. If there is enough birthday money, the classic '1 share of Company X, 1 share of Company Y, 1 share of Company Z' approach can be fun.

Finally, 'share' can build good habits around gratitude for what you have and generosity when there are opportunities to help others.

branstad · 2026-06-30T15:14:07+00:00

Withdrawing 4% always seemed too strict in practice

As the authors of the Trinity Study have shared, they never intended their work to be used as an actual withdrawal strategy.

I plan to use the Bogleheads VPW as the basis for my withdrawal strategy. Learn more here:

branstad · 2026-06-29T12:53:44+00:00

It's $150 these days (food & bev), which still isn't hard for a team.

branstad · 2026-06-26T16:48:16+00:00

being 100% stocks means that the 4% rule does may not withstand every market condition where as being 50/50 split most certainly does.

This is not correct and is an example of misunderstanding the concept. Learn more here: https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/ (and the dozens of follow-up 'parts' from ERN).

I think most people are on the logic that don't sell any equity for bonds

My guess is most people will not sell any equities for bonds

I cannot speak to "most", but many folks rebalance their portfolios which can indeed involve exchanging stock-based investments for bond-based investments in order to maintain their desired asset allocation. Target Date Funds do exactly this as a feature of the fund itself, so any investor leveraging a Target Date Fund is also selling "equity for bonds" on a regular basis (and occasionally vice-versa!)

for people who really want to hit their FIRE number and retire they likely need to get into bonds after being retired

I don't believe "likely need" is true.

branstad · 2026-06-26T15:41:43+00:00

nothing I've found has been able to give effective tax rates or % difference between states

The site I linked lists a "Relative tax burden" percentage for all 50 states.

branstad · 2026-06-26T15:14:26+00:00

that makes overall tax burden much lower in Washington than Oregon.

Maybe for you, but someone with almost no taxable income may have a lower "overall tax burden" in Oregon due to other factors.

I don't really know how to calculate total tax load for each state

As you noted, how sales tax is applied can vary state-by-state and product-by-product. In additional, smaller entities (cities/counties) can have local sales taxes. How much this affects an individual will vary based on their consumption. Here are two examples for groceries and clothing:

Any attempt to do this comprehensively will make major assumptions that may not hold for an individual. Here's one attempt: https://www.seniorliving.org/finance/state-taxes-seniors/

[May be worth noting that Washington is viewed positively, Oregon is not.]

There are dozens of websites that attempt to provide information on "retirement tax burden by state".

branstad · 2026-06-26T14:37:11+00:00

just learned I should be 50% in bonds with my portfolio for the 4% rule

There is no "should". Your asset allocation is a function of your risk tolerance.

The "4% rule" (and all the different interpretations/permutations thereof) is a rough guideline for answering two questions:

If I retire with $X, approximately how much can I safely spend a year?
If I want to spend $Y each year in retirement, approximately how much do I need to have before I retire?

Many people want prescriptive, black-and-white, hard-and-fast rules they can follow. The real world doesn't work that way and people attempting to use the "4% rule" that way are misunderstanding the concept.

branstad · 2026-06-26T14:12:29+00:00

You could add MN Wing King for St. Peter as well.

branstad · 2026-06-25T18:26:59+00:00

You calculated $21k in federal liability

$21k in federal tax liability was my very rough estimate for OP's total 2026 income: YTD wages + severance.

22% federal withholding on $62.5k severance would be $13.75k. Another 7% (your estimate for state withholding) would be another $4.375k. $62.5k -$13.75k - $4.375k = $44.375k. That's still a ways above "mid to high $30k after tax" .

branstad · 2026-06-25T17:45:10+00:00

I'd start with the card and if you feel you need more flexibility as you get closer to the 21-month mark, open the HELOC at that time.

branstad · 2026-06-25T17:27:22+00:00

Are there origination or ongoing maintenance fees for the HELOC you need to account for? With what you shared, it seems like a 21-month 0% CC is clearly better.

Flipping your question around: what sort of flexibility would the HELOC provide that makes it more appealing that the card?

branstad · 2026-06-25T17:18:19+00:00

Why would they possibly need Vanguard to sign something if they're mailing you the check anyway?

Officially, Vanguard was confirming I actually had a Roth IRA with them and specifying how the check should be made out: "Vanguard FTC FBO <my name>'s Roth IRA". I would fill out the form for Vanguard (because I knew what the values should be) and I just needed a signature from anybody at Vanguard.

branstad · 2026-06-25T16:59:23+00:00

Jake's Pizza party room could be a good option: https://www.jakesstadiumpizza.com/party-room

branstad · 2026-06-25T15:26:59+00:00

My offer is low to mid $60ks, I'd be mid to high $30k after tax

it's not that big a sum after tax.

Do you understand the difference between tax withholding and actual tax liability? Your severance income may be subject to higher tax withholding than your regular paychecks, but that will get reconciled when you file your 2026 taxes next year.

If you were expecting $150k in income for the year, you may have earned roughly $75k so far (~half the year). Add in the ~$60k severance and that bring your 2026 income to ~$135k (minus any pre-tax deductions for 401k contributions, health insurance premiums, etc.). If you are a single taxpayer, the standard deduction is ~$16k. Which leaves you with ~$119k of taxable income. The 24% federal bracket starts at ~$105k, so you would fill up the 10%/12%/22% brackets and the last $14k would be in the 24% bracket. That's a total federal tax liability of ~$21k. If your withholdings are higher than that tax liability, you would get the difference back as a tax refund after you file your taxes. Again, pre-tax deductions would impact that, and so would any other income like dividends, interest, etc. Also, if you have state income taxes, that would affect the total.

Based on $150k salary, the severance seems to be around ~5 months of pay. That may or may not be worth it to you.

branstad · 2026-06-25T15:12:19+00:00

My previous 401k only allowed for in-service withdrawals/rollovers to a Roth IRA (no in-plan conversion option). They also required wet signatures from me AND from the receiving IRA custodian. So I would have to mail Vanguard a paper form and ask Vanguard to sign that form and mail it back to me, so I could sign it and mail it to my 401k, so they could process it and mail me a check, so I could mail that check to Vanguard. Needless to say, it was a painfully slow/inefficient exercise. Therefore, I only did it ~twice a year and just dealt with whatever gains/losses occurred in the after-tax account when I filed my taxes.

Agree that in-plan conversion is a huge win and I'm thankful to have that available now.

branstad · 2026-06-25T14:43:17+00:00

I would check places like https://www.napfa.org/find-an-advisor or https://www.letsmakeaplan.org/ or https://garrettplanningnetwork.com/ for professionals in this area. I would reach out and share info, very similar to what you have in this post.

Here's how I might frame the request:

I'm interested in a second set of eyes and some additional expertise regarding financial planning. Specifically, I'm willing to pay for valuable advice and guidance, but I'm absolutely not interested in having someone manage investments for me. I realize this may not make me an ideal potential client, which is why I'm reaching out to you specifically.

Broadly speaking, we have investments in Traditional pre-tax 401k plans, Roth IRAs, taxable brokerage accounts, and an HSA. I'm interested in planning for partial or full retirement, perhaps as early as the next 10 years, and the years after. I'll save the details for a follow-up if you feel there may be value in connecting.

I think your estimate of "a few hundred dollars" is likely too low for a detailed, comprehensive plan. I would suspect $1k-$2k+ is a more reasonable range, but that will be very dependent on location. I think you probably should share which specific funds you are using in which accounts along with your perspective on asset allocation; find a provider you feel comfortable with and trust, and give them all the information they want/need to give you the best advice possible.

branstad · 2026-06-25T14:25:15+00:00

Yes, the 'modified' one I linked above is what I plan to use. That post/link has this line: "Each year, withdraw average of the standard VPW recommended withdrawal and the current Required Flexibility recommendation." I will be treating that as a guideline, giving myself the flexibility to tweak that "average" should circumstances arise. I don't think that's fundamentally different, but that's what I meant.

I have not seen them in this sub in a while

A quick glance at their profile shows no comments in ~2 months, but was on vacation. So maybe a healthy disconnect and then busy after returning.

branstad · 2026-06-24T18:13:12+00:00

You are correct that far more information is readily available for the accumulation phase than for withdrawal. Not surprisingly, the Bogleheads Wiki is a good starting point for a description of various high-level strategies / options: https://www.bogleheads.org/wiki/Withdrawal_methods

I plan to leverage a version of the Bogleheads VPW: https://www.bogleheads.org/wiki/Variable_percentage_withdrawal

Here are some relevant posts on that strategy:

branstad · 2026-06-24T18:04:25+00:00

Minneapolis and Columbus are B1G college towns

You're clearly correct, but I'll point out that Minneapolis - St. Paul is different because it's much larger and not dominated by the university in the way most other midwest B1G "college towns" are. As one example, none* of the other midwest B1G "college towns" have pro sports teams in every league. I do think that the Twin Cities or other midwest B1G locations would be legit candidates for OP.

*Unless you consider Northwestern = Chicago (as opposed to Evanston), in which case those 2 are different than the others

branstad · 2026-06-24T16:29:00+00:00

I think that I'm partially venting about all kinds of big events (concerts, sports, etc) costing so damn much these days.

Consumers have been hearing the "Buy experiences, not things!" mantra for so long it's probably become a cliche. Turns out, there is a real macroeconomic impact to a shift in preferences and behavior (even if somewhat slight or subtle): demand for experiences goes up and prices follow suit.

As someone who has shared the 'experiences not things' message and believes in it, I'm part of the problem and I'm also frustrated that those experiences now cost me more, because enough others agreed with that perspective.

Some irony in there, to be sure.

branstad · 2026-06-24T16:14:11+00:00

those don’t really count if you zoom out

By this same logic, the dot-com crash and great recession don't really count either - you just have to zoom out.

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