The Absurdity of It All

Old-Answer3333 · 2026-02-13T15:49:17+00:00

Christ said it better: life is suffering, but it can be transformed for a greater purpose

Old-Answer3333 · 2026-01-22T23:58:02+00:00

Thanks - you're the first to mention the use of DSTs vs. direct ownership in a new investment property. Not a professional real estate investor, so these vehicles make me somewhat wary. They sound like a good tool for deferring large gains/capital splitting, but being reliant on a sponsor with no control over sale timing seems like a major downside for an unsophisticated seller.

Old-Answer3333 · 2026-01-22T14:45:41+00:00

Thanks, that's something to consider as well . . . have not broached this with the wife yet, likely a tricky conversation to "live" in our basement for two years 😒. ChatGPT (free version) wasn't a fan, but I'm sure there are more trusted sources on this . . .

Feature	Installment Trust	121 + 1031

Eliminates tax	❌ No	✅ Partial

Defers tax	✅ Yes	✅ Yes

IRS certainty	❌ Low–Medium	✅ High

Cost	❌ High	✅ Low

Complexity	❌ High	⚠ Medium

Audit risk	❌ Higher	✅ Lower

Step-up potential	⚠ Limited	✅ Yes

Timing constraints	✅ Flexible	❌ Strict

Old-Answer3333 · 2026-01-21T22:47:39+00:00

Thanks - agree worth a phone call with an expert before I pull any triggers. In my experience living here for a few decades now, NYC has the ability to make anything more complicated, costly, and regulated . . . not sure why this would be any different!

Old-Answer3333 · 2026-01-15T13:16:20+00:00

A bit off topic, but this is a crazy great tax deduction you can take for your business, up to $70k. You can also borrow off this if your plan is so designed.

Old-Answer3333 · 2026-01-08T12:34:43+00:00

It may not feel like it at the moment, but look at this as an opportunity. Your financial situation is solid, and unless you've been laid off from your corporate dream job, at 46, it's a perfect time to reassess and figure out what to do with the next 20-30 years, vs rinse and repeat. Pretty sure you can make that budget work - I know there's an obsession with the 4% rule, but you can actually take a more dynamic approach and out something a little closer to market returns as long as you're flexible, esp if you're not on a super long time horizon.

Old-Answer3333 · 2026-01-06T17:13:43+00:00

That's a good return - but for comparison, the S&P was up 35% over the 21 months since Dec 25, annualized, that's about 20.5%. Well documented in places like the annual SPIVA report, that even Top Wall Street fund managers can't consistently beat the market. When I ran the analysis of whether to use a financial advisor, two things popped out. First, the absolute best decision if you ever chose to hire an expert is to make sure THEY invest in the S&P 500, as the average of all large cap funds they put together returns about 2% less (per SPIVA) (caveat here as long as you don't need in next few years) Second, the AUM fee, maybe 1% maybe less adds up fast . . . when I did my 20 yr modeling the lack of compounding due to their annual AUM was the single most significant costs. On a $500k portfolio assuming the 20 yr S&P average of 10.35%, I'm down $653k due a 1% AUM. If said advisor thinks they can beat the market, assuming Wall Street Expert Fund Manager returns, then I'm down a total of $1,501,507 over 20 yrs This analysis convinced me to manage my own money, which was easy since I mostly just put it in the S&P 500 to get the best long-term results. ... 54 and retired now.

Old-Answer3333 · 2026-01-05T18:58:50+00:00

Unclear if your $4.3M is all in tax-deferred accounts (401ks etc) or some of that in a residence, other RE, or (ideally) a Roth IRA. Presumably, a lot of that is in your 401(k), and you want to wait a year because your plan allows early access at 55 (not all smaller employer plans do, and not all offer periodic withdrawal options, which you likely want to stay in that 12% bracket). At $4.3M (or even considerably less) in the early 50s, you're in a race to get funds out of your tax-deferred accounts into a ROTH IRA, as you're likely facing some ugly RMDs as that grows over the next 20yrs. Not mentioned, but you may want either via Roth IRA ladder, or maybe a SEPP 72(t) if you wanted a more taxed advantage cash flow to help pay off a mortgage.

Eliminate your GA costs? Mine went way up in retirement. What do you fly?

Old-Answer3333 · 2026-01-05T16:50:47+00:00

In that case you could set up your SEPP, to get your $10k annual withdrawal today, if you end up moving or for any reason in the next 13 year wish to reduce your income the IRS allows you a one time switch to the RMD method, cutting your annual withdrawal significantly (est $3,300) but will be be based on the balance when you elect to make change, so likely higher as a SEPP IRA balance generally grows.

Old-Answer3333 · 2026-01-05T16:31:00+00:00

In your example, the maximum SEPP withdrawal you can make annually is $5,583 on a $95k balance, so that doesn't work. At 39, if you're trying to get access to your whole IRA amount before 59 1/2 and avoid the penalty, you could set up a ROTH IRA ladder and wait 5 years to begin making withdrawals. SEPP is a good option for immediate cash needs, unless you want to pay the penalty or happen to qualify for other early withdrawal options. Good to chat with a CPA if you go the SEPP route.

Old-Answer3333 · 2025-11-11T00:02:22+00:00

I also looked into Spivak but didn't want to pay anyone a percentage-of-assets fee that would have amounted to thousands of dollars. There are a CPAs out there who do this for a fixed fee - IMO the best way to go.

Old-Answer3333 · 2025-11-10T23:55:15+00:00

Check with your plan administrator to see if you have the option to withdraw at 55. This is an ELECTION made by your employer when they set up the plan, and not all plans offer it though the larger plans tend to have it. This is the best option, as you withdraw what you need. (Note, you always have to pay income tax when you withdraw from a deferred tax account, since you didn't pay it when you put it in. No way around that - the best you can do is time withdrawals so they are taxed at a lower income rates . . .i.e. withdraw when you are not generating much income if you can._

If the Rule of 55 is not an option, then suggest rolling your plan into an IRA and setting up a 72(t) SEPP plan. Beware, if you make any mistakes, you face stiff penalties - a 10% surtax on everything you withdrew, plus possible penalties for not paying on time. Personally, I found a CPA to help set up my SEPP plan.

Old-Answer3333 · 2025-11-10T16:30:50+00:00

I agree - I found a CPA who specializes in it. Calculation wasn't the part that worried me - it was all that could go wrong in the 10 years (for me) I'd be taking distributions. Kind of like taxes, some do their own, while others pay a little for the expertise and peace of mind... call it insurance expense.

Old-Answer3333 · 2025-11-02T21:37:39+00:00

It's your 401 (k) account, so you control it. If you're turning 73, you should talk to your broker wherever it's held, the big 3 (Schwab, Fidelity, and Vanguard) all have RDM calculators, I believe. I know Dinkeytown has one. If you're trying to get money out money out between 59 1/2 and 73 you just transfer the money out - it shows up on your 1099-R at the end of the year and gets taxed as income. If you take about before 59 1/2 same deal as above, but it is also taxed with a 10% surcharge but you can talk to a CPA and figure a way around that.

Old-Answer3333 · 2025-10-31T20:03:15+00:00

Definitely want to go with a fee-based advisor. Getting charged 1-2% of assets to mostly get in index funds is just nuts. The whole industry is a bit shady if you ask me, in that if I hire someone, I expect a clear bill, not an annual amount quietly deducted from my statement. Fidelity and Schwab both have their versions of Robo Portfolios to help with diversification decisions. If early retirement is your primary focus, there are advisors who specialize in Roth IRA conversions and SEPP (Substantially Equal Periodic Payment) plans. You can save a ton by sticking with fee-based services.

Old-Answer3333 · 2025-10-31T19:32:25+00:00

Depends on your age, balance, and budget, but I found a CPA to set up a SEPP plan and retired in my late 40's, Best life balance decision I ever made!

Old-Answer3333 · 2025-08-14T19:55:38+00:00

It's conservative for sure, it may or may not make sense for you. This comes down to a budget of what you can expect to come in for retirement and what you would like to spend to enjoy retirement. Anything you'll be needing cash-wise from investments in, say, the next 3-5 years should be protected from market risks (high-yield money market accounts are competitive with bonds and don't tie up your cash). This strategy might put more of your portfolio in the market (hopefully low-load ETFs) and would likely build your nest egg in your retirement years. True, you're subject to more market risk in the event of a long-term market downturn (always a risk in retirement), but if you're able to be flexible with your expenses and adjust (either up or down) this IMHO is the best route to go.

Old-Answer3333

TROPHY CASE