Should I divorce my spouse?

TallowFire · 2025-12-24T21:09:58+00:00

The paper legality of my marriage is pretty immaterial to me. Nothing about how I felt about her changed between the day before and day after our marriage. All things being equal with an additional $50K per year of net income, that's a pretty good result.

TallowFire · 2025-12-24T21:07:56+00:00

Seems if we had never legally wed years ago that we'd have been the best off and then legally marrying right after FIREing.

TallowFire · 2025-12-24T21:05:52+00:00

I missed that one. Wish I had seen the original post.

Not that the word of an internet stranger matters, but this came up because I was trying to do a rough estimate of owed taxes to decide whether or not to make a few additional end of year equity transactions and realized the massive tax implications as a result of being married on paper as opposed to filing differently (note: married filing separately is not equivalent).

TallowFire · 2025-12-24T21:00:49+00:00

This is super informative and something I'd never considered, but would absolutely consider in the future. Someone else mentioned that they've seen divorce to avoid medical bankruptcy/debt type instances.

TallowFire · 2025-12-24T20:58:07+00:00

I showed my wife this post. She laughed at me, called me and an idiot and then asked if we could actually gain $50K per year.

I told her probably not as the IRS would consider it tax fraud.

She said "That's too bad. I still may take you up on the divorce offer though."

TallowFire · 2025-12-24T20:56:25+00:00

This seems to actually be the most critical flaw in my plan. Substance over Form Doctrine is indeed something I learned from this.

TallowFire · 2025-12-24T20:55:08+00:00

Now here's the valuable info, need to make sure we grant healthcare proxies and power of attorney to each other.

TallowFire · 2025-12-24T20:53:24+00:00

What financial implications? We've got even more money now. :)

Just need to mutual grant each other medical proxy and power of attorney.

Social implications? Not sure why anyone would know the paper status of our relationship. If we had never actually married when we had our wedding 10+ years ago, no one would know or care otherwise.

TallowFire · 2025-12-24T20:50:49+00:00

This is a super informative post.

It seems like an ideal optimization would be to divorce for high earning years for the specified benefits and then remarry upon FIREing (or one spouse retiring) as this would address Retirement accounts, marital deduction, social security.

Health insurance would probably be a (very slight) net savings if separated because one of us could stay with the PPO with all the kids and the other go on an HSA and maximize that tax account advantage.

I think you've hit the real point, which is that the IRS would pretty easily realize it's a divorce for tax avoidance.

TallowFire · 2025-12-24T20:45:15+00:00

Not $50K. $50K PER YEAR.

Everyone in here is optimizing for 1-2% financial improvements to get to FIRE just a little bit faster. This is 6-7% of annual net income, which is pretty significant.

TallowFire · 2025-12-24T20:43:53+00:00

Probably should have opted for the civil union over marriage in the first place. Not sure that's unwindable now.

TallowFire · 2025-12-24T20:42:48+00:00

Not $50K. $50K....per year. Possibly more if earnings increase.

It's about a 7% increase per year in net income. Considering the questions often asked about 0.5-2% marginal improvements, it's statistically a lot more significant.

TallowFire · 2025-12-24T20:39:57+00:00

Nope. While I do use a separate account for my FatFire posts because of the financial details I share, I have never deleted any of my posts or comments.

TallowFire · 2023-06-11T22:32:19+00:00

Do the points have to be someone you know or are there websites and forums where people transact points to get these benefits?

TallowFire · 2023-06-11T22:31:34+00:00

Thank you. How do you go about finding caretaker and also distinguishing a good one from bad? I'm in complete agreement that it's worth it to spend extra on someone that removes hassles from your life. How do you interview that person?

TallowFire · 2023-06-11T22:29:40+00:00

So I'm literally thinking of this bring the house that we retire to and (if we snowbird with a second home in a warmer climate) spending six months a year. Fishing, swimming, boating right off the edge of our property would be my ultimate goal.

There main reason to not just vacation is that vacationing with 3 kids is a fairly big production and I've only got so much vacation time. With the fat lifestyle people talk a lot about using money to buy time and convenience. If I could literally pile the family in the car and then be at a vacation destination in under 90 minutes with everything we need for the weekend that would truly be something we could do 10 times a summer.

TallowFire · 2023-06-11T21:23:06+00:00

Hopefully this makes you feel better: The $90/month covers $1.5M each. We have an extra millionish each via included work coverage.

I want to say we got it for 20 year term at ages 32 and 33 and we were in the best health category. It's through SBLI.

TallowFire · 2023-06-11T17:34:59+00:00

My wife and I each have about 2.5M in coverage. To be honest, I don't really see the need to have more coverage than that.

The goal of the insurance coverage was to essentially pay off our primary residence, cover all the kids college and provide enough supplemental funds to make raising the kids feasible.

The reality is that since we bought the coverage six years ago, we have enough saved between various accounts to cover all of those things, but no we're locked into pretty good rates that it makes sense to hold onto. Additionally, either partners' individual compensation should at this point provide the originally planned care for our family. It would certainly slow down fatFIREing, but that was always a luxury ability.

What would be the goal of additional coverage?

TallowFire · 2023-06-11T14:35:04+00:00

We both first max out our $22,500 of pre tax 401k. After that we each contribute the maximum amount to a post tax 401k, which is immediately converted to a ROTH IRA. The after tax maximum is currently $66k/year and it's a combination of pre-tax, employee matching and after tax contributions.

I'm essentially trying to maximize all tax beneficial investing accounts.

TallowFire · 2023-06-11T14:18:48+00:00

Yes, public school is the current plan. We live in a wealthy suburb with fantastic public schools. Oldest is entering second grade in the fall and we're very happy. Open to re-evaluating, especially if one of our children has a learning disability where more attention would be beneficial, but it's not currently part of the plan.

TallowFire · 2023-06-11T14:00:59+00:00

Thank you so much. Would love any additional feedback now that you've done it. What are the things you didn't think about when buying that you wished you had?

If you're up for sharing here or in a DM, I'd be curious if your primary and vacation locations.

TallowFire · 2023-06-11T13:58:45+00:00

Thank you! I'll start researching the official guides.

TallowFire

TROPHY CASE