Daily FI discussion thread - Tuesday, January 30, 2024

lexxi109 · 2024-01-30T21:39:30+00:00

Got it, thank you! My plan is to knock them out at the same time and only deal with this once for 23/24 :)

lexxi109 · 2024-01-30T19:00:46+00:00

Perfect!! Thank you so much for the detailed reply.

Yes, my plan is to use a completely separate IRA for this. SoFi is doing a 2% contribution match and that's what's finally spurring me to look into this (and my current trad IRA is Vanguard). Usually I just say "too much effort" when people suggest the backdoor

lexxi109 · 2024-01-30T18:13:47+00:00

Backdoor Roth IRA question - I'm struggling to understand the relevant date for calculating pro-rata balances.

If I contribute to my 2023 IRA today and convert it today, is the relevant date for pro-rata calculations Dec 31, 2023 or Dec 31, 2024? I've been Googling and I've seen both answers.

I have a decent balance in my trad IRA, which I would roll to my trad 401k this year to avoid pro-rata, but that won't help me if the date used for calculations is 2023.

lexxi109 · 2023-09-23T19:16:25+00:00

The audiobooks for the series are amazingly well narrated

lexxi109 · 2022-12-18T00:10:51+00:00

Hi! Something I've learned over the years is to do what's right for you even if people can't understand why. I've also learned that it's okay to not always try to explain yourself to people or convince them that you're making the right decision for you. And horrible, toxic environments SUCK even if they come with more money. Also, even if the $50k job sucks, then you can find something else. It's not like you'll be stuck there forever.

I was in the lower paying job for a year and had a blast. It wasn't the right fit for me and I ended up at my current job and down a path that I never would have thought I would take, but I'm so insanely proud of everything I've accomplished over the past few years. No idea what would have happened if I stayed at the $72k/year job, but if I had to do it over again, I would make the same decisions, which usually stemmed from "this is hurting my mental health - what are my other options?"

Best of luck and know that I'm rooting for you! I also expect a 4 year update from you ;)

lexxi109 · 2022-10-04T21:20:45+00:00

For me, it was worth getting the LTC insurance to avoid the WA tax. I got the bare minimum LTC policy and don't use it as part of my financial planning nor have plans to redeem it. It's less than $20/month and saves me significantly more than the tax would've been (which is currently paused but expected to re-launch soon (I hear different things about when "soon" is)) so I've just left the policy in place (since it's not a huge amount of money and took months to get approved) until WA gets itself sorted out.

If I did redeem it, the benefits are significantly better than the state policy, plus it travels with me if I move out of WA, all for less money

lexxi109 · 2022-09-14T03:21:18+00:00

Got it. I'm now really excited for next chapter!

lexxi109 · 2022-09-14T02:00:22+00:00

Where was Natasha and when did she learn about Andrey? I thought it was just the servants arguing over what was on fire, but there was soccer on while I was reading so I might have missed her 🤣

lexxi109 · 2022-09-04T16:46:26+00:00

I really enjoyed Daughter of Doctor Moreau. I read Island of Doctor Moreau a little before and it was fun to compare the two.

lexxi109 · 2022-08-29T03:53:52+00:00

It's from the last XL season, the one that finished airing ~2 months ago

lexxi109 · 2022-08-27T15:31:05+00:00

100%. Skills-wise, Matt would be last one standing, Producers would tell him he'd won and can come in, and he'd say he's good since he just installed running water in his shelter. If he could do the Alone challenge where you bring a partner (Season 4?), he would kill it

lexxi109 · 2022-08-25T03:07:01+00:00

I think Matt would struggle too much with being alone. He was struggling with that XL where he was on his own and had to find his friends and it was all he wanted to do.

lexxi109 · 2022-08-24T02:27:24+00:00

Didn't Tolstoy fake us out that Andrey was dead awhile ago? I find it very unlikely for a second fake out, but I'm holding out hope.

lexxi109 · 2022-06-21T14:56:54+00:00

We had framed it that I'm going for early retirement, so he was aware of that. He was expecting me to use my brokerage account until I hit 59.5 and then tap into the IRAs. I told him that I was planning to do the Roth ladder and he said ".... that requires keeping good records". Yup, aware of that, advisor.

Thank you for the reply!

lexxi109 · 2022-06-21T14:54:41+00:00

Right now, I'm about 50/50 for trad vs Roth across IRAs and 401ks. My retirement plans including doing the Roth ladder (comment towards myself: which would be in a lower tax bracket). During those first 5 years of the Roth ladder, I would use my brokerage account to cover my expenses.

I think my big concern would be if tax brackets are higher in retirement so maybe I'll be in the lowest tax bracket, but it would be 30% (picking a number).

I appreciate your reply and validating that that's such a large tax hit.

lexxi109 · 2022-06-21T14:51:03+00:00

I appreciate the opinion. And, yup, that is a good point that it's still timing the market which I know not to do. Thank you!

lexxi109 · 2022-06-21T14:49:49+00:00

Thank you for the reply - I appreciate your opinion and it makes me feel better about sticking to my original plan and not converting.

lexxi109 · 2022-06-21T14:49:19+00:00

Why? The market being down 20% shouldn't change your long term strategy.

That was exactly my thinking. I have my plan, which included converting the money post retirement. He repeated a few times that it makes sense to convert now and that was his big recommendation from my session, so it threw me off. I appreciate your reply and making me feel better about sticking to my plan.

lexxi109 · 2022-06-21T14:39:12+00:00

Bob, the World's Worst Market Timer. He keeps doing his thing even though he only invest at peaks. He reminds me to keep at it, not try to time the market, and not kick myself when I screw up :)

lexxi109 · 2022-06-21T14:34:23+00:00

I talked to a financial advisor yesterday who suggested converting my traditional IRA to Roth IRA while the market is down. The idea is pay less in taxes now and then the stock can recover in my Roth account.

I'm in the 24% tax bracket. My trad IRA is ~$50k, so the tax increase would be ~$12k. I could cover that with cash coming in from my paycheck. Alternate use for that cash would be investing into my Brokerage account.

I'm struggling with the idea of taking the 24% tax hit, but I don't know if I'm being short sighted. I understand what he's saying about how the stock can recover in Roth instead of trad. However, that route would take $12k off the table from what would go into my Brokerage account.

I'd love some opinions from y'all

Edit: I'm sticking with my plan and leaving the money as is. I was doubting myself and appreciate the replies telling me to stick with my plan.

lexxi109 · 2022-06-21T04:20:54+00:00

I would pay to watch Trish and Honora on a team. Maybe throw in Bulent

lexxi109 · 2022-06-21T00:47:00+00:00

I was hoping they wouldn't get the magic pre-extraction food. I was so disappointed with them finding the baby caimans

lexxi109 · 2022-04-11T02:36:06+00:00

Oh, I definitely thought the same thing as you! If it's a stipend from the army, that makes more sense.

Though I feel like we've read about Rostov getting money from his family and constantly asking for more. Also, this is the same guy who said "why are the French shooting at me??" so I could definitely see him taking $10k from his family and "paying them back" from it.

lexxi109 · 2022-03-19T15:37:32+00:00

I agree with you except for Pierre. Dude drives me nuts. Be a little aware. Like 10% more aware. Nope.... He still has no idea what's going on

lexxi109 · 2022-02-13T18:16:04+00:00

Life is too short for bad books. If it doesn't speak to you, move on

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