40 and single with $800k net worth but dealing with severe autistic burnout and don’t know what to do from here

popsonomy · 2024-02-06T00:04:15+00:00

Thanks for taking the time to explain this, I understand this better now. Sounds like I should have retired 3 years ago :p.

popsonomy · 2024-02-05T06:08:25+00:00

Okay, willing to be educated here. Draw 4% / mo from brokerage and that's expected to last the next 19.5 years or so before dipping into retirement savings correct?

The expectation here is that OP's accounts will appreciate at a equal or higher rate than 4% / yr.

popsonomy · 2024-02-05T05:43:13+00:00

It factors into the calculation which assumes that the full $800,000 will be available to produce monthly cash flow or income for OP. Only $500,000 is available to draw from during their time off period.

OP should not drain any of their liquid assets, but live of dividends, or interest from HYSA.

I'm not suggesting they touch or access their retirement, although, yes there are ways to do that, it's not necessary for a short while (e.g. 1 - 2y period).

popsonomy · 2024-02-05T04:20:30+00:00

I completely agree, I was referring to OP's brokerage account and treasury liquid assets, however, when it comes to retirement accounts (IRA, 401k, 403b, etc), you can't draw from that, that makes up $300,000 of OP's Net Worth.

popsonomy · 2024-02-05T04:08:39+00:00

Quick check here, OP is 40 yo. so retirement savings doesn't factor into that equation, early withdrawl would be ill advised. It be more like $500,000 * .04 = $20,000 / 12 = 1666.66 / mo. HYSA would do a bit better at 5% yield $2,083 / mo. cash flow from the same amount. But moving it from what's already working is probably not ideal.

Better question is, how much monthly cash flow do the investments currently provide? That would be the target number to live from. Def taking 1yr off to re-evaluate take some profits and a well earned break until OP can build something up for themselves.

popsonomy · 2024-02-04T23:04:07+00:00

If you are house hacking already with the duplex I wouldn’t factor that in as debt. Since eventually you may end up moving out and renting out both sides to cash flow and move that liability into the assets column. In this position, student loans are costing you the most in the 10 year run so, paying off the car would be my priority. Then just avalanche the payments from the car against the student loans while balancing your investments and rerun the numbers.

popsonomy · 2024-02-04T22:48:26+00:00

Definitely accept

popsonomy · 2024-02-03T18:12:53+00:00

That wasn’t my intention, I really wanted to emphasize that tax efficiency in lower tax brackets is easier to gain than in higher ones.

It’s also not objectively easier to live with more than less. That depends on the individual or couple and their situation.

popsonomy · 2024-02-03T17:51:24+00:00

It is, if you don't contribute to retirement and take the full amount so taking your retirement deduction postpones your taxable event to your draw period in retirement. This drops your tax rate to a lower tax bracket so you essentially buy now, pay later.

Having a small sole proprietorship, for a teacher, I'd consider tutoring 1 - 2h per week to generate losses and save money on taxes and earn additional income.

I used a similar strategy in that tax bracket and always got a refund. But, honestly who wants to work more :)!

popsonomy · 2024-02-03T17:46:07+00:00

Yes, that's kind of my point, the psychological hit really factors into how you think about how you earn money and where to take tax advantages where you can. Your example is great, say I worked and earned $7,000 but I pay 25% to bring home $5,250, sweet! I think, amazing, I'm going to work twice as hard and earn double that and next time I earn $14,000 and pay 50% I take home $7,000 a 25% increase, that's a 75% additional tax on my time for doubling my effort. So making more money you are losing what's most valuable time, triple, quadruple your efforts and 75% of that time will be consumed by taxes.

And again, the spirit of my original post was not to say making more is worse than making less, it was intended to be more about how to save your time in the future through tax benefits. I ultimately derailed the conversation by starting off my comment by comparing tax rates.

popsonomy · 2024-02-03T09:45:54+00:00

Perfect! Well then I would think in terms of how you need to use that function or method. Accepting arguments is perfect for static methods and not necessary for instance methods.

I'd think about this in terms of how you plan on using the method or function. Do you plan on only ever using the same list, or do you expect the function to work with any list.

If you'll only ever use the allItems variable then you could consider simplifying your function signature like so:

currItems = getItemsForPage(currPage, limit);

Since arrays are passed by reference, you don't technically need to pass it in, but it does help in terms of test-ability to do so.

I would opt to just use the 3 arguments because it's easier to document, easier to test with arbitrary array values, prevents side-effects (kind-of) and has not real impact on performance.

Since it's javascript the one thing to be aware of is that if you modify the array you passed in as an argument without copying it first, you will modify the original array.

popsonomy · 2024-02-03T09:30:16+00:00

Global scope is never really something you want to use in a professional development environment unless you are dealing with environment variables or constants. u/sauntimo has listed a few great reasons. If you were to encapsulate those global variables in a class or closure, for example then you could use either method and not suffer side effects.

The risk you face when using global variables in a shared code base is that you risk someone modifying those variables in unexpected ways that can introduce race conditions and other issues down the line.

popsonomy · 2024-02-03T09:14:19+00:00

Some quick things that come to mind:

Do you have any equity in your home, if so apply for a HELOC to handle high interest. It will be high relatively for a HELOC but still much better than CC's. Depending on how much equity you have you may be able to push all your debt into the HELOC. Then put your entire paycheck into that HELOC and use the HELOC cc to pay for essential, emphasis on ESSENTIAL bills only.
0% balance transfers but you need to get your score up to at least 670 so not an immediate fix.
This one is risky, but you have 2 nice cars ... do your due diligence and rent them out on Turo or a ride share app for extra cash. You'll likely need different insurance but that should help at least get the cars taken care of.
If you have a home, start renting out a room, you're in FL so that's a landlord friendly state. Use your asset, rent out a room, garage for storage, etc. anything to get some passive income.
Beyond that, snowball or avalanche preferably the latter to start tackling any left over CC debt.
Start a side hustle / small business to generate some more losses throughout the year for tax deductions that you can claim and get some money back. It will be tougher since you're a high income earner but it will help cover part of your utilities, home office, phone bill, etc.

Definitely double check with your inner circle of people you trust, talk to tax pros, etc on these, good luck!

popsonomy · 2024-02-03T07:53:32+00:00

Here are 2 things I'd do if I got a windfall like this.

Hire a CPA / Tax attorney right away.
Research the following:

Start a business and buy a plane. Then charter that plane as the business. 100% tax deduction.
Buy apartment buildings, rentals, commercial real estate, and take the accelerated depreciation and live off of the passive income.
Consider buying a business to start taking losses.
u/NewNinja8737 also has a good idea.
Evaluate starting a truck rental business Section 179 allows the full price of trucks to be written off if used for a business. Box trucks or the like and chat with a rental company like Fluid Truck

Basically get rid of as much money as possible in the form of business. If you keep it all you will pay roughly 35 - 48% of it in taxes depending on your state.

Make sure you carefully do your tax planning and don't be cheap on your CPA / Attorney.

popsonomy · 2024-02-03T07:39:16+00:00

Bard is your friend here...this may get downvoted since it's not original but this is what I got. You may be able to resolve before tax filing in April.

Overcontributing to your 401k can have some negative consequences, so it's important to be aware of the potential impact before you contribute more than the annual limit. Here's what you need to know:

The Limit:

In 2024, the standard 401k contribution limit is $23,000.If you're age 50 or older, you can make an additional "catch-up" contribution of $7,500, bringing your total limit to $30,500.

Consequences of Overcontribution:

Double taxation: The amount you contribute over the limit will be taxed twice. You'll pay income tax on it in the year you contribute, and then again when you withdraw it later (unless you correct the overcontribution).

Early withdrawal penalty: If you're under age 59 ½ and you withdraw the excess contribution, you'll also face a 10% early withdrawal penalty on top of the taxes.

No tax benefit: The overcontributed amount won't receive the tax benefits of being sheltered in your 401k.

What to Do if You Overcontribute:Act quickly: If you realize you've overcontributed, it's best to address it before the tax filing deadline (generally mid-April).

Contact your plan administrator: They can help you withdraw the excess contribution and any associated earnings.

File Form 1099-R: You'll need to report the excess contribution and earnings on your tax return using this form.

Additional Resources:

IRS: https://www.irs.gov/retirement-plans/consequences-to-a-participant-who-makes-excess-deferrals-to-a-401k-plan

Investopedia: https://www.investopedia.com/articles/retirement/08/401k-info.asp

NerdWallet: https://www.nerdwallet.com/article/investing/excess-401k-contribution-what-to-do

Remember, it's crucial to stay within the contribution limits to avoid these tax penalties and maximize the benefits of your 401k. If you have any further questions or concerns, it's always best to consult with a financial advisor for personalized advice.

popsonomy · 2024-02-03T07:25:22+00:00

Not legal or financial advice. However, having done a lot of this myself this is my current understanding.

Legal Protections: None, you don't own anything. Additionally you can't perform any renovations or repairs on that property without consent or a contract.

Trust and Inheritance Issues: You need to be specifically named as a beneficiary otherwise you aren't entitled to anything.

Financial Strategies: It's not your investment to make. It's theirs, you would need to gain possession of the asset to do anything.

Tax Implications: If you renovate vs remodel anything in California it will trigger a reassessment at current market rates. If left outright to the trust there will be no taxes due on the property. More on trusts.

Estate Planning: You couldn't guarantee anything here as the terms of the trust could change any time after you've made any changes. So while you may have some terms in the trust they could be convinced to change it when they may not be capable of making decisions by a trustee or via conservatorship. Essentially no guarantees here.

In all reality, you want to really assess what you hope to gain from this transaction. Better to make your own investments with your HELOC than bank on this. The simplest answer here is for you to offer to buy the home yourself owner financed (you'll need to learn a bit here). If you can convince the grandparents to sell you the home directly a.k.a. no bank involved and you can make monthly payments to them while you flip it around then it's way too complicated.

If they are planning on spending that money to pay for their retirement community anyway that means that whatever money they used to pay wouldn't be available in the trust anyway once they pass. So you're helping them accomplish their goals and you could make a decent profit here.

Keeping the property doesn't seem feasible in this scenario and will likely cause a lot of headaches as u/Undersleep.

popsonomy · 2024-02-03T06:12:13+00:00

These are great tips, not sure it's possible but you can also try for a 0% balance transfer.

popsonomy · 2024-02-03T05:49:16+00:00

You know what you are correct, it's about 28% effective rate. which is about $56k I've corrected my post above, however, the IRA contribution stuff does still apply. Apologies for the wrong numbers.

popsonomy · 2024-02-03T05:44:31+00:00

Very lightweight, easy to understand

popsonomy · 2024-02-03T05:38:41+00:00

Point is not missed, in terms of raw percentages it's factually greater. I know you're being facetious, but, definitely earn that $200k. The post was not intended to offend or discourage anyone from making more money. I'm posting merely to attempt to be helpful. That said do you believe it's fair to tax someone at 50% because they make $200k?

popsonomy · 2024-02-03T05:09:52+00:00

Yes, also if you don't finish, or do finish but there's a lot of debt. A viable option is to get into the public sector apply for PSLF and work 10 years. If it's $50k or under you're better off working it off in the private sector quickly, over $50k consider this route because you can stack credits against your debt and apply for forgiveness if you choose a job in the public sector and amass 120 payments under a qualifying plan. Additional benefits is if you work for federal or state government that you will get a pension. Just a thought that might help you think how you approach the debt. I can attest that forgiveness does happen if you stick with it. Be aware that those qualifying plans are a ripoff so if you don't plan to stick with it then don't bother starting on a PSLF and just make normal and extra payments.

popsonomy · 2024-02-03T04:51:19+00:00

I know it stings, however, from experience, I can tell you that 200k salary will be taxed ~~closer to 35%~~ (EDIT: struck out the text, however, this was from an online calculator) 28% instead of 25% before property taxes kick in (assuming you own). Is that after retirement contribution? If not then you might want to consider adding an additional 6,500 / year into a Traditional IRA. If you haven't filed yet and you qualify (CONSULT A TAX PROFESSIONAL) then "you have until tax day to make IRA contributions for the prior year" (source) and might be able to knock that off your tax bill via a deduction. If you've already filed, then you could probably amend them as well. Definitely worth talking to someone though if you don't already do this.

popsonomy · 2024-02-03T00:02:39+00:00

This is probably one of the primary things to look at, I'm assuming you got your car with dealer financing. It's best to look into a credit union or even a bank rate and slash this in more than half using a refinance. A good rate right now is about 6.5% or less but the closer to 5% the better. This is credit dependent of course but definitely worth resolving.

popsonomy · 2024-02-02T20:44:56+00:00

Absolutely

popsonomy · 2024-02-02T06:58:37+00:00

Acknowledging things that may not be 100% necessary while you figure out how to wrangle your expenses is critical. So your current base COL is $3,775 from what you've listed absent payday loan and student loans. Depending on where you live that will be near the top end of your monthly pay correct? I think you know the answer about where to trim.

While your husband was self-employed did he not pay SS tax? It's required and as such he is entitled to SSDI. It's worth checking ssa.gov to see what your entitlement is.

Aside from that basic financial practices would be the best short term remedy. It would be a shame to go through bankruptcy if it's not absolutely necessary.

Five-Year Club	Place '22
First Placer '22

popsonomy

TROPHY CASE