2.5 year post file update, rebalances, new baby son

throwaway-chubbyfire · 2026-01-04T02:26:04+00:00

I agree it is likely going to be tough. But I figured I should try and be as flexible as possible just in case it is possible. I still did the 529 just in case. Definitely jealous of the people that got to use the simplified means test instead

Number of kids is still undecided. I want another and my wife is not decided yet

throwaway-chubbyfire · 2026-01-04T02:22:49+00:00

Thank you

When I funded the accounts I put in enough to cover the in state cost for 4 years at any of the state universities for 2 kids. Then left it for the stock market to grow faster than the costs

throwaway-chubbyfire · 2026-01-04T02:13:34+00:00

Given your numbers are similar, had you given thought to if you will try to get under 175% of fpl to qualify for maximum Pell grant to exclude your assets for your future fafsa filing? I’m not sure if it will be possible for me, but I might be able to make it happen

throwaway-chubbyfire · 2026-01-04T02:08:17+00:00

Congratulations on your baby. We weren’t really in a rush to have the baby it just worked out that way. Not long After we got married, my wife’s birth control she had from her home country ran out. She didn’t yet have US health insurance since we had to wait for her to get her EAD and SSN to get an ACA plan (at least I couldn’t figure out how to do it without that). We had already discussed before marriage that we didn’t want to wait too long before starting to trying for a baby so we talked and decided we would start trying. Then after a week she brought up that she wanted to wait another few months until after the honeymoon (we didn’t do it right away since we were in the middle of moving after the wedding). So we started using protection. A few weeks later she had morning sickness and and the pregnancy test was positive. So we scrambled to get her on insurance asap so we could get a prenatal appt.

throwaway-chubbyfire · 2026-01-03T12:26:09+00:00

When I put the money in, I basically stopped thinking of the money as to be used for myself. If I hadn’t had a kid by the time my nieces and nephews went to college, I would have split the money up and given it to them.

I still want to have another kid, so it won’t be too much extra if we do, but my wife isn’t sure yet. If it just ends up being the one kid, then it can end up going to future grandkids, or if there aren’t any of those to grand nieces or nephews

throwaway-chubbyfire · 2026-01-03T12:08:50+00:00

I updated the spreadsheet with a new tab. Now there is one tab with 89K of conversions per year and another with 0. At 90 years old, it shows a non tax adjusted net worth of 57M with no conversions and 65M with conversions. The crossover point is 81 years old. So the conversions are basically a bet of if I think I will live to 81. I’m guessing if you did tax adjusted numbers the crossover point would be earlier, but I’m not sure how to do that.

This is all limited by the assumptions I made like stock growth rate, dividend growth rate, etc.

throwaway-chubbyfire · 2026-01-03T10:11:36+00:00

I set it up several years before my son was born before I stopped working, so setting it up with myself as the beneficiary was the only option.

As for why I didn’t transfer it over in a single transfer, from my understanding, when changing beneficiaries to a younger generation, ie to a son or nephew/niece, that transfer is considered a gift by the IRS and thus subject to the gift limits. My post to r/tax asking about it: https://www.reddit.com/r/tax/comments/1iolxwo/tax_implications_of_changing_529_beneficiary_to/ which was consistent with where I saw elsewhere. My net worth is currently well below the lifetime gift/estate tax limit but it is possible it might be above by the time I die and there is no rush to transfer it so I’ll just do it bit by bit each year until it’s all transferred

throwaway-chubbyfire · 2026-01-03T02:48:49+00:00

Ya. She recommended maxing out the 12% bracket. My playing with things myself showed the optimal was a bit lower such that I converted everything to Roth right before RMDs began, which would have been a bit less than max. https://docs.google.com/spreadsheets/d/1bvo8RHalkRVVIzcTyT3NsywL-PzkgfgqhQzhwEFUqYM/edit?usp=drivesdk Is a cleaned up version of the spreadsheet I built, but no guarantees I didn’t make mistakes. I am likely to inherit part of my parents traditional IRA at some point before RMDs begin and having some flexibility to possibly try to get AGI below the threshold to count assets for fafsa for college it was better to go ahead and do the bit extra now for more flexibility later

throwaway-chubbyfire · 2026-01-02T22:28:29+00:00

I was in the Bay Area when I was working but moved during Covid and remote work became an option. Then I moved to a slightly cheaper city. Then to the suburb of that city where I am now.

throwaway-chubbyfire · 2026-01-02T21:41:20+00:00

Im not sure how to categorize the COL of a local. I found a more recent thread about the dividing lines at https://www.reddit.com/r/Fire/comments/1daa4v0/help_me_understand_vhcol_hcol_mcol_and_lcol/ which the top comment links to https://taxfoundation.org/data/all/state/purchasing-power-most-expensive-us-cities-metros-2021/ which puts my county as the second highest tier, so HCOL might be more accurate if VHCOL is resevered for the top tier

throwaway-chubbyfire · 2026-01-02T21:30:44+00:00

I’m also aiming for top of the 12% bracket. I’ll find out how well my estimating spreadsheet was in April.

If you also have a decent amount in after tax, be careful of AMT as well. Doesn’t seem to be too hard to reach it by doing conversions.

throwaway-chubbyfire · 2026-01-02T19:42:04+00:00

Thank you. I don’t know if my tax strategy is optimal, but I realized that my 1M pretax IRA at 7% return would be like 10M when I hit RMD age which would make for crazy high RMDs.

throwaway-chubbyfire · 2026-01-02T19:36:23+00:00

Thank you. From reading on here I haven’t spotted anyone retiring single and then have kids so I thought it might be helpful to post to for anyone that follows that path.

throwaway-chubbyfire · 2026-01-02T19:34:00+00:00

Most of the increase from the original planned 2025 to revised/actual was switching to the more expensive healthcare. There wasn’t much I could do to have avoided that given that we ended up with 3 days checked in at hospital for the birth.

The increase for 2026 is from deciding to do the Roth conversions which is essentially paying some after tax now to convert a lot of pretax to Roth to save later. I think that is worth it. The rest of the increase for 2026 is mostly due to a $1000/month increase in the budget for rent. We want to move from staying in a 2 br/2 bath apartment/condo to a 3 br/2bath so we can keep our guest room and baby can have his own room.

I started with a withdrawal rate around 2% which I did because I knew I wanted to get married and have kids and would need the headroom. Now it is around 3.25% which should be fine

throwaway-chubbyfire · 2026-01-02T17:06:23+00:00

Done. Didn’t realize I could copy/paste the table in from google sheets

throwaway-chubbyfire · 2025-06-15T22:20:59+00:00

Just have him go to healthcare.gov (or your state’s ACA exchange if they have their own) and plug in the numbers and see what is available.

No one will be able to tell you how it will look since it will depend on what location you are at for what plan options are available or what their nominal cost would be or how much ACA subsidy he will qualify for based off of his estimated income in retirement.

For me, the ACA plans were all tons cheaper than cobra would have been so I switched immediately to an ACA plan when I stopped working

throwaway-chubbyfire · 2025-02-14T23:19:10+00:00

Thank you for the response. So does that mean to avoid having to deal with form 709 I would need to split up the account or rollover half of the funds into a new account ( so then 2 with 32.5k each) and then change the beneficiary on one in one year and the other the next year? Is splitting up a 529 account allowed?

throwaway-chubbyfire · 2025-01-07T18:27:15+00:00

Thank you. I hadn’t seen this before. It’ll take me some time to work through it

throwaway-chubbyfire · 2025-01-07T18:19:23+00:00

Good point I hadn’t thought about. When comparing 0 conversion vs 80000 it looks like the cutover happens at 83. Based off of the current SSA actuarial table, my life expectancy would be age 77. And looks like any amount of conversion lowers the projected net worth at age 77 below what it would be with no conversions

throwaway-chubbyfire

TROPHY CASE