Taxes: How They Have Messed Up Our Timeline

We have our tax returns prepared by an accountant every year.  I know, I know, many in the FI community do their own but with Mr. SFF being self-employed and now having two rental properties, I would just rather have someone else, who is may more knowledgeable, do the returns for us.  Last week we got the returns back and were they a doozey!  We usually try to plan our taxes so we end up pretty close to zero.  We don’t feel the need to give the government a free loan throughout the year (getting a return) but we also don’t want to write a check huge check.  But I guess 2016 was a year where we were off, by A LOT.  It was bad enough that our accountant gave us a bottle of wine.  Yup, some good old alcohol to drown out the pain.

What contributed to this big change?  First of all we purchased a new duplex in mid January of 2016 so we had just shy of a full year of rental income with this new property.  Our other duplex is owner occupied and we usually only show a couple hundred dollars of taxable income from this one so I really had no idea what to expect from this new property.   Continue reading “Taxes: How They Have Messed Up Our Timeline”

Vacation Turned Delay-cation Turned Stay-cation

Last Tuesday we were supposed to fly out to the Denver area for a combined ski trip and also to visit my sister in law, her husband and my nephews.  Even three days out from our departure date we knew that this trip wouldn’t go quite as planned.  There was a blizzard on the horizon set to arrive on Tuesday, the day of our departure.  We got a notification on Saturday that one of our flights might be a problem as we were scheduled to go through New York right in the heart of the storm.  With this advance notice we were given the option of changing our flight without incurring any change fees.  We changed our first flight to go through Detroit instead of NY and as we were set to leave at 5:45 am we figured we would be able to fly out before the storm hit.

Sleeping the night before an early morning flight never goes well but even after tossing and turning for well over an hour, we got a notification that our flight was cancelled around 11 pm.  Bummer…but at least we knew the night before so we didn’t have to make it all the way to the airport in the wee hours of the morning before finding out.  We slept in a little bit (does 7:15 count?), had breakfast, and then decided it would actually be easier to drive over to the airport and figure out our options instead of waiting on hold for hours with the airline (the hold time on Saturday was 2 hours).  This turned out to be a great decision as the airport was a ghost town.  We didn’t see a single passenger, despite there not be a flake of snow in the sky, and only a few airport employees around.  Even all the shops were closed.  Apparently only 2 flights made it out that morning before things closed down which meant we had the full attention of the counter agent.  We decided since the forecast was estimating a couple of feet of snow it would be silly to head out west to ski/ride on Wednesday, plus the likelihood of actually getting out on a flight Wednesday was not likely as the storm was set to continue well into the day.  So with our flight rescheduled to Thursday we headed home to rest after a horrible night of sleep. Continue reading “Vacation Turned Delay-cation Turned Stay-cation”

Where Will Our Retirement Income Come From?

The journey towards Financial Independence is all about saving money but what about once you hit your FI goal?  That is when things change and you go from savings mode into spend down mode.  When in the car the other day both Mr. SFF and I admitted that the thought of actually spending our hard earned money was a little terrifying.  Yup, terrifying is the word we both used.  When you are a natural saver, like both of us have been our whole lives even well before starting this journey to FI, the thought of not only stopping saving but spending that hard earned money is a completely foreign and scary prospect.  I think this is part of the reason I am overestimating how much money we will need.  But in addition to overestimating our needs we are also trying to create other income streams so that we don’t actually have to rely on just our investments.

Now I think the term “spend down” might be slightly misleading for us as ideally we don’t want the value of our investments to go down over time.  Once we hit FI we need our investments to not only keep up with inflation but also cover any unexpected costs that could come up over the decades that we will be spending in our retirement.  This is even more important for those of us who will be spending so many years out of the full time workforce.  If you retire well into you 60’s and you haven’t been diligently saving over the years then you will likely be drawing down your money but as we likely have 40 or more years in our retirement we need to make sure our investments are still growing and ensure our needs are covered.  This means either making sure we have more than enough saved in our investment accounts or create other income streams.
Continue reading “Where Will Our Retirement Income Come From?”

The Power of the “F-U Fund”

Mr. SFF calls it the “Go To Hell Fund” but I call it the “F-U Fund”.  But whatever name you use, it is basically the sum of money you have saved that gives you the power to just quit your job at any point, usually when you get fed up with one thing or another, without having to stress about buying groceries or paying your mortgage.  FI is pretty much a giant F-U fund as it means you don’t ever have to find another job but the F-U Fund often starts with having just enough money to give you the power to quit your job at any moment and survive without rushing into another horrible or unsatisfying job.   Continue reading “The Power of the “F-U Fund””

2016 Savings Review

I will admit that I get excited about this post and, and more specifically the data it contains, every year.  This is the one time where I really get to look at all of our information, jointly as a couple, rather than just my income and savings.  As Mr. SFF and I keep separate checking accounts and credit cards so I don’t see the whole picture until I make him sit down and give me all of his data.   I try to get an update mid-year just to see now we are tracking but it is year end numbers that I like to see.  Yes, I know how much he has saved as he moves money periodically to the joint checking and then I move the money to our investment accounts, but I don’t how much he has made and if this is a large percentage of his take home income or not.  Since all of our benefits and 401(k) savings comes out of my paycheck Mr. SFF’s savings makes the biggest impact on our overall savings goal. Continue reading “2016 Savings Review”

My Clothing Ban Update

Towards the beginning of the year I decided to set a goal of not spending any money on clothing.  I didn’t set this goal on the first of the year so I did spend a whopping $3.49 on a new skirt in January but after that purchase I vowed not to purchase anything else.  I didn’t actual post about the goal until the middle of the year but I had the goal in my head.

Now to be clear, I have never been a huge spender on clothing but it can be surprising how one little purchase here and there can add up which is why I set the goal.  Plus, I have enough clothes so this goal has really shown me the true different between a “want” and a “need”.

There were times this year that I did want something new, including the last day of the year.   Continue reading “My Clothing Ban Update”

The Wonders of Gardening

Although winter is already in full force here, I figured I would do a little summary of our gardens this year and how we did.  We have a pretty small yard and only two raised beds measuring 2×6 and 2×8 so we are pretty limited on the garden real estate but we do try to make the most of it.  Over the past 5 years we have narrowed down our the vegetables that we grow to one that we have had success with and of course, ones that we enjoy.  This past summer we planted 3 varieties of kale, rainbow chard, carrots, green beans, and unsuccessful cauliflower and cucumbers. Continue reading “The Wonders of Gardening”

Making Sure You Have 40 Quarters of Work

I might be strange to discuss Medicare stuff as most of us on this early retirement journey are years from Medicare eligibility but as most of us in this community are planners calculating every need that might arise, I figured it was an important topic to cover (plus I have been doing some insurance CE on the topic so I figured I could share my wealth of knowledge).

Most of us don’t know the costs associated with Medicare and might even think that we just automatically get Medicare once we turn 65 for free.  In reality, we have to “earn” this benefit by paying into the system over the years.  For the average person this isn’t an issue because it takes them a few decades to amass enough money to retire but for those of us in FI community we have BIG dreams and those dreams often mean not working the majority of our adult lives.

Continue reading “Making Sure You Have 40 Quarters of Work”

Climbing the Corporate Ladder

For almost two years now my husband and I have been on this journey towards financial independence/retire early (FIRE) so the thought of climbing the corporate ladder was not on the forefront of my mind.  After all, I am trying to leave the corporate world.  But last fall I was faced with a big decision, should I climb?

The company I work for is a two-person operation for day to day management even though we are under a larger company.  So when my boss, representing 50% of the workforce, pulled me aside last fall and told me he would be retiring in Nov of 2016 I had a huge decision ahead of me.  Should I take over? Continue reading “Climbing the Corporate Ladder”