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I'm into the FIRE stuff. I don't find being interested in your work and having access to early retirement as mutually exclusive. Having the ability to retire

I'm into the FIRE stuff. I don't find being interested in your work and having access to early retirement as mutually exclusive. Having the ability to retire early is not really about retiring — it's about having optionality in your life to choose what you do with your time, whether that's what you work on, where you work, who you work for, or if you even work at all post the point of financial independence that divides "working life" from early retirement. Primarily, it's the freedom. In other words, many people in this space are more interested in having the option available to them to take time off work and travel for extended periods, take sabbaticals, work on problems of personal interest that might generate no income, start a company for fun, etc. It's more realistic to achieve these goals after hitting a financial independence milestone, however one defines that goal relative to their spending requirements in "retirement". Secondarily, it serves as "insurance" or a fall back to primary income should you choose to continue working in your current role or in a lower paying job but doing something you find personally fulfilling for other reasons, like a charity or non-profit. Maybe you want to work a blue collar job or two out of curiosity but that would be impractical or financial infeasible compared to an engineering salary. Maybe you want to work on open source full-time. Tertiarily, there are unique tax optimization opportunities that emerge when you have established wealth but have no to little income in a given tax year. One of the most popular blogs for learning more about this is Mad FIentist - https://www.madfientist.com/ https://www.madfientist.com/.

vram22 8y ago
>Tertiarily, there are unique tax optimization opportunities that emerge when you have established wealth but have no to little income in a given tax year. Interesting. Can you briefly mention such opportunities? I know they can be different by country, but still would be good to have an idea. I'll check out the Mad Fientist blog too.
- tedmiston 8y ago
  Disclaimer: I'm not an accountant, so my answer here is paraphrasing what I've read from others and may not be the best, is not advice, etc. Since the tax code is always changing, the techniques available will change over time. I always recommend having an accountant or financial advisor. That said, there are several ways to save money on taxes in the situations that exist around early retirement. 1 - One example is the 0% long-term capital gains tax rate accessible to a low income bracket, which one can put themselves in for a given year when they are living off investments and in control of their withdrawals (vs a normal salary that would exclude you from this bracket). https://www.physicianonfire.com/the-taxman-leaveth-taxes-in-early-retirement/ https://www.physicianonfire.com/the-taxman-leaveth-taxes-in-... 2 - A second strategy to consider is "Backdoor Roth" and Roth IRA conversions. https://www.physicianonfire.com/backdoor/ https://www.physicianonfire.com/backdoor/ https://www.gocurrycracker.com/never-pay-taxes-again/ https://www.gocurrycracker.com/never-pay-taxes-again/ https://www.madfientist.com/how-to-access-retirement-funds-early/ https://www.madfientist.com/how-to-access-retirement-funds-e... http://www.mymoneydesign.com/personal-finance-2/retirement/backdoor-roth-ira-conversion/ http://www.mymoneydesign.com/personal-finance-2/retirement/b... 3 - One more is maximizing contributions to an HSA as it combines the tax benefits of a Roth IRA (tax-free withdrawals) and a Traditional IRA (tax-deductible contributions) in one account. https://www.madfientist.com/ultimate-retirement-account/ https://www.madfientist.com/ultimate-retirement-account/ https://jlcollinsnh.com/2014/08/18/stocks-part-xxv-hsas-more-than-just-a-way-to-pay-your-medical-bills/ https://jlcollinsnh.com/2014/08/18/stocks-part-xxv-hsas-more... 4 - Avoid short-term capital gains tax rates. (Compare the percentages in the 2 tables here.) https://www.investopedia.com/articles/personal-finance/101515/comparing-longterm-vs-shortterm-capital-gain-tax-rates.asp https://www.investopedia.com/articles/personal-finance/10151... 5 - One last one to keep in mind is tax-loss harvesting and less commonly tax-gain harvesting. https://www.madfientist.com/tax-loss-harvesting/ https://www.madfientist.com/tax-loss-harvesting/ https://www.madfientist.com/tax-gain-harvesting/ https://www.madfientist.com/tax-gain-harvesting/ If you're curious for more FIRE related info, some good subreddits to check out are: - r/leanfire - r/financialindependence - r/personalfinance
  - vram22 8y ago
    Thanks for the detailed answer, I appreciate it. I guess some of the points may not apply to me when I live in India, but some probably will be in common, and the reddits are likely to be of use.
    - tedmiston 8y ago
      A lot of it is definitely country specific and I have no clue outside the US honestly. It gets even more nuanced if you happen to live in a different country than where your citizenship is. But these posts still could be useful reading to see what strategies you can apply in India. From those subreddits, in their about sections, there are additional relevant subreddits for outside the US as well.
      - vram22 8y ago
        Great info. Thanks again. Interesting to see from your profile that you work with Python, as I do. Checking out your HN post about your PyCon 2015 talk, and your sites ...

vram22 8y ago

>Tertiarily, there are unique tax optimization opportunities that emerge when you have established wealth but have no to little income in a given tax year. Interesting. Can you briefly mention such opportunities? I know they can be different by country, but still would be good to have an idea. I'll check out the Mad Fientist blog too.

tedmiston 8y ago
Disclaimer: I'm not an accountant, so my answer here is paraphrasing what I've read from others and may not be the best, is not advice, etc. Since the tax code is always changing, the techniques available will change over time. I always recommend having an accountant or financial advisor. That said, there are several ways to save money on taxes in the situations that exist around early retirement. 1 - One example is the 0% long-term capital gains tax rate accessible to a low income bracket, which one can put themselves in for a given year when they are living off investments and in control of their withdrawals (vs a normal salary that would exclude you from this bracket). https://www.physicianonfire.com/the-taxman-leaveth-taxes-in-early-retirement/ https://www.physicianonfire.com/the-taxman-leaveth-taxes-in-... 2 - A second strategy to consider is "Backdoor Roth" and Roth IRA conversions. https://www.physicianonfire.com/backdoor/ https://www.physicianonfire.com/backdoor/ https://www.gocurrycracker.com/never-pay-taxes-again/ https://www.gocurrycracker.com/never-pay-taxes-again/ https://www.madfientist.com/how-to-access-retirement-funds-early/ https://www.madfientist.com/how-to-access-retirement-funds-e... http://www.mymoneydesign.com/personal-finance-2/retirement/backdoor-roth-ira-conversion/ http://www.mymoneydesign.com/personal-finance-2/retirement/b... 3 - One more is maximizing contributions to an HSA as it combines the tax benefits of a Roth IRA (tax-free withdrawals) and a Traditional IRA (tax-deductible contributions) in one account. https://www.madfientist.com/ultimate-retirement-account/ https://www.madfientist.com/ultimate-retirement-account/ https://jlcollinsnh.com/2014/08/18/stocks-part-xxv-hsas-more-than-just-a-way-to-pay-your-medical-bills/ https://jlcollinsnh.com/2014/08/18/stocks-part-xxv-hsas-more... 4 - Avoid short-term capital gains tax rates. (Compare the percentages in the 2 tables here.) https://www.investopedia.com/articles/personal-finance/101515/comparing-longterm-vs-shortterm-capital-gain-tax-rates.asp https://www.investopedia.com/articles/personal-finance/10151... 5 - One last one to keep in mind is tax-loss harvesting and less commonly tax-gain harvesting. https://www.madfientist.com/tax-loss-harvesting/ https://www.madfientist.com/tax-loss-harvesting/ https://www.madfientist.com/tax-gain-harvesting/ https://www.madfientist.com/tax-gain-harvesting/ If you're curious for more FIRE related info, some good subreddits to check out are: - r/leanfire - r/financialindependence - r/personalfinance
- vram22 8y ago
  Thanks for the detailed answer, I appreciate it. I guess some of the points may not apply to me when I live in India, but some probably will be in common, and the reddits are likely to be of use.
  - tedmiston 8y ago
    A lot of it is definitely country specific and I have no clue outside the US honestly. It gets even more nuanced if you happen to live in a different country than where your citizenship is. But these posts still could be useful reading to see what strategies you can apply in India. From those subreddits, in their about sections, there are additional relevant subreddits for outside the US as well.
    - vram22 8y ago
      Great info. Thanks again. Interesting to see from your profile that you work with Python, as I do. Checking out your HN post about your PyCon 2015 talk, and your sites ...