Financial Independence: Methods, Mindsets and Cloth Diapers

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Financial Independence: Methods, Mindsets and Cloth Diapers

sweet_jones: Jan 1, 2007

T. J. Eckleburg posted:

Why do you specifically recommend maxing an HSA before even a 401k?

I prioritize my HSA deduction over 401k for the reason that both reduce current tax liability, but unlike the 401k the HSA funds can be withdrawn tax free. It's sort of like the best of all worlds: They're tax-free going in, tax-free growth, and tax-free going out. That and health care costs are inevitable.

That said, I do have a related priority question: I have access to both 403b (similar to 401k) and a 457 through my current employer. I am now looking to ramp up retirement contributions. I am not maxing out the 403b, and I have not opened a 457 though it is appealing, particularly the withdrawals earlier than retirement age. What I'm unclear on is what my rollover options would be if I left this employer as I likely would not have 457 access elsewhere. I assume I would lose the window for withdrawals but can this be rolled to an IRA?

Does it make sense to open a 457 before I max the 403b? I am maxing Roth IRA and HSA account contributions.

# ¿ Dec 5, 2015 00:43

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# ¿ May 3, 2024 16:54

sweet_jones: Jan 1, 2007

Fancy_Lad posted:

Here is the priority that I have used with FI/ER in mind:

1) 403b up to employer match (free money)
2) Max out Roth IRA
3) Max out HSA (for the reasons you outlined)
4) Max out 457(b) (prioritized over the 403 due to the lack of an age restriction - both have access to the same funds and have the same minimal fees)
5) Max out 403(b) (where I'm currently working on)
6) Taxable investments

When it comes time to leave my employer, my plan is to keep the 457b account I have with them unless something surprising happens to the governing rules or the fees charged there between now and then.

This was a fantastic post, and really appreciated. I had completely missed the obvious, which is leaving the money there. Given that it has the same advantages without the age restriction, I'm inclined to focus on the 457b so as to keep an extra door open with FI in mind.

The plan offerings are the exact same for my 403b and 457b, with some good offerings below 0.1% ER.

# ¿ Dec 7, 2015 16:37

sweet_jones: Jan 1, 2007

I've submitted a request for more plan information (needs to be snail mail apparently), but I was able to confirm that my company's plan is a 457b government plan as well.

# ¿ Dec 8, 2015 01:50

sweet_jones: Jan 1, 2007

GoGoGadgetChris posted:

Sometimes I think this is really the "I make at least $100k but don't find any satisfaction in my job" thread.

silicone thrills posted:

I personally make less but yes. This. I want to be FI so that I can pursue hobbies that make me happy and have a very low likelyhood of making me money. I really should be happy at my job. It pays really well for the effort put in but it just feels like sinkhole that I shovel my time into.

I think sometimes this thread lacks topics worth discussing. After an initial learning curve, pursing FI/RE is, it turns out, really boring.

What I think would be really cool to read about are folks who take sabbaticals or "mini-retirements" to try out the lifestyle they have planned for.

# ¿ Jan 9, 2017 23:31

sweet_jones: Jan 1, 2007

Doc Hawkins posted:

I could start posting ERE and gocurrycracker articles if you'd prefer more heated discussion.

I'm 9 months into something like that: slow-paced world travel while writing a software thing I'm hoping to grow into a community and a consulting niche. I'm 35. According to firecalc, my savings has a 98% chance of lasting at least 10 years at my initially estimated expenditures, but I've already committed to give up in two if I can't turn a profit by then.

Actually, those estimates ended up being wildly pessimistic: spending isn't consistent month-to-month when you're moving 4-7 times a year, but based on my experience so far, I could do it comfortably and productively (by my standards) for under 15k/year. I've also seen a few places so far where I could afford to just settle down and live indefinitely, but I haven't felt like it. Maybe that would be a bit "too retired."

ERE and GCC are good examples of the problem I have - I can't relate much to those lifestyles. ERE in particular, but while I envision slow travel I also plan to keep my home in Colorado. So same issue with GCC.

I CAN, however, relate to your point on inconsistent spending and I see a consistent trend in the blogs of casually suggesting Cost of Living in Vietnam or Thailand is indicative of retirement spending forever. Any cool places you'd care to talk about? Was it difficult to find housing anywhere?

# ¿ Jan 10, 2017 02:53

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# ¿ May 3, 2024 16:54

sweet_jones: Jan 1, 2007

I've never understood the perception of risk with non-governmental 457 plans. Is the worst-case scenario you roll to an IRA or 403b/401k if you leave that employer and aren't yet ready to draw down?

(I have a governmental plan myself)

# ¿ Jan 27, 2022 01:37

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Financial Independence: Methods, Mindsets and Cloth Diapers