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Droo posted:I am curious to hear more about the thought process behind treating your wife's money separately from yours, and having to each "pay half" of the bills and mortgage. My sister and her husband do this, and it has always fascinated me because it seems so odd. To list out some of the reasons I think it's a weird way to look at money: My wife and I have a similar arrangement. We divide household expenses based on percentage of income we bring in instead of down the middle, and we are (and will remain) child free, so that certainly impacts answers. We have a household savings account that we funnel our money into, then pay household expenses out of that. We target several months expenses to be in the fund in reserve (so it acts somewhat like an emergency account, although we each keep one of our own as well). Tracking of household expenses is done via a spreadsheet that would happen no matter what method we used to pool money to track expenses. We aren't super anal about it. It isn't like we are tracking everything with line item receipts, so if she picks up some makeup or something when she is doing the Target run for groceries it isn't a huge deal. Likewise if she picks up the tab for dinner a couple times to my one we don't hold it over the other's head. That's garbage that people in bad relationships do and will happen no matter how they track money. Droo posted:1. California is a community property state, so unless you have a prenup, the law doesn't care about your division of property anyway While I see what you are saying here, I think that basing your lifestyle on what the courts would do in the event that you broke up and were dicks to each other isn't exactly the best way to approach this question. Don't just ignore it, sure, but it seems pretty silly to change a system that works for you due to this potential. Droo posted:2. Men statistically have an easier time earning money, so it seems unfair to the wife Splitting by percentage addresses this one Droo posted:4. If your wife loses her job and has no savings, do you kick her out of your apartment because she can't afford it? Loan her money at interest? Move to a place you don't want to live because she technically can't afford her half? Heh, by percentage addresses this as well since $0/year = 0% of joint expenses! And the follow up question of "well what if they don't/won't find a job" is an issue with about any system you consider. The reserve in the household fund is there to assist with situations like this. Droo posted:5. If you want to go on vacation and she can't afford it, do you go without her? How does that work? We contribute to a vacation fund as well. This is mostly because I can't relax on vacation if I'm worrying about every expense, so we jointly contribute to the account and just use what is in the account on vacation. That money is already "spent" mentally when I put it in the account, so it helps with my fixation on frugality that I'm sure many in this thread are familiar with. Droo posted:6. If you retire rich because you saved, and your wife spent all her money and loses her job unexpectedly or whatever... do you get to eventually go to the good nursing home and she has to go to the crappy one? Once again this is a legal issue because medicaid wouldn't support her cost of living until YOU are also broke so it just makes no sense. Thesaurus posted:What happens if one of you ever falls on hard times? Would she let you starve or be more generous and tolerate scrounging around in the trashcan for food that she's discarded? Maybe she could sell you left-overs at a reduced rate. Or would she "donate" you some food and keep a ledger of her charity that you'd be expected to pay back one day (with interest, of course)? Well, worse case scenario is that if the money system isn't working out for us, we can switch to your socialist welfare marriage down the road.  The most important thing is to communicate goals and work together - The nuts and bolts of what you do really doesn't matter in my mind. Joint money isn't some sort of magic bullet that will make financials super easy if you and your spouse aren't on the same page or have poor communication.
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Apr 15, 2015 22:42
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Nocheez posted:It's easier for us to put it into the same bucket In reality, our split is just a continuation of the way we did it when we lived together for about 3 years. When we first got married, assuming it was the way you were "supposed" to do things we actually created a joint account with the intent of joining finances, but never actually got around to it. We ended up closing that account later when some fraudulent charges were put on its debit card (despite literally never using it for anything but withdrawing $60 out of that bank's ATM once). If something starts to not work with our split by percentage method, I don't think either of us would have a problem reassessing... No reason to force it just for the sake of it though. In my mind it is easier to not futz around with a system that has worked for over 15 years now
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Apr 23, 2015 19:49
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sweet_jones posted: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. Unless something has recently changed, you can rollover from a 457b into a traditional IRA, 401k, 403b, or 457b. Keep in mind that if you rollover into anything other than another 457b that the money would be governed by the rules of that plan (so the age restriction comes back into the picture). Are your current 457b investment options reasonable? If so, keeping it with your current employer's provider is also an option when you leave. The 457b has 2 big advantages, one being an extra bucket of 18k/year (currently) you can set aside pre-tax if you also have access to a 403b. The other is the lack of an early withdraw penalty - not that you can't get around with with other accounts at least with the rules that are in place today. I'd try to keep that ability. 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. Edit: https://www.irs.gov/pub/irs-tege/rollover_chart.pdf Fancy_Lad fucked around with this message at 21:28 on Dec 5, 2015 |
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Dec 5, 2015 21:15
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I should have clarified in my post that I am referring to 457(b) governmental plans. I have limited knowledge of the non-governmental plans, beyond their existence.Tomfoolery posted:Your funds in a 457 can go up in smoke if your employer goes bankrupt - something to consider My understanding is that this only applies to 457(b) non-governmental plans, but if you have information that states otherwise I would love to see it.
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Dec 7, 2015 19:39
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It's really strange to me that some of you seem to be classifying what they were doing as LeanFIRE - If he started with 950k and, as we have inferred, she had roughly the same... drat near 2m is just plain old FIRE by most definitions I think? At least in my area their 4% withdraw rate would be well beyond the median household income at that point. We aren't talking about 20k a year for a couple and eating beans in the woods all day every day, we are talking about ~75k at the start and possibly the option for over six figures at the end between the two of them. What it looks like happened to me is when his wife left the picture (taking half the NW with her) and the increased medical expenses came into play he had to make the decision between switching to LeanFIRE, moving to a lower cost of living area, or going back to work. Guy made his choice. Sure validate your numbers as best you can, anticipate the future as good as anyone can, and it's probably advisable to have some play in there for the unexpected. But unless you folks are advocating having 2x your actual FIRE numbers before pulling the trigger, in this case him going back to work doesn't seem that unreasonable to me given the circumstances. It's not like his life plan wouldn't have gotten shaken up in most any other case going through a divorce right after a life changing medical diagnosis... No Wave posted:I'll also admit I don't understand why it's supposed to be a "gotcha" that someone retired from their 40 hour+ per week career but supplements their income with some activity. They've clearly accumulated enough capital to change their lifestyle, is it supposed to be a contest after that point? Why argue about whether or not that actually counts as retirement? This is where I'm at with it. To start off the FI part was important for the "gently caress you" money. Looking at the RE I'm not exactly sure how that will look. The important thing to me personally is that what I do with my time isn't ruled by how much income it generates but instead being something I actually want to do. As much fun as playing video games all day sounds in theory, I really don't see that happening for long in reality - So if I feel like working for a non-profit that's important to me for minimal/zero pay, that option is there. Or heck maybe I'll really will miss my job but just want to do less of it and go back 50% or something. Or if I just want to go after hobbies that may or may not bring in some income. I've already largely destroyed one hobby by tying it to putting a roof over my head and food on the table, I don't really have interest in doing that to others. Just because whatever I'm enjoying doing with my time brings in a few extra bucks doesn't mean I've failed in my goal...
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Mar 18, 2021 17:24
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Before using your 457b, make sure it is a 'governmental' plan. I'm not an expert, but if it is a non-governmental, you'll want to do some research to determine if that will actually meet your needs/is worth the risk. Here's a random google search result that looks like it breaks down some of the key differences: https://wealthkeel.com/blog/what-is-a-457b-plan-and-how-does-it-work
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Jan 25, 2022 16:10
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