The Roth conversion is a popular year-end tax maneuver for DIY retirement planners. It works just as well at the start of the year, but more people are interested in December. The move involves transferring retirement assets from a traditional IRA, 401(k), or other pre-tax account into a Roth IRA. Conversions incur a tax consequence…
A more in-depth talking head version of this article is available on YouTube (view below). I chased early retirement for almost two decades. My early retirement goal made me a disciplined saver and investor, but I wholeheartedly believe early retirement is the wrong goal. This is humbling to write. In this article, I’ll provide three…
The FIRE movement made the rounds in national news for a few years and still gets a head nod here and there. The early retirement (RE) part of FIRE always received more criticism because it’s the goal when someone doesn’t like their career choice and wants to escape. In hindsight, this was me. Both financially…
My Dad retired in 2002 with a 403(b) and lifelong teacher’s pension. Unsure of his retirement savings, some fellow retired teachers recommended a financial advisor who “specialized in retired teachers”. So he converted the 403(b) to an IRA, transferred his and my Mom’s IRAs to the advisor, and trusted him to manage their money for…
The financial independence number is a benchmark to determine retirement preparedness. It’s also known as the FI number. Financial independence is achieved by: building enough passive income to cover annual expenses, or amassing a lump sum of enough savings and investments to cover living expenses through withdrawals, or a combination of #1 and #2. The financial independence…
My parents lived in their first home for more than 50 years. But they stayed too long. They thought the house would be their forever home for most of their lives, but also didn’t think they’d live so long into retirement. It’s been a year since they’ve settled into a more suitable home, and now…
ProjectionLab is a powerful financial planning tool that empowers do-it-yourselfers to set and track financial goals and forecast how their wealth will change over a lifetime. We can use it to experiment with various scenarios and assumptions to help us determine if we have enough to retire or achieve other financial milestones. This retirement planning calculator is far…
I named this blog after a goal I set back in 2002 to retire at age 55, one year before the age my Dad retired. The objective has driven many financial decisions over the past 20 years. My goal had all the markings of a SMART goal — specific, measurable, achievable, relevant, and time-bound. But…
I’ve been a self-directed investor for almost thirty years. Self-managing my investments has saved me tens of thousands in fees, though I’ve been susceptible to my own investment biases and mistakes. Overall, I believe the tradeoff favors do-it-yourself (DIY) investing. This article explores the pros and cons of DIY investing compared to hiring a financial…
TD Bank interviewed me on this topic. Check out the interview on YouTube or below. I’m 48. It’s been 28 years since I invested in my first stock. Twenty-eight years from now, I’ll be 76, about the same age as my parents. My parents recently fired their financial advisor and asked me to assist in…
I’m a DIY financial planner and investor. Hiring a financial advisor never made sense since I studied finance and enjoy money management as a hobby. I almost became an investment advisor a few times. My financial situation has never been that complicated. I keep my investments, taxes, and personal finance activities within my capabilities, so…
One of the advantages of reduced income due to leaving my full-time career is the opportunity to execute a Fidelity Roth conversion. Roth conversions allow investors to transfer money from a 401(k), traditional IRA, or other tax-deferred retirement account into a Roth IRA account. Traditional 401(k)s and IRAs let us invest pre-tax dollars into retirement…
I can describe my ideal retirement in three words. Long and healthy. If my retirement is long and healthy, I’ll have very little to complain about. Beyond that, everything else is icing on top of the cupcake. But like my sugar-crazed daughter, I spend a lot of time thinking about the icing. A Healthy Exercise…
Retirement is a fuzzy line these days. It seems increasingly rare for older people to cross the threshold from career worker to retiree on a single day and remain retired indefinitely. My Dad did that. So did a few of my extended family members and former coworkers. But when I ask retirement-aged people about their…