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Ask HN: Why do software engineers always focus on salary and early retirement?

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Re: Ask HN: Why do software engineers always focus on salary and early retirement?

#31

Post by vram22 »

tedmiston wrote: post #26

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 divi…

>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.

Re: Ask HN: Why do software engineers always focus on salary and early retirement?

#32

Post by tedmiston »

vram22 wrote: post #31
tedmiston wrote: post #26

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 divi…

>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.

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-...

2 - A second strategy to consider is "Backdoor Roth" and Roth IRA conversions.

https://www.physicianonfire.com/backdoor/

https://www.gocurrycracker.com/never-pay-taxes-again/

https://www.madfientist.com/how-to-access-retirement-funds-e...

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://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/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-gain-harvesting/

If you're curious for more FIRE related info, some good subreddits to check out are:

- r/leanfire

- r/financialindependence

- r/personalfinance

Re: Ask HN: Why do software engineers always focus on salary and early retirement?

#34

Post by vram22 »

tedmiston wrote: post #32
vram22 wrote: post #31

Earlier quoted context omitted.

>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.

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…

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.

Re: Ask HN: Why do software engineers always focus on salary and early retirement?

#35

Post by tedmiston »

vram22 wrote: post #34
tedmiston wrote: post #32

Earlier quoted context omitted.

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…

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.

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.

Re: Ask HN: Why do software engineers always focus on salary and early retirement?

#36

Post by vram22 »

tedmiston wrote: post #35
vram22 wrote: post #34

Earlier quoted context omitted.

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.

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.

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 ...

Re: Ask HN: Why do software engineers always focus on salary and early retirement?

#37

Post by natalyarostova »

deanmoriarty wrote: post #28
natalyarostova wrote: post #27

Earlier quoted context omitted.

>if I could go back I would choose to pursue a more "stable" highly-paid field (e.g. medicine) I'm fine with the first part of that sentence. But medicine is an awful awful example.

I should have clarified: by stable I didn't mean "reasonable work life balance" or other definitions, I meant the knowledge in the discipline you're practicing is itself stable. Several of my high school friends are not physicians and, while they have to generally keep up with the latest best practices in their specialty, most of the knowledge they acquired in school never changes for the entirety of their career (so…

That's true, you're right, ageism Doesn't really exist. I will say though that seeing my dad, an aging surgeon, there are other stresses. Doing emergency surgery at 3am is a lot more stressful as a tired 60 year old compared to an energetic and confident 35 year old.

I'm always reminded when I'm at his house, and he's on call, how much higher and stressful the stakes are in his line of work.

Re: Ask HN: Why do software engineers always focus on salary and early retirement?

#39

Post by sebmak »

I would say it is unfair to categorize software engineers as "always focus(ing) on salary and early retirement". It is true that in all fields, especially ones that pay well, there is always people who are in it for the money, and they want to get out as fast as they can. But there are plenty, and I would argue a significant majority, who do it because they love and enjoy it. You have to be careful when judging any field by the vocal minority because it is often just that, a very vocal minority.

I really enjoy writing code every day. I do it less now that I lead a team, but want to do coding of some sort until I die. My only motivation to make more money, is to eventually afford me the freedom to do coding for me.

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