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Early Retirement (2006)

philip.greenspun.com

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Re: Early Retirement (2006)

#151

Post by tryingtogetback »

ok2938 wrote: post #81
2sk21 wrote: post #75

I retired early recently - I am in my mid 50s. It's not anywhere as hard as people seem to think. With a disciplined approach to investing, I think that it's very much possible to reach financial independence with a typical tech salary in the US. I achieved FI without an extraordinarily high salary, stock grants or participating in an IPO. There is a treasure trove of information in the Bogleheads wiki: https://www.b…

My problem is, I'm kind of anti-capitalist, to make it short. Labor and capital and not just production factors, but they constitute a power relationship (and often a quite asymmetric one). I cannot bring myself to "invest" in something or believe that "my money works for me" - that's delusional. Money does not "work". People get all upset about the stance, but all I am saying is that everyone wants to profit off som…

"anti-capitalist" - how does one become an "anti-capitalist" when it's abundantly clear that, even though it's not a perfect system, it's the best system there is? It's the system that facilitates competition, social progress, scientific advancements etc etc

I'm thinking "anti-capitalist" attitude is usually a result of the poor decisions in early adulthood (decisions regarding education, reproduction, career, social circles). When these choices don't pay off, failure to recognize that and self-correct early enough builds resentment. Since the system doesn't reward poor decisions (works as designed) it's very common to shift the blame from yourself (your incapability to adjust, adapt, improvise, and overcome) onto the system and characterize it as "exploitative"

Re: Early Retirement (2006)

#152

Post by ok2938 »

_k9eq wrote: post #131
ok2938 wrote: post #81

Earlier quoted context omitted.

My problem is, I'm kind of anti-capitalist, to make it short. Labor and capital and not just production factors, but they constitute a power relationship (and often a quite asymmetric one). I cannot bring myself to "invest" in something or believe that "my money works for me" - that's delusional. Money does not "work". People get all upset about the stance, but all I am saying is that everyone wants to profit off som…

Unless your opposition to capitalism is based on idealistic notions of morality, you have to accept that it is the predominant mode of production that society involuntarily finds itself in. Marx was financed by Engels, a factory owner and capitalist, and if he had refused to do so on principle, he would have probably never gotten around to write any of his theory (regardless of what one things of it). Money disassoci…

Yes, true - many societies are using this configuration for hundreds of years.

My issue is not based on morality, but on the fact that we as humans are capable of reflecting on our existence. And that each of our lives is determined by a large amount of luck.

I could be born smart, ill, rich, poor and so on. Does some accidental property give me more rights and opportunities than others? My western net worth would allow me to retire right now in many parts of the world - but did I earn this privilege? Of course not, it was pure accident.

My issue is that people take a huge amount of lucky accidents as a justification of all kinds of power grabs and entitlements. And capitalism just has the potential to magnify this effect - e.g. by letting the "smart" and "lucky" control the "less smart" and "less lucky" and call it all "natural" and without alternative.

Re: Early Retirement (2006)

#153

Post by throwaway894345 »

brianwawok wrote: post #95
ok2938 wrote: post #81

Earlier quoted context omitted.

My problem is, I'm kind of anti-capitalist, to make it short. Labor and capital and not just production factors, but they constitute a power relationship (and often a quite asymmetric one). I cannot bring myself to "invest" in something or believe that "my money works for me" - that's delusional. Money does not "work". People get all upset about the stance, but all I am saying is that everyone wants to profit off som…

So if you don't invest, do you just save money in a savings account? Over a 50 year career S&P Index Fund vs stuff in a savings account is the different between... having 20k a year to pull from savings, vs having 100k a year to pull from investments. It's a pretty stark portfolio difference.

Ironically if you put the money in a savings account, someone much richer than you is going to be investing it on your behalf and taking the lion's share of the interest that you're leaving on the table.

Re: Early Retirement (2006)

#154

Post by dharmab »

SamuelAdams wrote: post #84
MattGaiser wrote: post #62

Earlier quoted context omitted.

Depends on what is covered under universal health care. In Canada, doctors and hospitals are covered. But if you need a lot of drugs, you might need to keep working. You also need to budget for dental and vision, as those are also tied to employment agreements.

I'm curious about Canada. My plan is to make a lot of money in the states and retire early, then apply for Canadian citizenship and move to Canada to cover health expenses. Even if the citizenship process takes 2-4 years, would this be worth it?

Immigration to Canada is notoriously difficult without family ties: https://www.canada.ca/en/immigration-refugees-citizenship/se...

Re: Early Retirement (2006)

#155

Post by throwaway894345 »

splistud wrote: post #144
ok2938 wrote: post #81

Earlier quoted context omitted.

My problem is, I'm kind of anti-capitalist, to make it short. Labor and capital and not just production factors, but they constitute a power relationship (and often a quite asymmetric one). I cannot bring myself to "invest" in something or believe that "my money works for me" - that's delusional. Money does not "work". People get all upset about the stance, but all I am saying is that everyone wants to profit off som…

Clear away the clutter. Are you able to sell things for more money than you bought them for and still honor your personal values? If you can, then do so. Forget the slogans, descriptions and tortured analysis. Can you as a human sell things to another human for more than you paid for them in a situation where you are both happy with the price? If so, do so. If not, I suggest you take a look at what is motivating your…

> Can you as a human sell things to another human for more than you paid for them in a situation where you are both happy with the price?

I would be really interested to understand how someone can exchange a good for someone else's labor (which is what you're describing above) but they can't invest--which is merely paying someone's wage in exchange for a share of the profits. In both cases the participants in the exchange find the agreement to be mutually enriching, so it's not like either is particularly inherently exploitative.

Re: Early Retirement (2006)

#156

Post by splistud »

underseacables wrote: post #96

I’m terrified of retirement. I’ve got about 30 years to go, and I’m only just now seriously thinking about saving for retirement. My two greatest fears are that I will retire and have to take a part-time job to make ends meet, or worse, there’s a health crisis that completely wiped us out financially. Our plan is to slowly develop a small real estate portfolio of rental properties to bring in secondary streams of inc…

If a man is physically fit to work in some capacity, and has learned to live on little income, that man has little to fear. By all means learn to save and invest, but it's not as important as staying healthy, and learning what things you spend money on that are unnecessary to your life, health and happiness.

Re: Early Retirement (2006)

#157

Post by ASinclair »

cyberlurker wrote: post #56
flowerlad wrote: post #44

Earlier quoted context omitted.

> The greatest expense for me in retirement is now health insurance Obamacare changes that. If you don't have much income you get ACA federal tax credits.

If you withdraw from a 401k, doesn’t that become taxable income? I’m assuming if someone takes enough out per year to hit $50k+ they will reduce their federal credits to zero.

This assumes all of your income comes from a traditional 401(k). As an early retiree that's unlikely. It's likely that a significant portion of your income will come from a taxable brokerage account. A significant portion of that income is your basis (what you paid for the investment) which is not taxable.

There's a lot you can do to "engineer" your taxable income in early retirement.

Re: Early Retirement (2006)

#159

Post by tkojames »

neogodless wrote: post #124
cyberlurker wrote: post #56

Earlier quoted context omitted.

If you withdraw from a 401k, doesn’t that become taxable income? I’m assuming if someone takes enough out per year to hit $50k+ they will reduce their federal credits to zero.

To avoid this, you want to have a multifaceted approach. Figure out how low your expenses can be while still being quite happy with your qualify of life. Some expensive things don't provide the happiness you think they will. Diversify the kinds of investment accounts you have. Maximize your tax-advantaged accounts like a 401k, but then contribute to a Roth IRA if available, and then plow money into a taxable brokerag…

This and HSA is nice to have as well. Max that out. Pay out of pocket for everything and keep records of it. When you retire you can pull all that out tax free. Irs says you can can do it. And it is pretax. Any left over money will turn into IRA when your old. But if you have family and can cover the out pocket cost HSA are really nice extra amount. My plan is use my taxable and withdrawal medical expenses from the hsa tax free. So I can convert 401k funds to Roth using the ladder. Ideally the normal Roth I have had for years never gets touched for a long time. Also you can also do a Roth via backdoor.

Re: Early Retirement (2006)

#160

Post by wil421 »

marktangotango wrote: post #36
cfeduke wrote: post #29

The greatest expense for me in retirement is now health insurance so it makes sense for me to instead work for insurance coverage and put my wealth towards an inheritance for my children. I used to naively believe once I paid off my mortgage, had a substantial retirement account and savings - a couple million dollars - I'd no longer work. It's also very difficult to get off of the treadmill of spending a lot of money…

This is the reality of the situation; until you're eligible for (edit) medicare, health is a significant expense. When paired with the "hedonistic treadmill" of spending, early retirement takes a lot more investment than many suspect. Even at a safe withdrawal rate of 4%, $2M is "only" $80k a year. You're not driving around in Ferrari's and eating caviar on that (parodying a rich lifestyle here). Of course there are…

Does the 4% withdrawal rate include dividends and the average 6/7% estimated growth rate? Napkins calculations for 2m at 6% is 120k.

As OP said if you don’t have a mortgage then you’re going to have a lot more extra money than someone with an 80-120k income and a mortgage.

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