r/financialindependence

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Hey everyone,

​Looking for some perspective on managing company equity. I’m incredibly fortunate that my company stock has been crushing it lately, but it’s introducing a ton of concentration risk.

​I used to just ignore my unvested stock until it actually hit my account then sort of market time. But because of this recent run, the value of my unvested shares has become auite large I can't ignore it anymore, it is kind of life changing money and I'm trying to figure out a diversification strategy for stuff vesting over the next ~3 years.

​At the same time, I’m trying not to count my chickens before they hatch. It’s just paper money until it vests, and a lot can change in 24 months. ​For those who get RSUs and do an ESPP, how do you handle it?

- ​Do you sell immediately on vest/purchase? Even if the stock is on a massive run and you feel like you'll miss out?

-​How do you account for unvested shares? Do you factor unvested value into your asset allocation, or do you strictly look at what is already liquid?

-​Tax strategies: Are you waiting for qualifying dispositions on the ESPP side or just ripping the band-aid off?

I am trying to protect from a sudden downturn before things even vest. ​How do you guys handle the math vs the psychology of this?

Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply!

Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked.

Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts.

Self-promotion (ie posting about projects/businesses that you operate and can profit from) is typically a practice that is discouraged in /r/financialindependence, and these posts are removed through moderation. This is a thread where those rules do not apply. However, please do not post referral links in this thread.

Use this thread to talk about your blog, talk about your business, ask for feedback, etc. If the self-promotion starts to leak outside of this thread, we will once again return to a time where 100% of self-promotion posts are banned. Please use this space wisely.

Link-only posts will be removed. Put some effort into it.

Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply!

Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked.

Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts.

Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply!

Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked.

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I’ve read all the FI materials and most of it focuses on a huge pretax bucket, and I understand why. But I’m in (what feels like) a unique situation where my Roth is large but my pretax and taxable are relatively small.

I was blindly maxing my Roth from 2003-2021, which is when I realized I need non-Roth monies to RE without tax penalties.

Anyways, I’m working through how to bridge from now until 59.5 (I’m 43), and would love to discuss with others who may be in a similar situation.

I’ve bounced a few ideas around with chatGPT but would really appreciate some human input, but maybe that means I should really seek a fee-only fiduciary.

I think for those with a large Roth, and smaller taxable and pretax monies, some more obscure ideas I’ve been looking at are things like utilizing Rule of 55 to access pretax funds out of a solo 401k (or just finding a job for its 401k to utilize Rule of 55), and also using a HELOC or PAL to simply borrow money as 59.5 gets closer, knowing Roth funds can easily pay it off once 59.5 hits.

Edit: Adding some more details, I didn't think there'd be this much action on this post. $3M in Roth, $1.2M in pre-tax plus HSA, $600k in taxable brokerage and cash. I have about $124k in Roth contributions, plus some unknown amount of contributions to a Roth 401k I had rolled over (but didn't document!). The spend I want to support is $180k per year.

Another learning as I'm looking at pulling those Roth contribution dollars: while this only applies if I get audited, the gold standard for "proving" the money I take from my Roth is from my contributions is to keep all the Form 5498s I've received each year I contributed. I did not know that. I may have those somewhere but my brokerages and banks only keep 7-10 years of these forms for download, and like I mentioned, I've been contributing since 2003. My first account was with TD Ameritrade which is now Schwab, but I can imagine for others there may be contributions to accounts with firms that no longer exist. So keep those Form 5498s if you ever want to use your Roth contributions before 59.5 and want to be prepared in case of audit.

So I’ve been deep in the whole financial independence journey for ~1 decade now. At $4.2M in net worth. Started as a normal person working out of college and consistently investing over time. When I was 29, I met this girl who I thought was the one - checked all the boxes except she liked to spend more than I felt comfortable with because I was deep in the saving journey and wanted to reach at least millionaire status before loosening up. Spent around $1k/month on dates for the first few months but I had to cut it back to ~200-300/month for dates because I wasn’t saving enough and life in NYC was expensive. She broke up with me because she felt like I valued money over her. I explained to her I preferred budgeting so we can spend more intentionally and on this plan, we could retire by 40. She wasn’t having it.

Fast forward to today, at age 36, I am pretty close to fat FIRE and can obviously now spend the amount she wanted but I’m in another city where the dating opportunities are not as good. It’s like I traded one opportunity for another. I know I can just go out there and find another girlfriend, but it’s a lot of work and I haven’t found it a similar one that I’ve been as attracted to or have as close of a match to. Just wanted to get this off my chest because it’s unfortunate the financial independence goal had to have this trade off.

Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply!

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I saw a video from a Financial advisor where he says that community, purpose, relationships, control and new experiences are pillars of a happy life. I agree. And I was watching a guy's vlog in his 30s who FIRED but got bored. It made me reflect.

Im trying to plan RE, but currently I think when I achieve FI, Ill not RE.

- I hate corporate for the layoffs, politics, interviews, etc

- My job builds skills that I use to help others through volunteering, it gives me purpose, community, relationships. My corporate job does not give me purpose.

- I have travelled multiple times for a very long time (gives me new experiences), I love it. I dont think I have to RE to do this. I can do it when I quit/sabbathical/layoffs.

- For my hobbies, I play sports (gives me relationships and community). If I RE I think ill end up spending most on video games and watching TV all day, which could be too boring.

- Im too young, I think. If I were to quit corporate, I would maintain the same interests I have but travel more aggressively.

Does anyone else have the same dilemma? How did you plan your RE?

ChatGPT launched a personal finance experience recently. Would be curious to hear people's experiences. It could be a useful Mint replacement.

https://openai.com/index/personal-finance-chatgpt/

56 year old wife 54

1.8m in liquid x .04 = 72,000 yr

Rent income = $18,000 yr

So $90,000 until ss kicks in for me 6 years

Ss = $27,000

Wife ss = $18,000

Total ss = $45,000

No debt now and still working as teacher/coach but I am on provisional and i need 4 classes to get certified.

Can teach 2 more years provisional then possibly give up teaching and coach.

Live in lcol area so if we quit today..90k lifestyle for 6 to 8 years

$135k lifestyle after that

Does it make sense to keep teaching and take classes or pull plug and try to manage a life on what i have accumulated.

Living costs are 90k and could scale back 20% if needed.

I'm 53, and nearing retirement having saved a few million dollars, which i consider quite good. When I see people on these forums who are 27 making $350k a year, I'm just amazed.

To give some context, When i was 30, I was fairly successful amongst my friends, living in vhcol city (not as high back then), say 2003, and I think my nw was about $100k, and I made about $95k which i thought was a lot.

it gradually increased maxing out around $250k into my 40's. I didn't know anyone who made over $300k back than, and if there were, it was very unusual. It seems like its very common place nowadays. Is it recent? Or am is it the forums I am on?

I have worked past 25 years in structured corporate jobs. Always a paid servant and cog in a wheel. Not been particularly successful at it - failed to launch as a manager but have managed to hang in there as an individual contributor by swallowing my ego, not talking back, not being too demanding, and quietly trying to do the job I have been assigned.

Been saving diligently along with spouse. Hence, reached a reasonably good financial position with:

$2.8M in pre-tax retirement

$1.3M in cash and post tax brokerage

$2M in VHCOL area home equity (but still have a sizable mortgage of $5k per month)

Apart from that mortgage, monthly spending is about $12k.

I know that we are at Coast FI, because the portfolio moves significantly more in any given month than how much we can save that month. So, pretty much our financial future is in the hands of Mr. Market, and that’s fine - S&P 500 seems to be chugging along.

I also know that in 5-6 years, we can FIRE with a portfolio value of around $6M. But then, I don’t want to just retire and do nothing. I can’t slow travel like a nomad because of some responsibilities.

Hence, would like to start developing some paths to a part time work in retirement so as to:

1. Keep some professional identity

2. Structure the days/weeks

3. Keep mentally alert

4. Earn some spending money

I don’t want to volunteer for free because I would probably not take that too seriously myself. A little bit of paid work imparts positive responsibility, I believe.

So, what are some ideas for meaningful part time work in retirement for someone who has spent their career in a 9-5 corporate office setting?

Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply!

Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked.

Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts.

Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply!

Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked.

Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts.

like lots of people, I have had some outstanding gains in my (rollover Charles Schwab) IRA over the past few years.

and also like lots of people, I have been engineered to never touch my IRA under any circumstances before retirement.

I'm looking for a perspective from someone willing to think outside that box.

my aging parent is in a multi-year cancer battle without any resources, and having some liquidity could really smooth this final chapter for the whole family (travel costs, funeral costs, etc).

Because I would be taking a disbursement before retirement age, I'm looking at a 10% ding. I also live in a no income tax state (Texas). When I look at the cost to access that $ vs, the super gains, etc it just doesn't seem like such an awful cost.

anyone here done this? any perspective that I'm missing?

(I'm in my late 40's, FIRE-ish, own my house and car outright, no kids, etc)

appreciate any feedback.

I thought this was an interesting and good read from 20 years ago, written by someone who retired early after working in software:

https://philip.greenspun.com/materialism/early-retirement/

I first read this a while ago but it just came back up the other day. Some things that stood out in particular:

• The idea that "once you're retired, your only job is to be happy" as sort of a dangerous trap was interesting. Also the point that much of your life will continue to be boring/mundane/you'll still have chores to do, but there might be pressure to feel like you should be happy all the time because you're retired
• His advice against working with non-profits is also interesting. Wonder how much that's changed in 20 years. I definitely think the section on teaching probably doesn't apply as much...
• Giving kids $1 for every $X they earn is an interesting approach to passing along money to children

I’m 38, make 165k salary. married file jointly with a stay at home wife, 2 kids.

-Paid off house $ car (share, I WFH)

-370k in traditional 401k

-50k in Roth IRA / maxing

-50k in spousal Roth IRA / maxing

-50k in 529

-20k in HSA / maxing

-30k brokerage / $500 a month in

-50k cash

I am maxing out both of our Roths and our HSA. I stopped contributing to my traditional 401k as we have no match and I want some more money for the in between years.

I just got a side gig consulting that I expect to make 20-25k a year in. it is 1099c I’ve never done 1099 and don’t have much if anything to write off so I’m wondering what my best option here is.

I know technically I should probably max the 401k to save 4-6k a year on taxes but I really like the idea of bolstering the accounts I can touch in those in between years, too. Wondering if I should do a Solo Roth 401k and pump in the money from the 1099 gig for a while and then convert it to my Roth IRA after (assume I can do that) or just find any write offs I can and lower that 1099 money as much as I can and just pump it into a brokerage? Any suggestions would be helpful keeping in mind my goals of flexibility now-retirement.

im not really looking to retire early per se I just want independence as soon as I can get it as I don’t know if the gettin will be this good for me forever :)