| 12/26/2020 7:01:34 AM mydogwantsmetoretire |
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| Congrats on your overall net worth success. In looking at your profile, I am about five years - age and net worth - from where you are today. Curious to know at what age did you decide to retire? With kids' college considerations, how did this play into your retirement timing? The second question is an interesting one as I have not yet studied net worth impact on financial aid calculations. |
| 1/4/2021 2:09:38 PM girlnextdoor |
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| Also interested in this. My daughter is only 2 so we have a long time until college, but plan to be at least partially retired by then (mid-30s now). We will probably (hopefully) have minimal income but reasonably significant assets at that point. This would be a great topic for the forum. |
| 2/5/2021 8:37:00 PM 4eaxfm |
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| Sorry for the late response! I retired at 50, but made the decision almost 3 years prior to pulling the cord. I actually kept a daily countdown on my whiteboard at work starting at Day 1,000. My original plan was to retire at 55, but my last boss motivated me to accelerate my time table. :)
Retiring early enough to align with kids' college can net you federal aid which I am shooting for, but it requires significant financial gymnastics most won't be comfortable with or capable of. In a nutshell, you need a low AGI (either from drastically reduced living expenses or stockpiled cash) and low passive income in order to qualify for the FAFSA simplified needs test, which then takes your net worth out of the EFC equation. If you have significant after tax account balances (which any early retiree should), that means those after tax assets need to largely be in non-dividend bearing stocks that you won't touch until your FAFSA years are over. |
| 2/9/2021 5:34:26 AM Baller1967 |
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| Really interesting comments thanks! Agree this is an interesting topic especially for older parents like myself. |
| 2/12/2021 11:42:24 AM mydogwantsmetoretire |
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| Thank you for the great feedback! I am two years from 50 and have been joking with co-workers (at least they think it is) that I am going to retire at 50. Based on projections, using a 5% market return, I think I can hit $3 million NW in two years, which I swore was the number I was going to change gears from mega corp. Financial gymnastics is a good way to put it and wonder if it has led you to a reduced quality of life (maybe from prior to this initiative). I will definitely reference this information when I run the numbers this summer. |
| 2/16/2021 11:59:04 AM 4eaxfm |
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| No QoL reduction here, though I am in a rather unique financial position. My wife got the itch for a career after decades of stay-at-home mommying and got a job teaching at a boarding school. The salary isn't great, but comes with significant benefits that enable a low AGI lifestyle: free housing, free utilities, free meals at the dining hall, even free tuition for faculty children. Her timing couldn't have been more perfect. |
| 2/20/2021 8:27:29 AM mydogwantsmetoretire |
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| Benefits are such an underrated portion of one's career and don't contribute to the AGI. Many times, people focus too heavily on salary alone. Looking forward to see how the financial aid initiative plays out. |
| 2/22/2021 7:53:45 PM 4eaxfm |
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| I am too. :) Unfortunately, I'm seeing new changes going into effect starting with the '23-'24 academic year which relaxes some requirements ($60k AGI, Schedule C ok w/less than $10k income/loss), but has a tough requirement that you can't file any other Schedules A-H, the kicker being Schedule B which must be filed if you have over $1500 in Int/Div income. I will have to break a few CDs early to get under that threshold for this year. As I said... financial gymnastics. |
| 2/27/2021 7:16:11 AM mydogwantsmetoretire |
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| Schedule B amounts that low are crazy for anyone that actually is an investor. Good luck! |