Blog - Engineering Your FI

How to Pay No Taxes on Social Security Income

Leave a Comment / By EngineeringYourFI / October 5, 2022 October 5, 2022

In the previous post, I discussed how to compute the taxable amount of your social security income (SSI). Which is unfortunately a bit complicated, but we got it done.

The next step is to figure out how to pay no (or minimal) taxes on that taxable amount of your social security, which is vital for the Tax and Penalty Minimization (TPM) method described in the Withdrawing Money After FIRE post.

You’re probably thinking “uh… doesn’t the definition of taxable mean you’ll pay taxes on it?”

FinCon 2022

Leave a Comment / By EngineeringYourFI / September 6, 2022 September 7, 2022

Time for our second FinCon! Last year Mrs. EYFI and I were lucky to attend our first FinCon in our hometown Austin, TX. We enjoyed it so much that we decided to attend again this year, but this time we’ll be getting on an airplane and headed to Orlando, FL.

How Much of My Social Security Income Will Be Taxed?

Leave a Comment / By EngineeringYourFI / August 31, 2022 October 5, 2022

Social security income (SSI) is a bit tricky when it comes to taxes. Though “a bit” might be an understatement for many folks.

Now you may be wondering why I’m talking about social security income on a blog about FIRE. Isn’t social security going to be gone by the time any of today’s early retirees reach their 60’s?

Withdrawing Money After FIRE

3 Comments / By EngineeringYourFI / August 19, 2022 October 5, 2022

At one point in our journey to Financial Independence (FI), I thought to myself, “How are we going to withdraw from all these different accounts we have? Especially once we’re FIRE, versus just FI (and still working). Is there some kind of best order? How much will taxes affect things?”

I pretty quickly found a lot of info online, but I was far from convinced that any of the methods I found were really optimal. Especially since we have some less common asset classes, like a 457(b) account.

Why You Should Mow Your Own Lawn

4 Comments / By EngineeringYourFI / June 30, 2022 September 5, 2022

Ah, summer time. Time for swimming, long road trips, and watching the millions of blades of grass in your yard come to life.

Unfortunately many folks will reach for their phone and wallet to keep that grass and other things in their yard in check: 40% of Americans with a yard, actually.

That’s a lot of domestic outsourcing!

Time to FI: What About Inflation?

2 Comments / By EngineeringYourFI / June 8, 2022 October 5, 2022

There are a couple questions that pop up frequently in the comments sections of posts and forum threads about computing time to Financial Independence (FI):

What about inflation?
What about salary raises?

Good news: these factors are essentially already accounted for in most “Time To FI” analyses. Why/how though?

Time to FI, Starting Below $0

Leave a Comment / By EngineeringYourFI / May 20, 2022 October 5, 2022

We’ve previously discussed how long it takes to get to Financial Independence (FI) starting with a net worth of $0, and starting with more than $0. But what if you have a NEGATIVE net worth? In other words, what if you have significant debt (e.g. credit card debt or student loans)?

First off, unless you took on student loans to obtain a degree that will power a high paying career, you need to recognize that YOUR HAIR IS ON FIRE! Action must be taken immediately!

Time to FI, Starting Above $0

1 Comment / By EngineeringYourFI / April 1, 2022 October 5, 2022

In the last article, I described how the time it takes to achieve Financial Independence is based on three factors: 1. Your savings rate (by far the most important factor), 2. the assumed investment ROI (usually something conservative like 5% to 7%), and 3. the withdrawal rate assumed (usually around 3.5 to 4%).

BUT, I used a big assumption: starting with $0.

But really, nobody has a net worth of exactly $0.00 (well, I’m sure there might be a handful of exceptions at any one time on a planet of 7.9 Billion).

What Savings Rate Should I Aim For?

Leave a Comment / By EngineeringYourFI / February 3, 2022 October 5, 2022

50%. Or higher. 70% to 80% is even better.

Am I serious? I can’t possibly be serious. Right?

Actually, yep, I am totally serious. And yes, I know that’s a crazy simple answer and probably seems totally impractical for most readers. But hear (read?) me out.

FinCon 2021

4 Comments / By EngineeringYourFI / September 22, 2021 August 19, 2022

This week Mrs. EYFI and I will be attending our very first FinCon conference, which we’re very excited about. We’ve been hearing about FinCon for years now, and this year we are super lucky that the conference is a 20 minute drive from our house here in Austin, TX.