Search found 12 matches

by Otnot
Thu Feb 03, 2022 6:52 pm
Forum: Personal Finance (Not Investing)
Topic: IRS demanding penalty+interest for 529 gains
Replies: 45
Views: 6383

Re: IRS demanding penalty+interest for 529 gains

As a follow up to my situation (slightly different than OP's). IRS was claiming I owed tax on gains from a 529 in 2019, and notified me as such in November 2021. I wrote them back telling them they were wrong. Earlier in January, I received a letter saying they were still "evaluating my situation". Today I received a letter saying that the inquiry is closed and I do not owe the proposed tax.

No "sorry", no "thank you", etc. It makes me mad that I almost wrote them a check in November because I didn't want the stress of dealing with this. I actually had my checkbook out before deciding to push back.
by Otnot
Mon Jan 10, 2022 9:07 pm
Forum: Personal Finance (Not Investing)
Topic: IRS demanding penalty+interest for 529 gains
Replies: 45
Views: 6383

Re: IRS demanding penalty+interest for 529 gains

I had the exact same thing happen to me for my 2019 return (I just received the notice from the IRS in November 2021). I had $3,100 of earnings in a 529 and they "proposed" I owe $1,000 in taxes.

I've withdrawn from a 529 from 2013-2021 (8 years of kids in college) with no issues.

I just wrote them a letter and said that they were wrong and included my 529 statement for 2019. I sent my letter in December and haven't heard back yet. I was thinking "no human could have generated the letter".

Misery loves company....I was pleasantly surprised to see this thread.
by Otnot
Sat Jan 01, 2022 1:12 pm
Forum: Investing - Theory, News & General
Topic: Capital Gains est. -- Vanguard Target Retirement Funds
Replies: 61
Views: 12335

Re: Capital Gains est. -- Vanguard Target Retirement Funds

I'll add myself to the list of people who just learned a very big lesson today about holding target date funds in a taxable account and will have the tax bill to prove it. I am disappointed in myself that I didn't understand this risk, but fortunately most of my taxable account is not in these accounts.

I retired in November, so I am no longer contributing to these accounts. I will probably just leave them alone from here on out since I'll be taking future distributions for living expenses.
by Otnot
Fri Oct 08, 2021 3:05 pm
Forum: Personal Finance (Not Investing)
Topic: Starting Pension at 55 vs 65 - My thought process
Replies: 10
Views: 1512

Re: Starting Pension at 55 vs 65 - My thought process

Thank you to all for the sanity check. This confirms that I will probably take it at 55. Regarding the other questions, my spouse is the same age as me. Regarding health care, we are doing ACA and I realize this pension impacts subsidies. My taxable account throws off a sizeable chunk of dividends every year and I had also wanted to do some Roth conversions, so I have modelled my retirement as if I am getting no ACA subsidies. If I can manage to get some, it will be a plus. If not, the pension will pick up a big chunk of the insurance cost (based on my research on the marketplace for my state). As I sit about 5 weeks from retirement, I am constantly reminded that the accumulation stage was so much easier for me. Tax issues, Roth conversions...
by Otnot
Fri Oct 08, 2021 12:52 pm
Forum: Personal Finance (Not Investing)
Topic: Starting Pension at 55 vs 65 - My thought process
Replies: 10
Views: 1512

Starting Pension at 55 vs 65 - My thought process

I am retiring early next month at age 53 and have sufficient 401k and taxable accounts that I have never really factored my defined pension into the equation before age 65. Like Social Security, I had assumed that waiting longer to take it was the most sensible answer. My pension is defined benefit with no COLA, and I have the option to take a lump sum rather than payments. I have read the Bogleheads "Lump Sum vs. Pension" wiki and confirmed that I would rather take the pension payments than the lump sum. Today I ran the numbers for taking the pension at age 55 (starting in 2023). I would receive approximately $18,000 per year starting at age 55 vs. $27,000 per year at age 65. Excluding inflation (and there is no COLA on this pens...
by Otnot
Tue Oct 05, 2021 12:47 pm
Forum: Personal Finance (Not Investing)
Topic: Has anyone downshifted their career in a big way?
Replies: 86
Views: 11894

Re: Has anyone downshifted their career in a big way?

Agreed. I have a local museum that I would like to proctor in. There is also a lunch delivery program for seniors and shut ins and I've inquired about working in the kitchen preparing the meals (scratching that itch to work in a food service...haven't done that since high school in the 80's). Between this board and other sites that I frequent, I find that a lot of us in corporate jobs romanticize service jobs ("I'd love to make pizza or burrritos or sell hardware"). There is probably not one right answer, and I wouldn't want to take away a job from someone that really needs it...but right now there are so many openings. I'll probably stick to volunteer work. I will need some structure in my life as an early retiree and just want s...
by Otnot
Tue Oct 05, 2021 11:56 am
Forum: Personal Finance (Not Investing)
Topic: Has anyone downshifted their career in a big way?
Replies: 86
Views: 11894

Re: Has anyone downshifted their career in a big way?

This has been such an interesting thread to read. I am retiring in November at 53. I have no financial need to ever work again, but I continue to fantasize about doing various minimum wage jobs for the experience and social aspect. My wife keeps telling me that I could never go from being in a corporate leadership role to taking orders from a 20 year old when I would see better ways to do things. She also points out that I haven't dealt with the public in a service job since I was in high school. She's probably right. I've always thought the Home Depot job would be a dream, but one of my co-worker's has a spouse that works at Home Depot full time and absolutely hates it. I think someone said above that "you still have to mow the grass ...
by Otnot
Thu Sep 23, 2021 10:01 am
Forum: Personal Finance (Not Investing)
Topic: Do FAFSA Even Tho Zero Chance of Need-Based Aid?
Replies: 41
Views: 3640

Re: Do FAFSA Even Tho Zero Chance of Need-Based Aid?

I did it one or two years for both kids when they first entered college. They did not qualify for any non-merit financial aid, and the merit scholarships they had did not require FAFSA. Once I figured that out, I stopped doing them.

I found the FAFSA form to be difficult to fill out and that it required more time and data collection than when I do my taxes. I also really didn't like the amount of financial information that my kids and their school saw. We live a pretty low key life, and I didn't really want my kids to know that we were "the millionaires next door" in our working class neighborhood. It turned out not being that big of a deal, but not really a discussion I wanted to have with them at that time.
by Otnot
Thu Sep 23, 2021 9:54 am
Forum: Personal Investments
Topic: For Fee Advisors
Replies: 18
Views: 3198

Re: For Fee Advisors

I found an advisor through Garrett Planning Network. https://www.garrettplanningnetwork.com/ It's kind of like a "google" for fee-only planners. I looked at a bunch of planners within a couple hours of me and reached out to one. It was my first and only time using a planner. I used him for about 9 hours at around $180 per hour. It was well worth it on a number of fronts. It confirmed to me that I was doing well managing my own investments and on track to retire, it gave my wife confidence that I have done a good job managing our finances, he suggested some portfolio re-balancing since I had been in savings mode and am now shifting to early retirement (my asset mix had been a bit too agressive), and he took a look at our insurance ...
by Otnot
Fri Jul 30, 2021 11:27 am
Forum: Personal Consumer Issues
Topic: Mountain west/upper midwest travel ideas
Replies: 22
Views: 2105

Re: Mountain west/upper midwest travel ideas

If you are from PNW, you probably know this, but we are in fire season now. Always worth checking on where the active fires are and where the smoke is bad (which can be hundreds of miles away from the actual fires). Have fun!
by Otnot
Sun Jul 04, 2021 7:14 pm
Forum: Personal Finance (Not Investing)
Topic: Best financial decision ever made
Replies: 81
Views: 10943

Re: Best financial decision ever made

1. Maxing out 401k every year since I got out of college.
2. Not giving in to lifestyle creep as career and earnings grew.
3. Invested extra money in a taxable account that now allows me to retire well before 59.5.
4. Married a spouse who shares my frugal sensibilities regarding cars, housing, etc.
by Otnot
Sat Jan 09, 2021 9:55 pm
Forum: Personal Finance (Not Investing)
Topic: Impact of Early Retirement on Social Security
Replies: 15
Views: 2500

Re: Impact of Early Retirement on Social Security

I went through this exact same exercise last week. I have maxed out my SS contribution for at least the last 10 years, but I'm young enough that some of my 35 years are college summer jobs that made less than I make in a couple of weeks now. I thought there might be some great benefit to toughing it out for a couple more years rather than doing early retirement this year or 2022.

For me, every additional year I work only raises my benefit at 67 by $500 per year. If I choose to work a few more years, it definitely won't be because I am hoping to up my social security check.