The best time to retire may be under a Democratic President. Democratic Presidents tend to create larger social and financial safety nets paid for by higher taxes. For those who are close to retirement or constantly thinking about retirement, this post is dedicated to you.
In general, I've tried not to rely on the government for anything. Instead, I've been indoctrinated since getting my first job that it is my civic duty to pay my fair share of taxes to help others without similar opportunities. Here's a history of my financial planning through various presidencies.
However, after about the 11th year of working in finance in 2010, I started to burn out. By the 13th year, I was done for good. Sayonara!
President Obama, A Democrat Helped Me Retire Early
With a heavy workload, higher income taxes and a new Net Investment Income Tax introduced under the Obama administration, I decided the marginal effort was no longer worth the marginal reward.
Although I felt bad about no longer paying $100,000+ a year in income taxes to help our great country, I found greater happiness. Instead of taking a red-eye flight for one client meeting, I could finally enjoy the parks and libraries that were supported by my tax dollars. Instead of getting into the office before 6 am most mornings, I could sleep in until 7 am.
Life was very comfortable living off less and forsaking the constant hustle for more money. The constant pursuit of money and prestige made me unhappy. So I took action to change my life for the better.
Then everything changed starting in 2017 under the Trump Presidency. Now that Trump is president again from 2025 – 2029, it may be time to work harder again. He even proposed new middle class and retiree tax cuts for 2025 and beyond, which should spur more Americans to work longer and harder. Not having to pay taxes on overtime, tips, and Social Security is huge!
The Best Time To Retire May Be Under A Democratic President
From 2012 until the middle of 2017, life was fantastic. My stressful job was gone and my mental and physical health recovered. The gray hairs that started to sprout in 2011 went back into hibernation.
Instead of being bored in retirement, I found joy playing tennis and softball. For three years, I fulfilled a goal of coaching high school tennis for 3-4 months a year. Further, my wife and I welcomed our first child.
The period between 2012 – 2017 provided for the best “retirement” lifestyle I could have ever hoped for.
Then, in 2017, Donald Trump decided to fulfill one of his campaign promises and cut taxes. The Tax Cuts And Jobs Act (TCJA) went into effect in 2018 and income taxes were lowered.
No longer was there a 39.7% marginal tax rate. Corporate tax was lowered to 21%. Small business owners could also deduct 20% of qualified income for qualified pass-through entity business owners.
Perhaps most enticing about the TCJA was the doubling of the estate tax threshold from $5.49 million per person to $11.18 million per person. For 2023, the estate tax threshold has gone up to $12.92 million per person. That's massive and encouraged me to try and build more wealth.
Couldn't Fight Back Greed
Suddenly, after five years of not focusing on making much active income, the desire to make more money started rearing its ugly head again.
Greed looked back at me and said, “Come along now. The opportunity is NOW to make as much money as possible before taxes go up again.“
For years, I beat Greed back with a stick. I told him I was happy with what I had. Plus, I was busy being a first-time dad and had no desire to trade time for more money.
Despite the TJCA going into effect in 2018, I held strong against the pursuit of money. It was hard because everywhere I looked, I saw people my age work tirelessly to build their wealth. After all, your 40s are when you're supposed to make the biggest bucks.
The supplemental income I earned on Financial Samurai was more than enough to pair with our existing passive income to lead a comfortable middle-class lifestyle.
I thought I had found a balance that would last forever. I was wrong.
Since investing since 1995, I've come to realize being greedier when others are greedy can pay off huge if you can avoid blowups. When it's a bull market, the time to get rich and strike is now.
The Rise Of Greed
Then in July 2019, I reached a milestone of publishing 3X a week for 10 straight years. I was proud and decided to publish this post to celebrate: The Secret To Your Success: 10 Years Of Unwavering Commitment. I wrote it to help motivate others to keep going with their endeavors as well.
In my arrogant, approval-seeking mind, I thought I would receive a tidal wave of congratulatory comments. 10 years of never missing a beat and writing for free is quite a feat! Instead, the feedback was more like a quiet stream in the woods you could barely hear unless you stopped to listen.
It was during that July month in 2019 I made a pact with Greed.
I told him I would focus more on entrepreneurship and less on retirement until the next presidential election. Readers didn't seem to really care about the 10-year milestone.
In an environment where we expect everything to be given for free, yet aren't willing to work for free ourselves, I felt like I was taken a bit for granted. Therefore, I decided to be more selfish for myself and my family.
Doubting The Best Time To Retire
I told Greed that if Donald Trump got re-elected, I would continue to make more active income. If a Democrat was elected President, then I would go back to living a more leisurely life.
I also made a pact with Good. I told her that with more money, I would once again pay over six-figures in income taxes to better help society. Being richer would also better enable me to take care of my family. Good gave me the green light.
So starting in early-2019, off I went to vacuum as much money as I could from the universe while also trying to balance family time. I woke up by 5 am to focus more on entrepreneurship and less on fun online.
After a year of hustling, I made more money. But I was not happier. Instead, I became agitated whenever a business-related matter arose and I wanted to do something else. But, I felt pressure to hustle on business development and more.
The Pandemic And Joe Biden's Win
As soon as it was announced that Joe Biden and Kamala Harris won on November 7, 2020, I felt a breeze of relief. When they were finally sworn into office on January 20, 2021, I finally felt I could relax.
The relief came mostly from feeling I could finally take a break from the grind. Under lockdown, the grind has been 24/7. Thankfully, things have eased up after a year and a half.
America is a capitalist country. Donald Trump is a billionaire businessman. Therefore, under Donald Trump, America had the most alpha pro-business attitude possible. It was only natural to also want to work as hard as possible to make the most money as possible.
When we pulled my boy from preschool in February 2020, the days got extremely long. Because I promised to be more business focused for as long as Trump's tax policies remained intact, every day felt like I was back to working banking hours.
And banking hours are horrible! All these analysts today at Goldman Sachs and other firms working 90+ hours a week are a sight to see. They will eventually make more than $400,000 a year, but I'm not sure they will be any happier.
With my boy now back in school, we have more free time. However, I still have to drive for 40 minutes roundtrip to drop him off and pick him off. Commuting during rush hour was one of the top things I disliked about having a job. It's funny how there's seldom ever a 100% win.
More Financial Relief For Everyone
Under Joe Biden, may be higher taxes and more regulation to try and help the middle class and poor. For most of Joe Biden's life, he was not a deca-millionaire. Dr. Jill Biden is also an educator who doesn't make much money.
Therefore, it is only natural to want to take things easier under Biden's Presidency. The essence of the Presidency has changed. And no, Joe Biden isn't a Socialist. He is a Moderate.
After many rough years since 2020, who doesn't want to take a break from the grind? Why bother grinding so much when the return on effort won't be as good as it once was?
It's Worth Taking Things Down Under President Biden
I'm thankful to Greed for pushing me to boost our net worth since we now have a second child. But I'm also relieved he's going to stop bothering me in 2024.
Realistically speaking, 2024 may be the last full year of low taxes if Biden gets re-elected. It took almost two years after Donald Trump took office for the TJCA to pass. I fully expect Biden to fulfill his campaign promise and raise taxes on individuals or families making over $400,000 a year.
Even though I'm not a fan of higher taxes due to an inefficient government, I am a huge fan of enjoying life to the maximum. Knowing there's a rough deadline for when I no longer have to chase money makes the journey easier to endure.
Two children and a pandemic have really burned me out. The exhaustion I have today reminds me of how I felt in 2011, 12 years into finance. My mind was spinning over ways to get out with a nice windfall. It felt so good to finally leave work behind the next year.
2024 is my 15th year running Financial Samurai. Maybe history will repeat itself in 2024. Maybe Financial Samurai will be sold and I will start a new venture as a multiple book author. Probably not since I blew up my passive income by buying a forever home in 4Q 2023.
Who knows, but I'm ready for a change. If a bull market can continue and big government can take care of the middle class more, maybe I won't have to return to work to provide for my family.
Financial Support Under A Democrat President
Historically, the S&P 500 performs well, no matter who is in power. Unfortunately, 2022 turned out to be a terrible year for the stock market. As a result, retiring under a Democrat President like Biden is proving to be more difficult.
One of the 10 worst times to retire is at the top of a bull market. So the silver lining, as the Fed destroys the stock market and economy, is that if your finances are still OK after a bear market, you should be even more confident in retiring.
Personally, I've started to relax more now that I published my Wall Street Journal bestseller, Buy This, Not That on July 19, 2022. I told myself I'd work hard for two years writing, editing, and marketing the book. After that, it was back to retirement mode for me.
In 2024, I'm going to continue moderating my workload and enjoy my “fake retirement” life. I'm a fake retiree because I still earn income doing what I love, which is writing.
More Help For Those Who Need It Most
The pandemic affected us all, some a lot more than others. Due to sheer bad luck and government-forced shutdowns, so many small businesses and its employees have been devastated. Thankfully, the economy has roared back in 2023 and so far in 2024.
Let's recap what the last stimulus package did. Biden's $1.9 trillion stimulus package and $2+ trillion infrastructure package did the following:
The $1.9 trillion passed rescue package includes:
- $1,400 in stimulus checks to eligible recipients
- A boost in enhanced unemployment benefits to $400 a week through September
- A boost to the Child Tax Credit to $3,600 for children under age 6 and $3,000 for those between ages 6 and 17 for a year. The credit would also be made fully refundable.
- Another PPP program for small business owners
- A $15/hour national minimum wage
- Student loan forgiveness is also on the table
If you've been able to amass a comfortable amount of money, then decumulation may be in order so you don't die with too much money. Personally, I think the best age range to decumulate your wealth is between 40-60 years old.
The Best Time To Retire Is When There's More Financial Support
When a President clearly telegraphs more financial support for Americans, Americans should feel less stressed about their financial future.
With more money from the government, Americans won't need to work as much, at the margin, to make more money.
With the proposed cancellation of $10,000 in student loan debt, more Americans can borrow to attend college without having to pay the money back. Parents won't have to work and save as much to fund their children's 529 plan. Children won't have to work as much to earn income to fund their Roth IRAs.
The more the government can provide financially, the less we have to provide financially for ourselves. As a result, at the margin, the best time to retire may be under Joe Biden or Kamala Harris, if she eventually becomes President.
Some may think it's dishonorable to rely so much on the government for financial support. Others may think that politicians are mainly egomaniacs who crave power and attention, and therefore, should not be trusted. Yes, there is some truth to these beliefs.
However, after decades of busting your butt for a better life, don't let honor and pride get in the way of getting government assistance. Goodness knows you've already paid a tremendous amount of taxes already!
Money Is Psychological
So much about money is psychological. You can follow all the “rules” of personal finance. But, at the end of the day, buying a house, buying a car, relocating for a job, investing in stocks, paying for college, and deciding when to retire is an emotional decision.
If you have a job, it is easy to pontificate about appropriate safe withdrawal rates when you don't plan to retire for years. However, deciding how to spend your money once you and your spouse no longer have steady paychecks is a completely different situation.
The reason why people suffer from the “one more year syndrome” is because they are simply too afraid to leave a steady paycheck behind. They fear they might run out of money in retirement. If they actually do retire, often there is some type of insurance policy like a working spouse.
There are many negatives of early retirement people don't like talking about. These negatives can distract you from your goals and following retirement models.
Think about how emotional it is to buy a house when you are expecting your first child. It's like going to the grocery store after not eating all day.
The desire to protect your child may ironically end up putting her into jeopardy because you overpaid. Rules like my 30/30/3 home buying rule are there to help you tame your emotions.
Emotion Tends To Always Win
However, in the end, emotion often trumps logic. Emotion is why we would rather lash out at others instead of taking action ourselves. Emotion is also why we end up in a bad relationship for too long.
The best time to retire is when you feel safe and secure. Thus, the best time to retire may also be when the government promises to spend an endless amount of money to rescue the economy from disaster.
We'll just have to thank foreigners and our grand kids for funding and paying back our debt.
Retiring Under A Democratic President
Psychologically, it should be easier to retire under a Democratic President because you know taxes are going up to fund greater social safety nets for all. For me, I've decided to at least take a two-month sabbatical to try things out.
It's better to work less and enjoy the benefits of a greater social safety net. Again, this thought process is more relevant for those who are close to retiring or constantly thinking of retiring.
The ideology changes from “every man for himself,” to “leave no man behind.” Under a Republican President, there seemed to be maximum fear of missing out on building a great fortune. That FOMO should slowly dissipate under a Biden presidency.
Example Of An Ideological Shift: Less Emphasis On Merit
A great example of this ideological shift is the abolishment of high school entrance exams for a lottery system. There's a deemphasis on merit, which means hard work may no longer be enough.
When I heard schools like Lowell High School and Thomas Jefferson High School were doing away with their entrance exam, I felt conflicted. (TJ reinstated merit-based admissions in 2022, Lowell has not).
I had mentally committed to dedicating two hours every weekday to teach my kids for 18 years. With supplemental knowledge from their old man, maybe they'd do better in school.
Now, maybe being so involved in my childrens' education isn't as necessary. With a lottery entrance system, no matter how hard my kids study or how much I teach them, we cannot improve their chances of getting into school. We also refuse to buy our way into private schools like I hear some families do.
Therefore, I might as well spend those two hours a day on my health. Or at least feel less guilty on the days I spend less time teaching my son.
Hopefully, my kids will also enjoy their lives more with less intense studying and tutelage from me.
Less Worry About The Future
When you worry less about falling through the cracks, you have less anxiety. And when you have less anxiety, you feel more comfortable letting go of the pursuit of money. The best time to retire is when you're most at peace. Four years later, you will likely be better off, no matter who is president.
Yes, some may take things to the extreme and take advantage of government programs not intended for them. For example, there are millionaire early retirees receiving healthcare subsidies. That doesn't seem right, but it’s not illegal.
However, with more opportunities, less competition, and more government safety nets, there is simply less worry about the future.
I went to Europe many times before the pandemic. So many people there seem happier working less than 40 hours a week. Their healthcare is highly subsidized. Further, getting a college education is cheap.
Even though America's capitalist culture has produced far more innovators than Europe's more socialist culture, Europeans have also been able to greatly benefit from our hustle. Isn't it great to benefit without having to do any or most of the work? Of course it is.
Our children are going to have an easier time launching. This should lower a parent's worry.
The Need To Make More Money Has Faded
My goal was to retire once there is herd immunity or once taxes go up, whichever comes first.
The need to make more money has faded under a Democratic president. As a result, the need to spend time working for money has gone down. Being able to win back my time as the economy opens back up is huge!
A recap of things the Biden's administration will try to do or help you with:
- A push to make community colleges and state colleges free. As a result, there won't be as big of a need to contribute to a 529 plan. There should be less desire or need to get into a prestigious school given we'll focus more on the learning and less on the status.
- $10,000 or more of student loan debt may be cancelled, making it easier to take out debt since you won't have to pay it back.
- The estate tax threshold may get cut. As a result, it's better to spend more money now than accumulate more if your estate is forecast to bump up against the new threshold. If your estate is already above the threshold, then by all means spend to the max.
- There should be less fear of anybody going bankrupt due to soaring health care costs. Health care premiums are still ludicrous, but there should be greater confidence the worst case scenario will no longer happen.
- If you are a stressed out, dual-income professional household making over $400,000, you might start smelling the roses more given your taxes are going up.
- If you are an underrepresented or marginalized group, you may receive more opportunities.
- There should be less fear of getting kicked out of your home due to a rent moratorium that will be extended until September. There will also be a mortgage moratorium as well.
The Best Time To Retire Is Now Over With Trump Winning
Hopefully all of your investments have done well under President Biden. However, if you're exhausted, the best time to retire may be now. We could all use a break and recharge after such a stressful and uncertain 2020 – 2022.
However, after the failed assassination attempt on July 15, 2024, Trump beat Kamala Harris and will now be the 47th president of the United States. Here's a detailed article on what Trump's presidency means for your money. In general, he should be positive for your investments.
As a result, with greater incentives to earn money due to lower tax rates and more career opportunities, it may be best to grind for four more years. Then again, if your investments do so well under a Trump presidency from 2025-2028, you could still retire sooner!
Personally, after blowing up my passive income in 2023 to buy a house, I'm on a path back to financial independence by December 31, 2027. My goal is to earn about $80,000 more in passive income, or grow my net worth by another $1.8 million. If stocks and other risk assets take off under Trump's second term, then maybe I'll get to FI sooner.
Achieve Financial Freedom Through Real Estate
If you agree the best time to retire is under a Democratic president, then you should build as much tax-efficient passive income as possible. Real estate is my favorite way to achieving financial freedom because it is a tangible asset that is less volatile, provides utility, and generates income.
In 2016, I started diversifying into heartland real estate to take advantage of lower valuations and higher cap rates. I did so by investing $810,000 with real estate crowdfunding platforms. With interest rates down, the value of cash flow is up. Further, the pandemic has made working from home more common.
Take a look at my two favorite real estate crowdfunding platforms. They are free to sign up and explore.
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and manages almost $3 billion for over 350,000 investors. For most people, investing in a diversified private real estate fund is the way to go.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends.
If you have a lot more capital, you can build you own diversified real estate portfolio. However, before investing in each deal, make sure to do extensive due diligence on each sponsor. Understanding each sponsor's track record and experience is vital.
Both platforms are Financial Samurai sponsors and Financial Samurai is a six-figure investor in Fundrise.
Free Retirement Management Tool
If you plan on retiring, it's good to us a free retirement tool. My favorite one I've been using since 2012 is by Empower. The Empower Dashboard helps me x-ray my investment portfolios for excessive fees, track my net worth, and figure out my retirement cash flow.
If you have a sizable investment portfolio, Empower's free tools are the best. There is no rewind button in life. Get your finances down right the first time.
Related posts about retirement:
Retire By A Certain Age, Not By A Certain Financial Amount
The 10 Worst Times To Retire Early (Or Retire Normally)
Planning For A 50-Year Retirement With Lower Return Assumptions
Readers, psychologically, do you think it's easier to retire under a Democratic President versus a Republican President? When do you think is the best time to retire?
To reiterate, this post is geared towards those who are close to retirement, constantly thinking about retirement, or are simply burned out. For all of you who are still early in your financial independence journey, keep working hard, saving aggressive, and investing wisely. And no, Joe Biden isn't a Socialist.
Hahahahaha!
Your post here exemplifies exactly what is wrong with the Democratic Party and ideology.
When government steps in and gets more involved, people get lazier. Why bother to work if the nanny state is going to take care of me?
If everyone was rich enough to follow your example, the country would completely shut down under Democrat ideology.
Fortunately, you have legions of low wage poor people who have to keep working to service all your needs while you relax and do whatever you want. They don’t have your options.
You make sure this continues to be the situation, by supporting an open borders policy that continually imports more poor people for you to exploit, and depresses the wages of those who are already here so your economic slaves stay in their proper place.
You also vote for government handouts to keep people JUST comfortable enough, that they don’t develop any ambition of their own. They follow your exact logic? Why work harder?
Congrats. Enjoy your time on your plantation.
Excellent!
Sorry, Sam, I’m calling B.S. on your “guilt” about not pay $100k in taxes every year.
You can donate to the US Government; details at https://www.fiscal.treasury.gov/public/gifts-to-government.html
The last time I checked, the average annual donation from across the country was less than $5,000,000 per year.
So, for all those people who talk with pride about paying their “fair share”, I’m laughing at you. And if you think your taxes are too low, then donate to the government to make up the difference and leave the rest of us – who think taxes are too high for our fiscally irresponsible government – alone.
Thanks for what you do but you really missed the boat on this one. Actions speak louder than words.
I think you misunderstand. I have guilt if I don’t pay taxes to help fund this great country. I feel very lucky to be able to make a living in America and raise a family. Someone has to pay for things like the $10,000 student loan forgiveness for people making up $225,000 a year, stimulus checks, and child tax credits. About 50% of American workers don’t pay federal income taxes, so I think it’s up to the fortunate half to contribute.
Because I am paying six figures a year in taxes, I don’t have guilt. I think this is where you misunderstand. Because to pay six figures in taxes and then donate more to taxes would feel like too much.
But if I was not paying any income taxes while making income, I would definitely donate more to the government and even more to various charitable organizations.
I hope that’s clear. Feels good to live life without guilt and contribute more than I take. What’s your situation?
So you want to remove the rest of our abilities to make money and level up in life because of some nebulous, false idea that you’re helping the “middle class and lower class”
Sorry, both of these classes were doing world’s better under Trunp. The6 didn’t have to lose 40% of their dollars value and had much more money, in general, to go around.
Sp please spare us the false assumptions that you’re helping us “little guys”. Biden did not help anyone, but the uber wealthy globalist class
Sounds like it’s every man for himself and it’s best to pay the least amount of taxes possible then. I understand your point of you. I do think it is important for those who can to get back as well.
Zadu is 100% correct
If I’m Mexican, can I invest in Fundrise or Crowwdstreet?
I would like to.
Unfortunately, I think you have to be American to invest in Fundrise or CrowdStreet. But you can still sign up and explore to understand how real estate crowdfunding works, the type of research material the platform provides, and the various opportunities.
You can always invest in a real estate ETF like VNQ, or individual REITs. They are more liquid. But they will be much more volatile as well.
Here is my real estate crowdfunding learning center page.
Hoping for the best, preparing for the worst. H.S. grad, learned a skilled trade, never had an issue finding a good career. 2 pensions, above average income, no debt. Not worried about my retirement, I am however pretty terrified about the future of this country and my childrens future.
What exactly are you terrified about? Maybe we can talk things out.
I enjoy reading your website and its probably best not to get into a political discussion that really wouldn’t make a difference. I think it’s time to focus on healthy living, friends and family. Try to make the place a little better than you found it and hope for the best. I wish the best to you and your family and everyone else.
OK, I was just curious given the word “terrified“ is a very strong word. I think if you are doing fine financially, your kids will probably do fine as well. I wouldn’t be so scared about the future.
I’ve seen the future, and it looks pretty bright to me.
Related: https://www.financialsamurai.com/ive-seen-americas-future-and-it-looks-bright/
I’ll jump in here and share with you what scares the living daylights out of me. Much like John I worked and learned and applied myself without “any” government assistance. Financially secure by following the rules. That in part is what’s so scary about the direction we are heading with the radicals controlling the agenda. Hard work and the success associated with the effort is now a bad thing! Being fiscally responsible is the result of white privilege. Have a different opinion and you get censored. Complete capitulation is now what’s expected in the form of “unity”. Facts no longer have any merit you either comply or be destroyed. Have we ever been in this situation before? Not in my lifetime. Self avowed Marxist are nominated for Nobel Peace prizes this would be the same people burning our cities to the ground but apparently that’s not news worthy. BLM is now providing the content for some school systems…..and of course anyone not black is a racist and must be punished. Makes my head hurt to think where we are heading as no one seems to have guts to say enough. Martin Luther King must be turning over in his grave as the race hustlers’ who defy everything that great man fought for is turned on its head. Victimhood is the excuse for a lack of personal responsibility. Denzel Washington is right the police aren’t the problem the family or lack of one is the problem. That is what concerns me. When we should be listening to Thomas Sowell, Denzel, Carver, and other great leaders we have Sharpton, Critical Race Theory and the 1619 nonsense. What will it take to get the train back on the tracks. Research your history and learn the facts how Blacks thrived in this country prior to the “War on Poverty” that’s what started this tragedy. Oh, by coincidence that program was also run by the party in charge today!
Dear John & Mike W. PBS News Hour would give you both some different perspectives, but not off our capitalist norms, so you would be safe there. Noam Chomsky, however, would disturb you. Both give US our ideals to work on, although Chomsky’s statements like we also revolted against our King because he refused to allow us westward expansion is certainly something I would want to corroborate, as well as some of his statements as they are underlaid by his progressive philosophy however, his intellect and reasoning is otherwise difficult to dispute even as it commands us to view ourselves in in lights most of us have not seen, nor most of us care to.
I really enjoy your blog. I am half Asian and feel similar pains as you from where I grew up. I am 45 now, have a great marriage, two kids, and am in good financial health. I have learned a lot from your blog. I really appreciate how you handle the comments. I am an engineer with a PhD. There will always be someone smarter than me. I try to raise my kids with a strong emphasis on values but similarly worry about their future. I am steering them towards health care so they always have the reward of helping others. After discovering your blog, I definitely spend more time making sure I enjoy life and put work in perspective. Hoping to retire at 55. Just paid off mortgage. Representation matters – please continue your blog!
I enjoy reading your articles, good stuff, I am 66, retired and on Medicare and my husband and I are collecting Social Security now. We both get pretty decent SS checks, and our home is paid off, so we do okay. We also have a healthy 401 K balance and some savings. We are debt free as well, no car payments, etc. Our only expenses are property taxes, health and home insurance, food, utilities and the occasional home maintenance cost. And when Covid 19 starts to dissipate, we hope to travel a bit. We mostly like to camp, so we keep our costs down that way by traveling in our RV. We are not super rich, but we are comfortable. My husband is 63, 3 years younger than me, and he got laid off from his job, a job he had worked for 26 years. He got a good severance package in which he was paid six months worth of salary, and he also got insurance coverage until the end of December of 2020. He had planned to work until 2022, but it worked out okay in the end. He has decided to retire for good. He had a really good, but stressful job and he’s decided to just enjoy his golden years. Instead of getting in Obamacare, he is keeping his insurance through Cobra for now. I’m hoping that Biden will be able to subsidize this as he’s wanting to do, although we are doing okay paying for the premium for now, but it is really expensive. We just want to be sure that the Supreme Court doesn’t mess with it come summer, although I know that Biden is trying to strengthen the ACA and the Supreme Court doesn’t seem that interested in dismantling for now. My hubby will also get a pension from a job he held before this last one, although it’s a small one, but it will help. I find that old fashioned thrift is what has allowed us to retire. I voted for Biden mainly because I wanted a sane president again. I got tired of all the drama of the last 4 years. But life seems okay for now, so we are joining the ranks of the retired and hoping that Biden will be good for retirees as you say.
Greed, just like anything else, is a choice. If you chose to get back to work because of tax cuts, blame yourself, not the person occupying 1600 Pennsylvania Avenue in D.C.
At any rate, we haven’t had a president who was qualified for the job since George Washington. All anybody in D.C. wants to do is borrow money to prop up a failed system that’s making the rich richer.
Please stick to what you do best. Politics stink. Both sides of the aisle. Doesn’t matter if you’re from the Left Coast or the Always Right.
Politics is closely intertwined with personal finance, considering how large our govt. is. You can’t avoid it.
Good and thoughtful post – as usual (and thanks)!
It’s clear how you read the economic incentives as a younger, (potentially)productive member of society. Higher tax rates (and 1% labeled as evil for being successful and wealthy) is a disincentive to work harder and create a more productive society (jobs and wealth for others). The less hard you work/create, the less tax dollars there will be to feed the government from taxes.
The government only gets money by ‘printing’ it (making the dollar worth less) or by taking it from productive parts of society (businesses and individuals) that actually pay taxes. These elected leaders then act like they are ‘generous’ by employing bureaucrats to give other people’s money to other people who pay less taxes…an inherently inefficient and expensive process, even if it’s going to the ‘right’ causes.
Yet, we are told Keynesian economics work? 81M Americans voted for the new regime…only 74M voted to keep the status quo. It may not be economically logical, but Americans want this.
This is an interesting post. I was involuntarily retired due to covid and its impact on my industry. I worked in oil and gas in Texas. I’m only 55 and I am not ready to fully retire. More from a desire to be out and about, interact with people, feel like I am creating something, feel useful. I am not rich in the media idea of rich but I have enough to eat, maintain a roof over my head, meet my bills. Not enough to take mega trips or buy vacation homes or a bunch of spending. Being able to maintain a safe abode and regular nutrition is rich enough for now. I will not be touching any retirement funds for at least 5 more years.
I am thankful that I have always saved and lived thriftily, which is enabling me to sit out the pandemic and wait. I am finding the whole visual of everyone being masked up all the time very distressing. I miss seeing smiles and facial expressions! I try to use my voice to convey cheerfulness but it is not ideal and I look forward to the end of it.
While I have been in this enforced idle time, I have (decluttered my whole house) identified two small businesses I plan to create/pursue and I am not pursuing them to become a mega millionaire but to stay mentally active, have something to focus on and see if I am able to grow something from nothing- like a little green experimental garden.
More important to me is to see if I CAN create something from nothing- just to see if I can. Do I have that talent? I was always told I could be an excellent entrepreneur and now I can validate that. I am very self motivated, upbeat, persuasive and very energetic.
When I worked for my previous employer (Fortune 500 company) I would put in looong hours as an IT project manager on global projects- I have learned a lot of useful skills and I am excited to try them out under my own steam and see how it goes. Plus I look forward to not having any throttle on my personal innovations. I am quite excited about that.
I have no fear of failure because I have no financial impacts in the negative from it. Plus I believe in nothing ventured, nothing gained. I, literally, have no where to go but up. I also plan to keep my future income under the taxable threshold. I had already gamed that out before I was forced to take early retirement. And I also own a bit of rental property which I paid cash for and don’t owe anything other than taxes on.
I have a wonderful husband, one child, a college sophomore attending a small private college who attends based on a combination of scholarships and student loans. My home is paid for, I have no debt only future renovation dreams. I love where I live and have a supportive group of friends and neighbors. So far, I have good health, for which I am extremely grateful and work on to maintain it as reasonable as possible.
I just want to live in a legal / political environment that allows me to be free enough to try new things, not have too many legal regulations that discourage trying to create an idea into a business (from scientific to customer service focused to inventor) I don’t know what is ahead but no one ever does if you look at it holistically. I try to take the long view. I am also the child of an immigrant and spent 11 years in the home country. The U.S. is a wonderful place to live. I am grateful to live here.
I have my personal political preferences but much of what goes on is outside of my ability to change it and I can only impact what happens to me, my circle, my family and so on so I will try to focus there and vote when possible but not take it personally if the political winds are not my preference.
I try to stay upbeat no matter what circumstances come my way and like many others- I have had life’s ups and downs. I choose to stay positive while acknowledging when something negative has occurred but not letting it beat me down. That is my personality and I cannot and do not want to change my approach. It works for me and I can only advocate for myself since I have to live with me :).
I think retirement means many different things to people. It can be scary because the parameters are so fluid. To some, it is a whole new beginning to do things they were unable to do before due to responsibilities and life events.
To others, it is non stop travel experiences, and to some others it is a lot of resting and a loss of steady income. I don’t really know what a retirement for me will be. And not being inhibited by fear of failure…. I am choosing to use the time and opportunity to create something new to see where it leads me.
Sometimes when I think I am going to destination ‘A’, I get side tracked by a road that leads to a whole new discovery I had no idea existed. I am sort of hoping for a side journey along the way and to model to my child that one can reinvent themselves and not be stuck in a rut or afraid of change and have a fulfilling life as long as they have the desire and it is okay to make changes.
I am ignoring all the media and their fear porn on politics and the pandemic. I am focusing on things local and strengthening my local bonds. I am not going to go through life perpetually angry and perpetually terrified. That is not living.
Thanks for your years of article writing. They have been very educational and enjoyable and I am grateful you chose to do them. If you choose to retire, I wish you much happiness in whatever way you choose to spend your time. You have a great talent and I will be sorry to no longer be able to avail myself of it but grateful you shared it with us for as long as you did. You have been an excellent motivational catalyst. Best to you and your family.
I am focused on the full retirement 2022 idea. I just turned 58, I am retired, and I have hit the milestones per “all the charts” to know I’m ok, even more than ok. I could work on recession proofing my retirement more, but there is always something, right?
I’m sorry I missed offering kudos for the 10 years of writing achievement! I hope the intangibles of honing your talent, and helping many more than weigh in on the comments is a reward of a different color.
I don’t have kids, and I live in Dallas (cheap relative to friends in SFO, or NYC no doubt). So my only pull back to greed is to create some incremental and crazy travel porn trips, or get into vacation homes (renting exactly where I want to go seems so much lighter). Anyway, I digress.
Finally, getting to the comment I set out to make here, is that if you retire Financial Samurai completely it will be sorely missed. Of course, only you can know what is right for this phase of your life, but I hope you consider a down size or some other creative forward path. Most commentary I find in this space is dull and doesn’t challenge my thinking, or more importantly lay out the math and back it up. It’s not 2022 yet, so I’ll stay tuned and see how it unwinds for you.
I was going to reply how disappointed I was with your post but I think the replies so far have summed up my feelings.
But to add to the previous posters, this back to the future set of programs has never worked and just made poor people poorer and rich people with asserts richer.
Why would we want to go to more socialism? Just Rich and Poor? I appreciate your past information but you lost me on this last one if you truly believe what you posted
Why do people think Joe Biden is a socialist and is for Socialism? He’s not. Raising taxes on only households making $400,000 is not socialism. Are you nuts?
Being disappointed by someone who personally wants to take it easy after grinding for so long and so hard is also nuts. Why don’t you worry about your freeloading self?
What have you done to help other people improve their finances and their lives? I’m assuming probably nothing, which is why you criticize others.
Sam help me understand this notion of poor people being left behind? As a former “poor person” no one left me out of anything. When I went to work and was exposed to personal finance for the first time and saving and investing and dreaming of someday joining those who achieve a level of success where your money makes enough money to replace the need to “earn it” or “go to work for it” was motivation enough for me. I didn’t go to a fancy MBA program I went where any poor person who wants to learn, apply, and achieve can go to learn all I needed to achieve my goal “the free public library”. We need to stop with all the victimization sanctimony, we need to stop making excuses, and we need to get to work. Hard work, success, financial independence isn’t a bad thing although you’d never know that in this commie, left wing, brain washing environment we find ourselves today.
Biden will not be good for poor people unless you are under the impression “the war on poverty” was a success? About the government helping you…..I just got my latest Social Security statement @ 62 I’d receive $28,000 per year. If all my contributions had been put into an S&P 500 Index the account would be worth over $2M……if you included my employers contributions it would be over $4M……thanks for the offer but every American would be much better off if the government starting doing a whole lot less for all of us, regardless of where you are on the wealth curve!
Great post Mike W. I like the FS, but I am at a loss to hear that we should be happy and welcome all the handouts that will be presented to us by the government. Who will be paying for this? Our kids, grandkids, great grandkids, etc. Not only the rich will be paying for this but the “middle class” and they provide the largest number of voters. We need to rely on ourselves and our own ingenuity/drive rather than asking for more help from the government. I wonder how many people who don’t need this government help will actually send back. Probably none because it is “free”.
Well said, sir. Well said.
As a self made person who started as an orphan, you’ve got it. The government does nothing for the truly poor but exploit them.
Joe Biden promised to govern as a moderate. On day one he signed EO’s:
—Letting biological men take over women’s sports & locker rooms
—Calling for amnesty for millions of illegals
—Ending deportations
—Killing thousands of good paying jobs
So, in less than 72 hours, Joe Biden:
– Killed 70,000+ jobs
—Eliminated women’s sports
—Sent troops into Syria
—Left the National Guard to freeze in a garage
—Admitted he doesn’t have a plan to fight COVID
—Broke his own mask mandate EO
—Ended US energy independence
At least it sounds like it’s a good time to retire!
but hey at least we got rid of the bad orange man
Oh you must be referring to the President who achieved the highest level of employment and increased wages for the working class more than any predecessor in the last 50+ years. We’ll see how you feel a year after the commies have been in office.
I know writing angry posts feels good and all, but doesn’t it feel silly after you’ve hit submit?
For the record, my post was sarcasm.
Not angry just stating the facts.
No. Just angry. Keep spinning it however you want in order to make yourself feel angrierv and reinforce that feeling. It won’t change anything. Maybe try to adapt to the situation instead. Compromise a little, you know, like in marriage or relationships.
With respect to you, some of us have come out of Communist systems. My family is horrified and see this election as a definite turn to a serveillance/communist system. We’ve lived it in the former Czechoslovakia so we know what communism is. It’s not an intellectual construct for us. Things aren’t going to be what people think. I sincerely wish I was wrong but once you’ve lived under that system you know Exactly what it is.
For those who think taxes don’t have much influence, I give two different examples:
1) There is a $3.8 trillion dollar muni bond market, whose bonds pay less interest than equivalent taxable bonds. If taxes don’t influence, why does it exist? Or are people just dumb and don’t look at the rate when they buy a bond.
2) The rocket fuel that propelled Amazon during its earlier years was the ability to allow its customers to skip out on sales tax. This is one reason they were able to displace Barnes and Noble so quickly in their early life.
I’ll give you a third one. I buy ADR stocks, and always look up the country specific non-resident tax penalty on their dividends, which varies between 35% (Switzerland) and 0% (UK). It affects by choice.
Good example on Amazon and ADRs! Can you offer a specific tax example of owning an ADR?
Long time reader. I cant believe what Im reading from Sam.
“Under Joe Biden, there will be higher taxes and more regulation to try and help the middle class and poor. “
Explain this. Under trump, the avg middle class family household income went up 6k. Under the previous two administrations (bush / obama), it went up $300. In fact, household income rose faster from 2018-2020 than any year since 1984.
heritage.org/markets-and-finance/commentary/middle-class-incomes-surging-thanks-trump-policies
cnn.com/2020/09/15/politics/census-median-income-poverty-2019/index.html
Look, it is clear you dont like trump. Honestly, nobody “likes” him, even his wife. However, policy wise, he has been one of the best presidents we ever have had domestically. Not to mention he was the first president in god knows how many decades that didnt drag us into a single war.
Im glad you feel cozy with joe biden as president. As if he is actually in charge. His policies will not be good for the middle class. Opposite in fact. Itll be great for rich and poor people.
I try to see the good and bad in any administration. The goal is to understand the nuances to take action to lead a better life. If you start just focusing on the bad, your attitude will decline and you’ll become less happy.
What are some ways in which you believe Biden will hurt the middle class? What is wrong with him being great for poor people who have been left so far behind in this boom?
Trump help enable capitalists, which I’m assuming most of us are reading and writing about personal finance, to get richer during his time. Capitalists who want to capitalize will still get richer under Biden. However, at the margin, for those thinking about retirement or want to retire, I believe Biden will help.
Tell me about your financial situation. Where are you in your financial journey?
How exactly is Biden going to help the poor?
Biden has already starting moving more troops into Syria. I expected this but on his second day in office! And to protect the oil fields while he kills a pipeline project that has employed thousands.
Are you saying Biden wants to hurt the poor?
Bigger financial support from the government through healthcare subsidies, increasing the minimum wage, etc. may help the poor.
What are some things Biden will do to you that hurt you? I’m trying to understand why you are so fired up.
I don’t think a president makes a massive difference. President makes more of a marginal difference to peoples lives given all the checks and balances and variables that go on in the world. Thx
The poor already qualify for medicaid. If they begin to make more money they end up having to purchase a crappy health insurance often with deductibles in thousands of dollars. It is a disincentive to even find better work. I met a truck driver on a greyhound bus who explained how terrible the policies he could afford were nearly useless.
I am most disappointed after seeing his cabinet of neoliberal war mongers and one of his first actions is to illegally send more troops to Syria. It saddens me that the American public has such disregard for the lives of those in other nations.
Obviously late to the party here but how do you feel about Biden being a warmonger now that he withdrew from Afghanistan? I suppose because he botched the withdrawal maybe the criticism will just shift to that?
If we all slow down what will happen to tax collections? The next step from the “regime” will be to find more sources of taxes and that will you yet again. And don’t worry, once it’s all said and done “the regime” will make sure that the peons are working. This time is really not different from countless other examples of socialism successes.
I don’t think we’ll all slow down. Taxes are only going to get raised for the top 2% household income earners. Therefore, the majority will continue to go about hustling as they normally do.
What has caused you to think in extremes?
They always say “Oh this new tax is only for the rich”. Then later on, it gets expanded. When the income tax was started it was “only for millionaires”. Now look who pays. Add up the costs of Biden’s “free stuff” plans. $9 trillion a year. Either they will print till we have runawy inflation (and our wealth becomes worthless), or they will have to raise taxes on everyone. As an example, even if you took 99% of the net worth and 99% of the income from the 1%, you would only fund “medicare for all” for 5 months. Look at the Nordic countries as proof- the marginal tax rates on the MIDDLE CLASS workers ranges from 40-70%.
At least the Nordic countries always rank as the happiest countries in the world, for decades.
Perhaps it’s not so bad if everybody pays more taxes and pitches in to support our country.
I agree. The problem is that many liberal politicians in the US would have us believe that we can all just have unlimited free stuff in the rich guys will foot the bill. If we want to live like the Nordic countries that’s fine by me what the public needs to understand that you personally will pay more taxes. Not Just the rich guy
Our tax rates, or put another way… our ‘economic freedom’ (when combined across the board) are actually very similar to many European countries. We’re already a very high taxed country. Around every corner a politician is coming up with a brilliant idea (e.g. a tax!) that will solve a problem (usually that they created) and then sell you a watered down pseudo solution that does not work for its purported constituency.
The first rule for all politicians should be that they and all family members are required without exception to use any and all public facilities that they have voted on. Thus all their children and grandchildren must attend public schools, public universities, public day care centers; they may have no private security – they must rely upon the police; etc; no private planes, boats, etc. – they must utilize public transportation and only carriers available to the general public (no skipping TSA by using private airports). All too often they make the rules and then exempt themselves.
Sam, nice article as usual. I’m sorry you were disappointed on your 10 year post, but I think you know your readers appreciate your efforts. Which is why we keep coming to your site, and making you the big bucks. I’m always confused when you speak of yourself as retired. Do you consider yourself currently retired? To me, what you do with this site seems like a job. You spend hours writing and curating articles, and then spend hours replying to bunch of mostly overworked random people on the internet ragging at you and taking out their frustration at you. Personally, I would not want this job. But more power to you, and you are very good at it. Your articles read like a well thought out in-depth research note you’d find from the top analysts at Goldman Sachs. Except you are allowed to say what you want. I’m also constantly confused by why you need to keep producing the massive active + passive income when your stated expenses and needs are so low. I imagine this cash flow is 7 figures annually and your net worth is in the 8 figures at least, based on the clues you drop on your articles. I am not surprised that you feel like this is a good time to wind down though. With such high taxes and after working so hard after you left your day job in 2012, it seems you have accumulated much more than you and your kids will need to live a great life in Hawaii. Totally agree with the conclusion of your article. Good luck selling financial samurai, I hope whoever buys it doesn’t realize that it will be worth close to nothing without you.
It’s a tough job, but somebody’s got to do it!
The Reality is, I enjoy the banter. It’s fun to learn new things from different people. I really wouldn’t continue, at least not at this pace, if I wasn’t having fun.
But what I have found is that a lot of people like to just criticize, but they don’t share anything about themselves or their thoughts on the topic in any type of depth. As a result, I often end up wasting my time responding. Therefore, to be more efficient with my time, my goal is to write more matter of fact posts we’re no banter is required.
For example, I can review more financial products, write plain definition post, and so forth. Still helpful and also good for business.
What kind of work do you do? And where are you on your financial journey?
Btw, I haven’t told anybody I’ve been retired since 2013. In this post, when I write I plan to retire again by the year 2022, the implication should be that I am not retired now. Sorry if that wasn’t clear.
No need to apologise, your article was very clear. The confusion was just me. I thought I’d read in some of your previous articles that you were retired.
I work as an investment manager, reading things written by Goldman analysts! On my financial journey, I’m in the one more year phase, been stuck there for a few years. My work doesn’t suck enough, I can’t figure out how much money I need, the target keeps changing, and I can’t figure out how much my portfolio can generate and if it will consistently meet needs and any unexpected large ticket items. Like you, the higher upcoming taxes make me question whether it’s worth going for more or just packing up shop.
If you enjoy your work, and are making good money, then you might as well just continue.
Have you reached a $10 million plus net worth yet like Joe Biden? I feel that $10 million is now an amount many people start feeling like they can do other things, retire, take it down a notch or take more risk elsewhere.
“If you enjoy your work, and are making good money, then you might as well just continue.” aka one year more syndrome!
Had no idea How Biden was worth $10 million. Good for them I guess. I’m almost there. Assuming you are already past that goal, what did you decide your next goal will be once you reached 8 figures? I’m guessing this game never ends. We just pivot and change the names and rules a bit. I’m afraid taking it down a notch doesn’t really happen if you have little kids. Time at the desk (or pre-covid an office) can equate to time off for many parents, letting them recharge and in turn become more patient and better parents. Of course this is tough for the stay at home spouse. Kids are tough work, but more than worth any effort.
True, Taking care of young children is definitely a full-time job. It’s much more difficult than having a day job. How many kids do you have how old are they now?
Once you get to $10 million, you can then reassess your life. But hopefully you constantly do that before then as well. Some new goals include building a certain passive income amount, working with underprivileged children, setting up a foundation, and so much more.
Heck, you might even want to start a website to help people for free in whatever field you have a tremendous amount of interest in. It’s really rewarding!
Working outside the home with small children is the hardest job ever not one or the other. It’s a luxury to stay at home with small children here in The Bay Area.
It’s interesting how I think working outside the home is so much easier than taking care of young children all day, and I worked in banking where it was pressure and 60+ hours a week. What occupation are you in?
I was a loan officer and I think lots of parents would love to have the option to stay at home with their children but, again financially. It’s not an option. Being a parent is the hardest job you’ll ever love.
I agree Sam, taking care of young children is full-time job, much more difficult than a day job (I have one of the most demanding day jobs well known for quick burnout). Of course we are talking about taking care of kids properly, not half assed like many parents do. You obviously are a hands-on actionable responsible parent. Little kids are naturally energetic, curious, and demand constant attention. I have 2, 6 and 8 years old. I wish I had more. Children, a good spouse, close family and friends are true wealth after the basics of life are taken care of. So if you are hesitant still, please don’t waste your time and put the third one in the oven.
As for reassessments, those are constant and if anything I need to slow down and smell the roses. Starting a business or website is of no interest to me, to do those properly I would have to give it all my energy, like a baby, and I don’t want to detract from my family. Also, eventually the goal of profitability ruins all creativity and freedom as you have to cater to your clients/audience. Helping underprivileged children sounds great, I have no expertise but would love to try.
$10 million is not the amount that makes me comfortable. I am 57 and live in California, with high taxes and a high cost of living. I have $10 million equity in 3 properties (personal residence, vacation home, apartment building) and about $5 million in cash and investments. To retire or take it down a notch, while at the same time keeping my 3 properties, i figure i need a net worth of around $18 million. I have read your article estimating the net worth of the top 1% and I feel your numbers are low.
Shoot for $10 million per person given the estate tax threshold is $11.58 million.
Honestly, I’m just happy to have a president again who is reality-based, interested in solving our countries challenges and doesn’t constantly try and pick fights and create drama. Worrying about tax rates is at the bottom of my list right now. Hopefully this marks a return to being able to have productive debates over policies rather than just “owning” the other side. My mental health has already improved since a week ago from that alone.
I do wish we’d all stop throwing around the word “socialism”. It’s long since lost its original meaning and just gets thrown around by both liberals and conservatives to mean pretty much anything. Instead, let’s have a debate about specific policy goals and how to achieve them.
Frankly, the same thing goes for debates about taxes. Talking about lowering or raising taxes in a vacuum is meaningless. Instead, let’s focus on what needs to be done and how to pay for it. Yes, I get there can be stimulative effects to tax policy at the margins, but there are also more focused ways to achieve the same ends.
I think this pandemic has shown that there is a place for government to step in and do things that aren’t practical or desirable on a private level. Looking around there are some pretty obvious issues (infrastructure, health care, education, etc) that will require some level of federal government involvement to really address adequately. I don’t consider myself a liberal, conservative, socialist, or capitalist. Just a realist.
Well said and Amen!!
Rich underscore R, by mentioning that you are, “just happy to have a President now that is reality based…” are you referring to his comment about desegregation and racial jungles?
I hope you are able to take it easier, Sam. Even if the reasoning is more fear based on what Biden MIGHT do. That grind is killer for mental health in the long term.
Thanks. I don’t have any fear about what Biden will do. Biden is much more moderate, and raising taxes at the $400,000 household income level is quite reasonable versus the proposal of raising taxes for household to make over $250,000 back during the Obama era.
And given I believe $300,000 a year is the ideal income amount for maximum happiness for a family of four, all is good. I just want more unity, and this pandemic to be conquered.
I have hope and excitement because I see the finish line. It’s like the excitement of anticipating a vacation after a pretty focused and hard-working two years. It’s gonna be great!
it’s like you going FIRE all over again! Also dont feel bad about people not commenting on the ten years. I am sure you have a lot of lurkers like me that are happy for you but dont necessarily post much as we are not contributing any greats ideas in the posts.
I know, right?! So exciting!
I’ve learned from my past, so I plan to do retirement better this time! Although circumstances have changed a lot.
Related: https://www.financialsamurai.com/if-i-could-retire-all-over-again-these-are-the-things-id-do-differently/
Reading your site resulted in me thinking about money, life and my happiness. I have been married for 48 years. This relationship is more important than money. When my wife and I get mad our relationship suffers and I don’t care about money. We can never stay mad longer than one day because we hate it
Have you ever seen a couple at dinner in a nice restaurant and they never say a word. This is misery.
Money is important to me, but it means nothing if my marriage is out of wack.
Relationships first. Money second.
You miss the point entirely why in Gods name would we give one red cent to the incompetents who woefully manage the $3.5 trillion we pay in federal taxes already? Given them more money is like trying to get sober by drinking more!
What’s your solution?
You’re not giving more money if you don’t make more than $400,000 in household income.
You might actually be getting more money back.
Again you miss the point entirely it doesn’t matter who is paying more or less giving an increase of tax revenue to the morons who have spent us into oblivion is not the answer.
Ok since u know the point. What is the solution? I’ve decided to re-retire.
What do you plan to do? Solutions are great. Otherwise, you’re just complaining. Thanks!
Ok Sam I accept the challenge so here goes the solution I’ll offer. Personally, I’m balanced between after tax money, IRA, and Roth so I can withdraw strategically whatever I need without incurring much tax regardless of what the hack politicians do for the next 7 years before mandatory IRA withdrawals will increase my liability to some degree. That also provides me 7 years to move money around and further reduce that liability. As for the bigger question of how to solve the issue I’ll offer the following:
1 – we need term limits these hacks who have been in office for decades have completely bastardized the meaning of Public service and turned it into a cottage industry for themselves selling our freedom to the highest bidders via “tax free” PAC contributions. My suggestion at a federal level two terms and you’re out. Period end of story, back to the real world no more career pimps / politicians.
2 – While the hacks complain about income inequality and the rich not paying their fair share don’t forget they are the ones who voted to change the tax code to allow such inequities. Hedge funds pay minimal income taxes because of “carried interest” how do you think that happened? The hacks sold taxpayers down the river to enact that tax policy in exchange for personal benefit.
3 – eliminate PACs and all political advertising. Federal elections would allow candidates free time for presentations over national TV as well as debates since the airwaves are public assets the networks should be forced to comply.
4 – All votes need to be made in person and you must show picture ID. If picture ID is required for airline travel or to buy a quart of beer, or drive a car I don’t think its to much to ask for one of our most important privileges’ as citizens in a free society.
5 – Cap the amount of money any one individual can contribute to eliminate blowhards like Bloomberg attempting buy elections.
6- Organizations of any sort should be barred from contributing one cent to politicians, that goes for corporations, unions, etc.
7 – The IRS and the tax code should be reduced to “zero deductions / write-offs” and a simple flat tax.
8 – Government – federal and state should have mandatory balanced budget requirements. If you can’t pay for it you don’t buy it just like the way most Americans live.
9 – We need a serious antitrust / breakup of monopiles in this country to eliminate “to big to fail” and bailouts of any sort. Financial institutions like JPMorgan should be broken into several separate companies vertical integration is unhealthy and uncompetitive. Mortgages separate business, Brokerage separate business, Private equity separate business, Credit card separate business, Consumer banking separate business, Corporate banking separate business.
Media – pre Reagan caps on how many TV stations, radio, Movies, cable, internet operations any one media company can own. Today we have propaganda because of a monopoly of media companies. Ex. Disney should also be several separate companies.
Internet companies need to be broken up…..Google, Facebook, Twitter, have zero accountability make hoards of money and basically censor whoever they please without any repercussions. As a matter of fact for all the Dems harsh words they benefit exclusively from this government sponsored censorship, in term Silicon Valley bankrolls the Dems almost exclusively and that not something even the media propagandist would debate.
More companies, more competition, more creativity, less power in many more hands, zero liability to the tax payer for reckless behavior.
10 – Completely stop the Fed from performing as the backstop for private companies, hedge funds, etc. Bailouts to any public company should be outlawed as the idea completely flies in the face of business risk and reward also known as capitalism.
Ok Sam there is my solution / recommendation. Never forget the hacks in office for decades are the ones who created all the issues they complain government needs to solve, when in fact gov. is the cause of the problem in the first place. Case in point the student loan crisis. When did it explode onto the scene shortly after the government outlawed private lending and made it a gov. program = zero qualifications to borrow, unlimited loan amounts, zero oversite of any sort, result a multi-trillion dollar disaster of governments making, and there answer = make the taxpayer fund the bill because its the students right to borrow without regard because college is a right. Bernie Sanders is a self avowed communist take him at his word “by any means necessary”.
You know I think this is a bit of refreshing post and I actually get the spirit of what you are saying. Many of these comments are not rooted in actual facts. Biden is not a socialist. If he was, he is doing a horrible job at it. lol. I actually would imagine that many of your readers are very smart and its troubling that they are drawn into these false narratives.
But I digress, as a dual income household with no kids and income over $500,000 I do agree with you that the pursuit of money is not healthy. Even with no kids, the quality of our lives is affected by the constant grind and the associated stress. This past year has given us time to think about what is truly important. Money is a means to end. To that point, we bought 2 vacations home in the midst of Covid for more passive income. Retiring and not working is not realistic for us. We like our professions, but to be able to to choose when and how to work is freedom. I think your site helps people make intelligent decisions on the “how/why” of making money work for you; instead of the other way around. Keep it up. I enjoy your insights.
Until they start taxing unrealized capital gains. D(I)RE is my only option. No Inheritance for me, so just DRE.
This post certainly does echo the change in the air that I’m feeling!!
My plan is to retire in the next several years, so I hope I can benefit from the perks you mentioned. However I’ve felt wary of the unpredictability of the stock market and started diversifying including buying a rental property.
I also bought REITs but they aren’t doing well in lockdown life.
Keep analytical posts like this coming!
Perhaps someone here can help me see how Biden is not a socialist? How is printing many trillions of dollars supposed to be something we all applaud? How is increasing the minimum wage supposed to help the small businesses who have been suffering throughout 2020 due to lockdowns? How is forgiving student loans at all fair to those who already paid off their loans? How is stopping rent while lenders are still requiring loan payments and the gov still wanting property taxes fair?
These are genuine questions and for someone in their early 30s trying to set myself up financially with a high income and investments, I don’t see how one can be optimistic over the next few years. Would be great to hear your thoughts.
You are right. Forget what u just read. Sam is wrong. You must create your success. Who is president doesn’t matter. Don’t be fooled. If you want a house near the ocean, you will need the money to buy it. Biden isn’t giving it to you. If you want to not work and live in a crappy apt., Biden may have a program to pay your rent. With food stamps, Biden may have a program to buy you day old bread.
The world has not changed.
how Biden is not a socialist? He is. So was Trump. Biden a little more so. It’s a spectrum.
How is printing many trillions of dollars supposed to be something we all applaud? It’s not supposed to be unless you are very short sighted and think your $1200 check has no long term costs.
How is increasing the minimum wage supposed to help the small businesses who have been suffering throughout 2020 due to lockdowns? It won’t.
How is forgiving student loans at all fair to those who already paid off their loans? It isn’t.
How is stopping rent while lenders are still requiring loan payments and the gov still wanting property taxes fair? It isn’t.
If there is no Fed and Fed Gov’t support, your investments will likely crash. Hence, you may want your belief of Socialism to help with your version of Capitalism.
Care to expand on this?
My investments were doing just fine prior to COVID. But since the lockdowns (which mountains of data indicate are useless) and the lovely fed government (which is telling people to live freely off of others), some of them are completely dark and I have lost a lot of money since things like property tax and repairs are still mandatory.
Sure. What are the details of your investments (type, purchase price, income, market price etc) that have lost money and what is “some of them are completely dark” mean?
Family bought a gym here in California for about $14M. Income was $850K a year and we finished off the loan portion late 2019.
They haven’t paid us rent since March 2020. Meanwhile, we are still responsible for all CAM and all property taxes which was well over $150k. No help from the government with regards to getting the property tax deferred. Gym can’t open because our incredible governor thinks it’s okay to shut down businesses indefinitely.
As it is right now, property won’t sell for what we bought it for.
I’m a fan of FS, not trying to sound like an asshole in any way. I’m just finding it hard to be optimistic about the direction this country is headed. I appreciate your perspective and I’m trying to understand how you see things so that perhaps I can adopt the same mindset.
I hear you on the frustration you’re feeling regarding the governor keeping outdoor dining, gyms, etc. closed. It is not only frustrating, it is maddening. If the government is going to force shut downs, then at least there needs to be specific bail out package is for small businesses. And then to top it off, with Gavin Newsom going to eat at French laundry for $1000 a head, that’s some BS right there.
On the bright side, your family is rich enough to pay $14 million for a gym! Even if this was your only family asset, I put you in a top 1% net worth. If the family gym is only a part of your net worth, then you’re obviously even richer.
I strongly do believe things will get better by the second half of this year. And then your customers will start coming back and the income will start being generated.
May I ask how you guys build enough wealth to buy a $14 million gym? And what other type of assets do you guys own?
I’m always pleased to discover the many ways readers have build wealth over time. It’s pretty awesome and inspiring!
Sam, I am grateful for my family’s economic status and we’re still doing well thankfully. But yes, the frustration has been high. Other gym operators have filed for bankruptcy but our tenant is one of the last few who haven’t. If they do, it would be disastrous as they would break the lease and renegotiate the rent at a much lower price point. They’re open in other states now but they have many locations here in California.
I hope you’re right about the second half of this year and I’ll keep that in mind moving forward.
My parents came here as immigrants in the late 80s. My dad started an accounting firm and all the cash he generated he put towards investing in commercial real estate throughout the 90s. He then got into residentials during the 08 recession and that is when I hopped on. Pretty much all residual income has gone into real estate while the accounting firm grows organically through referrals. Fast forward 30 years and here we are.
I’m the only person in the family to continue these businesses/investments and so I’m feeling the pressure. I want to not only preserve/protect what my parents built, but also continually grow it. This has been hard for them as they left their country because of a civil war, government corruption, etc. and now they’re seeing the start of something similar going on here.
Gotcha. The responsibility is a great one. Hang on for at least 6 months. Things WILL get better!
And congrats again for being richer than 99%+ of Americans during these hard times!
It’s interesting how you squeeze in as many as GOP talking points into your seemingly apolitical writing. Half of what you state is factually incorrect. For businesses, Republican policies have been great in the very short term and disastrous in the long term.
Politics matter for work behavior, investing, and our wealth. It’s important to understand both sides and adapt accordingly. To not do so would be foolish.
Can you elaborate on what the disastrous policies are for businesses long term? As an investor and business owner, this is important to me. There’s just too many folks from both sides throwing out terms like “disastrous” without presenting cogent arguments.
Thanks.
Wife and I are right around the $400K AGI mark. Biden’s tax plan to stick it to those making over that amount is nice in the sense that at work I no longer feel the need to try to move up or into management. There’s no way I’m going to take on more stressful work to make 40 cents for every dollar. Time to coast!
If you’re not stressed making $400K, then that certainly is the ideal income for maximum happiness and returns! Congrats!
Haha, I wouldn’t say not stressed, but it’s manageable from a cost/benefit analysis though. But I’d have to be clearing closer to 70% than 40% of additional dollars for the type of work required to people manage.
Max great job with the nice income just remember the high income rich individuals do not play by the same rules Biden’s plan attacks high income earners not those that have assets producing qualified income or capital gains. I do not believe he will change the taxation of capital gains because Wall Street would have adjusted and sold off. Be safe.
Ah, well if there is stress.. .it may be more stress than you actually realize or is healthy for you.
You may want to try taking things down a notch to $300,000 and see if you’re happier, if you have variable income.
I’ve found about $200K is ideal for an individual… ~$300K is ideal for a family of up to 4.