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Financial Planning / Tax Strategies
|Subject: Re: Tax Deferred Annuity right for me?||Date: 4/29/2013 7:02 AM|
|Author: inparadise||Number: 118550 of 121603|
Honestly - I still don't get this. It isn't at all any kind of demotivator to me, and I live in CA so have very high taxes. I am not unmotivated to work because of taxes.
And that is just fine. I didn't state my opinion to change yours. In fact it works much better for me if you don't buy into my opinions and continue to pay taxes. But I am curious as to why you and others who say how much you love to work post on Retire Early Camp Fire, particularly when it actually was about early retirement rather than politics?
Taxes are not our only motivator to exit the rat race, but they do make it a lot less tempting to stay in. As with many things there is rarely just one motive, with some being stronger than others. And the primary motive for my leaving the work force after Eldest was born was understanding what it meant to have a kid, realizing that we didn't want strangers raising them, but when you added all the costs of continuing to work with a baby at home, taxes included, it was a no brainer to quit. My time at home, making it easier for DH to put the hours in that he is naturally programmed to do, learning how to invest the money he brought home, was worth significantly more than the net paycheck after taxes and things like daycare. Heck, there were years I made more than his paycheck from the investments I made, blessedly tax free in Roths. Time is money.
The way to get more money? Work more.
Or spend less, which is exactly why we have the options we do. There are still only 24 hours a day, so there are limits to how much one can work and not have it affect your health. We have worked hard for decades to save a significant amount of money. Earning more money is not a motivator in and of itself. Joining the grasshopper population is, while you ants keep paying taxes.
It takes hard work and planning to retire early and most won't be able to do it. There is a real question as to how easily my generation is going to retire at any age. But again it looks as though the rules are going to change to remove benefits from those who have provided well, saved hard. Part of long range planning is to adjust when things change, so it is time to stop saving, start spending.
It has been somewhat frustrating to pay the large amount of taxes every year, contributing more and more to the gov't when the portion of the gov't we use has not gone up. This year we got hit by AMT, and were denied thousands of dollars in common deductions like mortgage interest and real estate/state taxes. We are not hedge fund managers, not high rollers able to pay 15% tax, just a taxpayer who made a boatload of money for the company he works for and for once was recognized for doing so. Because we don't live large, the AMT impact was not huge, but it is hard not to feel it is a punitive strike against us for doing well.
So yes, we have identified our concerns with the way things work, and know that we cannot change the system, that it will most likely get worse because our gov't does not encourage our saver way of life. We have also identified our solution. YMMV.
who has this year's taxes to thank as the tipping point for convincing DH to exit the working world 3 years earlier than he had planned
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