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Subject:  Re: Tax management for retirees Date:  6/18/2021  9:46 PM
Author:  1poorguy Number:  103285 of 105933

And the TCO is already comparable to ICE vehicles (and even better if you qualify for incentives) and is dropping every year. So what you get is an amazingly better, safer, more pleasant car. And you never need to visit a gas station again.

I should probably check the latest numbers on that. I know TCO is dropping. The tax credit (on those vehicles for which it is still available) helps a lot.

But even then, not every decision has to be based on taxes and money. My mortgage is currently 3.375%. We're paying it off early. We've been paying extra for a few years now. I'm fully aware that if I had that money in the market, I would have gotten considerably more for it**. But we don't want such a large payment anymore. And, frankly, I was expecting the bottom to drop out sometime over the past four years (since the problems in the market really haven't been fixed since 2008, so it's gonna happen again). We're less than two years to pay-off at this rate. Did I calculate how much less I would have to liquidate from assets after I retire when I pay this thing off, to try to manage the capital gains to qualify for the ACA subsidy? Nope. I could have. Did I consider this a "guaranteed 3.375% return"? Yep, because it is.

So was my purchasing a new EV (common wisdom is you should always buy used) smart? Maybe not. But it had the form and function we liked, and was considerably cheaper than a Model S or X (both of which I like), so was within our price range. We still won't have to visit the gas station***, there isn't much to maintain****; basically costs almost nothing to actually own it after you purchase it.

And in two years we'll have a paid-off house, and have to liquidate roughly $24K/yr less than we would otherwise have to do. Which can only help for the ACA subsidy, though I didn't calculate it out.


**Though it wasn't in the market, it was transiting through my checking account that pays less than 1%. A lot less than 1%.
***We still have two ICEs, one of which I want to get rid of. I like our Jeep, though, and it may be some time before an EV can go where a Jeep can.
****Tires, the 12V battery, maybe some lubrication after 50K miles or more, brakes...that's about it, I think.
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