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What is your current net worth?
Less than $500,000
Between $500,000 and $1 million
Between $1 million and $2 million
Between $2 million and $3 million
More than $3 million

Click here to see results so far.

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80% Millionaires
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80% Millionaires

=============================
Yes, but a million dollars just isn't what it used to be.

So it follows that the term "millionaire" isn't what the name used to imply, either.

Bill
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" 80% Millionaires

=============================
Yes, but a million dollars just isn't what it used to be.

So it follows that the term "millionaire" isn't what the name used to imply, either.

Bill"

*******************************************************************

Actually, the term is precisely the same as it ever was - and no one
should find it surprising that an internet group following the market
would contain a fair number of folks with "spare cash".

Times do change - and the value of money changes - but the denomination
of money has not changed.

Howie52
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80% Millionaires

Yes, if you assume people answered the poll honestly.

PSU
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80% Millionaires

Yes, if you assume people answered the poll honestly.


I would hope that anonymous people on an internet message board responding anonymously to a poll would, generally, be honest. But who knows.

One wrinkle is how to define net worth. I thought about it but deliberately did not "go there" when creating the poll. Each person can use the definition that suits them best. (Some might tax-adjust certain holdings, some might treat an income stream like an annuity or SS as an "asset", some might not include home equity in primary residence, etc).

Interesting results, anyway.
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I would hope that anonymous people on an internet message board responding anonymously to a poll would, generally, be honest. But who knows.

Maybe your experience is different than mine....but often I'll read an article or a blog post somewhere about some item....and for the next several days I see advertisements for that item on twitter, facebook, news sites, etc. And I don't even have an account at twitter or facebook. And let me tell you about the time that my wife used my computer to look for women's clothes. For the next MONTH I was seeing ads for dresses, panties, nightgowns, etc.

Don't kid yourself, they track you and they know who you are, whether you are "anonymous" or not.

I never respond to internet polls, so honest doesn't even come into play.
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I would hope that anonymous people on an internet message board responding anonymously to a poll would, generally, be honest. But who knows.

Hopes can be crushed.

PSU
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progmtl: "One wrinkle is how to define net worth."

Net Worth = Assets minus Liabilities.

"I thought about it but deliberately did not "go there" when creating the poll."

I would not either but only because the definition is so straightforward.

"Each person can use the definition that suits them best. (Some might tax-adjust certain holdings, some might treat an income stream like an annuity or SS as an "asset", some might not include home equity in primary residence, etc)."

Anyone doing the first two things is not calculating net worth. Home equity is already included in net worth (value of the house is an asset) and any mortgage is a liability, so home equity flows to bottom line in net worth calculation.

Those adjustments may be valuable for purposes of some discussion or decision, but you are not then calculating net worth, but calculating something else.

Regards, JAFO
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These polls are obviously not statistically significant polls by any stretch of the imagination. They are small talk on a message board.

That being said, for purposes of talking about retirement planning, I would probably inquire about "financial net worth" and not count the primary place of residence either. So, when I answered I did not include the value of our home, or our SS, or jgcspouse's pension or our loan to our daughter to buy a farm, or annuities. For me, all of those things are "something else".
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jgc123: "These polls are obviously not statistically significant polls by any stretch of the imagination. They are small talk on a message board."

I agree.

"That being said, for purposes of talking about retirement planning, I would probably inquire about "financial net worth" and not count the primary place of residence either. So, when I answered I did not include the value of our home, or our SS, or jgcspouse's pension or our loan to our daughter to buy a farm, or annuities. For me, all of those things are "something else"."

I think in terms of "investable assets" - IRA, 401-K, brokerage accounts, savings not specifically earmarked for something else, etc., assuming that other assets are greater than liabilities. IF other assets were not bigger than liabilities, I would discount investable assets by the amount necessary to make other assets plus equal liabilities.

Just my $0.02.

Regards, JAFO
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"I think in terms of "investable assets" - IRA, 401-K, brokerage accounts, savings not specifically earmarked for something else, et"

That highlights an interesting difference in our thinking patterns. Once I reached a certain threshold in terms of saving enough to retire on, I stopped thinking of savings that is 'earmarked for something else' as opposed to any other savings.

So...if our combined income from pension, SS, dividends, interest, annuity and mortgage loan repayments is X, and I want to have enough cash to see us through a major (20% or worse) downturn, then I look at the cash in my various accounts and decide if it is enough. But I still think of cash as a financial asset wherever it is located.

But I thinking was closer to yours when I was younger and my circumstances were different.
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One wrinkle is how to define net worth.

True. I did not include the equity in our house. Can't know without actually selling the house, but in LA i guess our equity is $400,000 to $500,000. We plan to sell the house when we "retire" to the Old Folks Home. We are thinking here: http://carlsbadbythesea.org/

CNC
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True. I did not include the equity in our house. Can't know without actually selling the house, but in LA i guess our equity is $400,000 to $500,000. We plan to sell the house when we "retire" to the Old Folks Home. We are thinking here: http://carlsbadbythesea.org/


Great Choice CNC, The wife and I walk by there all the time when we are vacationing in Carlsbad. We like staying here. https://www.beachterraceinn.com/ Nice rooms right on the beach.

Andy
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>Great Choice CNC, The wife and I walk by there all the time when we are vacationing in Carlsbad. We like staying here. https://www.beachterraceinn.com/ Nice rooms right on the beach.

Andy


Thanks, Andy. We are spending next week here: https://member.diamondresorts.com/Resorts/CIB/FactSheet/Popu...

CNC
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". We plan to sell the house when we "retire" to the Old Folks Home. We are thinking here: http://carlsbadbythesea.org/

CNC "

*******************************************

Ever see an old television show called "The Prisoner." - circa 1967?

For some reason the photos remind me of The Village.

Looks like an enjoyable locale.

Howie52
Congrats on approaching retirement.
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Thanks, Andy. We are spending next week here: https://member.diamondresorts.com/Resorts/CIB/FactSheet/Popu......

CNC


That brought me to a login page CNC and I know Diamond has a place by the flower fields near Carlsbad. If that is where you are staying you are very lucky.

Andy
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That brought me to a login page CNC and I know Diamond has a place by the flower fields near Carlsbad. If that is where you are staying you are very lucky.

Andy


https://local.yahoo.com/info-20798495-carlsbad-inn-beach-res...

Will get to the resort's page. Isn't everyone in Diamond Resorts?

CNC
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Isn't everyone in Diamond Resorts?

I can only afford the Cubic Zirconia Resorts.
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Will get to the resort's page. Isn't everyone in Diamond Resorts?

LOL if there not maybe they should be.

Andy
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80% Millionaires

Yes, if you assume people answered the poll honestly.

I believe it. Many (most?) of the people on this board have been at TMF for two decades-ish. That means they've had an interest in personal finance and investing for at least that long. Totally plausible you can become a millionaire in that amount of time just by doing the basics like maxing (or close to maxing) your 401(k) and maxing your IRA.
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jgc123:

JAFO - <<< "I think in terms of "investable assets" - IRA, 401-K, brokerage accounts, savings not specifically earmarked for something else, etc.">>>

"That highlights an interesting difference in our thinking patterns. Once I reached a certain threshold in terms of saving enough to retire on, I stopped thinking of savings that is 'earmarked for something else' as opposed to any other savings.

But I thinking was closer to yours when I was younger and my circumstances were different."
[Note - re-ordered]

IIRC, you are not that much older than me, but most of my "investable assets" are in tax protected accounts (for other reasons, and I do not care to elaborate), so sometimes easy liquidity (without generating taxable distributions) can be a concern.

"So...if our combined income from pension, SS, dividends, interest, annuity and mortgage loan repayments is X, and I want to have enough cash to see us through a major (20% or worse) downturn, then I look at the cash in my various accounts and decide if it is enough. But I still think of cash as a financial asset wherever it is located."

I will give one counter-example. 529 money - earmarked for child's education, and while I could (in theory) withdraw for other uses, it would generate taxes and penalty and reduce the amount available for schooling; so in reality, I do not consider it part of investable assets for retirement.

Ultimately, no skin off my nose that we view things slightly differently, and if it works for you, great.

Regards, JAFO
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"I will give one counter-example. 529 money - earmarked for child's education, and while I could (in theory) withdraw for other uses, it..."

My children are 38 and 33 years old respectively. I am long past paying for education of children and/or their weddings. So I assumed I was older than you (approaching 63) but that may have been a faulty assumption.
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"Each person can use the definition that suits them best. (Some might tax-adjust certain holdings, some might treat an income stream like an annuity or SS as an "asset", some might not include home equity in primary residence, etc)."

Anyone doing the first two things is not calculating net worth. Home equity is already included in net worth (value of the house is an asset) and any mortgage is a liability, so home equity flows to bottom line in net worth calculation. - JAFO


---------------------

I agree with you about the second thing but question your reasoning about the first regarding Tax adjusting. A pre-tax dollar setting in a TIRA is worth less than a tax free dollar setting in a Roth. Put another way, the inevitable Tax on the TIRA, represents a liability that offsets some of the gross value of the TIRA asset.
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Interesting continued conversation on this thread... and that is precisely why I did NOT attempt to define net worth in the poll. I'm sure it has a precise accounting definition. Yet people, for a variety of reasons, choose to interpret it their own way (I do; I'm someone who tax-adjusts SOME holdings which I know are going to get smashed by taxes upon realizing their value, like stock options).

I agree with syke6 that it is not surprising at all that the respondents to the poll are 80% or more above $1 million net worth. There probably aren't tons of new people flocking to these antiquated message boards. We're mostly long-timers, higher than median incomes, strong interest in investing - and for some of us retiring early is a priority!

I thank TMF and many people on these message boards over the years for opening my eyes to the possibility of early retirement starting around 1999 (when I was 3 years post-college and getting settled in my career). I'm now 44 and have something like 8-12 years to go, depending on the vagaries of market movements and my comfort level in pulling the plug down the road. It's been an interesting ride.

cheers,
-progmtl.
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As a matter of principle, I do not calculate this.

I am more concerned about what I'm worth alive than what I'm worth dead.
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why I did NOT attempt to define net worth in the poll

I would respectfully argue you probably should have, due to the wide variation you'll get in responses based on how net worth is calculated.

You could certainly ask responders to use a standard, at least for the major assets, in arriving at net worth. The BankRate calculator is probably a good approximator and is pretty easy to use.

https://www.bankrate.com/calculators/smart-spending/personal...

Some may want to extend this simple form to include the present value of annuity streams, such as a pension or life annuity, using life expectancy and a conservative investment return as the discount rate. For retired households with a Federal CSRS 35 year pension this could easily be half of the household's net worth. And those with a TIRA or a defined contribution plan may want to multiply this by (1-marginal Fed + State tax rate), as part of the value of those accounts really belongs to the IRS/State and so could be considered a liability (claim on assets).

Just some thoughts

BruceM
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jgc123:

<<<"I will give one counter-example. 529 money - earmarked for child's education, and while I could (in theory) withdraw for other uses, it...">>>

"My children are 38 and 33 years old respectively. I am long past paying for education of children and/or their weddings. So I assumed I was older than you (approaching 63) but that may have been a faulty assumption.

You are not much older than I am, you were just luckier in love and married and started your family much sooner than I did.

Regards, JAFO
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bighairymike:

<<<"Each person can use the definition that suits them best. (Some might tax-adjust certain holdings, some might treat an income stream like an annuity or SS as an "asset", some might not include home equity in primary residence, etc)."

Anyone doing the first two things is not calculating net worth. Home equity is already included in net worth (value of the house is an asset) and any mortgage is a liability, so home equity flows to bottom line in net worth calculation. - JAFO>>>

---------------------

"I agree with you about the second thing but question your reasoning about the first regarding Tax adjusting. A pre-tax dollar setting in a TIRA is worth less than a tax free dollar setting in a Roth. Put another way, the inevitable Tax on the TIRA, represents a liability that offsets some of the gross value of the TIRA asset."


Who knows what tax rate you will pay? Will you do the same with all other capital assets, too? At what rate?

Net worth is simply a snap shot in time, calculated as assets minus liabilities. Start excluding asset and guessing at liabilities and you are calculating something else, not net worth. Do so as you wish, I can see scenarios in which it is worth while and useful, but it is not a net worth calculation.


Regards, JAFO
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BruceCM: "The BankRate calculator is probably a good approximator and is pretty easy to use."


I agree with you that it seems good and pretty easy to use. It looks much like spreadsheet, but I do not count cash value of insurance because it is accessed by loan (or perhaps policy termination).


Regards, JAFO
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What you include or exclude from your "net worth" calculation depends on what you intend to use the answer for. If you are looking for a big number you would include home equity, the value of your cars, the value of the clothes in your closet, etc.

Pedantically, that's the right number.

But when you are trying to figure out things about how much money you have for retirement purposes, the appropriate number is the value of your liquid and near-liquid investments. For that purpose, I do not include the value of "consumption" items like house equity, cars, clothes, books, etc. I also probably wouldn't include any equity I had in rental houses--simply because it is not liquid.

This would be "investable net worth". And that's what people on an investment board would be looking for.
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We used to call that NIPR millionaires - Not Including Primary Residence.
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This would be "investable net worth". And that's what people on an investment board would be looking for.

Speak for yourself, not for 'people on an investment board'. If I see 'net worth' with no other constraints, I expect to see total net worth. I only look for 'investable net worth' when that constraint is placed on what's being asked for.

AJ
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I just do a tally of the balances of all my accounts-checking, MMA, brokerage accounts, CD’s, I-Bonds and even the change I keep in my cars for tolls. That’s all the cash I can get my hands on if all heck should break loose, that’s what is important to me.

House and cars....ehhhh? No

Cash value of life insurance policies? No

Property value? No

All of that is good when looking at my overall Net Worth, but I’m more interested in easily accessible CASH.

Lucky Dog
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Lucky Dog wrote:

....and even the change I keep in my cars for tolls. That’s all the cash I can get my hands on if all heck should break loose, that’s what is important to me.

Had to laugh at that bolded part. ;-)

I had my car broken into in NYC when I lived there way back when due to my little Tupperware tub I kept in the car filled with my GWB toll booth money. Of course, the toll is $15 these days, but back then in the 80's I could do it with quarters as the toll was only $2 - $3.

BB
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What you include or exclude from your "net worth" calculation depends on what you intend to use the answer for. If you are looking for a big number you would include home equity, the value of your cars, the value of the clothes in your closet, etc.

Pedantically, that's the right number.


Yes, this. In order to discuss just about anything, we need to have a common definition. While using the accepted definition of "net worth" means we're talking about a number that is less useful for a variety purposes, it has the great advantage of being well defined.

That having been said, when I look at net worth I exclude the value of my car, the clothes in my closet, and other personal possessions. I don't exclude them because they're illiquid, though they are (except, arguably, the car). I don't exclude them because they're immaterial, though on the scale of my net worth they are. I exclude them because they're a nuisance to value, the car depreciates, and it's just not worth the effort to come up with a number.

I look at the size of my investment portfolio more than I look at my net worth, but even there I look at it mostly as a subset of net worth. I don't adjust for the deferred tax liability, because that liability is subject to considerable estimation error based on assumed tax rates and how the liability gets realized. Estimating the taxes comes into play when I actually plan to use some of the money.

For what it's worth, excluding my car, my personal property, and even my residence from my net worth would make no difference to where I land in the poll's options. Adjusting for deferred tax liability might make a difference, particularly if I assume everything is liquidated in the same tax year. But I don't expect that to happen.
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It would probably be easier if you all just pulled out a ruler instead of quibbling about definitions.
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It would probably be easier if you all just pulled out a ruler instead of quibbling about definitions.

For some, a ruler doesn't work.

PSU
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...because it only goes to twelve inches?

skorthos
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...because it only goes to twelve inches?

Or if an inch is too long you could measure in centimeters...

IP
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You have a dirty mind. ;-)

It's not the first time someone said that.

PSU
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I have missed this entire thread, coming in after 43 posts to complain about “definitions”, which apparently has already sidetracked a number of posts.

“Net Worth” isn’t how much cash you have in your car, or how much cash you have altogether. It’s *net* worth. Everything that’s an asset minus everything that’s a liability.

If I have a house worth a million dollars and a million in the bank, how is that “less” than someone who has a $250,000 house and $1.2m in the bank? The “net worth” is the actual value of everything: house(s), cars, bank accounts, portfolio, other monies, everything.

If you want to cal it “investable net worth” that is a different thing, but words have meaning. Don’t invent new meanings on the fly please.
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If I have a house worth a million dollars and a million in the bank, how is that “less” than someone who has a $250,000 house and $1.2m in the bank?

Since you asked, that would depend on whether either house has a mortgage and the size of that mortgage.

PSU
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Yes, if you assume people answered the poll honestly.

I would hope that anonymous people on an internet message board responding anonymously to a poll would, generally, be honest. But who knows.

One wrinkle is how to define net worth.



I answered honestly. As far as defining "net worth," I used all the 401k/IRA/etc-type assets. The equity in our home didn't matter, because counting it or not didn't change the category that applies. The one wrinkle is that I counted both my assets and my wife's together. Although, I just realized that doesn't change the category for me.

Counting the value of my (or our) autos also won't change the category.
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"If I have a house worth a million dollars and a million in the bank, how is that “less” than someone who has a $250,000 house and $1.2m in the bank? "

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Well, there is this thing called a mortgage.
And there are things that degrade the value of houses - including
several "Acts of God", wars, pestilence and such. You might say that
other items can be impacted by such things - but selling a piece of
property does tend to have a time factor impact which sometimes causes
folks headaches.

The terms "house poor" and "land poor" come to mind.

Howie52
Also, the flick "Money Pit" comes to mind.
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"Well, there is this thing called a mortgage."

That would show up as liability on your 'net worth' statement, or you could just use 'equity' in your house.

- ----
"And there are things that degrade the value of houses - including
several "Acts of God", wars, pestilence and such. You might say that
other items can be impacted by such things - but selling a piece of
property does tend to have a time factor impact which sometimes causes
folks headaches."

Yes, housing is not an immediately liquid asset...then again, some people own restricted stock or lightly traded stock, or hold bonds or CDs with maturity dates and penalties for cashing them in, or bonds with lower interest rates that aren't worth as much if you trade them in during high interest rate periods. There are all sorts of problems of various asset types.

However, "net worth" is...well net worth. Everything you own, minus what you owe. Simple.

Now, if you want to define 'retirement assets' for 'retirement income' purposes - that's a whole new ball game.




t.
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TheBreeze:

I answered honestly.

Thanks. I did too. And, like you, I realized that some of the net worth machinations-of-calculations would not have changed my answer either, as far as moving to a different "tier" in the poll.

I expected disagreement about how to define net worth, which is why I DIDN'T define it. I suppose I should have expected the resultant thread from a bunch of stubborn, money-minded, early-retirement-focused (most, but perhaps not all), millionaires. I say that somewhat fondly! :)

Most of us, definitions notwithstanding, are thinking about the ability to live off our assets until we die. Some of us have other income streams (not me, for another 18+ years if SS is still there similar to today) and that muddies the picture a lot. But I think most of us with our $1 million + net worths don't care one bit about the value of our cars, or clothes, or electronics. We care about the value of investments, which dwarf the value of our possessions, and perhaps the home equity in a primary residence, if it may be feasible to downsize, and other financial vehicles that allow us to support ourselves in retirement.

So IMO most of us filter "net worth" through that sort of lens. And make the adjustments that seem reasonable.

In the end, i'm not overly surprised at the poll results except perhaps the number of > $3 million respondents. Good for you all! I'm hoping to have one of those retirement experiences like some here where I retire with > $2 million (but less than 3) and 10+ years later, despite living off my nest egg, I'm at > $3 million.

cheers,
-progmtl.
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Yeah, for me the ruler measured 0....
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My spreadsheet is set up with 3 sets of numbers: retirement funds (our IRAs/401K/403B accounts), liquid investments (savings acct + stock account) and the illiquid accts (529s and house equity).

The summation of the 3 gives us net worth, the retirement+liquid gives me what we will have in retirement, and the liquid is the freedom from working now fund.

If I was being super OCD, I would add in cars/jewelry/other valuables but that is more precision than needed. At some point, I should add in the HSA under retirement accts, but again, it won't budge the number much so why bother?

Simple system, have been doing it for years now. Update quarterly. Drag my DH over biannually to look at the numbers (he is COMPLETELY uninterested in finances).

KISS. I refuse right now to even try to estimate taxes on the withdrawals.
Kristi
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