1. Hey, Ed. Happy New Year! I’m glad to see that tax overhaul is going to be very kind to you in 2018. For us, we’ll see a 33% reduction in our income tax. Not too shabby. Throw in the $28K Obamacare subsidy and our effective federal tax rate will be around -93%. Again, great for us. But is it great for my fellow Americans? The plot thickens, my friend.

    • Happy New Year Mr. Groovy,
      It’s almost like the government wants us all to be wealthy. First, they give us a substantial amount of Free Money! to live an awesome lifestyle. Then, they give us a second bracket of low-tax income, the 12% bracket. Third, we still have all those accounts to fill up with pre-tax dollars: 403b, 457, IRA, and HSA. Finally, they provide nice health insurance subsidies if you live a “poor” / low-income lifestyle.

      Come on people, take the hint…the government wants you to be wealthy. If you throw in some geo-arbitrage in Flyover Country, your net worth grows at the speed of light!

      Come see us in Merida! Ed

      • “Come see us in Merida!”

        From your keyboard to Mrs Groovy’s ears! It will probably be 2019. This year is going to be tough with moving and building a house. Are you going to FinCon this year? Hopefully I’ll see you there, my friend. Hope 2018 is as kind to you as 2017 was. Keep growing rich like the government wants. Cheers.

  2. Kate

    Hi Ed,
    I am an educator in California. I was just curious
    If other states have an equivalent of calstrs or a teacher retirement system (pension). I have a love hate relationship with it considering they take $900 a month from my check and may never see much of it again if I decide to peruse FI or retire early. May be a topic for another post? I would be interested how the pension plays into your retirement plans

    • Hi Kate, pensions are a complicated subject because each pension plan has it’s own 1.) vesting requirements and 2.) payment formula. Here’s how it works in Georgia. First, you are vested after working 10 years, and you can begin drawing the pension at age 60. That can be 10 straight years or 10 years over a lifetime. In your case, you should ask a pension representative about your plan’s vesting requirements. Many times you do not have to work 30 years to draw a pension.

      Second, our payment formula is: (numbers of years worked * 2%) * (highest two-year salary average). So, if you worked 10 years and had a two-year average of $50k, you’d receive 20% of $50k = $10k. That’s how it works for us. I’m not sure how it works in California.

      I haven’t written anything about my pension, but maybe I should. Overall, I’m happy that my wife and I have a pension when we turn 60. I should get about $24k and my wife will get about $20k.


  3. For Kate in California: Before you do anything find out if the district you teach in provides lifetime medical benefits upon retiring. They are golden! Calstrs is a very good pension and they are incredibly helpful. Schedule an appointment to see where you stand. They’ll give you a 3 year window. Granted the pension has been revised but it’s still good. Also take care of those sick days as you may receive retirement service credit for them when you retire.

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