Taxes and Financial Planning Archives - Page 2 of 3

The Roth Conversion Strategy Guide for Early Retirees

22 Comments / Taxes and Financial Planning, Financial Independence / Retire Early (FIRE), Investments / By Jim @ Route To Retire / December 17, 2019

Doing a Roth conversion can be the key to a successful FIRE (financial independence, retire early) strategy. That’s definitely the case for us. By doing some financial planning, this one move is allowing us to access money in our pre-tax retirement accounts with no penalty and the ability to pay little to no tax when it happens. Today, I’m going to take you through some more details on what a Roth conversion is and why it’s so valuable. I’ll also …

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How and Why We Changed Our State of Domicile

16 Comments / Taxes and Financial Planning, Estate Planning, Investments, Panama, Real Estate / By Jim @ Route To Retire / December 3, 2019

One of the things we did before we headed to Panama was to change our state of domicile. If you’re not familiar with the term, your state of domicile refers to your principal place of residence. If you leave for a while, it’s what can be thought of as the place you would return to afterward. In other words, it might be considered your “home base” in the U.S. – your permanent place of residence. For snowbirds that head from …

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Choose FI: Your Blueprint to Financial Independence

2 Comments / Product and Service Reviews, Debt, Education, Financial Independence / Retire Early (FIRE), Geoarbitrage, Investments, Real Estate, Saving, Self-Employment, Spending, Taxes and Financial Planning / By Jim @ Route To Retire / October 1, 2019

I don’t normally write book reviews on this blog, but I’m making an exception for the new Choose FI book. I was expecting my opinion to sway one way with the book but my impression after reading it went in a completely different direction. Chris Mamula is the author of Choose FI: Your Blueprint to Financial Independence (along with coauthors Brad Barrett and Jonathan Mendonsa). If you’re not familiar with Chris, he retired in 2017 at the young age of …

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Estimated Self-Employment Tax Used to Scare Me!

8 Comments / Self-Employment, Taxes and Financial Planning / By Jim @ Route To Retire / April 23, 2019

I’m just going to say it – I have three very small businesses that I’ve been running for years and I’ve never paid estimated self-employment tax payments. Ouch, for shame, for shame! That’s right, I’m a complete failure in that avenue. And that could have cost me, too. If you owe $1,000 or more come tax day in April, you might be hit with a penalty by the IRS. In essence, it’s an interest penalty on the difference of what …

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Why a $5,000 Tax Return Refund is Actually Good News

22 Comments / Taxes and Financial Planning, Financial Independence / Retire Early (FIRE) / By Jim @ Route To Retire / March 13, 2018

There are some folks out there who are enthralled by the idea of taxes. The idea of working on their tax return actually excites them every year. I’m far from being one of those people. Taxes… borrrrring! Unfortunately, love ’em or hate ’em, if you’re in the U.S., you’re stuck with doing a tax return every year. There’s a part of taxes though that I don’t really get. It’s the idea that if you get money back on your tax …

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Prioritizing Each Investment Account for FIRE

16 Comments / Investments, Financial Independence / Retire Early (FIRE), Taxes and Financial Planning / By Jim @ Route To Retire / November 28, 2017

As I became a little more familiar with the idea of FIRE (financial independence / retire early), I needed to learn where I should be putting my money. And I’m not talking about the specific investments – I’m referring to the type of investment account. Terms like taxable, tax-deferred, and tax-free can make a huge difference in the outcome of your portfolio. When I started out, I didn’t understand just how much of a difference each of these accounts could make in …

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Is Rule 72(t) the Escape Tool for Me?

12 Comments / Financial Independence / Retire Early (FIRE), Investments, Spending, Taxes and Financial Planning / By Jim @ Route To Retire / October 24, 2017

Rule 72(t). The name sounds as boring as 401(k). And it should because it’s from the same place – the Internal Revenue Code. Both are part of the tax law that the IRS gets to govern. Coincidentally, both Rule 72(t) and 401(k) plans are pertinent to this post. I recently wrote a post about our FIRE plans titled The Roth IRA Conversion Ladder Dilemma. I talked about how we plan on using the ladder to access our tax-deferred accounts earlier than …

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The Roth IRA Conversion Ladder Dilemma

13 Comments / Financial Independence / Retire Early (FIRE), Investments, Spending, Taxes and Financial Planning / By Jim @ Route To Retire / October 10, 2017

I’ve been a bit moody the past couple of weeks. I’ve been focusing a lot on trying to pinpoint our exact retirement date and I’ve been struggling. The problem all stems from the Roth IRA Conversion Ladder we plan to do. First off, if you’re on the path to FIRE (Financial Independence/Retire Early) and you’re not familiar with how a Roth IRA Conversion Ladder works, this could be important to you. It’s not the end-all-be-all solution, but the ladder is …

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My Experience with a Certified Financial Planner

20 Comments / Financial Independence / Retire Early (FIRE), Investments, Saving, Taxes and Financial Planning / By Jim @ Route To Retire / September 6, 2016

Recently, I decided that I wanted a second opinion on my game plan. Although I’m pretty confident on how to make things work, I decided that this is important enough to warrant bringing in someone else to look everything over and give some unbiased input. So I recently hired a certified financial planner. I thought this would be a great opportunity to take you through the process from start to finish to give you a better idea if this is something that you …

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Tying Up Loose Ends…

8 Comments / General Thoughts, Financial Independence / Retire Early (FIRE), Investments, Real Estate, Saving, Taxes and Financial Planning / By Jim @ Route To Retire / April 5, 2016

I recently realized that I have a number of loose ends out there from previous posts that my regular readers might be wondering about. So I thought I would take an opportunity to put out a post following up to hopefully tie up those loose ends a bit… Switching to an Accountant This was the first year I decided not to use TurboTax and go to an accountant. If you remember, I had three goals with this: Check over my work Get …

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