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The financial independence retire early (FIRE) community is a very supportive and tight-knit one. One thing I appreciate from the diverse FIRE community is that there are people ahead of us who are always willing … Read more
Retirement planning is a big part of your financial preparation and strategy. Your 401(k) is one of the best retirement investing accounts you have and so easy to set up through your employer. Add on tax free or tax deferred growth and matching employer contributions and you’ve got a retirement planning powerhouse. However, among the biggest retirement planning mistakes includes ignoring your 401(k) and forgetting to contribute to your workplace retirement account. Following are the 9 biggest retirement planning mistakes to avoid. Most of these 401(k) mistakes can be avoided with smart retirement planning and help from professional retirement consultants. 401(k) Mistakes That Can Cost You Most experts agree that a 401(k) is one of the smartest ways you can save for retirement. But here’s the catch, about one-third of middle-class Americans are dipping into their retirement funds before actually retiring, according to a 2025 Transamerica Research study, “Retirement in the USA: The Outlook of the Workforce”*. If you do that, you could be putting your future financial security at serious risk. Withdrawing from your 401(k) before you turn 59½ typically means paying a 10% penalty in addition to any income taxes owed. That one decision could cost 30%+ of the amount withdrawn. These are some common retirement planning mistakes to avoid: 1. Being Unaware of Types of 401(k) Accounts When it comes to 401(k) accounts, most people can choose between two main types: traditional 401(k) and Roth 401(k). The difference between them can have a big impact on your retirement strategy. With a traditional 401(k), your contributions are made before taxes, so you lower your current taxable income. However, you’ll pay taxes later when you withdraw money from your 401(k) in retirement. This can offer major tax advantages today, depending on your current tax bracket. A traditional 401(k) might be a good choice if you believe that you’ll be in a lower tax bracket when you retire and start your withdrawals. On the other hand, a Roth 401(k) is funded with after-tax income, which means that you pay taxes on your income before funding the Roth 401(k). When you retire, your 401(k) withdrawals, including any investment growth, are completely tax-free. This account might be good for you if you anticipate that tax rates will go up in the future or that you’ll be in a higher tax bracket in retirement. 2. Failing to Make Saving a Regular Habit It’s easy to think you’ll start saving later when you feel more financially secure. But, if you don’t save enough, skip contributions to a 401(k) or fail to gradually increase your 401(k) contributions as your income grows, it could seriously impact your retirement savings in the long run. The good news is that it’s simple to get started. You can set up your 401(k) to automatically deduct contributions from your paycheck, so that you’re saving and investing automatically. Many plans also let you schedule automatic annual increases to your contribution rate. This way, you’re contributing a greater amount each
It is easy to get caught up thinking about the benefits of retirement, like no more morning commutes, more time with loved ones, travel, hobbies, and freedom. But from a financial perspective, the first few years of retirement are some of the most critical. While much attention focuses on accumulating sufficient assets for retirement, the timing of market returns during a specific ten-year window spanning five years before and after retirement that researchers have termed […]
You can have all of the money in the world, but it means nothing if you don’t have your health. Warren Buffett drove this point home at the first Berkshire Hathaway meeting I attended over 10 years ago. A young audience member asked a question about book recommendations. Buffett rambled on and changed the topic, […] The post Maximum Fitness: The Best Benefit Of FIRE appeared first on 1500 Days to Freedom.
Planning for retirement involves making smart financial decisions to ensure a comfortable future. One crucial aspect of retirement planning is minimizing taxes to maximize your savings. In this article, we will explore various strategies for achieving a tax-free retirement, including utilizing tools like index universal life, whole life insurance, Roth IRAs, Roth 401(k)s, Roth TSPs, and municipal bonds. Index Universal Life Insurance Index universal life insurance is a financial product that combines the benefits of […]
Hey Everyone! I am back from my California road trip. We had a blast visiting friends and family. We also explored the Central Coast and the Sequoia National Park. Mrs. RB40 and I went to school in Santa Barbara and love the area. Houses in Santa Barbara are crazy expensive, though. That’s why we wanted to check out other beach towns along the Central Coast. Morro Bay was a great spot. I wouldn’t mind retiring there someday. The bay would be great for paddling and other recreational activities. We enjoyed Sequoia NP too. My parents took us there when we were kids, and I have fond memories of the park. RB40Jr wasn’t impressed, but I think he’ll appreciate it when he’s older. Teenagers… The picture here is from the Oregon Caves National Monument & Preserve. We stopped for a night in Grants Pass and spent the morning at the Oregon Caves. It was great. The tour was interesting, and the hike wasn’t too strenuous. I highly recommend visiting the Oregon Caves if you’re driving from CA to OR on the I-5. It’s a good stop. On the personal finance side, things were good. Our net worth hit a new high again. That’s crazy, but I’m not complaining. I’ll enjoy feeling rich while the stock market is doing well. Cash flow was okay, too. We stayed with friends and family most of the trip and saved a ton of money. A road trip is way cheaper than an international vacation. Alright, I’ll share how I’m doing with my New Year goals. Then, I’ll go over our net worth and cash flow. Let’s go! 2025 Goals Here is my 2025 goal spreadsheet. It’s great. Try it out if you can’t keep up with your New Year goals. The key is to review the spreadsheet monthly to track your progress. That way, you can see which goals need extra attention and work on them. It looks like I’m on track for most of my goals. Financial Goals Sell Rental Condo This was my main goal for 2025. The previous tenant moved out of our rental condo in January. I fixed it up and listed it for sale. Unfortunately, the condo market was terrible in Portland. We only had one viewing in 4 months! I think buyers are afraid right now. The economy is too uncertain and the interest rate is high. That’s why I decided to rent out the condo for now. We’ll put it on the market again in a few years. Anyway, I want to travel more and I’m tired of being a landlord. I’d rather invest in real estate crowdfunding. That’s much easier. Prep duplex for sale Along the same line, I want to sell our duplex* after RB40Jr finishes high school in 2029. We want to move to Southern California to be closer to families. Mrs. RB40’s parents are getting older, and they need help. *We live in one unit and rent out the other. This year,
Retirement planning tools are incredibly helpful, until they’re not. Various tools can offer insight into your financial future, but none of them tells the whole story on their own. To make informed retirement decisions, you need more than just a number or a percentage. You need to understand how these tools work, what they assume, and, most importantly, what they don’t tell you. Monte Carlo Simulations: Great at “What Ifs,” But Light on Context Monte […]
If you don’t think that headline is sexy, I’m afraid I can’t help you. But if you’re like me and “the numbers” are loads of fun to play with, you might appreciate Boldin. Having a simulator tool at the ready is like having a good co-pilot to remind you to check the fuel gauge and […] The Post How I’m Using Boldin to Tweak Our Retirement Finances appeared first on Abandoned Cubicle
More than a few readers have asked us a variation of this question: “why save for retirement when the world is on fire?” In fact, they’ve asked often enough that we decided to dust off the ol’ podcast and address the doomerism head-on. We try to keep things light around here. Or rather, we try to lighten up the dark times with a liberal application of 90s pop culture gifs and dick jokes.* For the most part, we’re successful! If we can give you a sensible chuckle or a hearty snort-laugh while you’re reading about the racism and classism inherent in the credit scoring industry, then we consider it a job well done. But there’s no denying that right now… shit’s bleak. A handful of our followers have therefore asked us some variation on a concerning theme: If everything’s going to hell in a hand basket, why should I even bother saving for a future retirement that won’t exist? Like I said: bleak. We’re happy to have an opportunity to show off our rarely-glimpsed optimistic sides. These times are unprecedented—but they’re also super precedented. History is brimming with excellent guides for surviving turbulent times, and we can learn from them how to brace ourselves and protect what’s important. It’s a conversation worth tuning in for, even if you’re feeling more hopeful about the future. *Bitches Get Riches: It’s not just dick jokes about money… it’s also money jokes about dicks! This week’s question The doomerist question at hand came to us from a follower who prefers to remain anonymous. So we’ll call them Cricket. The question is: “BGR, I have some money that I can put in a retirement account, but I’m having trouble bringing myself to do it because the world seems like it’s on the verge of ending (not to be dramatic). I’m in my early twenties and it’s hard to imagine current financial institutions still existing in 50 years, for better or for worse. Why should I even bother saving for retirement when the world is on fire?” We completely understand what’s got this question-asker feeling so demoralized about the future. We share their yearning “for better” as well as their fears of “for worse.” With so much traditional advice being chucked out the window, is saving for retirement still a worthwhile endeavor? Our answer [embed]https://youtube.com/watch?v=wkQEho126qo&feature=oembed[/embed] Climate change, authoritarian regimes, the rollback of rights for women and minorities, unfettered capitalism and billionaire oligarchs… it can all seem like an overwhelming tsunami, sweeping progress and decency and a decent quality of life away from our grasp. But if I may spoil the episode a little bit, we believe there’s plenty of hope. But more importantly, we think there’s still something worth fighting for. Here’s where we suggest you start
Hope you’re all having a good summer and not drowning in sweat like we are. When we’re not out at community pools or chasing our toddler around at playgrounds, we managed to find the time to look through our readers cases and this one jumped out at me. It’s about an American living in Merida, one of our favourite places in Mexico. If you’ve never been there, I highly recommend it as the people are […]
Well, sort of. Most of the tasks that comprised my usual workload had been automated during the past year, so my current position was made redundant. There were a range of alternative positions that I could have ‘applied’ for, but none were really of great interest to me, or a good fit for my skill set and qualifications. It also made little sense financially to continue working rather than
When you’re dealing with financial struggles, you might need to tap into all of your resources. It can feel really uncomfortable to drain your emergency savings, max out your credit cards, and… finally… start pulling money out of your retirement accounts. That’s the situation I was in a few years ago when I had a major health crisis. And it felt like I’d never recover physically or financially. But I did, from both setbacks. And […]