All posts by Joy

The Cost of Getting Healthy: Worth It

With my somewhat aggressive savings plan, my networth has eeked over the $480k mark, leaving “just” $20k left for the remainder of the year to hit my annual and “before giving birth*” goal of $500k. (*still not pregnant, so it’s looking more and more likely that I’ll hit this goal.)

While I’m far from frugal, I started doing some longer term calculations and realizing that perhaps I’m saving too much of my paycheck (is there such a thing?) I’m not a Mustachian — I have no desire to “retire early” — and maybe I don’t need $200k a year (after inflation) in actual retirement because I hope to always be able to work (albeit in a different, lower paid and more meaningful job once I’ve saved enough.) Continue reading

Congrats to 1500 Days to Freedom on Early Retirement…

I’m kind of sort of part of the personal finance blog community. Kind of sort of as I write way more about my mental illness and its intersection with my finances than specific and actionable financial advice for others. When I started writing this blog in 2007, just a little under 10 years ago, there were a handful of personal finance blogger types who had a strong following, and a lot of folks who had a handful of readers and intended to stay that way. Today, it’s kind of crazy how the personal finance blogging community has picked up and become quite the business.

One segment of the community is the “early retirement” folks — the ones that blog about saving money and investing in order to retire, usually in their 30s or, more realistically, 40s, in order to live life on their terms. This week, blogger 1500 Days to Freedom left his FT job with $1.4M in networth. I guess between his family’s frugal living, gains on his portfolio and the lower cost of living in Colorado where he’s based, $1.4M will last him and his family a lifetime. it’s a significant accomplishment, especially at age 40. Strange as it is, I’m only 6.5 years away from 40, and it’s highly unlikely that I will have $1.4M, even collectively with my husband at the time… Continue reading

Smile, Though Your Heart is Breaking: My Memoir

The older I get, the more visits with the parental unit become concrete episodes of psychological disorder ripe for analysis, versus emotional jabs to the heart. An obese, hot-tempered and narcissistic father dying from not one but two-types of cancer yet beating the odds thus far despite terminal illness, and a mother who has no ability to process emotion and who lives solely for capturing life in posed photographs where everyone looks happy, never mind how they actually feel.

When I hear of yet another occurrence of my father jabbing my mother with his cane or throwing her phone against the room, shattering its screen, or him calling her any number of degrading terms, I can’t help but blame the victim, or see them both as victims, as she has no ability to empathize with others, only to nag and focus solely on the illusion of happiness in moments captured on camera with no context to the disorder and discomfort underneath.

If I were to write a memoir, perhaps its title would be – Smile, though your heart is breaking. I had rationalized throughout my life that every family takes photos, that smiling and looking pretty in pictures was a normal part of life – which is it, if not to the extent of addiction to photographs without having the ability to live in the moment. The measure of the success of any life event or family outing could be measured in two ways — did my father not have an outburst, and did my mother capture photographs of everyone smiling at the camera with our eyes open and teeth showing just the right amount.

Yesterday, I had to stop my father from flinging across the room the $700 point-and-shoot camera I had purchased as a gift to my mother for the wedding. At dinner with my grandmother, sister and parents, my mother asked the waitress to take a photo on her phone, which inevitably didn’t come out that great because it was dark and the phone doesn’t take good pictures, so she asked the waitress to take another photo on the camera instead. This prompted my father to threaten to toss the camera across the room in a way where you knew he was serious. His mother luckily talked him down and the photo was taken by the waitress, albeit with my father purposely with the back of his head to camera.

Earlier in the day, a friend from childhood came over to visit. She was in town as the same time as I was by coincidence, but she actually had planned to see my parents at the time when she didn’t know I would be there. She came over and talked to us for a bit – time wise it was not ideal as we had to leave for dinner with my grandmother. We had to say goodbye and get going to be on time, but of course, my mother needed to take pictures of us smiling for the camera. My father nearly struck her with his cane, but company was present so he somewhat behaved himself. He took a swing as to threaten, but did not get near her.

I hear that this year when they were at their winter condo in Florida, with no one watching the moment, he struck her on the side. She knows that’s not ok, but at this point it’s just her life.

Mom complains about going to the hospital with my father for his surgeries, and shares that she is not looking forward to “taking care” of him if (when) his cancer gets worse. It breaks my heart that she can’t empathize or sympathize with her husband of all these years, of another human being who is dying of cancer and who has his best years behind him. But then I remember all the things my father has done to her, and I can’t blame her for her reaction – though it would be the same if he were a loving, kind man, she’d still only care about herself. She’d still complain about how the events are harming her life, not showing any modicum of care for another human life.

Smile, though your heart is aching. Smile, even though it’s breaking. — I see my family infrequently, and when I do, I always remember why I moved so far away. I wish I could have a close relationship with them, but that just isn’t in the cards…

I knew, getting out of the car, that my jeans had shifted too low and my shirt to high, and my stomach, plump with the roundness of a long winter’s depression and its related binge eating, was protruding in a non-flattering fashion. My father, of course, had to comment. “I am going to say it,” he said, and I knew what was coming. He paused, for a moment, clearly about to say I look fat but instead shifting the language to say “you should change before we go to grandma’s, she won’t appreciate how you are dressed.” I took a deep breath and said “I just need to pull my shirt down,” and left it at that. Years ago the comment would have been more direct towards my weight gain, but I think at this point since I have a husband he doesn’t bother me with that, only the inappropriateness of my clothing choices, despite having just traveled to visit them.

I know it could be worse – much, much worse. I’ve heard stories of friends who have parents who have done horrible things, or who just weren’t there at all. Parents who were divorced, who got remarried, who dated abusive men or women and alcoholics and drug addicts. Plenty of people are born into much worse situations – perhaps into loving families, but in areas of the world riddled with war. Few, in th history of time, come from healthy, stable families. Some do. And those who come from stable households often struggle with life when it gets rough unable to handle any imperfections. Perhaps in a way being hardened early is a blessing as life only gets more emotionally challenging over time, with the loss of loved ones built into not one the status quo, but the inevitable.

I’m trying to break free of all of this to find myself – before I have my own family. I have a wonderful husband who is everything to me. As I said to a friend the other day — one can be grateful and still miserable. Today, that’s me. Grateful, but broken. Appreciative, but empty. In awe all that I have, but have long forgotten what happiness feels like, my mental definition of the emotion locked in as a moment where I tilt my chin lightly downward, pull my shoulders back, open my mouth slightly with lips tilted upwards at the smile, and wait for the flash to capture the shell of a person who appears to be having a wonderful time.

Holy Sh… Estimated Taxes… WTF… as a Married Couple

Getting married is wonderful for so many reasons. Taxes is not one of them. Besides the horrific marriage fine levied by our tax lords if you happen to want to be an independent woman and continue working post tying the not, there’s also a whole host of tax intricacies which suddenly make TurboTax no longer a viable option and accountants your new BFF.

My husband is an independent contractor.  He usually makes anywhere between $80k and $110k per year, depending on how business is going. As a single person, he was able to take advantage of safe harbors designed to protect self-employed folks from overpaying taxes to avoid fines for coming short on estimated tax payments.

Safe harbors for estimated taxes for single, self-employed folks basically say that you can either pay 90% of your current year’s eventual tax bill OR 100% of your prior year’s tax bill. As a single person, this is pretty easy to figure out — even if it’s hard to guess what 90% of this year’s tax bill will be, you can pay 100% of your prior year’s tax bill and know you’re safe from fines, even if you end up owing more at the end of the year. If business isn’t going quite as well this year, you’ll get a refund, and you’ll give uncle sam a loan for a while, but it won’t be that bad.

Of course, getting married makes this all sorts of more complicated, requiring expensive accounting help to make sense of this mess.

Estimated tax safe harbor for higher income taxpayers. If your 2016 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2017 or 110% of the tax shown on your 2016 return to avoid an estimated tax penalty.

Thank you IRS for an explanation that is not clear at all. It sounds like if your AGI is over $150k as a single OR married person you are considered a higher income taxpayer. This means Mr. HECC would not have been considered a high income taxpayer as a single person, but now that we’re married we’re well over $150k and he can no longer use the safe harbors for his estimated taxes.

Instead, we have to pay 110% of our 2016 taxes (including my taxes) in order to not get penalized this year. Suddenly, my W2 withholdings are no longer an annoyance of over or underpayment to the government, but they can result in substantial penalties.

So – we need an accountant, stat. I consider myself fairly financially literate and the IRS explanation of all of this is the most confusing thing I’ve ever read.

Are any of you married with one partner earning W2 income and the other self employed? How do you manage your estimated tax payments?

What Does it Take To Be Successful in this Business?

Removing myself from the equation, I ponder what persona would be successful in a role like my own. I seem to care far too much personally about everything I do, which renders my work occasionally high quality but too often belated.  The quality, the “artistic merit” of the work is not valued – only its completion, it’s project management of other people playing their parts and getting their projects done faster and more effectively than anyone else, or at least making it seem that way while in reality surviving on little sleep to make sure everything gets done and no one has to ask twice regarding the whereabouts of a deliverable.

It’s the alienating daily experience of being an “NFP” in a strictly “NTJ” world… welcome to Silicon Valley, oh sensitive artistic one.

Everyone appears to be satisfied with this world, stressed, maybe, but focused, determined, and given those drawn to this industry are the types who always got A’s on their exams and submitted every last ounce of extra credit assignments possible, I feel like a complete outsider. I’ve never actually fit in anywhere, so the outsider role is at least my status quo. As I observe those in the world around me and age in the industry where I’m no longer the youngest in the room (now, far from it), I feel even further removed from the center of gravity here. I’m off kilter, wobbling about and hoping no one notices I’m slipping sideways, that is, until the inevitable face plant. Continue reading

Time to Move On… But Where To Go?

I thought maybe, just maybe, with a new boss and a more focused role I’d be able to keep my head down and get my shit done and I wouldn’t be a total train wreck. I knew that was highly unlikely, but the hope was there.

The historical self-sabotage rears its ugly devil head yet again, and I’m on the fast track out of this org, as soon as my superiors have enough documentation on the things I do wrong and enough new resources to manage the pieces I still run so nothing so much as briefly falls apart in my absence. The clock is ticking and soon my time will be up. Continue reading

Our Marriage Tax Penalty: How It Played Out

There is a lot of misinformation about the marriage tax penalty. While it’s true if one spouse doesn’t work and the other makes any amount of income, the couple will get a “marriage bonus,” once both partners are working and making enough income to live, esp in a high-cost-of-living area, the tax penalty is going to kick in.

The worst marriage penalties are seen when you have kids and lose deductions based on income, but I’m going to share in simple terms why we received a marriage penalty this year – this beautiful first year of our marriage – due tour income.

Federal Taxes Only (State marriage penalty not included below)

Mrs. HECC
Income: $195,000
Single Filer Tax: $47,749.25

Mr. HECC
Income: $105,000
Single Filer Tax:  $22381.75

  • Total Couple “Single” Federal Tax: $70131
  • Married Filing Jointly Tax: $74,217

And, just in case you’re wondering, it is not better to “file separately” as a married couple — this is not the same as filing single (which you can’t do when you’re married.)

Married Filing Separately:

Mrs. HECC

Income: $195,000
Single Filer Tax: $51,958.50

Mr. HECC
Income: $105,000
Single Filer Tax:  $22981.25

Total Married Filing Separately:  $74939.75 

As you can see, if you have somewhat higher incomes, the marriage tax penalty will be quite notifiable.

If we never got married… $70,131 in taxes
Marriage Fine (Filing Jointly)  +$4086
or, Marriage Fine (Filing Separately) +$4808.75

This plays out similarly in state taxes.

Yes, we’re fortunate enough to be high-income earners – but we also cannot afford a house. So there’s that.

 

Are 401k Accounts a Scam?

I’m no financial expert, but I try to follow the basic principles of investing and retirement savings in order to hopefully not be dirt poor in old age. One of these principles has been to consistently max out my 401(k) each year, which I’ve done faithfully now for many years, ever since I finally had access to a retirement account at work. As soon as as started making too much money for a Roth IRA, I socked away $18k a year in my 401k… and now, between all my pre- and post-tax retirement accounts, I have about $235k locked away, compounding over time.

However, after reading more propaganda on 401k investing, I started to suspect something fishy is up. Most of the anti 401k content focuses on issues with high fees — which, indeed, are a big problem with 401ks. But, really, the most suspicious piece of messaging out there on the benefits of the 401k is that you don’t have to pay taxes now so you get the “benefit” of paying them later. Continue reading

Thinking About Retirement Savings… as a Married Couple

My husband and I have very different financial philosophies. He spends very little and keeps his savings in a bank account. I spend too much but given my income have managed to save quite a bit — and I aggressively invest my savings in index funds, stocks, and alternatives.

Together, we have about $550k in savings, with $443 of that in my investment accounts ($235.5k in retirement included in that), and about $100k in his bank accounts. Over the last few years he has been investing in a Roth IRA, so he probably has about $10k in retirement savings to his name. As a married couple, he’s no longer eligible for an IRA, and he is an independent contractor, so I’ve done some digging into how he can increase his retirement savings, you know, before we retire. Continue reading

Thoughts on the Marriage Tax Penalty, Now that I’m Married

Unlike many unsuspecting newlyweds, I was well aware of the marriage tax penalty long before I got married. It seemed like a cruel joke that the tax brackets were different for married couples than singles, and that once married you no longer could file as a “single person.” There’s plenty of publicity around the “marriage bonus” but this only applies if you have one working person in the household. If both partners work and make about the same amount of money, you end up screwed.

I got married anyway.

The marriage penalty impacts different classes in different ways. The worst impact is on lower income couples who end up phasing out of tax credits and other benefits such as healthcare allowances if both partners work, even if together the couple is still together earning at poverty levels. For middle income couples in high-cost-of-living areas, the $1k-$10k+ that has to be paid to the government just for the privilege of being married is significant. Is love worth that much? Continue reading