The Intersection of FIRE and Disney

bernina

DIS Veteran
Joined
Jan 25, 2014
Thank you @1st*toright and @pillow. I don’t think I would have even thought of that - wait until a few weeks before payment due, withdraw from Roth, deposit into 529, and finally pay tuition from 529 to take advantage of the state tax deduction. Genius!

I think I’m going to open a 529 soon and put the minimum in there, just so it’s open and waiting.

Thank you all, this forum is great!
 

BridgetBordeaux

DIS Veteran
Joined
Jun 27, 2008
Thank you @1st*toright and @pillow. I don’t think I would have even thought of that - wait until a few weeks before payment due, withdraw from Roth, deposit into 529, and finally pay tuition from 529 to take advantage of the state tax deduction. Genius!

I think I’m going to open a 529 soon and put the minimum in there, just so it’s open and waiting.

Thank you all, this forum is great!
I encourage you to consult a tax professional about that strategy. Passing the Roth money through the 529 may cause a complication if audited.
 

runwad

Dis Veteran
Joined
Jan 18, 2006
On the topic of paying for college: Don't forget about the American Opportunity Tax Credit https://www.irs.gov/credits-deductions/individuals/aotc if your joint MAGI is 160k or less you qualify.

You have to pay 4k of qualified educational expenses in order to get a $2500 tax credit. You can't pull money out of your 529 (earnings already tax free, double dipping- no no) it's gotta be cash or can be loans that would pays the 4k.

My kids have taken 10k in loans and I got 10k back over 4 years in tax credits. My oldest just graduated in May. We'll wait till our 6 mos grace is up and pay them off.

There's a new bill being discussed, I don't have a link dang it, but they are talking about letting you pay back student loans with 529 money. I have one more starting college this fall so I'm interested in this. Let the 529 sit and grow and take the Fed loans, pay off with the 529 at the end, we'll see. But I'm sure there will be some stipulation about not also getting the AOTC.

It's a lot of strategizing to get the best deal :thumbsup2
 
  • BridgetBordeaux

    DIS Veteran
    Joined
    Jun 27, 2008
    Thank you @1st*toright and @pillow. I don’t think I would have even thought of that - wait until a few weeks before payment due, withdraw from Roth, deposit into 529, and finally pay tuition from 529 to take advantage of the state tax deduction. Genius!

    I think I’m going to open a 529 soon and put the minimum in there, just so it’s open and waiting.

    Thank you all, this forum is great!
    Here is a link that explains how you can tip toe through the transactions.
    In order to NOT create a taxable event, only the contribution portion of the Roth can be moved to a 529.

     

    bernina

    DIS Veteran
    Joined
    Jan 25, 2014
    Here is a link that explains how you can tip toe through the transactions.
    In order to NOT create a taxable event, only the contribution portion of the Roth can be moved to a 529.

    Thank you!! Yes, we’re definitely only talking contributions and not earnings. The goal would be to only touch the contributions for college and leave the earnings for wedding, house down payment, etc (at which point DH will be 59 1/2 so we would start with his and have mine to withdraw in 5 years or when needed).

    And we will definitely meet with our advisor regarding any college payment or savings but plans. So much to learn and even though 8 years feels so far away it will be here before we know it.
     

    1st*toright

    DIS Veteran
    Joined
    Mar 1, 2017
    This thread has been inactive for a while, but I've been in a FIRE frame of mine today. Its Prime Day - deals all over the place. I have saved sooooo much money today - by NOT buying anything!!! Really wanted to, but counteracted the urge by reading Mr Money Mustache (a good counterbalance to all the consumer frenzy everywhere else, even if he's a little extreme). I did buy some shoes yesterday (using a cash back portal and Shoes.com's coincidental sale) which I needed, but today I've been looking at all kinds of stuff I want, but really don't need. A new fancy frying pan - yep, I really want it, but it would be a good thing for someone to get me for my birthday (in 6 months), not something I need right now. New soup bowls - yep, we are down to only 3 matching ones, but we have plenty that don't match and I have a fancy set for a formal dinner, anyway. A roomba or some other kind of robot vacuum - do those even work?

    We've been working on some home improvement stuff, so we are spending money, and expenses from my sweet DH's new business are rolling in (hopefully income will follow, but right now we're mostly dealing with expenses). It's all planned and budgeted spending, but I still don't like seeing balances decrease (ever), so I've been really trying to hold the line on other discretionary spending.
     

    speedyfishy

    DIS Veteran
    Joined
    Apr 3, 2016
    This thread has been inactive for a while, but I've been in a FIRE frame of mine today. Its Prime Day - deals all over the place. I have saved sooooo much money today - by NOT buying anything!!! Really wanted to, but counteracted the urge by reading Mr Money Mustache (a good counterbalance to all the consumer frenzy everywhere else, even if he's a little extreme). I did buy some shoes yesterday (using a cash back portal and Shoes.com's coincidental sale) which I needed, but today I've been looking at all kinds of stuff I want, but really don't need. A new fancy frying pan - yep, I really want it, but it would be a good thing for someone to get me for my birthday (in 6 months), not something I need right now. New soup bowls - yep, we are down to only 3 matching ones, but we have plenty that don't match and I have a fancy set for a formal dinner, anyway. A roomba or some other kind of robot vacuum - do those even work?

    We've been working on some home improvement stuff, so we are spending money, and expenses from my sweet DH's new business are rolling in (hopefully income will follow, but right now we're mostly dealing with expenses). It's all planned and budgeted spending, but I still don't like seeing balances decrease (ever), so I've been really trying to hold the line on other discretionary spending.

    I was texting my SO about all these deals and luckily he said we don’t need that stuff. The only thing I got was Giftcards for places that we go to on a regular basis. I do love my Roomba and it works but I got the newest model that was $1000. It was a generous gift.
     
  • runwad

    Dis Veteran
    Joined
    Jan 18, 2006
    I've just been bleeding money this month. Our oldest got her first job out of state, so helping her get a place set up and moved in.

    Then our youngest will be moving out going to college next month and it will start all over again 😟 .

    But come September we will be empty nesters for a while and plan to really get back on the savings track:thumbsup2.
     

    1st*toright

    DIS Veteran
    Joined
    Mar 1, 2017
    I was texting my SO about all these deals and luckily he said we don’t need that stuff. The only thing I got was Giftcards for places that we go to on a regular basis. I do love my Roomba and it works but I got the newest model that was $1000. It was a generous gift.
    I didn't get organized to do any gift card buying. I was following the vacuum discussion on the credit card thread a while back. I really want a Roomba (or whatever), but DH refuses to believe that they work. My counter to that is that it would definitely work better than our current mid-week cleaning routine of, um, not vacuuming. Another thing for him to buy me for my birthday (which falls conveniently after Black Friday). Or I could just up the nagging and get my teenager to vacuum mid-week, using the vacuum we already have (what are kids for if not free labor, right?)
     

    LuckyMamaInDE

    DIS Veteran
    Joined
    Oct 3, 2004
    I didn't get organized to do any gift card buying. I was following the vacuum discussion on the credit card thread a while back. I really want a Roomba (or whatever), but DH refuses to believe that they work. My counter to that is that it would definitely work better than our current mid-week cleaning routine of, um, not vacuuming. Another thing for him to buy me for my birthday (which falls conveniently after Black Friday). Or I could just up the nagging and get my teenager to vacuum mid-week, using the vacuum we already have (what are kids for if not free labor, right?)
    We have a Roomba that we run 2x a week---used to be 3x before long-haired dds left for college/moved out! Our floors stay so much cleaner than they used to, plus I don't have to pull out the the broom, swiffer, and vacuum any more! It wasn't the fanciest model made at the time of purchase almost 2 years ago (knowing dh it was probably one listed in Consumer Reports lol).

    Ours cleans hardwoods in the kitchen, dining room, dh's office (which would be the formal living room), and the entry hall, plus the family room carpet. Once a week I pull up the throw rugs (front entry, in front of sink, in front of oven) but the other times she vacuums those clean as well.

    Her name is Eva, as in Wall-E :rotfl:
     
  • tzolkin

    DIS Veteran
    Joined
    Jan 3, 2008
    Wanted to give an update on our progress over the past few months since joining this thread. Any input or suggestions are welcome.

    Background: We had been considering downsizing for a while and finally found a place that we decided would work. Purchased at the end of March and have been renovating. We just sold our previous house last Friday and are now in the new place (not completely done, but it's working). Age 38; kids are 20, 15, 13. Our goal is to have as little expenses as possible in the next 5 years once all the kids are graduated/out. Not necessarily looking to "retire" (won't have nearly enough saved), just wanting more flexibility (having the option to travel more and work less).

    Here are some numbers:
    - Mortgage for the current place is $74k and around $600/mo less than the previous home.
    - We had purchased a piece of property last year so I used $28k of our house proceeds to pay that off.
    - Have not yet decided how to allocate the remaining $41k.

    - In addition to the mortgage savings, I also started a new job several months ago. So, that's an additional $3200 per month in income (after taxes). I am currently putting 20% into a Roth401k, but have been too busy yet with the renovations and moving to analyze whether that's the best place for the money (I need to do a min of 4%). Also, now that we do not have the expenses of two homes we can save more (even all) of my income.

    Between the cash and the additional income, we could pay off the current house in under a year and still have a decent emergency fund but I think some combination of saving while paying off the debt would be a better idea. We were late to start saving so we only have around $125k in our investments.
     

    speedyfishy

    DIS Veteran
    Joined
    Apr 3, 2016
    Wanted to give an update on our progress over the past few months since joining this thread. Any input or suggestions are welcome.

    Background: We had been considering downsizing for a while and finally found a place that we decided would work. Purchased at the end of March and have been renovating. We just sold our previous house last Friday and are now in the new place (not completely done, but it's working). Age 38; kids are 20, 15, 13. Our goal is to have as little expenses as possible in the next 5 years once all the kids are graduated/out. Not necessarily looking to "retire" (won't have nearly enough saved), just wanting more flexibility (having the option to travel more and work less).

    Here are some numbers:
    - Mortgage for the current place is $74k and around $600/mo less than the previous home.
    - We had purchased a piece of property last year so I used $28k of our house proceeds to pay that off.
    - Have not yet decided how to allocate the remaining $41k.

    - In addition to the mortgage savings, I also started a new job several months ago. So, that's an additional $3200 per month in income (after taxes). I am currently putting 20% into a Roth401k, but have been too busy yet with the renovations and moving to analyze whether that's the best place for the money (I need to do a min of 4%). Also, now that we do not have the expenses of two homes we can save more (even all) of my income.

    Between the cash and the additional income, we could pay off the current house in under a year and still have a decent emergency fund but I think some combination of saving while paying off the debt would be a better idea. We were late to start saving so we only have around $125k in our investments.

    What’s the interest rate on the debt? We are maxing my SOs 401k before paying off his student loans. They are at 3-4% but the tax savings and the student loan interest lowers the AGI on our taxes and the interest rate isn’t that high. A lot of people prefer to have no debt and the guarantee return though. It’s really whatever you are more comfortable with.
     

    tzolkin

    DIS Veteran
    Joined
    Jan 3, 2008
    What’s the interest rate on the debt? We are maxing my SOs 401k before paying off his student loans. They are at 3-4% but the tax savings and the student loan interest lowers the AGI on our taxes and the interest rate isn’t that high. A lot of people prefer to have no debt and the guarantee return though. It’s really whatever you are more comfortable with.
    Only debt is the $74k mortgage. It’s at 4%. No tax savings since we likely won’t itemize deductions.

    It would be nice to have no debt/mortgage, but I think the earnings on investments would outweigh the interest on the mortgage. (If we don’t pay it off now, we will within 5 years). I’m thinking some combination of more saving while also putting extra toward the house, but just haven’t decided on the best way to allocate.

    Perhaps something like $1000 extra per month to mortgage and $2000 extra toward savings (but then I also need to decide how to divide that up— Roth IRA, Roth 401k, regular 401k, 403b, etc)
     

    AlohaNow

    Just keep swimming...
    Joined
    Oct 19, 2008
    Hey crew! Has anyone seen the documentary 'Playing with FIRE'? I just read about it in Kiplinger's and plan to go see it next week. Sounds like it's right up our alley!
     

    MrsPete

    DIS Veteran
    Joined
    Feb 24, 2002
    Admittedly I haven't read this whole thread, but I'm going to share something that a co-worker said to me recently:

    He and his wife love Disney. They are both going to retire soon (both are teachers) but want to keep going to Disney. They plan to take seasonal jobs at Disney driving busses. They already own an RV, which takes care of the lion's share of their living expenses, and they'll be able to hang out at the parks after their shifts. He says that they'll receive a free Disney ticket every X number of work hours, which they'll save so their kids can come visit, and they can go to the parks together. He says they're thinking of doing this a month or two each year.

    I haven't examined the possibility /reality of this myself, but it sounds like a fun plan to me.
     

    WVMomof3

    DIS Veteran
    Joined
    Feb 21, 2005
    Admittedly I haven't read this whole thread, but I'm going to share something that a co-worker said to me recently:

    He and his wife love Disney. They are both going to retire soon (both are teachers) but want to keep going to Disney. They plan to take seasonal jobs at Disney driving buses. They already own an RV, which takes care of the lion's share of their living expenses, and they'll be able to hang out at the parks after their shifts. He says that they'll receive a free Disney ticket every X number of work hours, which they'll save so their kids can come visit, and they can go to the parks together. He says they're thinking of doing this a month or two each year.

    I haven't examined the possibility /reality of this myself, but it sounds like a fun plan to me.
    I know people that do this. They have been doing it for over 10 years. They say it is harder to get hired on as seasonal now than it used to be. You do have to do so many hours per year, I think it is more than a month or two. They snowbird down there, so they are usually there October - April, they also live in an RV. They work retail in one of the shops, I think it is not always the same place every year. They use to be able to coordinate their schedule and always work the same shift, but I think that is harder now too. They love the discounts and I think for the most part like the work, but I do think the closeness of the RV living is wearing on their marriage a little.
     

    ten6mom

    DIS Veteran
    Joined
    Aug 28, 2012
    Hi everyone... new to this thread but I saw @SouthFayetteFan had started this one so I had to pop over and see what you're all chatting about. I didn't get through the last half of the pages but I did skim the first half.

    I technically HAVE a financial planner but I am looking either for a new one (need tips on how to do that without hurting her feelings. She's a nice lady but quite frankly I am not convinced she is particularly savvy; plus she ONLY communicates by phone and that just doesn't work for me as I work nights and business hours aren't my thing) and/or how to move my current (very small) investments to 100% online. Anyone got any tips on either or both of those items?

    Also, does anyone have a Coverdell for their kids? If you do, any thoughts on those vs a 529?

    And, I do NOT contribute to my employer's tax deferred "thing" (457b) :o . I have avoided it all this time because I don't know enough about investing to even know if it's a "good" program or not. My question is, if it does NOT have an employer match, do you think I should look into it anyway? I do contribute a small amount to a Roth every month outside of work. A very small amount. Conversely, if I find out it DOES have an employer match, should I do it regardless of how "good" a program it is? What say you, wise DIS-ers?
     

    WVMomof3

    DIS Veteran
    Joined
    Feb 21, 2005
    Hi everyone... new to this thread but I saw @SouthFayetteFan had started this one so I had to pop over and see what you're all chatting about. I didn't get through the last half of the pages but I did skim the first half.

    I technically HAVE a financial planner but I am looking either for a new one (need tips on how to do that without hurting her feelings. She's a nice lady but quite frankly I am not convinced she is particularly savvy; plus she ONLY communicates by phone and that just doesn't work for me as I work nights and business hours aren't my thing) and/or how to move my current (very small) investments to 100% online. Anyone got any tips on either or both of those items?

    Also, does anyone have a Coverdell for their kids? If you do, any thoughts on those vs a 529?

    And, I do NOT contribute to my employer's tax deferred "thing" (457b) :o . I have avoided it all this time because I don't know enough about investing to even know if it's a "good" program or not. My question is, if it does NOT have an employer match, do you think I should look into it anyway? I do contribute a small amount to a Roth every month outside of work. A very small amount. Conversely, if I find out it DOES have an employer match, should I do it regardless of how "good" a program it is? What say you, wise DIS-ers?
    I am not much help in any of that but for the last part I would say find out pronto if your company does a match. I think that is throwing away free money if you don't do at least that much.
     

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