MUSIC: Low Key Gliding - Hal Walker

Who are you? What do you value? How much risk can you tolerate? What is you capacity to tolerate catastrophy? Getting finances in order is about making conscious decisions when you were not doing so before. One who trods down this path–treating it with the gravity it deserves–will rebuild their finical world in the image of what they value in life. Finances should be a mirror of what you want your life to be in all stages; in youth, in middle age, in the elder years, and in death. It's a tool that enables you to live the life you desire, filters out foolhardy thoughts, and acts as a scale to give decisions their proper weight. Retirement planning and having a solid understanding of personal finance is one of the best tools to decide what kind of live you want. It will give you the tools to plan it, exit ramps if things are going poorly, and tell you how to derive maximum benefit from a windfall. Have a think. How do you live?

MUSIC: Drive45 - Everything I own

1a. Expenses 1b. Savings 1c. Monitoring 1d. Interest 1e. Taxes 1f. Investing 1g. Insurance 1h. Windfalls

じぶんがいない - salyu × salyu

2a. Tax Advantaged Investments 2b. Pensions and Social Security 2c. Real Property 2d. Children and Community MUSIC They Caught us Doin' it - The Vaudevillian

To retirement your money must be working for you. Money in a bank, in a mattress, or in non-appreciating assets are not retirement savings. A healthy retrement savings is one in which those savings are growing heavily in value. The most common way folks invest their retirement savings is into the stock market. It is the safest way to get to retirement.

The main way most folks save for retirement is tax advantaged investments. These are in two broad categories, Tax Differed and Tax Exempt. Both reduce the amount of taxes you pay on income, just at different points in your life. Withdraws from tax advantaged are penalized if done before retirement, with some exceptions and nuances. Broadly speaking they protect your money as well; they can't be seized if you go bankrupt, are generally shielded if you get sued, and are hard for creditors to access.

Tax Differed accounts reduce your immediate tax burden. The most common types are; 401(k), offered by private employers; 403(b), offered by nonprofits; TSPs, for government workers; and Traditional IRAs, available to everyone. These work mostly the same, but there are nuances. You should read about the details of these accounts when they're offered to you. If you don't have access to these (e.g. you are self employed) you should read about and invest into a Traditional IRA.

Example: If Oliver made $50,000 and invests $3,000 into a tax differed account they'd only be taxed on $47,000 of their income. When Oliver retires they to withdraw $40,000 to cover their living expenses. The $40,000 withdrawn is treated as income, and will be taxed as such.

Tax exempt accounts are accounts that reduce your tax burden in retirement. You still pay income tax on tax exempt accounts, but you will not need to pay it in income taxed when you withdraw from your retirement accounts. These are best if you suspect you're making less now than when you will in retirement. For most of your life this won't be the case. Very early in your career, if you're taking a sabbatical, you win or inherit a lot of money, etc. are when you'd want to put more month into a tax exempt account over a Tax Differed. Examples of tax exempt accounts include a Roth 401(k), and a Roth IRA

Example: If Oliver made $50,000 this year and put $5,000 into a Tax Exempt account, they'd still be taxed on the full 50,000. Oliver is now old, and has reached retirement age. The $5,000 investment grew at 6% per year over 20 years and is now worth $16,036. Oliver can now withdraw the money and it wouldn't increase his income for that year.

You should put more of your retirement savings into a tax differed account if you expect your income to be lower in retirement than what your current income. Most folks will make less in retirement than they make for most of their career. This isn't true for everyone. If you're early in your career and are not making much money, but expect that to change, or are switching careers, or are taking a sabbatical, or otherwise are not making much money that year (and thus will have a low income tax burden for the year) you ought to save using a ROTH. If you're not sure whether you'll make more or less you can always invest in both types of accounts and use vibes and napkin math to help decide how much will go to each.

MUSIC: Fire Sale - Church & AP Remix

SWEAT - MUSIC: Nice Things - Tank and Bangas

MUSIC: Drugs - The Philharmonik

MUSIC: An Elusive Nightmare - Rockos

MUSIC - Waiting for Death - CandleKid

MUSIC: Back when I was 4 - Jeffery Lewis

Do not worry about being optimal. Folks can obsess over this stuff. All of this is is a tool enable you to live the life you want, it shouldn't be a major stressor. Once you've sat down and made the decisions you can forget about the details. The details only need to be considered when you're making massive life changes, e.g. a career change, a house purchase, finding/loosing a life partner, etc. That initial hump of planning and getting finances in order takes a while. After that maybe an hour a month, 20 minutes a week. Most of this stuff is automatic. You make a decision when you're young, execute as your age, and change course when your life plans change.

Good Music listened to while writing this:

Brain breakers:

Tsu No Guemi - Rory in early 20s. lolil0 0pz - Goreshit HD.189733.B- c678924