Landlord sent over my lease renewal with a 0% increase for the year. I was going to pull a Cuse and argue any increase but looks like I don’t have to. They easily could have done it though since there is limited 2 bedrooms.
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Out of curiosity I looked into mortgage refinance rates, I just purchased last summer but dropping from 2.75% to 2.25% seems significant. The first quote I got shows a closing cost of local taxes equal to about 2% of the loan amount. Is that normal? I knew there would be closing costs but that seems significant, why am I being taxed just for transferring a loan? I’m calculating a breakeven point of almost 3 years given the new numbers.
Is this actually a cost, or is it possible that you’re just funding the escrow account? On my refinancing a few months ago, I had about 2.3% of my loan amount show up as Property Tax in the “Other Costs” section of the pre-closing disclosure, but it was just pre-funding the escrow account, so it’s not actually an expense. (And it was offset by the refund of the escrow account from the previous servicer.)
But if it’s a real cost, I have no idea what it is.
I don’t think so, there’s another section for the initial escrow deposit although it’s only looking for 2 months worth there. My property taxes are 1%/year so that’s far less than the 2% charge they’re looking for in the closing cost section.
My refinance went well.
Went from 3k payment (usually 2650 but changed to 3k for the next year or so to fund back the escrow from being behind) to 2200, had no payment in January and because they pulled my payoff before I paid December mortgage I got a 3k check from old servicer after closing.
I also changed my home insurance to cheaper and timed that to happen on closing date and got a $500 check from old one since the year end date is a few months earlier and you pay one year in advance so got refunded that.
Also got like $150 cash at closing.
The pandemic and being laid off for 6 months crushed us financially and had to take out 401k covid withdrawal that we now need to pay back over next 3 years but the refinance part is a huge help. Fingers crossed they don’t change qualifications for next stimulus payment.
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With all the stonking that’s going on of late, here’s something I’ve been wondering about. Let’s say that you plan to retire completely at age 65 with a net worth of X, meaning that if your net worth is less than X you will continue to work.
Now assume you have reached X net worth at age 40. At this point you think, "Well, X would be enough if I was 65, but to stop working completely at age 40, I really need Y.
What is your ratio of Y to X? Obviously this varies from person to person and depends on a variety of factors (kids, etc.), so I’m not looking for a general answer. I’m looking for your answer.
This is a really interesting question. I’m not sure that ratios (as opposed to just dollars) are going to be that meaningful, but I think my answer would be about 4-5.
Like, if I were willing to retire on $2 million at 65, I would probably be willing to retire at 40 with $8-$10 million. A couple of important factors for my case:
- My job is pretty flexible and not unpleasant (especially if I were to decide to not care about it). So early retirement probably isn’t as important to me as it is to most people (driving my ratio up).
- I’m in this weird ass situation where I don’t contribute to social security (and don’t receive benefits), so the numbers that I think about for retirement are probably higher than other people (who do have social security coming to them).
4 is way higher than I would have put anyone on. I guess part of it is because I wasn’t really considering scenarios where one wants to work even though they don’t need to. That’s actually what I will likely do myself, but all of my planning is as if I will have zero income from work (or SS for that matter – but that’s a very unealistic assumption).
I actually have a pretty detailed estimate of this because I have a spreadsheet that monitors our household progress against a retirement date target of age 60. According to that work, we would need 3.25X more money in hand today to retire than we are forecasted to need at age 60. This isn’t exactly your 65/40 scenario but it’s pretty close.
My projections are very detailed and capture a lot of household-specific factors like our current earnings and tax levels, our projected tax level in retirement, our real estate & mortgage situation and planning, our projected social security benefits, and the pension arrangements we have with our employers (my wife actually has a public sector DB pension which is a game changer on retirement planning). Any or all of these factors will differ pretty dramatically from household to household so it’s awfully hard to establish a rule of thumb.
Another big issue that I didn’t mention is kids’ college spending. At 40 (which is in my past), I’d have to bake in estimates of how much I’d be spending to put my kids through school. And given the enormous uncertainty (e.g., where they’d go, how long they’d attend), I’d only want to retire early if I had a comfortable buffer for that college spending. But at 65, that spending is in the past, so I wouldn’t need nearly as much of a buffer.
Yes, typically for retirement planning purposes it doesn’t make any sense to set a retirement date target at an age that precedes a) when your mortgage would be paid off in full and b) when you have met any substantial education costs for kids. The normal situation that makes people successful is to have some kind of “set it and forget it” retirement savings going on in the background during your 30s and 40s, and then around age 50 you start making calls about using savings to either accumulate more retirement savings or pay down your mortgage.
I’m already well past 40, but taking that as the baseline, it would be at least 3x. I have to factor in that I’m losing at least 15 years of pensionable time, and I can’t even start drawing it until 55. I’m living entirely on savings until then, which will deplete it faster.
I can’t imagine not working tbh. What the hell would I do with myself?
I’m willing to believe that I’ll be bored out of my mind and won’t be able to entertain myself without going to work every day, but I sort of doubt it’ll pan out that way.
I think the key once you hit your number is to just heavily prioritize flexibility over pay, i.e. trade time for money.
The problem is that in many industries you can’t do this and maintain interesting and meaningful work, as anyone not working constantly is basically dropped from the best clients/work/etc.
The easiest way to guarantee flexibility is to work for yourself but then you lose that sweet sweet employer health care, which to me is worth like $30k a year. LOL America.
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Solid point. Thankfully my job I can work as much or as little as I want and all that really changes is how much I’m paid.
Agreed. I addressed this in a subsequent post.
My plan when I’m “retired” is to work about 1-2 days a week and only taking on projects with approximately zero associated bullshit.
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He’s not posting here anymore, but Cuse let me know that he took his landlord to court and won his full security deposit and damages. The landlord’s lawyer (something I thought wouldn’t be allowed in a small claims case) made several arguments for why he shouldn’t get the money, but ultimately the plain reading of the law won out - they didn’t send money timely, and the law specifies damages.
The lawyer immediately told Cuse that they would be appealing, but backed down fairly quickly and sent a check that has now cleared. So this has bolstered my belief that one of the few places that individuals can beat corporations is in landlord-tenant cases. Lots of localities have very well-specified responsibilities and damages, and unfortunately tenants are often unaware of their rights and how they can be enforced.
I was hoping that he’d provide the update himself, and maybe he still will, but he gave me permission to post this.
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This is exactly what I’m looking for. Out of curiosity at what age do you only need 2X?
My 40 to 65 ratio is 2X, but I am severely overestimating how much I need for retirement at 65.
Hell yeah Cuse! Down with the man!
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