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January 9, 2024: How States Tax Retirees, Mini-Retirement Coaching, Health Challenge

Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. American Express is a ChooseFI advertiser. Disclosures.

How Each State Taxes Retirees

This article from Kiplinger, “Taxes in Retirement: How All 50 States Tax Retirees,” is a quick way to determine how your state (or future retirement destination) taxes income for retirees, including:

·         Income Tax on Taxable Income

·         Social Security

·         Pensions

·         401(k) and IRA Distributions

(Note: This article has more ads than any I have ever seen, but the information is incredibly useful)

Mini Retirements: Jillian’s Group Coaching

I know how deeply Episode 451 of the podcast on ‘Mini-Retirements to Accelerate Your Path to FI’ with Jillian Johnsrud resonated with you, because I got swamped by emails in response to that particular episode.

Jillian is starting a Career Break/Mini-Retirements Coaching group this month and if you are serious about a mini-retirement, but feel stuck, this could be the perfect opportunity to take action.

The 12-week program includes a detailed workbook, 20+ sessions including coaching, Q&As and mastermind groups and a 1-on-1 with Jillian.

This type of in-depth, small group coaching program obviously can’t be free but if you’re serious about a mini-retirement, this could be what you’re looking for.

To be clear, ChooseFI earns $0 from promoting this – I just feel strongly about it and I was able to get you a 30% discount for finding the program through the FI Weekly Newsletter.

Jillian is only looking for people who are the right fit, so click through to the Group Coaching page and then click on the “Schedule a Call” button and when you speak with Jillian, tell her you found out about it here.

Health Optimization Challenge

Is improving your health important to you but you don’t know where to start?

I listened to Episode 804 of the Rich Roll Podcast with Simon Hill that came out on January 1st and was blown away by the free health & longevity challenge they are putting together.

This challenge beautifully summarizes much of the health research I’ve done over the past 5+ years and even though I have zero affiliation with this program, nor do I know Simon Hill other than listening to that episode, I simply had to include it here. The 12-week program starts February 1st and will require some testing to get your baseline, so listen to that episode and then sign up for the Living Proof 2024 Challenge workbook here.

What I’m Reading, Watching, Playing

Here’s the second monthly installment of what I’m:

Watching: “World War II: From the Frontlines” and “You Are What You Eat: A Twin Experiment” on Netflix.  As you’ll see in my reading list, I’m currently interested in learning more about World War II, and so far this series on Netflix hasn’t disappointed. 

Reading: I’m currently juggling a few books including:

·         ‘Buy Back Your Time’ by Dan Martell. I’ve taken on everything at ChooseFI for the past few years and need to find a better balance.  This book is helping immensely.

·         ‘Magic Words’ by Jonah Berger. I love this type of research that essentially hacks into the human operating system.  This is a fun one.

·         ‘Areté’ by Brian Johnson. Maybe the best pure ‘self-help’ book I’ve read; could easily slip into rah-rah nonsense, but the author does a masterful job of making this actionable.

·         ‘The Splendid and the Vile: A Saga of Churchill, Family, and Defiance During the Blitz’ by Erik Larson. An inside look at Churchill and London as they endured the Blitz of 1940 and 1941.

·         ‘The Narrow Road Between Desires’ by Patrick Rothfuss. This novella is set in the same fantasy world as my favorite book, ‘The Name of the Wind,’ as fans patiently wait for the 3rd novel in that series.Playing: Our family recently started playing Spades, the classic ‘trick taking’ card game and all four of us are really enjoying it! Our ultimate goal is to learn to play Bridge at a reasonably adept level, so we’re starting with Spades then learning other trick taking games such as Hearts and Euchre.

ChooseFI Community Taking Action This Week

“My 1% today is that I’m going for a no-spend January, to try to reset my relationship with instant gratification. Ironically, my tiny purchases that pile up habit has come about from being better with money over the last 5 years! I’m a sucker for Instagram adverts and Kindle daily deals. Will keep you posted on how it goes.”

– Elizabeth

“Our family had a few 1% wins this week! My oldest daughter bought her first car, with cash that she saved from working as well as a matching program that we put in place. We offered to match dollar for dollar, everything she saved into her savings account. During this year long experiment, we discussed spending, budgeting, how employer matches and vesting work. She’s not eligible for a 401k at her job (so no match) but she will be heavily funding her Roth IRA next year since she bought her car and has fully funded her starter “emergency fund”. The growth from 16 to retirement will be incredible!

Another 1% was setting up a 529 match for my youngest daughter; like Jonathon and others we dragged our feet but Colorado has a cool program where the state will give $100 when you open the account and up to $500 match annually for 5 years. Plus contributions are Colorado income tax deductible. She’s just turned one in December but there is plenty of time for her fund to compound into something large!”

– Joe

“My 1% better was setting up an automated monthly transfer from my checking account to my HYSA for my upcoming car insurance yearly payment, which will be in December. I chose to set up an account with Wealthfront because I like their “savings buckets” feature, which allows me to separate different lumps of money, since my life and expenses are particularly lumpy.

The peace of mind this will bring, come November, when I can just transfer this money to cover a year of insurance will be huge. I also recently opened a cash back credit card that I plan to use exclusively for gas, which will earn me 5% back and a $200 entry bonus once I meet the minimum spend. I’m excited about all the little things ChooseFI has opened my eyes to so I can continue to put more money into my Roth IRA (no 401k for seasonal employees!).”

– Liv

Brad Note: Our recommendations for:

“My 1% better was selling our campervan. We built it for mountain biking trips just the two of us pre-kids, and it was getting less and less suited to what we needed with young children. We sold it for more than it cost us 6 years ago, and will use some of it to buy some good quality tent camping gear. The rest is invested so we can spend 4% of it each year on holidays. Added to the savings in tax, insurance and servicing this gives an extra $2500 a year to spend on travel and Airbnbs for when it’s too cold to sleep in a tent.”

– Rob

“My 1% better was by taking the first step in a life long dream of having my own farm. I closed on 69.3 acres of farm land the last week of December with 29% down. By just buying land and not moving it allowed me to find something in the area at a much more affordable price.

Hopefully within a few years, I will be able to grow my cattle herd and sell grass fed beef and ideally turn my dream into something that also makes money. Taking money out of investments for the dream was mentally challenging but I have to remember it too is an investment, just with a very high start up cost and a bit risky. To fulfill the dream it’s worth the risk since taking steps towards FI it put me in a position to have the funds to be able to afford to take such risks. Happy New Year!”

– Kristen

“My 1% better this week was purchasing The Family Emergency binder (Brad note: 20% discount with code ‘CHOOSEFI’) to organize documents and accounts for our family. My husband and I have two young children and we have never set up anything like this before. It’s been something I’ve been considering since finding ChooseFI in 2023 and hearing the podcast episode about it, but your FI Weekly email was the reminder I needed to take action today!”

– Megan

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Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. American Express is a ChooseFI advertiser. Disclosures.
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