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Wednesday ruminations

March 7th, 2018 at 06:47 am

Snow day
We all got the go-ahead to work from home today on account of the snow. We're expecting a possible foot of snow.

I only need to work a 4 or 5-hour day today, anyway. After that, I'll attempt to shovel out my driveway, although the snow won't stop til late tonight.

More time for reading...at the office!
I'm in a situation many people would love to be in....Reading is a big part of my workday at the office since there are frequent downtime periods when I have no work. There are 4 or 5 people who feed work to me, and it can often get busy, but not til later in the day, around 5 or 6 pm. So yesterday, for instance, I began at my usual later start time of 10:30 am but then didn't leave the office until 9:15 pm.

So they pay me pretty well (and let me do things like read a book), just to have me on hand when something needs to be proofed on a very tight deadline. So I'm free to catch up on my reading, and while I always surf the web and check the DJIA daily (and recently began playing free Luminosity games), I also like to have some "light" reading in the form of a real book on hand as well.

As mentioned on someone's blog post here, I recently finished a sweet book called Merle's Door by outdoor writer Ted Kerasote. Merle was a homeless golden retriever who adopted Ted when he was on a rafting trip in Colorado. Unlike most pet owners who dominate their animals with a life full of rules, the author was big on letting the dog make his own decisions, and it leads to some entertaining and interesting reading about canine intelligence and emotion.

I don't want to start spending money again on brand new books, so I'm glad I picked up a used $4 book at a local book sale last weekend. That will be the next thing I read, and I will try to make book sales more of a regular habit to feed my workday habit. I may even do something I haven't done for years: browse my local library.

I had a hard time selecting something to read, because all of what they had was fiction and I tend to go for non-fiction, and I'm never really sure what will sustain my interest in terms of a story. I don't like sad stories filled with heartache or dysfunctional families. I'd go for something more uplifting.

I enjoy biographies of people I admire, certain self-improvement books, and of course, anything related to personal finance and retirement planning. (If you have anything you'd recommend, let me know.)

Deciding on whose payroll I should be on
Earlier this week my boss talked to me about whose payroll I might like to be on, moving forward. J., my friend and the recruiter who found me this job when he was working for a different recruitment firm that laid him off, was urging me to talk to my boss about moving me from the previous recruiting firm's payroll to his new firm, because he would make some money that way.

My boss asked me if I had any thoughts/preferences about either going on my company's payroll, going on my friend's new recruiting company payroll, or staying on the payroll of the original recruiting firm.

I don't see any clear advantages for me either way, as long as taxes are deducted from my check by whoever. I already have the health insurance and the plans offered by both recruiting firms are really sub-par.

Some agencies also offer a 401k to longtime workers, but I highly doubt I'll have anything left over to contribute on my new part-time hours. Unless I started withdrawing money I might need for living expenses from my taxable accounts, in order to have earned income withdrawn from my paychecks and directed to a tax-deferred 401k.

Hmmm. Would that be worth doing?

Did you say a raise??
My boss said if I went on my friend's payroll, he's have to pay 25% of my earnings to the recruiter. If I worked for my company directly, he said he could even give me a raise because he wouldn't be paying that extra 25%! He said he had to check my contract with the original firm to see if there was a buyout clause where he would have to pay a hefty, but gradually lowered sum, to hire me directly.

When he mentioned a possible raise, of course my ears perked up (I've only been there 5 months), but at the same time, it could put me in a very strange position of having to turn it down. Unless the raise was a really big one, a few extra thousand dollars could cause more problems for me in terms of continued eligibility for lower cost health insurance, and might not be worth it.

Without the subsidies, I'd pay an extra $5,500 a year, or $458 more a month. Based on my current work hours, I'd have to get a raise of more than $18.32 an hour just to equal what I'm saving on healthcare. So I don't think it would be worth it, and I doubt any raise he might have in mind would approach $18.32.

My mason called me before 8 am today saying he could be here in about 40 minutes, at the start of a major nor'easter, but I told him not to come and it could wait. So maybe next week then, he said.

Timing IRA contributions
I like to make my IRA contributions early in the year, as they have more impact that way, but given th fact my income could be just under or just over the income limit for healthcare subsidies, I'm going to play it safe and wait til late in the year to decide what kind of IRA contribution I can make. Most likely, I'll be making traditional IRA contributions which will lower my taxable income.

Which means my hope of doing at least some Roth IRA conversions will have to wait until, I guess, I'm not on the healthcare exchange, assuming it still exists, since a Roth conversion is a taxable event.

If I actually keep this part-time job til age 65, get on Medicare and then quit this job entirely, then maybe that would be the best time to do some Roth conversions in what I anticipate could be fairly low income years.

This is suddenly of heightened interest to me after Dido spoke about how the relatively low tax years of early retirement eventually become high tax years for many seniors after age 70.5, when required minimum distributions begin. If all your $$ is in traditional IRAs, you have less flexibility to manage withdrawals in such a way as to minimize taxes. Combined withdrawals from both traditional and Roth IRAS, or traditional and taxable monies, offer the best low-tax approach.

4 Responses to “Wednesday ruminations”

  1. Carol Says:

    Roth conversions between say 65 and 70 ( always watching your tax bracket) can be a very good idea. We did some and may do some more in a few years.( We are in RMD land now.) It is helpful to take a look at the RMD tables and compare them to what you'd be taking out anyhow to live on.

  2. PatientSaver Says:

    Thanks, Carol. This is most interesting. Where do you find the RMD tables? I was thinking Vanguard could probably automate the process for me, on either a monthly or annual basis, but I didn't know there were any tables available.

  3. Dido Says:

    Google "IRA uniform lifetime table." The first entry should have age 70 with the divisor 27.4.

  4. Carol Says:

    I think Vanguard will automate for you whenever time comes. Google as Dido said. There is a calculator to play with at bankrate.com that you can fill in and it will spit out guesstimates for you. Be sure to look at both "calculate" and " see report" and scroll down-- it puts in ages and numbers. Of course, this is just a prediction -- but it is informative.

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