Retire early to hunt more?

[AvidIndoorsman]

Have you ever mapped out a lunch conversation between a few buddies? Who the heck sticks to the topic. My buddies and I may start with why the hell the Vikings don't dump Cousins and end up 20 minutes later arguing about why Steve never asked Sally to the prom 20 years ago with none of us knowing how we got there. The initial question gets answered early on and through a series of seemingly minor deviations and tangents you end up wandering all over - how is this some type of violation of normal discourse? If a thread gets hijacked in the first page or two and the OP gets no useful answers then that is a bad thing, but OP got his answers pages and pages ago. The thread at this point limps along on its own merits (or lack thereof) at this point irrespective of the OP - as is the way in almost all non-scripted human dialog.

For all those who don't know @VikingsGuy funds his hunting with residuals from being one of the master minds of Seinfeld.

 

[Mountain Man]

The people posting this past week ruined an outstanding retirement thread by bickering about tax ideology. It is a shame this conversation derailed and many people fueled that fire instead of starting a new thread with the distinctly different subject.

 

[RobG]

And back to the original discussion . . .

That is an awesome video.

However, (bear with me... I'll eventually get to the topic...) I'm sure you would agree that avoiding taxes through wise investments is as important as low fees, and the number of options that open up goes up very fast when your income exceeds your needs.

For example, I'm self employed with an S-Corp. That in itself avoids a lot of taxes. In addition, if I had the money I could**:
1) contribute $50k to my work self-401(k)
2) contribute $7000 to my IRA (I'm over 50)
3) contribute $16,000 of my wife's income to her 401(k)
4) contribute $7000 to her IRA (she's over 50).
5) contribute $7100 to a health savings account and wait for it to grow before cashing it out tax free.
Actually, I think some of my numbers are low.... That's off the top of my head and there may be more.

So that would chop $87,100 off my income if I had the disposable income and it would save more than $10,000 in taxes. That could translate to more than $100,000 in 30 years, and you can do it each year if you have the means...

And it doesn't stop there... using those shelters you can lower your income to the point where you get health insurance for free from the ACA exchange. Meanwhile, you are living a good life earning tax free income from rental property because your depreciation (on appreciating property) is offsetting the rental income. And you can use 1031 to help keep that income tax free... Or maybe you live by selling your stocks which are taxed at a much lower rate than income.

The point being that if you have the means you can use deductions to make you appear to the IRS as someone with a very low income while living a good life. On the other hand, the average Joe actually earning that amount can't afford to save anything. The system is stacked against them. But that doesn't mean you should let guilt prevent you from retiring early if you can...

Back to the OP... so, in addition to saving everything you can and also avoiding fees, educate yourself on the tax code and investment options to position yourself so you can take advantage of the breaks. Also educate yourself on investment options outside your 401(k) because that money might not be available if you retire early. You are going to have a tough time retiring early by just saving unless you make a lot of money; you have to educate yourself and get actively involved in your own investments.

** I'm not 100% sure because I don't make enough money to do all that so I don't have first hand knowledge. And for high income earners some of this stuff may be limited. Plus I may have some jargon wrong... but in general these options are available to the upper middle class and not the average Joe.

 

[Allenkoz]

I’m considering retiring early to hunt more, and I’m curious to hear from others who have done it, considered it, or are planning on doing it. I know it’s still a long ways off, and a hundred things can change between now and then, but I’d like to have a start of a plan now rather than just stumble upon it and wish I’d planned some things out differently 15 years prior, etc.

There are a lot of factors involved, so I’ll list them below by topic, with some notes with hypothetical retirement ages of 50, 55, 60, and 65. Please comment on any oversights or misunderstandings I might have.

Here’s my situation - I’m 37 and I’m eligible for what is essentially an LE retirement at 48. My wife stays at home with our kids ages 3, 1, 1. We live well below our means and save/invest more aggressively then most.

Boredom
It seems that most retirees end up returning to work in some capacity within a year of retirement. This is difficult for me to wrap my head around as I have about fifty hobbies I like to do if I had more time, I’m a homebody, I don’t need to work to have a social life or feel like I’m doing something important, etc.

50 - still have kids at home, so unlikely to be bored, etc

55-65 - I figure I can always volunteer more, conservation, donate expertise related to my profession, etc, if I need to have a workplace-like activity.

Hunt financing vs youth/health
I’m enjoy small game hunting, and inexpensive big game hunting, but there are a few hunts I want to do that run a bit more (guided moose, caribou drop hunt, etc) so available funds to hunt is somewhat of a factor

50 - I’m likely to still be in great health. However, I’d really need to plan the higher dollar hunts carefully. If I stay at my job I’ll have 5 vacation weeks/year, but if I left I’d still need an income stream to bridge until age 55, as all my retirement funds are currently tied up in tax-advantaged shelters that I can’t withdraw early. I could open a brokerage account, but it seems risky to put any funds in there until my tax-advantaged contributions are maxed out, which as of today they’re not. My line of work is not conducive to being gone 3 months of the year during hunting season, so to have an income from seasonal work, I’d likely have to switch industries and take a pay cut on the order of 50%. Plus even with all the extra time available from leaving a full time job, I’ll still have kids at home so it’s not like I’ll be out hunting all the time anyways.

55 - If I keep taking care of my body, I have a very good chance of still being able to hunt hard on DIY trips in the mountains, etc. If I someday catch the bug to do a lot of higher dollar hunts I’d have to be selective on what I could do.

60 - My worry is I’ll regret having worked too many years and run myself out of health before I had the opportunity to hunt as much as I wanted to.

65 - I’d be able to go on just about any hunt I could imagine, but who knows if I’d have the health to do so or even still be alive. Retiring at this age seems less appealing than at 50.

Healthcare
50 - I’d have to buy insurance on the open market, join my wife’s employers’ plan IF she had even returned to full time work, or join a health sharing plan. All are riskier and more expensive than my current plan.

55 - Under current laws my kids can stay on my insurance plan until they’re 26. That seems a nice gift and one way to help them get established as adults, etc, but that’s a lot easier to do with my work-sponsored plan than an alternative.

60 - At this point bridging 5 years until Medicare would not be a significant financial burden due to accumulated wealth

65 - Medicare eligible

...

I’ve talked it over with my wife and retiring at 50 seems a bit of a pipe dream, unless something significant changes in our situation, and I’m not sure I’d really want to make any crazy changes anyways. I think 55 is fairly realistic goal as long as I plan carefully for it.

It's ovbious that you've thought about this alot. If you can do it, make it happen and don't look back. You can always go bacl to work if you get bored or decide it was the wrong decision,