Income tax

Who cares about having a mortgage or rent when you’re old and retired?

Givin a choice, many people would rather not be making payments on the place they live in when retired , If possible to pull off. Because that is the biggest bill you have in your life.

I don’t know how the Canadian social retirement system works. But I do know that Social Security retirement in America is not enough to live on if you also have rent or mortgage. It’s based on assuming that you are not paying for a place to live anymore. That’s just the way it is. That’s also sometimes why America has homeless Elderly.

Banks and mortgage owners would rather us keep handing them interest payments on borrowed money, vs us making interest off of our own money. And making money off of your own money helps you keep up with the cost of living inflation. When you are on a monthly budget that does not grow, this is not possible.

This is not just my opinion, it’s also the opinion of leading financial advisors. It’s about getting the most out of your money.

Then again there also comes a point where some people may make so much money that none of this matters.

I could go on and on about this, but realize this post was about taxes. 🤔

Post Edited (astroman) : 2/3/2023 5:21:53 PM (GMT-8)

When I was in my 20s having a remote home, cabin, somewhat offgrid , was my dream. Things were also so much cheaper then. If I could make my living on 100% online this now be possible. But I work with my hands , brains and machines so that’s not possible.

You can still get a boarded up home in the upper peninsula of Michigan for $20,000. That area never fully recovered from the loss of timber and copper mining. People who have learned how to make a living online are now moving there though. You just have to deal with 10 feet of snow in the winter, possibly out in the middle of nowhere so it really helps to have a life partner who has the same game plan.

I have known a few people who lived off grid in northern Minnesota. Reality is it’s very difficult to achieve and again, you really need a partner to do this together who is on the same plan. One couple drove to a small town for their low wage jobs. Another couple have a sled dog business, But now need regular jobs as well. And the dad of one family was a minister, with some sort of a paycheck, and was a self-employed logger - Cool guy, no longer alive. The stories this tough old guy had though.

Where is that Hawaiian shirt? I have Bob Marley playing in the background so that has a summer vibe vs 1F outside.

Later Dude

Post Edited (astroman) : 2/3/2023 6:44:26 PM (GMT-8)

Given my (our) age and my health status, I know my remote cabin fantasies are just wishful thinking.

Before "tiny homes" became a fad and drove up the prices, they seemed a possibility. I'm referring to pre-built homes on a trailer. But, that type of home has its own set of problems with zoning, where to park it, hooking up services (electricity, water, sewage), and, of course, having a vehicle to tow them. I have a old sedan.

One tiny home community I visited, several years ago, would rent a space with utilities and trash collection...for $600/month. So, that would be on top of any mortgage payment for the home itself. With the price of tiny homes at that time, the mortgage and land rental would be about the same monthly cost as a mortgage on a larger (but, still reasonably sized) slab-built home.

To me, having a tiny home with stainless steel appliances, granite countertops, and exotic hardwood floors sorta defeated the whole idea of why I was interested in more simple living in the first place. Man, if I could go back to age 17 and know what I know now! Haha. I imagine many of us would make different choices.

Aloha, Astro!

Yeah the tiny home thing has totally gotten out of hand. Local taxation hates them things. And any safe trailer park - lot rental is also insane now. Only way to do that is by an existing one on its own land out in the country. That’s why you now have van dweller retires out west chasing 70°F. I’m sure every region has some very cheap places to live but it’s cheap there for a reason usually because some sort of difficulty in living there.

“Man, if I could go back to age 17 and know what I know now! “

I must say that to my coworkers a couple times a week. Too bad we can’t live twice, once for practice, then later for the real thing.

Well, I’m gonna watch one of the original Hawaii Five-0’s for free streaming on Pluto - but with my red plaid lumberjack shirt on. Walmart would be proud.

medical nerd, sorry for hijacking your thread this seems to happen with the Dude and myself on occasion.

Post Edited (astroman) : 2/3/2023 8:00:21 PM (GMT-8)

astroman said...
But I do know that Social Security retirement in America is not enough to live on if you also have rent or mortgage.

Girlie said...
Do you not get other retirement income in the U.S? Like from your employer?

No.

Well, except when you do.

So, yes...and, no.

Maybe. It depends.

If a person works for an employer that offers a retirement plan like a 401(k) or a 403(b) [those retirement plans are named after the part of the U.S. tax code] AND they contribute part of their salary to their particular plan (which have contribution limits), then they should have something to withdraw in retirement.

An alternative retirement plan is a self-directed Individual Retirement Account (IRA). There are two types: (1) a Traditional IRA, and (2) a Roth IRA.

With the Traditional IRA, the worker contributes "pre-tax" money. Meaning, the money they contribute is taken out of their paycheck before their paycheck earnings are taxed. This lowers their amount of taxable earnings for when they file their yearly income tax paperwork. With the Traditional IRA, the contributions are taxed upon withdrawal. If the money is withdrawn before retirement age, not only will taxes be due, but early withdrawal penalties will be assigned.

With the Roth IRA, the worker contributes "after-tax" money. That is, the worker's paycheck is taxed like normal and they contribute to their Roth IRA from whatever money remains. However, in the Roth IRA, when the funds are withdrawn, they are tax-free. Unless, of course, the funds are withdrawn before retirement age. In that case, the principle can be withdrawn without tax, but all other money will be taxable...and subject to an early-withdrawal penalty.

I'm not sure how many (if any) companies still offer it in the U.S., but some employers offer/offered a Pension Plan where the company makes contributions to the employees retirement account. I'm less clear on the rules surrounding this, as I don't have a pension plan. Employees may have to stay employed for a certain amount of time to gain ownership of the money that was contributed on their behalf...or, there may not be any such limitations.

But, there are many workers who either: (1) work for an employer that doesn't offer a retirement plan, or (2) they don't earn enough to contribute to a retirement plan and still have enough take-home pay to cover their expenses. There could also be undocumented workers (in the country illegally) working for cash who couldn't legally open an IRA, even if they did have enough money (due to needing to provide valid identification). These are the working poor. I've been there before. Now, I'm unemployed again, so that's another step backward.

Anyway, these are a few high points and I'm skipping some details such as employer-matching in a 401(k) and age-based contribution limits. I doubt any of that will be of much interest or concern to you, as you're in Canada.

With your list of multiple income streams from the government and employers and your three-bedroom two-story home with a mortgage payment less than an apartment rental, it seems you're on "Easy Street."

Did you retire, or are you still working part-time? Earlier in this thread, I saw you posted about going to Hawaii next year for your son's wedding. I've only seen photos, but it looks like an extraordinary place. Didn't you visit there for vacation, just within the last few months? Or, am I thinking of someone else? Nevermind leaky gut, I have leaky brain!

Dude: “But, there are many workers who either: (1) work for an employer that doesn't offer a retirement plan, or (2) they don't earn enough to contribute to a retirement plan and still have enough take-home pay to cover their expenses. “

We both work for the Health Authority which is unionized and pensions were negotiated at some point.

Looking at my husbands recent pay statement - there were two deductions for pension:

CPP (Canada pension plan)
and
the union pension plan.

Both deductions totalled approx $200

MedicalNerd said...

Lymie24 said...
A few thoughts I had:

1. Lyme is a financial stressor. Many become unable to work. I am in that camp. Forgot owning a home. I believe there is a good chance I'd be dead without my wife. I'm super lucky I met her before I got sick. I'm also super lucky I met her while I was a young, and subjectively speaking of course, probably better than average looking guy. Talk about some randomness and luck huh? To be honest, getting sick and being forced out of the rat race and the system in which we exist has left me time to contemplate and read critiques about the system in which we exist. I'm not as big of a fan of that system anymore. Yet still, my wife really wants a house and I understand the practically behind it for wealth building. Currently we are living with my mom after my dad died. It helps her and helps us. Luckily, her house is basically like a two story duplex. The upstairs is probably bigger than the last house we rented. In order for us not to be house poor we need to save up a sizable downpayment. This is especially important so I can continue to spend money on my illness costs.

2. I'd find a new tax guy. Whewww. That guy is too much.

3. There are always going to be people who criticize anything. That includes welfare. Don't be afraid of SSDI or section 8. This is why programs like this exist. Who cares what others might think? They lack imagination. If they all of a sudden were in your shoes they would likely do the same thing. Take advantage of the same benefits they once criticized so harshly. I've seen it many times living where I do (the south). People who will criticize "welfare queens" while simultaneously accepting social welfare programs such as disability, unemployment, social security, medicare, robust veteran's benefits etc.

You do what you have to do. I hope it all works out for you. Hang in there.

I would love to live with my parents or family, don't have any really though unfortunately. They're very dysfunctional so it's pretty much me and the 3 kids and my bf. He helps loads which is why I'm lucky. Luckily I'm a huge medical nerd and studied so much over the years. This illness put a stop to me completing college but at least I know loads and can try and beat this on my own. I feel like I've become my own doctor and advocate. It's really lucky your wife helps and that you guys get to live with your mom. I wish I can live wit my family. Sometimes its every man for himself. At least that's how it seems once your sick with this illness. My plan is to keep saving as much money as possible and yes, definitely need a new tax guy, no wonder some of choose to be introverts lol.

Yes, no doubt I am fortunate. 100% agree. I couldn't live with dysfunctional family. Good choice for you not to even pursue that. My mom and I have some major differences in lifestyles and belief, but, we love each other and are open and tolerant. As far as the house goes, my parents have a fairly large house. It was the house I grew up in from age 11 on so def feels weird to be back here living, but again, I'm lucky it's even an option. The upstair is practically it's own house with a sink, bathroom, shower, and bonus room where we can hang out. It helps because we aren't on top of each other. Sucks that moving in with my mom is what it has come to with my illness, but, happy it was an option. Additionally, love my dad, but he didn't prepare my mom for his death in terms of managing bank accounts, bills, and all their other accounts regarding TV, internet, phones, insurance, etc. I have enjoyed being here and helping here get all that stuff squared away. Makes me feel useful for once lol. I wouldn't be able to do it if I was still living 30 minutes away.

I agree that it is revealed how cutthroat the world is once you fall due to illness or whatever it may be. I've been sick for many years. My sister got cancer and died during the beginning of my illness. I didn't even really bring my illness up at that time. Obviously I was more concerned for my sister and I wanted the attention to be on her struggle. After that my parents really didn't sympathize or take much interest in my illness. When they would ask me how I was I could tell they were often doing it just be to nice. When I would try to explain things to them I could tell they weren't buying it. I think since Lyme is so unknown compared to something like cancer they couldn't understand. People who don't really have any idea how cancer works know that the word cancer=bad. They don't have to know the technicalities. Lyme is much more mysterious and when you can't get better some people can't comprehend. I never got much interest from my parents. My friends disappeared because I was unable to hang out. I'm super lucky I've had my wife to help me. She is probably the only one in my life who has really cared what is happening to me. I suppose that makes sense since she has skin in the game too lol.

I hope you are getting that type of support from somebody close to you! Sorry for rambling to you like your my therapist! lol

astroman said...
Girlie- dude pretty much summed up what we get from employers In the form of pre-taxed dollar savings accounts to be used only in retirement. Early withdrawal has penalties.


The company “pensions” that you mention are almost gone in America. I guess roughly between 10 and 20% of the working population has this today and they do not pay as much as they used to. They were money given by companies or unions and placed into an account to be used when you’re retired. Some of them were a lot of money. They were generally not a deducted part of your pay but free money given to you only to be used past a certain age. They started being phased out as companies were buying other companies in the 1980s. They sounded like a great deal and of course they cost companies money which is why board of directors slowly start eliminating them. Union jobs are the jobs that still have pensions in the United States. Manufacturing jobs used to all be union, Very few still are. Nurses have unions, teachers have unions, the railroad as a union. Public utilities usually have unions. All of the airlines used to have unions, that is no longer the case. Commercial electricians steel workers, welders etc. have unions. People who work for the government enjoy pensions in later life. Many more jobs had these pensions before the 1980s. It was part of the draw to get employers to work for them.This is part of the reason why the baby boomer generation in America was, as a whole, the richest generation ever. Their children and grandchildren are not so lucky though.

We are pretty much told by the government nowadays to invest your extra cash wisely known as your retirement portfolio. They tell you this because they know the Social Security retirement money that you are entitled to (if you worked) Is not really enough to retire on in America for many people. It all depends on what their lifestyle expectations will be in retirement.

Yeah, we are getting screwed compared to our forefathers. I'll share what I've seen.

* First, it was pensions.
*Then the owner class and C-suite peeps were like "Nah" that's too expensive.
* Then, it was 401K matching. You have to save for own retirement, but we will help you by matching!
*Initially, matching was pretty high. 5 to 6% was common.
*Then they were like "Nah" how about 3%? Or trick people by saying we match up to 6% but we only match half of the first 3%
* My wife's last job was with a private employer. They were a social work company. Foster care. She was there 10 years. Started with matching 3%. Over time they dropped matching all together and said they would contribute 700$ a year. LOL!
* My wife got a job with the Fed government like 6 months ago and the matching on the TSP is waaaaaayyyyyyy better. They match up to 5% and contribute an automatic 1%. So putting 5% of your paycheck into TSP equals 11% of your paycheck gross into TSP.

The thing that drives me mad about our system is the cost of living is going way up. At the moment, obviously, everyone knows about inflation. However, cost of living/inflation, has been outpacing wages for a long time(I'm fairly confident, if wrong correct me) so the insidious nature of how unsustainable this all is has been bubbling for a long time.

Furthermore, this is a consumerist economy. If people don't consume consume consume then the whole deck of cards falls apart. We are not talking about just consuming the essentials we are talking about consuming the superfluous savagely. Just think about how extensive advertising is. Even just writing this message on a disease forum there is ads for THC and knee pain on the side of this message box. You can't go anywhere or hardly do anything without being bombarded by ads. Buy buy buy. consume consume consume.

Meanwhile, prices are going up. Wages aren't keeping up. But still! You better save for your own retirement otherwise you are irresponsible and a dirtbag! Don't worry about the fact that many people are just trying to survive. This equation does not compute.

Okay rant over lol

Very well stated, Lymie24. If this forum had "Likes," I'd give you 100 of them.