For the sake of OP…let’s not! 
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And many, many others don’t even give a thought to what kind of cat food they can afford when they retire.
I’ll be enjoying Sheba and Fancy Feast (at least) starting in 2036, allah willing.
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You quoted me but I certainly didn’t say it. We at least agree on this: nobody pays the top tax rate because some of your income was taxed at all those lower levels along the way.
Where I got absolutely murdered last year was the Federal level: in 13 years of self employment my effective tax rate has always been in the ~25% range, and with income/deductions in the same range the effective was 40%. As much as I fly anyway I’m strongly considering another country ahead of Nevada/Arizona (my usually “maybe I should…” list).
I’m not playing except to say: maxing out one’s SEP-IRA makes a HUGE difference.
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The wife and I are going to start an LLC for that reason next year. We’ve gotten better and better roles and now we’re getting slaughtered federally, as well. But we’ll delay a little because we aren’t quite ready yet and don’t wanna pay the small business tax in November when it’ll be due again in Q1 2020.
As consultants, we can surely find enough write offs to make the LLC profitable and as a bonus have more opportunities for B2B freelance work. Home office, partial car leases, phones, internet . . . It adds up fairly quickly.
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System failure…i took Cup’s quote from your post and the web make it look like it was yours…not a shot at you…this time 
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Detente 
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Totally agree on the SEP IRA.
Let me put this in Leashacker terms. A SEP IRA is like MSD’s on a lease but for taxes and retirement.
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Totally agree. I do a monthly contribution and then true it up at the end of the year: for 2018 I either owed $12.5k more in Fed Taxes or I could put that into the SEP, maxing it out, and owe about $1000 in Fed taxes. No brainer.
Being able to stuff that much in a year has been a huge multiplier. I can’t imagine going back to a 401k or 403b.
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The fact that you can fund it anytime before you file taxes even on an extension for the previous year is phenomenal. I should dollar cost it but tend to just wait and lump sum it. Crazy initial return every year with the savings.
I’ve just got to figure out the QBI deduction. You sound like you got hammered like I did. SEP saved a lot as usual but I screwed up the QBI and it hurt.
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Well now you guys have me researching sep iras.
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Fed worker i guess.
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Qbi? Sep? Do detail please. Is there income limit on the Sep ira?
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Hey OP here.
Not to sound like a dick but can we like not talk about the invest stuff in this thread?
I’d prefer someone start a new thread and let me know when they do as I’m a scotch and a half in and I have 32 tabs open on SEP IRA.
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Lucky you! For 2020, the allowance jumps allowing up to 42 tabs on SEP IRAs.
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Fair ask.
Mods: would one of you amazing humans mind splitting into a new Off Ramp post and moving the retirement clunk clunk posts there? 
We can talk about all kinds of tax shelters: multi-member LLCs and their taxation election (IRS 8832), SEPs, SOLOs, profit sharing plans, and lots of terrible message board advice better suited for CPAs like Section 179 for gvw > 6000 pounds, and 1099s ability to write off their lease/gas/insurance.
No 529 talk though 
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I get that but a vast majority of people are still paying between 9-10%. Which is much higher than most states and I am paying nothing in Florida. That was my point.Also “rich” in California means something completely different when an average house cost over a million dollars. I have a friend that moved to Silicon Valley to take a job paying 250K he’s living in a tiny apartment barely making ends meet. The merits of California are not at issue but California has a high cost of living surly we can all agree on that?
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not necessarily.
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This is incorrect. The median household income in California is ~70k. For a two earner household making 70K, your effective state tax rate is going to be maybe 4%. You made the mistake discussed above of not considering the lower tax rates on the first 60k of earnings. Your tax rate won’t get north of 8% for a household until you are earning several hundred thousands of dollars a year.
But yeah, California cost of living is super high. Just like where I live in Virginia. It’s a trade off. I like living In a walkable community with good parks, schools, social services, fire, police etc… would I consider retiring somewhere cheaper, absolutely. But right now I enjoy an average daily commute of 20 minutes round trip.
Also a little discussed benefit of high cost of living states is economic opportunities for not just parents, but children. Look at where kids going to the Ivy League come from. New England is WAY over represented. Mid Atlantic is over represented. California is proportionally represented while the rest of the country is underrepresented. I want to give my child as many advantages as I can and growing up in Northern Virginia is a big advantage.
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I am from Maryland and spent many years working in the defense business. I got tired of renewing my clearance every 3 years and got a good job offer to move down to Florida so I took it. Are you inferring that the only places with the services or life styles you listed above are places with high taxes? If so, I would encourage you to visit south Florida. I live in a gated community on a golf course. We have spectacular parks,schools and all other services and I have a 15 minute commute with no traffic.
As far as the ivy league that is a whole other discussion on college. I don’t want to wade into that rabbit hole.
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I totally get the appeal of a gated golf community but that doesn’t really counter what I said. A gated golf course community is the opposite of a walkable urban/suburban neighborhood. I’m not arguing you live in a bad place, it’s just somewhere I have no interest in living.
As for taxes, yeah urban areas are usually gonna have higher taxes, there is just no other way to fund the services that a dense population demands, think public transit.
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