You may not know this, but I create original artworks with the interior paint I use for each house I’ve bought since 2003. Not only is art fun, but maybe one day, these original pieces will sell for megabucks! So when Masterworks approached me to do a sponsored post about investing in fine art, I welcomed them with open arms.

Masterworks, founded in 2017, is an investment platform that helps non-accredited investors buy shares of fine art. The fine art market has been booming due a surge in wealth by the investor class. Further, with the growth of countries like China, there is more capital chasing fine art than ever before.

There are three retirement goals to shoot for in order to comfortably walk away from your day job and remain retired. They are:

1. Accumulate 25X your annual expenses
2. Accumulate 20X your annual household income
3. Be able to live off a 0.5% annual withdrawal rate

Instead of viewing these retirement goals as at odds with each other, view these retirement goals along a spectrum. They were all introduced at different times in history to address different economic conditions.

Let’s review them one by one and see how they can apply on your financial journey.

Due to the pandemic, more people are wondering whether they should withdraw funds from a 401k or IRA before retirement to help pay for life. There are plenty of reasons to withdraw money from a 401k or IRA early. Unfortunately, some people go too far and end up using their 401k or IRA like a checking account instead of as a retirement account.

Withdrawing funds early from a 401k or IRA is like constantly picking at a scab. The more you do it, the slower your wound will heal. Pick it too often and the wound might actually begin to fester and result in a potential amputation (terrible retirement).

Once you start withdrawing from your 401k or IRA early to pay for things, you may come to rely on your retirement funds as a crutch. As a result, you may never end up building a strong third leg for your retirement stool.

In general, treat your 401k and IRA like a black hole where money only goes in and never comes out. Then work to build your after-tax investment accounts in order to generate passive income.

Of course, if you are facing a life or death situation and the funds in your 401k or IRA are all you have, then withdraw what you need.

Hopefully, everyone who has access to a 401k is contributing to a 401k. To not do so is a mistake you don’t want to realize when you’re old and unwilling or unable to work. This post will discuss all the top 401k mistakes that hurt your retirement.

Let us be clear. The government isn’t going to save you. With a large Social Security funding shortfall, the government is having a hard time saving itself.

Further, thanks to a global pandemic and massive stimulus, the government has a huge budget deficit. Therefore, the government will probably adversely affect your retirement life by either raising the eligibility age to receive Social Security and Medicare, raise taxes or both!

Having contributed to a 401k and a Solo 401k since 1999, I’ve made plenty of mistakes that have likely cost me over $200,000 in lost appreciation over the years. My goal for this post is to help you not make the same 401k mistakes I made.

Contrary to popular belief, the ideal retirement age isn’t as soon as possible. Retire too soon and you may feel empty for never living up to your true work potential. Retire too late and you might always be left wondering what could have been if you had changed course sooner.

For example, a 35-year-old couple making $400,000 might love their jobs. With two young kids under three, both parents might both want to work for 20 more years. This way, they can maximize their capital and support their kids through college.

Then you might have a 30-year old couple making a combined $200,000. They don’t have kids and don’t want kids. Instead of needing a 4-bedroom, 3-bathroom home, they are happy living in a 1-bedroom condo for much less. All they want to do is travel and lead a simple life. In their mind, the ideal retirement age is 40.

To minimize regret and maximize happiness, I believe the ideal retirement age range is between 41-45. Let’s go through why.

Decamillionaire Democratic Presidential nominee, Joe Biden, has stated he will raise taxes on people making over $400k a year if he is elected. Biden has called anybody who makes more than $400k “rich” and should, therefore, pay “their fair share” in taxes.

Further, if Joe Biden is elected, once you make more than $400,000 a year, you will face a top marginal income tax bracket of 39.6%, up from 37% currently. In addition, you may likely have to pay FICA tax on income above $400,000 despite a cap on benefits.

Under billionaire Donald Trump’s tax plan, only after an individual makes over $518,401 does he or she pay the top marginal income tax rate of 37%. For married couples filing jointly, their income would have to breach $622,051 before facing a 37% marginal income tax rate.

$400K For Individuals Or Couples

It’s not clear whether Biden is making the $400,000 income threshold for the top marginal income tax rate for individuals or married couples.

If the $400,000 pertains to married couples only, then the income threshold for individuals facing the top marginal income tax rate will likely decline to somewhere around $250,000 – $300,000.

If the $400,000 pertains to individuals and married couples, then high-earning individuals best not get married! It would be much more tax-efficient to earn up to $400,000 per individual and just live happily ever after with another $400,000-earning individual.

When Supreme Court Justice Ruth Bader Ginsburg died on September 18, 2020, at 87 years old, the first person I thought about was my 9-month-old daughter.

I thought about how RBG fought her entire career for women’s rights so that daughters, mothers, and sisters everywhere could lead better lives. Thank you RBG!

I’m not sure if you’re aware, but I’ve been writing about the importance of gender equality for a very long time on Financial Samurai. Here are some of my posts throughout the years:

Someone Has To Give Birth: Why Women Shouldn’t Be Penalized For Being A Mom (2009). A wakeup call for people who get snippy when women take maternity leave.

The Government Is Sexist And Nobody Seems To Care (2010). Discussed the absurdity of the marriage penalty tax and why it came to be.

The Gender Wage Gap And A Solution To Gender Inequality (2012). A no-brainer solution that should be adopted by all firms.

Over The Hill At 40: A Discussion On Age Discrimination In The Work Place (2014). Argued why people over 40 rock.

Sexual Harassment At Uber Reminds Me Why HR Is Not Your Friend (2017). Highlighted how the company did nothing after repeated complaints by one brave female employee.

The Marriage Penalty Tax Has Been Abolished, Hooray! (2018). Reviewed the new tax laws that are essentially a victory for higher-earning, career-focused women who wish to get married.

How To Negotiate A Severance As A High-Performing Employee (2018). Showed how my wife was able to negotiate a severance after getting passed over for a raise and a promotion gotten by two other guys.

Each post’s existence originated from the deep frustration I have about the lack of gender equality that has made its way into our systems. If our systems were governed by a more balanced group of people, our systems would treat all people more equally.

My goal is to bring about more awareness so that we can all speak up and take action to level the playing field.

The right asset-to-liability ratio is important if you want to retire comfortably. If your ratio is too low, you may stress too much about your finances. If your ratio is too high, you might not be taking enough advantage of cheap debt to get richer.

As interest rates decline, the propensity to take on more debt increases.

On the corporate finance side, companies are taking on more debt to fund operations, investments, and acquisitions. The hope is that the return from various corporate activities will surpass the cost of debt in order to bring even more wealth to shareholders.

On the government side, the Treasury Department is issuing more Treasury bonds to pay for more government spending. It is logical to conclude that tax hikes are on the horizon. Luckily for us, the U.S. government can also print an unlimited amount of money to in essence pay back the debt.

On the personal finance side, consumers are taking on more debt to live a better life today. Below is a chart of my favorite type of debt, mortgage debt. Mortgage debt is the least bad type of debt because it generally improves the quality of your life and can often help build wealth through an appreciating asset.

As mortgage interest rates drop to record-lows, millions of Americans are smartly refinancing their existing mortgages to increase cash flow. Meanwhile, there’s a growing number of Americans buying new homes to live a better life.