If rates go down and you qualify for a new mortgage, then sure. That’s what people have been doing for the last 50 years, as mortgage rates dropped from 20% to 2%.

> he would be eligible for up to a $3,000 credit, correct?

No, he would have up to $3000 deduction to ordinary income that year. It has no effect on past years, and would at most bring your taxable income to $0 if your income is super low already… which does not produce negative taxes regardless.

> it was mechanically identical to someone trading with a retirement account

But it was not actually trading in a retirement account.

It is the retirement account that is mechanically similar to this general case, not the other way around. This is the normal way things work.

Retirement accounts are given special privileges (and associated limitations) not afforded to anything else because the government wants to encourage retirement preparations. Nothing else gets special privileges.

Why is number 2 part of your savings rate calculation?

None of that sinking fund should be involved in savings rate at all, it’s all an expense, none of it is income or savings.

One method of doing it is:

At the time the expense occurs, you have an expense of $y from the vacation, and a reimbursement of $y (a negative expense) from the sinking fund.

When you add $x to the sinking fund, you have an expense of $x.

There are other ways as well, but that’s my preference.

> My thoughts are that if he can explain the financial hardship to the IRS and get payments on the back taxes delayed,

He may be able to get on a payment plan, sure.

> when he shows capital losses in 2022 (by realizing the big loss on current stocks), those losses will offset the owed taxes.

Losses in 2022 do not reduce taxes for any previous year.

> If so, we can also request a case review with Medicare to explain that he never actually had any income, this was all just a couple of trades that are now underwater.

He did actually have income. He then spent that income on new stuff, but if spending your income meant it didn’t exist then nobody would ever have any income.

“Surrender charges”

“Max partial withdrawal”

It sounds like you have purchased some form of annuity or permanent life insurance product, these aren’t terms associated with IRAs specifically (even if you have done so within an IRA). We can’t speak to any fees you may pay for breaking that contract.

Withdrawing anything from a traditional IRA or earnings from a Roth IRA is subject to income taxes and a 10% penalty. You can withdraw contributions from a Roth IRA without tax or penalty.

> My plan would be to open a new Roth and a new Traditional IRA once I get back on my feet again and can contribute (in theory) the amount I cashed out of each account.

If it is within 60 days of the withdrawal, you can do one indirect rollover per year. Otherwise, your contribution for 2022 is limited to the lower of $6000 or your earned income, regardless of what you may have withdrawn.

No.

ERISA is a federal law governing many aspects of qualified retirement plans. One aspect of which is that qualified 401 and 403 plans (I don’t remember about 457) always go to a spouse upon death of the owner, unless said spouse has explicitly waived that right.

The only reason they can’t use a different gym is that they can’t be away from their work computer for too long.

Maybe just… go to the gym when you aren’t working?

I don’t really use a gym myself, but I can’t imagine you’re going to get “the results you want” any better at the gym if you’re worried about rushing back to your computer instead of the eorkout, any more than I do when working out at home.

There’s not a trick to it, if that’s what you’re asking. If your average balance in checking is increased by transferring from savings, the average balance in savings is lower by an equal amount.

Getting a better bank would solve the problem.

If you want to gamble that the IRS will be delayed in processing your tax return in particular, I guess. You only get interest if the IRS is unable to refund you within 45 days of tax day or receiving your tax return, whichever is later.

Doesn’t seem worth the effort really, but you do you.

In network max OOP and in network routine care (office visits, lab work) as well.

Asthma management is often included on preventative drug lists for HDHPs. No coverage actually means “no coverage except for preventative care.”

The “escrow account” that it mentioned is the thing you are using to pay your insurance and property taxes. By law, the escrow account can include an additional reserve, and basically every mortgage servicer requires the maximum allowable reserve.

> Throughout the life of an escrow account, the servicer may charge the borrower a monthly sum equal to one-twelfth (1/12) of the total annual escrow payments which the servicer reasonably anticipates paying from the account. In addition, the servicer may add an amount to maintain a cushion no greater than one-sixth (1/6) of the estimated total annual payments from the account. However, if a servicer determines through an escrow account analysis that there is a shortage or deficiency, the servicer may require the borrower to pay additional deposits to make up the shortage or eliminate the deficiency, subject to the limitations set forth in § 1024.17(f).

Periodically, the servicer will analyze the escrow account, and adjust your payments as needed to account for both the tax/insurance/etc. as well as the reserve amount.

So, if the tax/insurance payments have been going up, the reserve was drawn on to make up the difference… meaning you now need to refill the reserve. Additionally, since tax/insurance went up, the size of the new reserve also went up, again increasing the amount needed to refill the reserve.

Once the reserve is refilled, your payments will be reduced somewhat. If the estimates were too high, you’ll be paid back the excess.

This is normal and expected behavior for every mortgage that uses an escrow account.

Exemptions haven’t been a thing for 3 years. How are you filling out the current w4?

Without checking any of your math, yes, that’s pretty much how it works.

What do you have available?

A mortgage is not part of your cost basis.

And the capital gains brackets are progressive brackets just like the regular income brackets. The capital gains brackets sit on top of the other income brackets.

If he has $10k in other taxable income for example, then the first $34k of capital gains (up to the $44k bracket) would be taxed at 0%. The rest would be in the 15% bracket.

> I don’t want to pull ahead the tax loss for next year

Why not? Losses carried forward from this year are 100% identical to losses taken next year.

Are they your spouse, or are they a domestic partner? Those are not the same thing.

Otherwise, you can claim a qualifying relative as a dependent (“relative” is defined very loosely, and would most likely apply here if they are a domestic partner) if they lived with you for more than half the year, you provided more than half their upkeep, and they earned less than $4200 in the year.

It’s true that “average returns” are not particularly interesting to look at, and do not take into account the effects of compounding.

That’s also both irrelevant and highly misleading, since when people actually talk about stock market returns, they are using average annual growth rate (also known as compound annual growth rate), not average returns. That’s what the 10% number commonly discussed is.

And that number is also the stock market as a whole weighted by market cap, not the DJIA which is 30 companies weighted by stock price.

The long term average return of the stock market as a whole is around 10% annually. This includes any effects of compounding you choose to name, whether you want to call them “negative” or “positive” or any other label.

That return is a long term average over more than 30 years, any particular year (or 2 years, or 5 years, or 10 years) is quite unlikely to be exactly 10%. Some periods are higher, some are lower.

It is perfectly true that a drop of 50% requires a gain of 100% to break even. But that doesn’t mean anything new or interesting, long term market return calculations already include all price changes by definition, including both the 50% loss and the 100% gain.

> I am freaking out a bit because now I’m wondering if I’m a victim of identity theft and someone has fraudulently set up this account in my name.

If you were previously employed for more than 30 days in the state of California, by an employer with more than 5 employees, and that employer did not operate their own retirement plan, then they were legally required to include your name in the CalSavers system. Nothing suspicious at all.

Your notification probably includes where to go to manage your stuff, including the opt out. Otherwise, www.calsavers.com

None of that advice is different than you would give in any other period. You would still pick high interest savings for your emergency fund. You would still be aware of the true cost of cars and out more down if the financing price is too high. You would still refinance your mortgage if rates go down.

Fundamentally, there is no change in financial advice between high inflation or low inflation or deflation, because none of those are controllable through your personal financial choices. They just happen.

You do not have one definitive “credit score,” you have dozens of credit scores, which use dozens of different credit scoring models to take the information on your credit report and turn it into a number.

Credit karma gives you a vantagescore. They do that because nobody uses vantagescore, and so it’s very cheap to provide it to you. So the score credit karma gave you is 100% accurate, it’s just that nobody really cares about that particular score.

Your mortgage lender would have most likely used some combination of FICO 2, 4 and/or 5.

Credit cards usually use FICO 8, which is also somewhat commonly provided by credit monitoring services (though not credit karma). Auto loans usually use FICO Auto. There are a variety of other FICO scores that lenders might choose to use in different situations.

It doesn’t effect anything at all (or if it does, you should immediately get a lawyer and expect a fat legal settlement).