Personal Finance 101 for Young Lawyers Forum

[T3TON]

Lives and personal reasons do not matter. ... Litigation is litigation.

Are you serious? If this was true, no one would gun for impact lit at the ACLU, or international human rights law, or Bristow fellowships, or DoJ Honors, or even SCOTUS clerkships. None of these positions "make sense" from a purely economic standpoint, and after all, litigation is litigation, amirite?

No, because this person is already in Big Law so they need to stay because they have the golden ticket. They can do everything you just mentioned minus Scotus clerkship after big law. They are not thinking long term if they are talking about leaving after 1 year so they can get a low paying state job when they make $180k now.

Odd exchange. SCOTUS clerkships and Bristow Fellowships certainly "make sense" from a financial perspective for anyone who has not yet made partner. It is entirely possible to do a SCOTUS clerkship after a stint in biglaw. And biglaw associates are ineligible for DOJ Honors.

[QContinuum]

Lives and personal reasons do not matter. ... Litigation is litigation.

Are you serious? If this was true, no one would gun for impact lit at the ACLU, or international human rights law, or Bristow fellowships, or DoJ Honors, or even SCOTUS clerkships. None of these positions "make sense" from a purely economic standpoint, and after all, litigation is litigation, amirite?

No, because this person is already in Big Law so they need to stay because they have the golden ticket. They can do everything you just mentioned minus Scotus clerkship after big law. They are not thinking long term if they are talking about leaving after 1 year so they can get a low paying state job when they make $180k now.

Odd exchange. SCOTUS clerkships and Bristow Fellowships certainly "make sense" from a financial perspective for anyone who has not yet made partner. It is entirely possible to do a SCOTUS clerkship after a stint in biglaw. And biglaw associates are ineligible for DOJ Honors.

I wasn't saying folks could go from BigLaw to DoJ Honors. Rather, I was pointing out that from a purely economic standpoint, it'd never make sense to do DoJ Honors instead of BigLaw. Or impact lit at ACLU. Or international human rights law. Or what have you [insert just about any prestigious, competitive non-BigLaw legal job you can think of].

I also disagree that a Bristow makes economic sense. (Of course, a Bristow makes sense! It's a tremendous opportunity. But anyone doing a Bristow would make more money doing (one more year of) BigLaw.)

A SCOTUS clerkship likewise does not make economic sense. Yes, the SCOTUS clerkship bonus is huge, but no SCOTUS clerk spends a single year clerking. They spend, at minimum, two years, and sometimes three years, as a clerk. The SCOTUS clerkship bonus does not make up for two years of lost BigLaw earnings.

[T3TON]

Lives and personal reasons do not matter. ... Litigation is litigation.

Are you serious? If this was true, no one would gun for impact lit at the ACLU, or international human rights law, or Bristow fellowships, or DoJ Honors, or even SCOTUS clerkships. None of these positions "make sense" from a purely economic standpoint, and after all, litigation is litigation, amirite?

No, because this person is already in Big Law so they need to stay because they have the golden ticket. They can do everything you just mentioned minus Scotus clerkship after big law. They are not thinking long term if they are talking about leaving after 1 year so they can get a low paying state job when they make $180k now.

Odd exchange. SCOTUS clerkships and Bristow Fellowships certainly "make sense" from a financial perspective for anyone who has not yet made partner. It is entirely possible to do a SCOTUS clerkship after a stint in biglaw. And biglaw associates are ineligible for DOJ Honors.

I wasn't saying folks could go from BigLaw to DoJ Honors. Rather, I was pointing out that from a purely economic standpoint, it'd never make sense to do DoJ Honors instead of BigLaw. Or impact lit at ACLU. Or international human rights law. Or what have you [insert just about any prestigious, competitive non-BigLaw legal job you can think of].

I also disagree that a Bristow makes economic sense. (Of course, a Bristow makes sense! It's a tremendous opportunity. But anyone doing a Bristow would make more money doing (one more year of) BigLaw.)

A SCOTUS clerkship likewise does not make economic sense. Yes, the SCOTUS clerkship bonus is huge, but no SCOTUS clerk spends a single year clerking. They spend, at minimum, two years, and sometimes three years, as a clerk. The SCOTUS clerkship bonus does not make up for two years of lost BigLaw earnings.

This math seems way off. Let's assume you clerk for two years: once on the D.C. Circuit and once on SCOTUS. You'd receive $72,000 your first year, $86,000 your second year, and $400,000 in a signing bonus. That averages out to $280,000 a year, which is more than you'd make in biglaw. Bonuses for Bristow Fellowships are also huge and well exceed the lost value of two years of biglaw. Not to mention that firms may pad SCOTUS clerks' end-of-year bonuses and may be more likely to promote them to partner.

Your general point stands that litigation is about more than money. But some opportunities outside of biglaw do pay more even over the short-term. And many opportunities pay more over the medium-to-long-term.

[QContinuum]

This math seems way off. Let's assume you clerk for two years: once on the D.C. Circuit and once on SCOTUS. You'd receive $72,000 your first year, $86,000 your second year, and $400,000 in a signing bonus. That averages out to $280,000 a year, which is more than you'd make in biglaw.

Thanks for following up. Your math, of course, is correct, so far as it goes. However, a SCOTUS clerkship still doesn't make economic sense. Let me explain.

No one can have certainty, ex ante, that they will be able to land a SCOTUS clerkship. At most, one can land a clerkship with a feeder judge. Even with that feeder clerkship offer in hand, one's chances at SCOTUS are still pretty low. The vast majority of clerks for feeder judges do not go on to clerk on SCOTUS.

So, sure, looking back, the SCOTUS clerk has made more money than she would've had she gone straight into BigLaw. But that's not the right way to look at it. That's the same bad logic as saying - look at the #1 student at this T3 law school who landed BigLaw. This fellow was a history major at a low-ranked college. Law school was absolutely the right move for him - in hindsight. It doesn't make attending a T3 law school a good economic choice for any 0L - including this particular fellow - ex ante. You must discount the upside - the BigLaw paycheque in this case, the SCOTUS clerkship bonus in the original case - by the (very low) probability of obtaining that upside.

Again, though, all this is really academic. Of course anyone who's interested in litigation who has a feeder clerkship offer should take that offer, instead of going straight to BigLaw. This would be the case even if clerkship bonuses went the way of the dodo. Clerkships, especially high-profile CoA ones, can confer immense, career-long benefits. That's undisputed. I was just trying to illustrate the absurd outcomes one could get by focusing on economics uber alles.

Not to mention that firms may pad SCOTUS clerks' end-of-year bonuses and may be more likely to promote them to partner.

I don't think we have any data to substantiate this, and I doubt it's true. If anything, SCOTUS clerks may be less likely to make partner, because they often go into firms' appellate practices. Appellate practices are typically loss leaders, meaning firms are particularly reluctant to make additional partners, and it also benefits firms more to hire high-profile ex-government lawyers to lead these practices than to promote homegrown associates who are brilliant but don't have the name recognition.

[T3TON]

This math seems way off. Let's assume you clerk for two years: once on the D.C. Circuit and once on SCOTUS. You'd receive $72,000 your first year, $86,000 your second year, and $400,000 in a signing bonus. That averages out to $280,000 a year, which is more than you'd make in biglaw.

Thanks for following up. Your math, of course, is correct, so far as it goes. However, a SCOTUS clerkship still doesn't make economic sense. Let me explain.

No one can have certainty, ex ante, that they will be able to land a SCOTUS clerkship. At most, one can land a clerkship with a feeder judge. Even with that feeder clerkship offer in hand, one's chances at SCOTUS are still pretty low. The vast majority of clerks for feeder judges do not go on to clerk on SCOTUS.

So, sure, looking back, the SCOTUS clerk has made more money than she would've had she gone straight into BigLaw. But that's not the right way to look at it. That's the same bad logic as saying - look at the #1 student at this T3 law school who landed BigLaw. This fellow was a history major at a low-ranked college. Law school was absolutely the right move for him - in hindsight. It doesn't make attending a T3 law school a good economic choice for any 0L - including this particular fellow - ex ante. You must discount the upside - the BigLaw paycheque in this case, the SCOTUS clerkship bonus in the original case - by the (very low) probability of obtaining that upside.

Again, though, all this is really academic. Of course anyone who's interested in litigation who has a feeder clerkship offer should take that offer, instead of going straight to BigLaw. This would be the case even if clerkship bonuses went the way of the dodo. Clerkships, especially high-profile CoA ones, can confer immense, career-long benefits. That's undisputed. I was just trying to illustrate the absurd outcomes one could get by focusing on economics uber alles.

Not to mention that firms may pad SCOTUS clerks' end-of-year bonuses and may be more likely to promote them to partner.

I don't think we have any data to substantiate this, and I doubt it's true. If anything, SCOTUS clerks may be less likely to make partner, because they often go into firms' appellate practices. Appellate practices are typically loss leaders, meaning firms are particularly reluctant to make additional partners, and it also benefits firms more to hire high-profile ex-government lawyers to lead these practices than to promote homegrown associates who are brilliant but don't have the name recognition.

Thank you for clarifying your position. Your view is reasonable, although I disagree with the conclusion that pursuing a SCOTUS clerkship is not economically justified ex ante. Clerking for SCOTUS requires two decisions: the decision to accept a feeder clerkship and (if accepted) the decision to clerk for SCOTUS. We both agree that the second decision is cost-justified. I think the first decision is too.

Clerkship bonus included, the biglaw associate comes out roughly $70,000 ahead of the circuit court clerk. On the other hand, working for a feeder judge provides benefits even without a SCOTUS clerkship that have economic value. For instance, working for a feeder judge can improve your odds of landing one of the government positions you (correctly) identify as a common path to partner. I would wager that the improved odds of partnership, when added to the risk-discounted value of a SCOTUS clerkship, make clerking for a top circuit court judge cost-justified in most cases.

As for the end of your post, I disagree that clerking for SCOTUS could in any way hurt an associate’s chance of making partner. Sure, many SCOTUS clerks join appellate groups or academia. But plenty choose to go into more lucrative practice areas instead. Those that do enjoy a huge competitive advantage because of their credentials.

But also, I agree that this discussion is mostly academic. Litigation is, or at least should be, about more than making money.

[Anonymous User]

Looking for opinions. Should I diversify? 4th year associate. Currently have loans paid off, $40K in checking account (emergency fund), $47K in 401K, and $70K in VFIAX (Vanguard S&P 500 index fund, admiral shares).

For as long as I'm in biglaw my plan is to max 401K and dump the rest into VFIAX, while keeping checking account hovering around $30-40K. I recall VFIAX being recommended earlier in this thread, but now I'm reading elsewhere that it's a bit risky to dump everything into S&P stocks. Should I start investing in bonds as well? I'm not very literate investing-wise.

[champ33]

Looking for opinions. Should I diversify? 4th year associate. Currently have loans paid off, $40K in checking account (emergency fund), $47K in 401K, and $70K in VFIAX (Vanguard S&P 500 index fund, admiral shares).

For as long as I'm in biglaw my plan is to max 401K and dump the rest into VFIAX, while keeping checking account hovering around $30-40K. I recall VFIAX being recommended earlier in this thread, but now I'm reading elsewhere that it's a bit risky to dump everything into S&P stocks. Should I start investing in bonds as well? I'm not very literate investing-wise.

You're looking good. I would continue to max the 401k and also a Roth IRA (will probably have to do this backdoor, in short this means contributing the $6k yearly max to a traditional IRA and then converting it to Roth). Otherwise, after maxing those tax-advantaged accounts, dumping the rest into an index fund makes sense. Assuming you are in your early/mid 30's you have time to wait out ups and downs in the market. If you want any of that money in the next few years, though, i.e. for a down payment on a home or anything else, I'd move it to a high yield savings account.

[Anonymous User]

Looking for opinions. Should I diversify? 4th year associate. Currently have loans paid off, $40K in checking account (emergency fund), $47K in 401K, and $70K in VFIAX (Vanguard S&P 500 index fund, admiral shares).

For as long as I'm in biglaw my plan is to max 401K and dump the rest into VFIAX, while keeping checking account hovering around $30-40K. I recall VFIAX being recommended earlier in this thread, but now I'm reading elsewhere that it's a bit risky to dump everything into S&P stocks. Should I start investing in bonds as well? I'm not very literate investing-wise.

You're looking good. I would continue to max the 401k and also a Roth IRA (will probably have to do this backdoor, in short this means contributing the $6k yearly max to a traditional IRA and then converting it to Roth). Otherwise, after maxing those tax-advantaged accounts, dumping the rest into an index fund makes sense. Assuming you are in your early/mid 30's you have time to wait out ups and downs in the market. If you want any of that money in the next few years, though, i.e. for a down payment on a home or anything else, I'd move it to a high yield savings account.

Much appreciated!

[nealric]

Looking for opinions. Should I diversify? 4th year associate. Currently have loans paid off, $40K in checking account (emergency fund), $47K in 401K, and $70K in VFIAX (Vanguard S&P 500 index fund, admiral shares).

For as long as I'm in biglaw my plan is to max 401K and dump the rest into VFIAX, while keeping checking account hovering around $30-40K. I recall VFIAX being recommended earlier in this thread, but now I'm reading elsewhere that it's a bit risky to dump everything into S&P stocks. Should I start investing in bonds as well? I'm not very literate investing-wise.

100% equities isn't terrible for a young person so long as you don't panic sell when things go down. The stock market has marched pretty steadily upwards for the last 10 years, but reversals are part of life. Those reversals don't matter much when you have a 40 year time horizon, but a lot of investors end up way behind by panic selling and waiting out the recovery.

As far as bonds, most advisers would advocate at least SOME money in bonds to control the swings from equity. 80/20 allocation between stocks and bonds is reasonable for a young person. Note that you want bonds in a tax advantaged account if possible because the interest is taxed at ordinary rates. If you want to change your asset allocation, do it in your 401k (will also prevent gain from being recognized on the equities). As you get older, you may want more bonds. Many retirees are 60/40 or even 50/50.

Finally, rather than keeping a big checking account for your cash/emergency savings, I'd recommend opening up a high yield savings account (Ally, Marcus (goldman sachs), USAA all offer accounts like this). You'll earn ~2% on the money rather than zero sitting in checking. That's almost $1,000 a year of free money if you stuff $40k in it. Don't put more than you might reasonably need to spend in the next month in the checking account. The money in my high yield savings account can accessed within 48 hours if I need it.

You are doing a lot better than some. One lawyer who'd spent almost 20 years in biglaw confided in me that they had put ALL of their money in their checking account (other than 401k). That lawyer likely literally lost out on over $1 million in gains over that time period.

[Anonymous User]

Looking for opinions. Should I diversify? 4th year associate. Currently have loans paid off, $40K in checking account (emergency fund), $47K in 401K, and $70K in VFIAX (Vanguard S&P 500 index fund, admiral shares).

For as long as I'm in biglaw my plan is to max 401K and dump the rest into VFIAX, while keeping checking account hovering around $30-40K. I recall VFIAX being recommended earlier in this thread, but now I'm reading elsewhere that it's a bit risky to dump everything into S&P stocks. Should I start investing in bonds as well? I'm not very literate investing-wise.

100% equities isn't terrible for a young person so long as you don't panic sell when things go down. The stock market has marched pretty steadily upwards for the last 10 years, but reversals are part of life. Those reversals don't matter much when you have a 40 year time horizon, but a lot of investors end up way behind by panic selling and waiting out the recovery.

As far as bonds, most advisers would advocate at least SOME money in bonds to control the swings from equity. 80/20 allocation between stocks and bonds is reasonable for a young person. Note that you want bonds in a tax advantaged account if possible because the interest is taxed at ordinary rates. If you want to change your asset allocation, do it in your 401k (will also prevent gain from being recognized on the equities). As you get older, you may want more bonds. Many retirees are 60/40 or even 50/50.

Finally, rather than keeping a big checking account for your cash/emergency savings, I'd recommend opening up a high yield savings account (Ally, Marcus (goldman sachs), USAA all offer accounts like this). You'll earn ~2% on the money rather than zero sitting in checking. That's almost $1,000 a year of free money if you stuff $40k in it. Don't put more than you might reasonably need to spend in the next month in the checking account. The money in my high yield savings account can accessed within 48 hours if I need it.

You are doing a lot better than some. One lawyer who'd spent almost 20 years in biglaw confided in me that they had put ALL of their money in their checking account (other than 401k). That lawyer likely literally lost out on over $1 million in gains over that time period.

Super informative, thank you!

[sparty99]

Looking for opinions. Should I diversify? 4th year associate. Currently have loans paid off, $40K in checking account (emergency fund), $47K in 401K, and $70K in VFIAX (Vanguard S&P 500 index fund, admiral shares).

For as long as I'm in biglaw my plan is to max 401K and dump the rest into VFIAX, while keeping checking account hovering around $30-40K. I recall VFIAX being recommended earlier in this thread, but now I'm reading elsewhere that it's a bit risky to dump everything into S&P stocks. Should I start investing in bonds as well? I'm not very literate investing-wise.

100% equities isn't terrible for a young person so long as you don't panic sell when things go down. The stock market has marched pretty steadily upwards for the last 10 years, but reversals are part of life. Those reversals don't matter much when you have a 40 year time horizon, but a lot of investors end up way behind by panic selling and waiting out the recovery.

As far as bonds, most advisers would advocate at least SOME money in bonds to control the swings from equity. 80/20 allocation between stocks and bonds is reasonable for a young person. Note that you want bonds in a tax advantaged account if possible because the interest is taxed at ordinary rates. If you want to change your asset allocation, do it in your 401k (will also prevent gain from being recognized on the equities). As you get older, you may want more bonds. Many retirees are 60/40 or even 50/50.

Finally, rather than keeping a big checking account for your cash/emergency savings, I'd recommend opening up a high yield savings account (Ally, Marcus (goldman sachs), USAA all offer accounts like this). You'll earn ~2% on the money rather than zero sitting in checking. That's almost $1,000 a year of free money if you stuff $40k in it. Don't put more than you might reasonably need to spend in the next month in the checking account. The money in my high yield savings account can accessed within 48 hours if I need it.

You are doing a lot better than some. One lawyer who'd spent almost 20 years in biglaw confided in me that they had put ALL of their money in their checking account (other than 401k). That lawyer likely literally lost out on over $1 million in gains over that time period.

Super informative, thank you!

Why is your emergency fund so high? You should lower it.

[nealric]

Looking for opinions. Should I diversify? 4th year associate. Currently have loans paid off, $40K in checking account (emergency fund), $47K in 401K, and $70K in VFIAX (Vanguard S&P 500 index fund, admiral shares).

For as long as I'm in biglaw my plan is to max 401K and dump the rest into VFIAX, while keeping checking account hovering around $30-40K. I recall VFIAX being recommended earlier in this thread, but now I'm reading elsewhere that it's a bit risky to dump everything into S&P stocks. Should I start investing in bonds as well? I'm not very literate investing-wise.

100% equities isn't terrible for a young person so long as you don't panic sell when things go down. The stock market has marched pretty steadily upwards for the last 10 years, but reversals are part of life. Those reversals don't matter much when you have a 40 year time horizon, but a lot of investors end up way behind by panic selling and waiting out the recovery.

As far as bonds, most advisers would advocate at least SOME money in bonds to control the swings from equity. 80/20 allocation between stocks and bonds is reasonable for a young person. Note that you want bonds in a tax advantaged account if possible because the interest is taxed at ordinary rates. If you want to change your asset allocation, do it in your 401k (will also prevent gain from being recognized on the equities). As you get older, you may want more bonds. Many retirees are 60/40 or even 50/50.

Finally, rather than keeping a big checking account for your cash/emergency savings, I'd recommend opening up a high yield savings account (Ally, Marcus (goldman sachs), USAA all offer accounts like this). You'll earn ~2% on the money rather than zero sitting in checking. That's almost $1,000 a year of free money if you stuff $40k in it. Don't put more than you might reasonably need to spend in the next month in the checking account. The money in my high yield savings account can accessed within 48 hours if I need it.

You are doing a lot better than some. One lawyer who'd spent almost 20 years in biglaw confided in me that they had put ALL of their money in their checking account (other than 401k). That lawyer likely literally lost out on over $1 million in gains over that time period.

Super informative, thank you!

Why is your emergency fund so high? You should lower it.

I think that emergency fund is fine. Biglaw doesn't have the best job security, and legal jobs can take a lot of time to secure. 6-8 months living expenses isn't unreasonable. That amount will become less and less a drag on returns as this person progresses in their career and continues to add to their investments.

[Dr. Nefario]

IRA Question: SO and I each have 2018 traditional IRAs which we took a deduction for in the 2018 tax year (SO's also includes a small amount of pre-tax funds rolled over from a prior 401(k)). We also have 2019 traditional IRAs, but are no longer eligible for the deduction, so we want to take the backdoor Roth approach. We can't rollover the pre-tax and deducted funds into either of our 401(k)s because there's a restriction against rolling in funds from personal IRA contributions.

What's the best approach here? It seems like to backdoor, I'm just going to have to eat the tax consequence in whatever year we backdoor. Any ideas are welcome.

[Yugihoe]

IRA Question: SO and I each have 2018 traditional IRAs which we took a deduction for in the 2018 tax year (SO's also includes a small amount of pre-tax funds rolled over from a prior 401(k)). We also have 2019 traditional IRAs, but are no longer eligible for the deduction, so we want to take the backdoor Roth approach. We can't rollover the pre-tax and deducted funds into either of our 401(k)s because there's a restriction against rolling in funds from personal IRA contributions.

What's the best approach here? It seems like to backdoor, I'm just going to have to eat the tax consequence in whatever year we backdoor. Any ideas are welcome.

There's not much you can do. I would just do the backdoor roth and eat the pro rata tax hit. Assume you plan on being above the income limit for a while now, this sounds like the best option since you'll be backdooring multiple years going forward.

[MrLions]

I want to take out a $6000 personal loan to max my Roth for 2019. I have a biglaw SA upcoming this summer, and FAIR credit (~650, neglected some credit card payments last year). Any tips for how to get a loan, other than from friends or family? Ideally I'd take the loan out right before the April 15 deadline and then pay it back during the summer. Should I look into P2P lending?

[sparty99]

I want to take out a $6000 personal loan to max my Roth for 2019. I have a biglaw SA upcoming this summer, and FAIR credit (~650, neglected some credit card payments last year). Any tips for how to get a loan, other than from friends or family? Ideally I'd take the loan out right before the April 15 deadline and then pay it back during the summer. Should I look into P2P lending?

You want to take out a loan to invest money? This is the dumbest idea I have ever heard. Dumb as hell. Like no.

[Anonymous User]

I want to take out a $6000 personal loan to max my Roth for 2019. I have a biglaw SA upcoming this summer, and FAIR credit (~650, neglected some credit card payments last year). Any tips for how to get a loan, other than from friends or family? Ideally I'd take the loan out right before the April 15 deadline and then pay it back during the summer. Should I look into P2P lending?

You want to take out a loan to invest money? This is the dumbest idea I have ever heard. Dumb as hell. Like no.

You don't know how a Roth IRA works, do you?

[MrLions]

I want to take out a $6000 personal loan to max my Roth for 2019. I have a biglaw SA upcoming this summer, and FAIR credit (~650, neglected some credit card payments last year). Any tips for how to get a loan, other than from friends or family? Ideally I'd take the loan out right before the April 15 deadline and then pay it back during the summer. Should I look into P2P lending?

You want to take out a loan to invest money? This is the dumbest idea I have ever heard. Dumb as hell. Like no.

You don't know how a Roth IRA works, do you?

Not meant to be anon

[sparty99]

I want to take out a $6000 personal loan to max my Roth for 2019. I have a biglaw SA upcoming this summer, and FAIR credit (~650, neglected some credit card payments last year). Any tips for how to get a loan, other than from friends or family? Ideally I'd take the loan out right before the April 15 deadline and then pay it back during the summer. Should I look into P2P lending?

You want to take out a loan to invest money? This is the dumbest idea I have ever heard. Dumb as hell. Like no.

You don't know how a Roth IRA works, do you?

Not meant to be anon

Do you? Because that is not even "earned income."

[MrLions]

I want to take out a $6000 personal loan to max my Roth for 2019. I have a biglaw SA upcoming this summer, and FAIR credit (~650, neglected some credit card payments last year). Any tips for how to get a loan, other than from friends or family? Ideally I'd take the loan out right before the April 15 deadline and then pay it back during the summer. Should I look into P2P lending?

You want to take out a loan to invest money? This is the dumbest idea I have ever heard. Dumb as hell. Like no.

You don't know how a Roth IRA works, do you?

Not meant to be anon

Do you? Because that is not even "earned income."

I earned over $6000 of income in 2019 but I spent it. Money is fungible. It doesn’t matter which expenses—the Roth contribution or my rent—you conceptualize the loan covering.

With a Roth, gains and withdrawals are never taxed. The question is, how much is this favorable tax treatment worth. By missing 2019’s contribution I’d be potentially missing out on tens of thousands of future income (remember, it’s the final year of gains—not the first—that would be left on the table). Therefore, paying a few hundred dollars in interest to enable me to make the contribution is easily worth it.

[LaLiLuLeLo]

I got married last year and switched jobs (both market paying) and after I put in most of our info in TurboTax it’s estimating a giant refund - over 10k fed and 6k state. Part of this is overcontributions to SSI because the new job but this is a massive return whereas previously I usually was close to zero. Last year I actually owed federal but got a state refund that netted out.

Anyone else here get married and this was your experience?

[lawhopeful100]

I got married last year and switched jobs (both market paying) and after I put in most of our info in TurboTax it’s estimating a giant refund - over 10k fed and 6k state. Part of this is overcontributions to SSI because the new job but this is a massive return whereas previously I usually was close to zero. Last year I actually owed federal but got a state refund that netted out.

Anyone else here get married and this was your experience?

Did you already put your spouse's income into Turbotax? I got married this past year too and used TurboTax. I also switched jobs so I got the SS over-contributions too. Turbotax showed me with like a $10k refund, but then I put in my wife's W-2, who is a teacher, and that dropped it to just under $5k. I also left from a large firm to take a pay cut by going in-house, which might make a difference. Either way, congrats on the refund. It is cool to get the extra money, but then you realize you were giving the government an interest free loan essentially, but psychologically it feels better than owing money imo.

[LaLiLuLeLo]

I got married last year and switched jobs (both market paying) and after I put in most of our info in TurboTax it’s estimating a giant refund - over 10k fed and 6k state. Part of this is overcontributions to SSI because the new job but this is a massive return whereas previously I usually was close to zero. Last year I actually owed federal but got a state refund that netted out.

Anyone else here get married and this was your experience?

Did you already put your spouse's income into Turbotax? I got married this past year too and used TurboTax. I also switched jobs so I got the SS over-contributions too. Turbotax showed me with like a $10k refund, but then I put in my wife's W-2, who is a teacher, and that dropped it to just under $5k. I also left from a large firm to take a pay cut by going in-house, which might make a difference. Either way, congrats on the refund. It is cool to get the extra money, but then you realize you were giving the government an interest free loan essentially, but psychologically it feels better than owing money imo.

I try to get as close to zero as possible, but with social security, marriage, my dumb payroll department not changing my withholdings, and no knowledge of what my wife did for her tax returns, it was tough for 2019. But funny that we had very similar situations. My wife is also an educator.

[nealric]

My goal is to pay as much as possible without owing a penalty. Present value of keeping the money for me is only a couple hundred bucks (depending on assumed discount rate), but money is money.

[FND]

My goal is to pay as much as possible without owing a penalty. Present value of keeping the money for me is only a couple hundred bucks (depending on assumed discount rate), but money is money.

I think you mean as little as possible without owing a penalty. that's my stance too, but for a different reason. No fucking way am I giving the IRS an interest-free loan