Well, sort of.
I guess I should say I’m richer than I thought I was.
Or I will be, someday.
Yesterday I was doing some retirement planning (yeah, I know… another crazy Saturday morning). In a conversation at dinner with some friends on Friday night, I realized I’d mis-calculated some of the taxes in my long-term plan. As I considered how to efficiently “draw down” from my investments to fund my retirement, I’d been calculating the taxes at standard federal income tax rates. But in a flash of insight, I remembered that withdrawals from stock positions are actually taxed at the capital gains rate. Moreover, it’s only the gains that are taxed– not the bulk of the investments (they were already taxed before I invested them).
I pulled up my spreadsheet and updated a few formulas, then sat back and looked at the numbers. Things are much better than I thought they would be. Before, retirement felt a little bit like skating on some questionable ice, and now I’m relieved that it shouldn’t be quite like that. Of course we’ll end up adjusting things as we go, but it’s nice to know I’ll have a little bit more money than I thought I would.
Yeah, the adventures of financial planning, right?