You never slow down, you never grow old

A bunch of different snippets today. First up, my brother sent me this link from USA Today that as Congress starts to try to figure out tax reform they might change the tax deferred status of 401k contributions. If they were to change it such that all 401ks essentially now become Roth 401ks (going forward) that wouldn’t be the worst thing in the world. Of course, some (many) would come out behind especially if their tax rate ends up being lower in retirement but it wouldn’t by itself be catastrophic (not to be taken as my supporting the idea, I don’t).

The potential catastrophe would be if would be savers are turned off by not being able to deduct their contribution and so don’t set anything aside. The article cites research from the Economic Policy Institute that the median working age family had only saved $5000 as of 2013. I actually don’t think Congress will mess with this in anyway shape or form such that the path to savings is impeded, if anything they should make it even more attractive to save money but if they are so stupid to hurt middle class savers, that is from the top down. From the bottom up, many of us still have the opportunity to set money aside to solve, or prevent, our own problem.

Over the last few years I have been very intrigued with tiny houses. One aspect that doesn’t seem to get talked about much is the extent to which they are vehicles (often having to be licensed through the DMV) and so they potentially depreciate in value similar to a vehicle. If you watch the various shows on HGTV and the like of people paying what amounts to $400 a square foot you’re probably pretty skeptical about those economics but the various things I follow on social media are now starting to list used tiny houses for sale. I saw one over the weekend for about $16,000.

The context of my blogging about tiny houses is not that 224 square feet would be a permanent solution for too many people but something like a five-year stint as a young retiree, renting out a primary residence and cutting back significantly on expenses, maybe delaying Social Security, if that appeals to you, could solve retirement problems for a lot of folks. This would also apply living in a foreign country. If that $5000 number above from USA Today is anywhere close to right then a lot of Americans will need to think outside the box. Five years as a young retiree on an adventure sounds intriguing and if it is financially beneficial, all the better.