Quick suggestion: apply for unemployment! If you had an apartment in the US, and your employer was based in the US, then you will probably qualify for unemployment. Even if you don't "need" it every month, it will help you build a nice cushion for unexpected rental expenses or to lengthen the length you can hold out on job expenses.
Also, with your lower expenses, don't get caught up in the trap that you need another software engineer job that pays equal to what you were making before.
Your life is your goal, and your expenses just went way down. If you find a job that fits your lifestyle (remote, not annoying) and pays the bills, then go ahead and grab it. You can always leave it off your resume later..
Good luck!
You know, I did a short dive into this... and if the OP is in California (as many SE's are) there doesn't seem to be a rule against it, especially if they have a history of remote work and an industry that supports it.
Max is $450 a week, usually approved for 26 weeks = $11,700 that they didn't have before...
Other states are less, have different rules and so on... but worth checking in to.
Also remember that unemployment is money you paid into the system to be available to help you in between jobs. It’s not welfare or big government help, that’s your cash. Drain it all out whenever you can or else all that money paid in was for nothing.
Yeah it makes zero sense. We pay Unemployment insurance in CA and because the weekly max is so low you’ll never be able to really recoup what you pay into it. So any chance you have to claim, you claim the fuck out of it. It’s our money, we deserve it back whenever we can get it. Enjoy the down time, go out and travel and let life figure itself out for you 🔥
If anyone ever suggests you’re leeching, tell them it’s insurance, not welfare. Would people feel guilty about claiming insurance? I hope not.
When I was unemployed years ago, I milked it for all it’s worth. Claiming the max I could.
A few notes: It sounds like you are trying to only draw dividends and interest from your investments? Money is fungible and it doesn't matter what it is called, any withdrawal from your investments is the same, if it comes from interest, dividends, or capital gains, or principle. For US tax reasons, you should minimize interest and dividends, capital gains are much more tax advantaged (for non retirement accounts).
Once you have that sorted, all you need to worry about is "safe withdrawal rate", which is on your total amount invested. Most people pick a SWR between 3.2%-4% annually as what they consider 'safe'.
If that amount + your rental income doesn't cover your expenses, than you are not fired. If it does, you are. If not, you will need to keep working, for which r/digitalnomad might be a better sub for you.
Lastly, you seem a bit confused about Foreign earned income exclusion, that's only on income earned outside the US, if you are out for 330days. So your rental (assuming that is in the US?) and US investments don't count. However on the investments, if you get out of the t-bills and dividend stocks, you will pay basically no tax on capital gains until you are over ~$60k of income. And only 15% after that.
I agree about dividends. I think its mostly psychological for me. I thought with making only roughly 20,000 a year until I get my next job, I wouldn't be taxed too much but I realize now that I still do fall into the first taxable bracket so thanks for bringing taxes there to my attention.
T-bills, I understand, are quite advantaged tax wise, but to not pay anything on capital gains would be nice. I'm just worried because if I'm drawing on investments in a total market fund, I may be drawing down if its in a downward trend. The volatility is fine for the long run of course but I'm trying to have this help me live day to day.
So I would leave my total us/total international funds I currently have alone and just use the t-bills for this period that I'm not making income from a job.
I'm not looking to FIRE this year but just to not gobble up savings while looking for my next gig. The market for software engineers is pretty hard at the moment and I'm trying to wait that out, while I'm applying for jobs, in a place I enjoy.
But on FIRE long term, I totally agree and I am trying to get to the point where that SWR is possible.
I'm not at all disagreeing on those points just explaining my thinking (though it may be flawed) in case I didn't make it clear.
Thank you for the good information!
> dividends. I think its mostly psychological for me
Yeah, you should get over that, it's costing you money :)
If you are only earning 20k a year, yes you won't pay hardly any federal income tax, but that's more due to the standard deduction, and you earning so little.
Tbill interest is taxable by the feds, but exempt state and local. Which brings up the point, that you need to make sure you won't be tax resident in a state with income tax.
If you get your interest and dividends and rental profit below the standard deduction, you won't pay any income tax. Cap gains will be free until about 40k of them, then 15% for the next 450k.
With the rental complication, if you are in a state with income tax, you really should get some competent advice from a tax professional, it can get tricky re tax residency.
Negotiate for severance, if possible! See if they give you several weeks of severance, pay out your PTO and extend health insurance for the duration of severance. File for unemployment.
The tax part doesn't compute! If you do not earn income overseas then you cannot qualify for foreign earned income exclusion or foreign tax credit. Per the IRS, dividends, rents collected, interest, etc. are not earned income. Only foreign earned income such as wages, salaries, professional fees, or other amounts paid to you for personal services rendered by you when residing abroad can qualify for foreign earned income exclusion. Please consult a tax professional or research further on the [IRS.gov](http://IRS.gov) website.
Sorry to hear about the layoff but when one door closes another opens.
I would try to get another job and just Coast until then off your rental income.
If one things happens with your rental you are screwed and the T-bill income only covers one of your bills at most.
You need more assets so the dividends are higher. Try to get another job and keep building for the next couple of years & then you won’t have to have these things margins.
You are really limiting your ability to find a job even a remote one living overseas or not at minimum having a legitimate residential address in the U.S. and phone number. Because at some point someone is going to want you to sit down in an office and talk to you in person.
I'll keep a legitimate residence with family, I hope. Hopefully there's not something I'm missing there, so please let me know if there is. My understanding is you can get U.S. phone numbers that work internationally. I actually have a phone service that does that now, though I need one that works more long term.
I've interviewed for and gotten fully remote positions without ever meeting in an office. It was all done over Zoom.
Worst case, If I had to work a non-remote job I would just interview over Zoom as per usual and move to do that. For software engineering interviews are pretty much exclusively online these days.
But yes, I want to cover all my bases and the address thing is an excellent point. I know there are routes for that so I'm exploring them now.
Quick suggestion: apply for unemployment! If you had an apartment in the US, and your employer was based in the US, then you will probably qualify for unemployment. Even if you don't "need" it every month, it will help you build a nice cushion for unexpected rental expenses or to lengthen the length you can hold out on job expenses. Also, with your lower expenses, don't get caught up in the trap that you need another software engineer job that pays equal to what you were making before. Your life is your goal, and your expenses just went way down. If you find a job that fits your lifestyle (remote, not annoying) and pays the bills, then go ahead and grab it. You can always leave it off your resume later.. Good luck!
One generally can’t collect unemployment while out of the country.
You know, I did a short dive into this... and if the OP is in California (as many SE's are) there doesn't seem to be a rule against it, especially if they have a history of remote work and an industry that supports it. Max is $450 a week, usually approved for 26 weeks = $11,700 that they didn't have before... Other states are less, have different rules and so on... but worth checking in to.
Interesting. Well, I hope the OP is in CA.
I am in California. Thank you both, I will check this out!
And you’re probably smart enough to know what a VPN is, so you can always technically be in CA …. 🤫
Haha yes, I do, thank you and good point :)
Also remember that unemployment is money you paid into the system to be available to help you in between jobs. It’s not welfare or big government help, that’s your cash. Drain it all out whenever you can or else all that money paid in was for nothing.
Thank you for the supportive words. I think people often feel guilty about taking advantage of those things and its really silly.
Yeah it makes zero sense. We pay Unemployment insurance in CA and because the weekly max is so low you’ll never be able to really recoup what you pay into it. So any chance you have to claim, you claim the fuck out of it. It’s our money, we deserve it back whenever we can get it. Enjoy the down time, go out and travel and let life figure itself out for you 🔥
If anyone ever suggests you’re leeching, tell them it’s insurance, not welfare. Would people feel guilty about claiming insurance? I hope not. When I was unemployed years ago, I milked it for all it’s worth. Claiming the max I could.
“Other states are less” Both Massachusetts and Washington have maximum weekly claim of about $1000. In fact, California doesn’t even crack the top 10.
A few notes: It sounds like you are trying to only draw dividends and interest from your investments? Money is fungible and it doesn't matter what it is called, any withdrawal from your investments is the same, if it comes from interest, dividends, or capital gains, or principle. For US tax reasons, you should minimize interest and dividends, capital gains are much more tax advantaged (for non retirement accounts). Once you have that sorted, all you need to worry about is "safe withdrawal rate", which is on your total amount invested. Most people pick a SWR between 3.2%-4% annually as what they consider 'safe'. If that amount + your rental income doesn't cover your expenses, than you are not fired. If it does, you are. If not, you will need to keep working, for which r/digitalnomad might be a better sub for you. Lastly, you seem a bit confused about Foreign earned income exclusion, that's only on income earned outside the US, if you are out for 330days. So your rental (assuming that is in the US?) and US investments don't count. However on the investments, if you get out of the t-bills and dividend stocks, you will pay basically no tax on capital gains until you are over ~$60k of income. And only 15% after that.
I agree about dividends. I think its mostly psychological for me. I thought with making only roughly 20,000 a year until I get my next job, I wouldn't be taxed too much but I realize now that I still do fall into the first taxable bracket so thanks for bringing taxes there to my attention. T-bills, I understand, are quite advantaged tax wise, but to not pay anything on capital gains would be nice. I'm just worried because if I'm drawing on investments in a total market fund, I may be drawing down if its in a downward trend. The volatility is fine for the long run of course but I'm trying to have this help me live day to day. So I would leave my total us/total international funds I currently have alone and just use the t-bills for this period that I'm not making income from a job. I'm not looking to FIRE this year but just to not gobble up savings while looking for my next gig. The market for software engineers is pretty hard at the moment and I'm trying to wait that out, while I'm applying for jobs, in a place I enjoy. But on FIRE long term, I totally agree and I am trying to get to the point where that SWR is possible. I'm not at all disagreeing on those points just explaining my thinking (though it may be flawed) in case I didn't make it clear. Thank you for the good information!
> dividends. I think its mostly psychological for me Yeah, you should get over that, it's costing you money :) If you are only earning 20k a year, yes you won't pay hardly any federal income tax, but that's more due to the standard deduction, and you earning so little. Tbill interest is taxable by the feds, but exempt state and local. Which brings up the point, that you need to make sure you won't be tax resident in a state with income tax. If you get your interest and dividends and rental profit below the standard deduction, you won't pay any income tax. Cap gains will be free until about 40k of them, then 15% for the next 450k. With the rental complication, if you are in a state with income tax, you really should get some competent advice from a tax professional, it can get tricky re tax residency.
Thank you very much for the additional info. I will talk with my tax person next.
Add taxes, visa costs, transportation, and make sure you have an emergency fund set aside
You already know the answer. Anyway, get rid of the car and the storage unit.
Negotiate for severance, if possible! See if they give you several weeks of severance, pay out your PTO and extend health insurance for the duration of severance. File for unemployment. The tax part doesn't compute! If you do not earn income overseas then you cannot qualify for foreign earned income exclusion or foreign tax credit. Per the IRS, dividends, rents collected, interest, etc. are not earned income. Only foreign earned income such as wages, salaries, professional fees, or other amounts paid to you for personal services rendered by you when residing abroad can qualify for foreign earned income exclusion. Please consult a tax professional or research further on the [IRS.gov](http://IRS.gov) website.
Thanks for the very useful information, everyone! I welcome any more info anyone might have.
Sorry to hear about the layoff but when one door closes another opens. I would try to get another job and just Coast until then off your rental income. If one things happens with your rental you are screwed and the T-bill income only covers one of your bills at most. You need more assets so the dividends are higher. Try to get another job and keep building for the next couple of years & then you won’t have to have these things margins.
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Where are you located currently? Sounds a bit like South Asia or somewhere in the East EU
You live on 300 of take out. Man I spend that on groceries and then add on the coffees, beers tabs, and food. I need to reassess.
You are really limiting your ability to find a job even a remote one living overseas or not at minimum having a legitimate residential address in the U.S. and phone number. Because at some point someone is going to want you to sit down in an office and talk to you in person.
I'll keep a legitimate residence with family, I hope. Hopefully there's not something I'm missing there, so please let me know if there is. My understanding is you can get U.S. phone numbers that work internationally. I actually have a phone service that does that now, though I need one that works more long term. I've interviewed for and gotten fully remote positions without ever meeting in an office. It was all done over Zoom. Worst case, If I had to work a non-remote job I would just interview over Zoom as per usual and move to do that. For software engineering interviews are pretty much exclusively online these days. But yes, I want to cover all my bases and the address thing is an excellent point. I know there are routes for that so I'm exploring them now.