Tag Archives: retirement

So My Employer Over Contributed to My 401k – Now What?

Although I had the idea last year to contribute enough for my 2017 401k to obtain the match my company provides, I decided against it since I didn’t want to mess anything up w/ my taxes.

Fast forward a few months and I notice something strange when my Fidelity 401k shows a contribution on Jan 2. This clearly came out of my final 2017 paycheck. I looked at my paycheck and confirmed this — my employer made my contribution in 2017, even though I told them not to start contributing to 2018. Continue reading

A Loose 5 Year Plan

The whole “being pregnant” and going into “nesting” mode is real. I’ve been spending way too many hours scouring Redfin and Zillow despite knowing that I can’t afford a home here, other than maybe a 1 bed, 1 bath in a really bad part of the bad part of town.

So. I’m trying to focus my energy on longer-term, more realistic goals, while also ensuring that I keep my job in order to hit them.

2018

  • Age: I turn 35(!)
  • Networth: Close out the year at $645k-$650k
  • Housing: Live in 1 bedroom / 1 bath apartment (50% = $14.1k yr)
  • 401k: invest $22.5k
  • Stocks: invest $30k 
  • Baby #1: born, 0 – 5 mo
  • Baby #2: not born yet

Continue reading

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Life is Really So Short.

Most of us remember being kids and, while we might have been worried about death, our lives were so long ahead of us. What they don’t tell you back then is that your childhood is long and slow, and you end up getting so excited about turning 18 and 21… then you’re suddenly 30 and then 40 and then you’re 50 and however many years are left of your life, the best of your health is probably being you… Continue reading

Annuities are FUCKED UP… aren’t they?

As the resident personal financial advisor for my family (despite that I have no idea what I’m talking about half the time), I’ve jumped into understanding my parent’s financial situation (the good the bad and the ugly) as I will have to help my mother manage her finances for the rest of her her life once my father is gone. He may live longer than her but she is relatively healthy right now and he has terminal cancer, so it’s likely I will be the only person able to really help ensure her quality of life since she understands zilch about money.

My parents are doing ok financially – not great – not as good as they should be doing given how much my father earned throughout his life — but they overspent and now they’re left with about $300k in retirement funds and $400k in real estate, give or take a few hundred thousand since I can’t get a straight answer from my father (who unfortunately doesn’t like to talk about this stuff because his go-to answer about any important financial question longer than a few years out int he future is ‘i’ll be dead then’). Continue reading

10th Anniversary of Her Every Cent Counts and Exciting News

10 years ago, I wrote my first post on Her Every Cent Counts. Well, I missed the exact anniversary date, but it was on May 29, 2007 when I started writing, noting that my networth at the time was $27,000 and that my income was $35,000 a year.

Over the last 10 years, as I started to save money each year, investing in retirement and taxable accounts, I got this crazy idea that I wanted to save $500,000 before having my first child. Given I had less than $100k to my name when this idea popped into my head, it seemed to be an impossible quest.

I ran my networth numbers on June 1 and discovered that due to growth in my portfolio and other savings, I have achieved my goal of $500,000 in networth (before having kids.) It feels kind of surreal – on one hand, it feels like a huge accomplishment, to have saved $500k before my 34th birthday — on the other, as I confront the realities of unemployment and consider changing careers, I wonder if I should fight through life in a role that isn’t suited for me in order to move on to my next goal of $1M by 40 – or, do I find peace with living a simple life, find a job I can actually be good at, and not touch the $500k (outside of educational funds) so it can blossom into a substantial retirement account to enjoy later in life?

There is no one in my real life to be able to celebrate this moment with — so I’m celebrating it here with you, my anonymous and semi-anonymous readers. Thanks to you, I have kept up savings for the last 10 years – have turned down opportunities to live closer to work and in nicer housing, have generally been more frugal than my income would enable me to be, esp in the last few years, and have been heads down on achieving this arbitrary goal that nonetheless is incredibly rewarding to achieve. With 32 years left to retirement, not touching the $ and it growing an average of 5% YoY gets me to my retirement savings goal of >$2M. The trick, now, is not touching that money, and still managing to make enough to live a decent life.

Happy 10th Anniversary HECC, and to all of you who read my blog regularly or occasionally or are brand-new readers, thank you for inspiring me to be a good saver, and for making it possible to achieve this major life goal.

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Are 401k Accounts a Scam?

I’m no financial expert, but I try to follow the basic principles of investing and retirement savings in order to hopefully not be dirt poor in old age. One of these principles has been to consistently max out my 401(k) each year, which I’ve done faithfully now for many years, ever since I finally had access to a retirement account at work. As soon as as started making too much money for a Roth IRA, I socked away $18k a year in my 401k… and now, between all my pre- and post-tax retirement accounts, I have about $235k locked away, compounding over time.

However, after reading more propaganda on 401k investing, I started to suspect something fishy is up. Most of the anti 401k content focuses on issues with high fees — which, indeed, are a big problem with 401ks. But, really, the most suspicious piece of messaging out there on the benefits of the 401k is that you don’t have to pay taxes now so you get the “benefit” of paying them later. Continue reading

Joining J. Money’s Million Dollar Club

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Today, I’m taking a pledge and – being one of the last to the party – to join J. Money’s Million Dollar Club. I’ve already unofficially been a member since I’m working towards $1M (well, $2M is my financial freedom money goal) but this makes it all more official. Plus, hopefully he’ll add me to his fancy list. I like lists.

I would like to become a millionaire by the time I’m 45 (or sooner) independent of any wealth my husband is accumulating. This puts me well on my way towards $2M+ in individual networth AND means that when my (hypothetical) children are in their pre-teen and teen years I can be more flexible with my career and actually see my kids before they’re out of the house, married off, and spending time with kids of their own (tear. boy do they grow up fast.)

In order for me, Her Every Cent Counts, to become a millionaire by 45, I pledge to do the following:

1. Invest an average of $5000 per month for the next 10 years (between taxable accounts and retirement accounts)

2. Max out my 401k each year for the next 10 years (or every year I have access to a retirement plan through work) even without match (because let’s face it I’ll never work for a company that offers a match.

3. Live in my 1 bedroom rented apartment with Mr. HECC for as long as possible (i.e. until our first child is two) even though I would much prefer to live in a 2-3 bedroom house. Only buy a house after I have $750k-$1M saved for retirement that I don’t need to touch, so it can grow to $2M by the time I retire.

4. Continue to drive my used 2011 car until it dies (but invest the appropriate amount into keeping it in good shape.) Never buy new cars.

5. When possible, increase my monthly savings beyond $5000 (for instance, I can save up to $7000 right now per month if I’m extremely frugal) but don’t let being “ahead” of my net worth goal at any moment in time change my savings rates.

6. Put aside any additional income (bonuses, tax refunds, extra income) into my investment accounts.

7. Find a career that enables me to consistently save $5000 per month for the next 10 years (which means that I can’t go back to grad school unfortunately so I likely have to stay in my current career and just learn to suck it up.)

8. Gain skills and keep up to date with latest skills to become highly valuable as a consultant in my industry so I can potentially earn more money working for myself and enjoy my life more.

9. If needed, move to an area of the country with a lower cost of living (but only if I can continue saving $5000 consistently per month for the next 10 years)

10. Invest in experiences only, especially travel before kids and family vacations after kids. Rotate cheap vacations (camping) with fancier ones (Hawaii). Any additional income (if income increases) should be split between savings, “life experience” fund and housing fund.

 

 

 

We All End Up There in the End

I’ve always been afraid of dying, but after visiting my now deceased grandmother’s “home” in Las Vegas, I gained a new fear of living. Aging is not a fun process by any means as we lose control of our minds and our bodies towards our inevitable fate.

Why am I thinking about this on Christmas? My husband’s grandmother, who is in her 90s, is in one of those homes and the situation, from what I gather, is not a good one. When you’re in your 90’s – even if you are mentally intact – you often lose your autonomy. If you are lucky, you have a family member who genially cares for your well being who is given power of attorney  over you and everything in your life. Where you live, when you go to the doctor, when you can go for a walk, and practically how often you’re allowed to breathe per day. Continue reading

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Are State Sponsored Retirement Plans a Good Idea: California Secure Plan Bill Passes Assembly

Americans are not saving enough for retirement. In lieu of accepting that the standard fiscal state for the majority of retirees is poverty, some states are trying to help people get their financial acts in order. This week, California became the latest of those states (see what’s happening in your state here), with the “Secure Choice Retirement Savings Program” bill to create a state-run retirement plan for roughly seven million private workers passing the Assembly – one step closer to becoming reality. This would make California the eighth state to establish such a plan.

There are 55 million workers who don’t have a way to save for retirement at their workplace, and of those, only 5% take the steps to open an IRA, according to the AARP.

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A Brief History of Retirement and the Social Security Crisis

Ah… retirement. That time in life when you’ve worked hard for long enough to “deserve” time to sit back and relax – maybe play some golf, or take classes to reignite an old hobby, or travel the world. Today retirement is so engrained in our culture as a natural phase of life that it’s easy to forget that it is a very modern concept.

In 1881, Otto von Bismark, a conservative minister president of Prussia, came up with an idea to have older adults not have to work to the very last second of their lives. Eight years later the German government started to provide a retirement system for anyone over the age of 70. At the time, not many people made it that long.

Across the Atlantic in the US, retirement was a fledgling idea. Municipal employees started to receipt public pensions in the mid 1800s and in 1975 American Express started to offer private pensions. It wasn’t until 1935 when the Social Security act passed and the official retirement age in the US was 65. (Life expectancy for men was 58 at the time.) Continue reading