One of my goals for 2014 was to live on my savings and max out my 401k before obtaining access to any new funds. The good news: as of February 15 I am $550 away from maxing out my 2014 401k! The bad news is that the markets haven’t fared that well in the first few weeks of 2014, thus my $17500 investment has immediately shrunk. Boo. At least I’ve managed to survive on my “life fund” from late 2013. I’m now down to about $3000 so it’s great news that I’ll be seeing some of my salary in my next paycheck!!!
It was important for me to get the 401k out of the way early on because I am concerned I may be laid off from my job soon, and chances are I will find another position at a small company that will not offer access to a 401k. While I’ve never had access to a 401k with a match, I’ve taken full advantage of tax deferred savings when available. I’ve only had access to a 401k in 2010, 2011, 2012, 2013 and 2014. My first full-time job even brought in a 401k specialist to talk to us and then decided it wasn’t worth paying to administer the retirement plan, so we didn’t get one. I know a 401k is a luxury and I take full advantage of it when possible.
As of mid February, my networth is around $259k (including my maxed out 401k.) That kind of sucks because at the end of 2013 my networth was $250k, so I’m only “up” $9k right now (or down $8500 if you count the total amount of money I’ve put into my accounts!) Hopefully the market will rebound and I actually purchased these 401k shares on the cheap. We’ll see. It would be nice to see the $17500 earn 10% this year and conclude being worth at least $19250. Right now my current employer 401k has $59296.43 in it for 3 years of investment, worth about $19765 per year.
The good thing about maxing out my 401k early is that if I do lose my job I won’t have to worry about finding another job for this year to get tax-advantaged investments. I can start worrying about that again in 2015!
Woo! I’ve always thought about that, but then decided to do it evenly over the year instead. Last year I maxed it out early in October because I really wanted to quit my job, but I don’t feel like doing that this year. Besides, I can always max it out pretty quickly in 1-2 months later in the year if I want too.