January 2016 Early Retirement Progress

We contributed $7,526.83 this month to our retirement accounts, and we lost $21,578.59 in investment value this month.

January was not a nice one for the markets.  However, we can’t control those, so we have focused on what we an contribute.  This month was slightly higher due to Dad’s company’s $2250 contribution to our HSA, but we also contributed $375 this month and will continue to do so every month this year.

Last January was a perfect storm of the HSA contribution and a 3 paycheck month for Dad, so this January is not quite as high as last January’s contribution.  But it will even out throughout the year.  Dad now has a mandatory 3% contribution (vs 2%), so we’ll end up contributing about $1200 more to his account over the year than last year.

We’re both maxing out our 403(b)s, and it was gratifying to see that on our W2 forms.

2016 Totals

In 2016 we contributed $7,526.83 (10.75% of our goal of 70k), and we lost $21,578.59 in investment value.

Disney on a Budget

In January, we took Daughter Person to the most magical place on earth for her 5th birthday – Disney World.  We spent some time in Hollywood Studios, but mostly in the Magic Kingdom and Epcot.  We also got to spend an extra day because of the snow storm on the East Coast – we figured an extra day at Disney was better than waiting around in the airport with a 5 year old – we made the right call.  On Wednesday, we had our flights re-routed through Chicago (instead of DC) and flying on Sunday vs Saturday – no issues or delays getting home at all!  I used my miles on United to book our flights, so they were $30 in fees (and free checked bags!).

Park Tickets

We spent the most at once on Park tickets. We bought a 5-day pass through Undercover Tourist using two Barclay’s cards, $944 for the tickets, $800 statement credit for us.

Hotel

We were going to stay in a Hilton via points, but for 2016, the Lake Buena Vista Hilton didn’t have the Disney Perks of an on-site hotel, so we changed tactics and paid for the Caribbean Resort.  The Magical Express was nice, and saved us from renting a car. But, we really wanted the on-site perks because it was Daughter Person’s 5th birthday and we wanted to make sure that we got reservations to Cinderella’s Royal Table on a Friday Night.  We had a better chance of that by staying on-site and being able to make the reservations 186 days in advance rather than 180 days.  We didn’t have a package, and we spent about $900 for 6 nights (vs the originally planned 5 nights).  No points, but used our cash back Fidelity card (2%).  Not having a package ended up being a good thing when we had to extend our stay by a night.

The resort was nice, but it made me think of a cheap motel because all of the room doors open directly to the outside.  It was clean, it had a cool pool, but it was nothing to write home about.  I’m pretty utilitarian in my hotel choices – it’s really just a clean place to sleep.

Food

This is where we spent most of our money.  We didn’t go with a dining plan because we tend to eat very light for breakfast and lunch and then nice dinners.  The dining plan didn’t cover many of the dinners we had reserved and planned, so I Was planning on paying out of pocket for all the food.  We probably spent about $250/day on food and drink: breakfast, lunch, dinner and the occasional snack.  I did drink my way through the world at Epcot, so that was a good bit of it…  After talking with some folks, the dining plan might have been a good option for us.  I did try to help with getting the occasional kids meal for myself for lunches – no one asked or batted an eye, I wouldn’t have been able to do that on the dining plan.

Other Notes

We did get the Memory Maker photo package, which I thought was worth every penny.  You just find a photographer on property, ask them to take your picture, and scan your magic band, and the picture shows up online and I own limited digital rights to them.  We definitely got our money’s worth with this, and we didn’t have to worry about taking the pictures ourselves or not being in the picture.

Daughter Person had a blast, and already wants to go back.  Mom and Dad were stressed out with the crowds (and it was “low” season!), and aren’t planning on making a return trip until Daughter Person is in middle school or is at least tall enough to go on the rides at MGM and Universal Studios.  Then, we’ll probably stay off property, rent a car and do things on our own.

I was somewhat disappointed in the number of thrill rides available – I prefer my coasters to go faster than 30 mph (so does Daughter Person, she kept asking where the “real” roller coasters were). We didn’t ride that many rides, but instead played the various “games” at the parks.  The Magic Kingdom has the Sorcerers of the Magic Kingdom card game and several adventures in Adventureland related to Pirates of the Caribbean, and Epcot has a Phineas and Ferb game with “Agent P” that takes you through the various countries and trigger neat effects.

The trip was worth Daughter Person’s enjoyment at seeing the “magic” for the first time, and 4-5 was a perfect age for it!

December 2015 Early Retirement Progress

We contributed $6,084.27 this month to our retirement accounts, and we lost $7,710.85 in investment value this month.  (This is only until 12/31/15, and doesn’t include the horrendous results from January 2016)

2015 year was a loss overall for investment gains/value.  We only lost $141.09 though, which really isn’t that much, and was heavily out-weighed by our contributions.  We contributed more than my 2015 take home pay, and just slightly less than my take home pay plus the 18k that was taken out for contributions.  So, realistically, we could live on just Dad’s take home salary, but we wouldn’t be able to contribute near as much to retirement (only his contributions). We could live on my take home if we reduced expenses just slightly and/or didn’t contribute the legal max to my 403(b).

2015 had a lot of ups and downs in the market, being mostly up in the early part of the year, and mostly down in the latter half.  We’re still going to contribute as much as we can in 2016, which right now is looking like approximately the same amount.  We want to save for a deck on the house before we really contribute that much, and our guesstimate for that means not much left for extra retirement contributions in 2016 – but then 2017 will have a lot more!

2015 Totals

In 2015 we contributed $66449.15 (94.93% of our goal of 70k), and we lost $141.09 in investment value (-0.59% of our planned total).

Detailed Financial Picture – January 2016

December’s Numbers

I hope everyone had a nice holiday season and the financial “hangover” isn’t too bad.  We paid for anything up front, so no extra debt for us for the holidays!

As of January 6, 2015, we are $321,071.86 in debt with a mortgage.  We currently have $905,408.00 in assets.  Our investment accounts are at $488,831.28. Our Net Worth is $584,336.14, down from $592,278.09 last month (1.34% decrease)

This month was not so great on the investment front, which really impacts our net worth.  I also updated our car values, neither of which decreased significantly from about 6 months ago.  Both cars are “above water”, so we could sell them at any point really if we needed to.  We have no plans to, so it’s not that important.

Daughter Person started a new daycare on January 4.  It’s slightly more expensive now ($175/wk vs $160/wk), but the center busses to and from her half-day Kindergarten program that she’ll start in August/September, and we felt it was important for her to meet her teachers and new friends first rather than change everything at once. It’s also about 10 miles closer to us, so Dad won’t be driving as much.  I’m probably going to start driving the Camry to and from work on a daily basis because I have the longer drive now, but Dad really likes the Camry and doesn’t particularly like driving the RAV, so there’s still some debate.

I’ve put aside quite a bit of cash for our Disney vacation coming up in a few weeks, so I didn’t pay as much down on the line of credit.  I suspect I’ll be making another payment with what we didn’t spend on vacation once we get back and assess the damage.

Debt (in the order we’re paying it down):

  • Line of Credit (8.75%): $3,000 (-1,000.00)
  • Car loan – RAV4 (0%): $7831.18 (-489.44)
  • Car loan 2 – Camry (0%): $23,722.20 (-439.30)
  • Mortgage (3.875%): $289,518.48 (-488.66)

Total paid off in September:  $2,417.40

 

2015 End of Year Investment Income

Fidelity (and most of Vanguard) have posted their end of year distributions this weekend, and after adding all of ours up, over multiple accounts: We’ve “earned” $10,850.60 in investment income this year – with most of it ($6521) in December.  We’re primarily invested in total stock market funds, and those generally dump all their goodies at the end of the year.  We do have about 18% bonds in our tax-advantaged accounts and they earn us about $100/month throughout the year.  Most of this money is in tax-advantaged accounts and  “untouchable” for us, but our taxable account generated $138 in dividends/capital gains this year (almost 100% FSTMX).

If my goal was to live completely off dividend/capital gains income, we’d need about 3.4million in the bank based on this year’s income.  But, if that was my goal, I wouldn’t be as heavily invested in equity index funds, and instead would have more money in bonds, which throw off more reliable income.

Still, $10k in almost completely passive income isn’t much to sneeze at – that’s about 2 months worth of living expenses for us.

How did your investment income do this year?  Did it increase as you wanted it to?

Detailed Financial Picture – December 2015

November’s Numbers

As of December 8, 2015, we are $322,489.36 in debt with a mortgage.  We currently have $914,767.35 in assets.  Our investment accounts are at $493,010.04. Our Net Worth is $592,278.09, up from $587,477.65 last month (0.82% increase)

 

Dad got an almost $4000 bonus this year, and we used that to cover our interim property taxes (the mortgage company did an early escrow analysis and sent us some money, but about $1800 short), and pay more off the line of credit.

I’ve switched to making minimum payments on the cars in order to use some of that money elsewhere.  It’s only about $100, but it can pay off the line of credit faster, and the line of credit has interest, the car loans don’t.  The amounts this month are slightly lower than the actual minimum payment because I had “pre-paid” so much previously by rounding up the amounts.  So, next month, we’ll be paying more on the cars.

We’ll likely pay off the cars “on schedule” according to the loan agreement, but I can’t get really excited about paying off a 0% loan early when that money could be going to investments.

On the plus side, the line of credit is scheduled to be paid off February 2016, so I’m looking forward to that.  December is a three paycheck month for Dad and so I can spend that extra paycheck on the line of credit in January.

Next month, I’m going to be re-valuing the cars as well through KBB, so I expect to see a drop in net worth from that.  Hopefully, the surge of HSA money we get in January from Dad’s company will make up for some of that.

Debt (in the order we’re paying it down):

  • Line of Credit (8.75%): $4,000 (-1,600.00)
  • Car loan – RAV4 (0%): $8,320.62 (-429.38)
  • Car loan 2 – Camry (0%): $24,161.50 (-388.50)
  • Mortgage (3.875%): $290,007.14 (-487.09)

Total paid off in September:  $2,904.97

 

November 2015 Early Retirement Progress

We contributed $4,848.32 this month to our retirement accounts, and we gained a whole $806.40 in investment value this month. At least it wasn’t a loss.

We’re probably not going to make it to our goal of 70k for 2015, but we’ll be pretty close, and if we had spent more carefully while moving, we might have made it.  We’ll be contributing just over 66k into our accounts (not including the 529 we have for Daughter Person) for the year, which I think is pretty impressive, but only about 30% of our gross income.  I’m hoping that next year, we’ll be able to contribute more because we’ll finally be done with the moving and settling – and once the deck and patio are put on the house, there won’t be any (planned) major expenditures in the near future).

2015 Totals

In 2015, so far, we’ve contributed $60,364.88 (86.24% of our goal of 70k), and we’ve gained $7,569.76 in investment value (31.70% of our planned total).

Property Tax Fun

Our house is new construction, and we were warned by the sales guy for the builder about interim taxes.  We were also expecting to get billed for the interim taxes *after* we got the money back from our escrow analysis for this year (expected April/May).  It didn’t quite go down like that.

Mortgage companies don’t pay for interim taxes.  Since we have new construction, and the property hadn’t been assessed at the time the tax bills went out, we paid taxes on the unimproved land amount (about $200).  But, we own improved land with a house on it, and the county comes by to re-assess the property once the deeds are filed and they get off their asses to do so.  We had gotten the 2016 assessment back in September, and know what we’ll be expected to pay (more or less) next year.

On Thursday, I got a letter letting me know that the county assessed our house in 2015 for interim tax purposes (at more than our 2016 estimate?).  On Friday, I got three bills from the local tax collector: one for 2014 school taxes (2 months worth since they’re on a fiscal year of July-June), one for 2015 school taxes, and one for 2015 borough taxes, totaling about $8.5k. Not having that money easily accessible and deciding to borrow from our line of credit (again) to cover us until we got the expected escrow analysis in April, I moved money into our checking account and wrote the checks (yes, they had to be three separate checks).  I had until January 19, 2016, but I figured I’d rather take the tax deduction this year rather than next.  So, I put the checks together, put them in an envelope to mail off this morning (Monday).

Monday mail arrives, with the escrow analysis and a check for $6.1k.  Now, we only have to cover just over 2k in taxes, which we expect with Dad’s annual bonus in a few weeks.  It’s not that I *like* coming up with 2k out of the blue, but we were kind of expecting this to occur, just not as quickly as it has.  That $6.1k will be deposited tomorrow once we both sign it, and then it will be transferred back to the line of credit so we’re not borrowing quite as much.

There’s still quite a large escrow balance with our mortgage company, and we’re probably going to “owe” them next year for escrow (about $300-$400), but it was nice getting that check now instead of in April/May when it would have been a year since we got our mortgage.  I wonder if the analysis will continue to occur in November or the very large balance in the escrow account triggered the analysis, or if it’ll begin occurring April/May like I was expecting.

 

October 2015 Early Retirement Progress

We contributed $5,062.46 this month to our retirement accounts, and we gained $26,776.07 in investment value this month.

We’re back in positive investment gains territory (by like 6k), and we contributed a lot this month.  Mostly from an extra $250 I put in my Roth to keep it above the 10k minimum for FSTVX.  I’m almost positive we’ll be within the MAGI limits this year, but that decision could be expensive if Dad gets a significant bonus pushing us over the limits (and rumors are going around that his company did well, so we might get a large bonus :( ).  I’m hoping our HSA, 529 and 403(b) contributions bring us down at least into the phase-out range.

Dad’s retirement plan is changing next year, and we’ll be able to put even more money aside.  Right now, it’s three tiered, 2% mandatory with 5% “match”, up to 10% with a 3.33% match, then up to IRS limits with no match.  The new plan is two tiered: 3% mandatory with 3% “match”, up to IRS limits, with a 1 to 1 match up to 6%.  So, instead of 2% +18k + 8.33% match, we’ll be contributing 3%+18k+9% match.  I estimate we’ll be putting about 2k extra per year into his 403(b)/401(a) plans because of the changes  (mandatory contributions don’t count against the IRS limit of 18k).

With HSA contribution changes, we’ll also be putting more in there next year.  I suspect we’ll be able to hit our 2016 70k goal easily and perhaps a 75k goal – since we’re (hopefully) not moving again, our expenses will stabilize.  We want to put a deck and patio on the house next summer, then we’ll be more aggressively saving towards retirement again.  The HSA is one of the few ways we can avoid PA state taxes on some of our income, so I’m aggressively taking advantage of it.

Not sure I want to contribute to a Roth or the taxable account with extra funds.  With the Roth, we have to keep the funds basically in cash (or invested in our taxable account via dollar cost averaging) until we do taxes and know if we’ll be able to contribute or not.  There are no restrictions on the taxable account vs the Roth, it’s our money to do with as we please.

2015 Totals

In 2015, so far, we’ve contributed $55,516.56 (79.31% of our goal of 70k), and we’ve gained 6763.36 in investment value (28.33% of our planned total).

Detailed Financial Picture – November 2015

October’s Numbers

As of November 5, 2015, we are $323,794.23 in debt with a mortgage.  We currently have $911,271.88 in assets.  Our investment accounts are at $492,498.51. Our Net Worth is $587,477.65, up from $576,110.21 last month (1.97% increase)

 

We’re almost at half a million dollars in our retirement accounts – as long as there is no major decline in the markets, we’ll get there just with our contributions before the end of the year.

I added another $250 to my Roth as I’m reasonably sure we’ll be under the MAGI this year because we’re contributing so much to our 403(b)s.  That brought me well into the > 10k range for the advantage class fund.  Next goal is to add $2500 to Dad’s Roth to get him up to being able to invest in a mutual fund rather than an ETF.  He never had a Roth before last year (aka this February), and I’m not sure that it really makes sense for us to contribute that much to Roths right now because of our tax levels.  I had one from when I didn’t make much, but that’s been sitting around growing for a while.

We’re steadily paying off the line of credit and once we do, we’ll be saving to put a deck on the new house next summer.  We’re going to be building it ourselves with the assistance of a friend who has built them before, so that’ll save us a lot – and be quite the adventure!

Debt (in the order we’re paying it down):

  • Line of Credit (8.75%): $5,600 (-1,200.00)
  • Car loan – RAV4 (0%): $8,750 (-500.00)
  • Car loan 2 – Camry (0%): $24,550 (-450.00)
  • Mortgage (3.875%): $290,494.23 (-485.52)

Total paid off in September:  $2,635.52