Category Archives: Retirement

Posts detailing our path towards early retirement

May 2016 Early Retirement Progress

We contributed $6,165.44 this month to our retirement accounts, and we gained $3,302.53 in investment value this month.

This is likely our last high contribution month for a while. Dad’s new company doesn’t contribute as much, and we are losing his 3% mandatory contribution going forward.  We’re expecting to get another large-ish contribution into our HSA ($666.66 into a different one) from his new company.  On the plus side, his new company supports payroll deductions for the HSA.  On the downside, the investment options in his HSA kinda suck.  I’ll probably do a rollover to our existing HSA (or a brand new one!) before the end of the year to keep all the money together.

Dad’s new 401(k) is with MassMutual, and the cheapest investment option has a .97% fee – it’s at least an S&P500 index fund.  Because of taxes, we’re contributing our 18k (or as close to it as we can this year), but it’s going to hurt us going forward.  Needless to say, none of his IRA or old 403(b) money is getting rolled into that account.  The tax savings more than makes up for the fee, and Dad is going to forward a strongly worded letter that I write to their HR person to look at a different 401(k) option with less fees (like Vanguard or Fidelity).  The funny thing is, the company acts like they’ve got the best investment options available to their employees – I just laughed…  The match is OK for the area, but the investment options are *horrible*!  They’re also pulling the same stunt that I had with ADP in my old company. ERISA only requires that contributions be deposited by the 15th of the following month, so they get to make money off half of our contribution for a whole month, and half for a half month.  I don’t know the exact amount of Dad’s company contribution (although I have a good guess), so these numbers may be updated.

Without contributing 3% mandatory pre-tax *and* cheaper healthcare *and* a higher salary, we’re going to be even closer to the Roth IRA income limits than previously – possibly over 🙁  I’m going to save 7k for the year with the “extra” money we’ll be getting because of these differences, but it may or may not go into a Roth (we have too much in IRAs to do a backdoor). If we make too much, I’ll just put it into our taxable account, if not, it’ll go into our Roths.

2016 Totals

In 2016 we contributed $23,303.67 (33.29% of our goal of 70k), and gained $9,148.74 in investment value.

April 2016 Early Retirement Progress

We contributed $5,007.41 this month to our retirement accounts, and we gained $3,302.53 in investment value this month.

This is likely our last high contribution month for a while. Dad’s new company doesn’t contribute as much, and we are losing his 3% mandatory contribution going forward.  We’re expecting to get another large-ish contribution into our HSA ($666.66 into a different one) from his new company.  On the plus side, his new company supports payroll deductions for the HSA.  On the downside, the investment options in his HSA kinda suck.  I’ll probably do a rollover to our existing HSA (or a brand new one!) before the end of the year to keep all the money together.

Dad’s new 401(k) is with MassMutual, and the cheapest investment option has a .97% fee – it’s at least an S&P500 index fund.  Because of taxes, we’re contributing our 18k (or as close to it as we can this year), but it’s going to hurt us going forward.  Needless to say, none of his IRA or old 403(b) money is getting rolled into that account.  The tax savings more than makes up for the fee, and Dad is going to forward a strongly worded letter that I write to their HR person to look at a different 401(k) option with less fees (like Vanguard or Fidelity).  The funny thing is, the company acts like they’ve got the best investment options available to their employees – I just laughed…  The match is OK for the area, but the investment options are *horrible*!

Without contributing 3% mandatory pre-tax *and* cheaper healthcare *and* a higher salary, we’re going to be even closer to the Roth IRA income limits than previuosly – possibly over 🙁  I’m going to save 11k for the year with the “extra” money we’ll be getting because of these differences, but it may or may not go into a Roth (we have too much in IRAs to do a backdoor). If we make too much, I’ll just put it into our taxable account, if not, it’ll go into our Roths.

2016 Totals

In 2016 we contributed $23,303.67 (33.29% of our goal of 70k), and gained $9,148.74 in investment value.

March 2016 Early Retirement Progress

We contributed $5,478.73 this month to our retirement accounts, and we gained $29,203.07 in investment value this month.

I did get a raise in March, which resulted in a bit too much being contributed to my 403b since the HR system still had my old percentage calculation.  I’ve adjusted it so that I contribute slightly less next month to be more in line with the IRS’s 18k max.  My raise also means I got more of a “match” from my employer since it’s based on percentage.  I adjusted the rate to what would be taken out normally, so my paycheck will be quite large in December with no contributions taken out (no worries on my “match”, it’s paid whether I contribute or not).

We finally made it into positive territory for investment gains this year – even if not by much. We didn’t spend enough on our Fidelity Cash back card to warrant a “reward” to our taxable account last month. It was close, but not quite.  We’ll be able to redeem those points for cash back this month though.  We’re focusing spending on a new AMEX we got that gives $300 cash back when you spend $2,500 in 3 months.  No credit pull was necessary, and it’ll replace our Costco AMEX as an AMEX card in late June.

2016 Totals

In 2016 we contributed $18,296.26 (26.14% of our goal of 70k), and gained $5,846.21 in investment value.

Over Half a Million in our Investment Accounts

In the past month, we’ve reached a milestone: we have more than half of a million dollars in our portfolio – the majority of which is earmarked for retirement – about $10k is for Daughter Person’s 529.  Our net worth is more because we have a house (mostly) and some cash accounts, but this is the bulk of what we’re saving for retirement.  Our goal is about $2 million before we retire – 25% of the way there.

Of course, the markets could go south again, and our balances would go with it, but we have time to ride out some of the market swings.

Most of our contributions have happened in the last 3-4 years.  We’re continuing to try to increase our annual contributions, and if the markets do their thing, we’re looking at working another 9-10 years at the most, and we’ll have a nice cushion for unexpected expenses, and not have to work.

From personalcapital.com - our portfolio balance

From personalcapital.com – our portfolio balances

February 2016 Early Retirement Progress

We contributed $5,290.70 this month to our retirement accounts, and we lost $1778.27, in investment value this month.

I expect to get an “out of band” raise this month based on market analysis that I’m not being paid enough for my job description (the University generally aims to be at the 25th percentile of market pay, except since our department is “hot” and difficult to hire in, we’re getting the 50th percentile of pay).  Nice to know I’m worth more – especially after the last 4 months (more details to come)!  It also means that the University’s contribution to my retirement accounts will increase by a similar amount since it’s percentage based.

Dad is considering finding a new position, so we’re going to have to hold off on contributing to our HSA until August (We’ve already contributed through June), and if he works somewhere without an HSA (my job doesn’t offer an HSA plan), we’d have to go through the rigamarole of taking out excess contributions.  So, I’m just stopping contributions until we know for sure, and then I’ll put them in at the end of every full month we’ve still got an HSA.  I’m still setting aside the same amount every month, but it’ll just be contributed differently.

2016 Totals

In 2016 we contributed $12,817.53 (18.31% of our goal of 70k), and we lost $23,356.86 in investment value.

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.

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).

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).

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).

September 2015 Early Retirement Progress

We contributed $4,804.06 this month to our retirement accounts, and we lost $10,529.49 in investment value this month.

I think this year is going to be negative on interest, but net positive because of our contributions.  We’ve contributed about 30k more than we’ve lost, so we’re still ahead of the game.  So far, October is looking up, but I’m not going to count my money until I sell my investments and take it out of those accounts.

We’re only contributing any cash back to our taxable account for now (and probably until next summer), but it’s been significant – over 1k this year so far.  That will change now that we’re done “moving”, and only pick up again once I start buying things for the deck next summer.   The only reason we’ll be contributing in October is a 2k whole house humidifier that we installed and put on the visa card (because cash back…).

2015 Totals

In 2015, so far, we’ve contributed $50,454.10 (72.08% of our goal of 70k), and we’ve lost $20,012.71 in investment value (-83.82% of our planned total).