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.

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