Yes, even in the midst of all this house building party, I am watching our 401(k) like a hawk.
We are still contributing up to the match - which is 100% of 6%. We never stopped, even when we were gung ho about the Dave Ramsey plan. We could just not turn down a 100% match.
What I am excited about though is how much it has grown this year! We are WAY behind the mark on retirement, but we are not giving up.
As of closing yesterday, we have $71,000 in our 401(k).
OK, I am sure many of you did a double gasp and that is fine. We are working on it. We are going to have to play catch up, but we do have goals in mind.
We have been considering with my business, to not use any of that money personally, but roll it into retirement accounts. I still need to do research, but there are small business owner retirement accounts that are not limited like the Roths.
That is something we are considering though - Roths, but we would have to do the backdoor as we make too much money to qualify for them. However, my business could fund both of ours easily.
It is a battle though - pay off debt - including the mortgage or save. Given our time span left, I am leaning toward saving in the 401(k), using the business to fund more retirement accounts, then use Hubs paycheck to pay down debts.
It is not Dave Ramsey worthy, but there is a security bone in me that just wants to save, save, save.
I got to thinking about this more today, because I was approached by a woman wanting 3 tshirt quilts. She is willing to wait. I have a waiting list of 6 quilts right now and no one seems to care how far out in the country I am moving. I am dying to sew again and would if I could, but that storage room is not an option. It will come with time - patience has never been virtue of mine, but I tell you - I am learning it now - kicking and screaming, but I am learning it.
So, our rough plan:
1. Home - the one we are building is the one we are staying in. Texas is cheap to live in, the county we are moving to is even cheaper. Hubs job is here and there is a possibility of free lance, part-time work in this field once he retires. I have a business here that can go on as long as I want it to.
2. Debts - we want to be consumer debt free as quickly as possible. We will know that number a little better when the house is finished. I want to do a 10 year mortgage, but Darrell is not on board with it, he thinks a 13 year is better with 2 kids in college. We will see. I still think we can do it. So that would be 10 years to be out of debt.
3. Retirement - Continue funding 401(k) to matching. Look into my business funding an additional retirement account and/or building up cash reserve.
That is it right now. Darrell needs to delve more into what he will do after retirement, but he is not ready. The road is still too rough ahead for him and I think he will be better suited to do this when the kids are out of the house and the mortgage is paid off.
There you have it - our very rough and not well thought out Retirement plan as of today.
Hanging in there! How is your Thursday shaping up?
one husband......four kids......debt......sewing...... saving......cooking......yoga......sweet......chaos......life......
My husband and I max out our 401Ks. There have been times where I want to drop it down so we can use the money for other things but I am holding strong. I know you have a lot of things to pay for but contributing more means at least a 28% tax savings on each additional $ since you must make over $186K a year since you don't qualify for a regular Roth IRA. I save 33% since Utah has income tax. Just a thought.
ReplyDeleteYeah, I know - we are trying to get on top of it. Maybe contributing to 401(k) to get our income low enough would make the Roth work, but a good percentage of our income is in the form of bonuses, so we never know. We would still have to make our decision after the year is over. We have no state income tax or tax on groceries. Property taxes are high, but seniors get a break and vehicle registration is low. It really is a cheap state to live in - there is just a lot of heat!
DeleteAnd sometimes we make that much and sometimes we don't. It depends on the year.
DeleteMaybe it would be better to say any bonuses go straight to retirement until it's maxed out. Then its money you weren't counting on to get anyway and you can balance your budget (debt, tuition, expenses, etc) on your monthly take home pay.
ReplyDeleteTrue, we are just starting to rethink because we did not have bonuses for 3 years! The oil industry is coming back bit by bit.
DeleteI check our retirement accounts quite frequently, too! I can relate to the struggle of wanting to save more. We actually increased ours by 2% a few weeks ago. Can't really say that it made much of a difference on our net pay, but it will with our retirement!
ReplyDeleteI haven't given a lot of thought to paying off our house, other than knowing that we need to do so before we retire. I'm trying to take this one step at a time. Our focus right now is on our consumer debt. Groan.
Yes, consumer debt - I am only thinking about the mortgage because that issues is coming up in just a few months. We have to refinance as soon as we close on this house because it has an adjustable rate. That is the only way they issue construction loans nowadays. We will refinance the mortgage right away!
DeleteWe typically use our January bonus to max our 401K, and that allows us to keep our paychecks higher for our monthly spending. We have quite a bit saved, but I'm consantly worried that it's "not enough". How do I know really what "enough" means? Great question, but I'm a worrier & wish I had a magic answer to predict our retirement costs.
ReplyDeleteI know what you mean. Especially putting it in retirement savings, you are locked until retirement. My husband is a BIG - we need to live now person, so it is a delicate balance. I wish I knew that answer as well. I will just keep saving and looking at the figures as we get closer and closer to retirement.
DeleteWhat about a 13 year mortgage that permits regular overpayment without penalty? Then maybe 11 months of the year you put your business money in the retirement accounts and once a year you put your business money on the mortgage. That or compromise and do an 11 or 12 year mortgage? What the financial gurus never ever take into consideration is that each and every couple/family is entirely different from the next...and I think that you are making all your dreams happen in a slightly different way according to what you want. The important things is that you are making it happen.
ReplyDeleteYes, that is what my husband is thinking. We can pay more without penalty, so that is what we are working through! Yes, we are making it happen! Thank you for kind words!
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