I have been dreaming of maxing out retirement benefits at my full time job for about 6 months now.
For me that means $3174.60 a month or $38,215.20 a year toward retirement.
How you ask?
Well my union/state contract mandates 11% away each month toward retirement: $678.33 a month.
I can max out my 401K fund for $1458 a month, $17,500 a year.
The state has a second retirement savings vehicle state employees can use, the 457, that I can put away up to $1458 a month. For me the 457 would be $1100 a month to ensure that I had enough monthly to live on or $13,200 a year.
My take home would be $2260.81 a month broken down into the following sending categories:
Rent (estimate depends lease at that time) 790.00
Water/sewer/garbage estimate 65.00
Spending money: 200.00
Electric: 40
Gas for house: 30
Cell bill (2): 160
IRA: 10
Groceries: 290
Household: 10
Gas for car (Prius): 125
Car payment (0%): 326
Internet: 85 (estimate. Getting rid of cable means I’d like to watch a few favorite shows each week so need high speed/lots of download size. Must use current company because I use a microcell tower in my apartment to get cell phone coverage as I do not have a land line. The tower only works on AT&T internet. The use of the cell tower boosts the cell coverage to 5 bars and costs nothing extra to run.)
Netflix: 15
Audible.com: 15
Student Loan: 270. (Interest rate locked in at 1.25%. I am not in any hurry to pay this off because 5 more years of limited payments and the balance is forgiven through the federal loan forgiveness program)
Mom (assistance): 150
Emergency savings: 50
I would need to save a few things ahead of time to prepare for the year of living like this:
Car insurance for a year: 1400
Renters Insurance for a year: 350
Contact/Glasses: 720
Clothing: 1000 (estimate)
Personal HSA Savings: 200
Gym yearly membership: 100
All that totals $3770.00
Plus, I have my emergency fund.
And I earn between $150-700 dollars a month in the house and pet sitting business. Usually I have that money accrue in a savings account for the entire year but if I could use that during any month I needed after I save the business expenses I need for the following year, about $800.
I wonder if I have the strength to live this close to the bone for 12 months.
I know I could adjust my retirement savings at any time to get more money if I needed it.
What do you guys think?
Dreaming of a Retriement (Savings) Plan
July 29th, 2013 at 04:31 am
July 29th, 2013 at 05:20 am 1375075250
July 29th, 2013 at 06:01 am 1375077682
I am playing some personal catch up because we have had furloughs for four years and i haven't been as aggressive in savings as i wish i could have been. Well, furloughs and helping out a family member meant it was much less than i was contributing.
Our fees for both the 401k and 457 are set by the state programs. Monthly admin fees of $1.50 for each 401k and 457. So i pay $36 a year.
They also have the option of paying a little more each month and the Professional Management at aon hewitt who run our program will have an Investment Advisor create and maintain a personalized retirement strategy for your 401k/457 accounts. I am not sure what the extra fees are because i have never looked into them.
I met with my personal investment guy for my Roth and he looked at what i was invested in and we made a couple of changes. That was in May. Right now i am doing the asset allocations aggressive (30%) and moderately aggressive (70%) because i don't have the time to actively manage my accounts. The MER on these two asset allocations are .13% and .18%.
The largest MERs come in the small cap funds and those were .75%. As i am currently staying in the asset allocation area i am paying .13% and .18%.
As of Friday my rate of return for the accounts from jan-july 26 was 10.9%.
Calpers does not tell us the MER for our defined benefit contribution plans. Based on studies the estimate MER is 1.7%. I can't do anything about that for my mandated retirement.
July 29th, 2013 at 12:19 pm 1375100379
July 29th, 2013 at 12:31 pm 1375101106
July 29th, 2013 at 01:53 pm 1375106000
I do wonder if your take-home would be much bigger due to all of the tax breaks, or did you already factor all that? This would be more reason to do so - to lower your taxes, which are probably quite high as a single renter.
The only thing I would do differently is lowering the 457 plan or the 401k contributions, in exchange for funding a regular IRA or a ROTH IRA. Just because you can invest anywhere and limit fees. Employer plans will always have more hidden fees and restrictions, is why I suggest that.
July 29th, 2013 at 02:37 pm 1375108664
July 29th, 2013 at 03:30 pm 1375111809
MonkeyMama i used the state controllers office state employee paycheck calculator to figure out the paycheck amounts. And all the fees i coild find on he atate program werw $1.50 per month per account and the MER of .13% and .18%. I don't think there are any others.
July 29th, 2013 at 03:49 pm 1375112951
July 29th, 2013 at 05:14 pm 1375118076
Only one thing to note: if you need to adjust, when are the windows? Can you do so monthly or is it quarterly? If I know when my exit points are it gives me a plan.
July 29th, 2013 at 05:20 pm 1375118445
And I max out my Roth through the housesitting company income although I am working on marketing to be able to increase the income generated through house sitting and dog walking.
July 29th, 2013 at 09:58 pm 1375135133
July 30th, 2013 at 08:08 am 1375171714