(1) Max out 401ks - $33,000
(2) Max out IRAs - $10,000
(3) Prepay mortgage - $1200
(4) Add to baby fund - $3500
(5) Add to emergency fund - $7000
(6) House/Furniture fund - $3000
Total - $57,700
(1) - $8274 (25%) (goal is $33,000)
(2) - $5000 (50%) (goal is $10,000)
(3) - $500 (42%) (goal is $1200)
(4) - $1200 (34%)($7561 in our baby fund, goal is $10,000)
(5) - $-1200 (-17%)($25,439 in our emergency fund, goal is $32,000)
(6) - $3000 (100%) (Completed)
Total - $16,744 (29%)
Completed funding my 2010 IRA and bought some bargain stocks yesterday. Otherwise, we are behind on our goals but trying to catch up.
5 comments:
I like your site. It is quite inspiring. I also set goals and have been using NetworthIQ for a while
NYTimes article is out online... didja notice?
Sam,
I'm totally flumoxed why you're maintaining $25K+ in an emergency fund in, apparently, cash.
You are at the stage in your financial life where several things have happened or are now happening:
1) You are, or should be, earning more on your investments than you'll ever save in a year.
2) The rules for an "emergency" fund no longer apply to you. Your stocks are more than liquid enough to get you through minor hits like the tax audit, and if something really huge comes up (extremely unlikely), you can tap into the retirement accounts.
You might say that you're holding that cash in your investment account, but then it would be more than 40% of your holdings, a VERY conservative strategy.
I have other comments, but I'll wait to see how these are received.
Sam this seems like a very interesting blog, would you mind if I linked it to my blog, frugalstudents.blogspot.com?
This may have been addressed in an earlier comment, but I read through the last few months of your blog today and I noticed you're considering converting your IRA to a Roth IRA this year (since the income limits have been removed). Smart strategy since this is a loophole year, and it's possible that the rules will change and you won't be able to convert post tax IRA holdings in later years. However, you mentioned that your IRA was 3/4 post tax and 1/4 pre tax, and you were considering just converting the post tax funds. You can't. You can convert any percentage of the IRA you choose, of course, and you could choose to convert 3/4 of your total regular IRA holdings to the Roth, BUT for tax purposes the IRA will review your total preconversion IRA holdings and you will have to pay tax on a prorata basis. So, even if it's held in different accounts, etc., if you have 3/4 post tax and 1/4 pre tax money in the sum of your IRAs, and you convert to the Roth this year, you'll have to pay taxes on 1/4 of whatever amount you convert. However, there's still an advantage. You can take the tax hit this year, 2010, OR you can defer the taxes to 2011 and 2012 and pay half of the tax each year. That's a one time deal for conversions this year. It's a great deal, and you should definitely do it. IRS Publication 590 is the starting point. Bon chance!
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