Musings about personal finance, real estate investing, life in South Florida, historic house projects, Snarfle the dog and anything else that strikes my fancy.
Wednesday, February 29, 2012
2012 Savings Goals - February Report
(1) Max out 401k(s) - $6123 (18%)(goal is $34,000)
(2) Max out IRA(s) - $0 (0%)(goal is $10,000)
(3) Add to e/r fund - $ 1600 (16%)(goal is $10,000)
(4) Pay down mortgage - $830 (17%)(goal is $5,000)
(5) House projects - $0 (0%) (goal is $5,000)
(6) Trading account fund - $0 (0%(goal is $5,000)
Total - $8,553 (12%)
And, since we just finalized our 2012 savings plan, it should be no surprise that we are approximately $3,800 behind. We are really going to have to work hard to meet, or come close, this year's ambitious goals.
Like you we always plan and do max our our 401k to the IRS limits. A thought, since I find I can't keep much savings sitting idle, and you have a sizable emergency fund, depending on your comfortable level, is to put this year's emergency fund contribution into some conservative investments in your brokerage account instead. You take more risk than a MM or bank CD but you can liquid in an emergency, just potentially with some loss. I keep just $10k in a money market. I have credit I never use as a short term gap about the $10k if needed. But I do have a number of mutual funds etc that could be drawn down if I need the money. At the moment when I have a few extra hundred in the checking account I transfer it to a mid-cap index fund offered by my brokerage with no transaction fee and let it build. When it reaches a certain level I will add to something else. I also have some funds in some safer balance funds that mix large cap stocks and bonds to mitigate some of the market volatility. I do have some riskier stuff that I would look to last. My only point is maybe you can sleep well with $25k in an emergency fund (or pick a number)with a backup brokerage account with a bit more risk but higher potential then 1% return instead of just $50k cash. But your situation may require a high cash balance in reserves. Something to consider.
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