2015 Progress Check

[corn18]

I was working on the massive excel budget spreadsheet on my flight to NYC and thought I would do a progress check vs. plan.

Income: As expected
Expenses: spend to date is within 0.2% of plan
Savings: exceeding plan by 7% (on track for 30% savings rate this year)

I'm happy with this so far. I did have some emergency spending but it was small enough that I could cash flow it. No other surprises.

Plan for 2016 is to raise the savings rate to 42% by reducing discretionary spending. Having 2 kids out of the house helps that a lot. The big change in savings I am making is to my 401k. I will max out the pre-tax contributions and then hit the $53k limit with after tax contributions. Wish I had known about the after tax contribution to Roth IRA conversion opportunity at the beginning of this year. I could have put an extra $10k into my 401k.

How's your 2015 going so far?

Tom

[Like2Plan]

Tom,
You are doing great!

We have fully funded DH's 401K and my Roth for the year. We are on track for an after tax investment we are making.
Our discretionary spending is up. We have to work on that.

[Jluke]

Increased 401k contribution from 6% (2014) to 10% (Jan 2015) then to 15% (Jun 2015)

Contributed 4400 of the 5500 for Roth YTD.

Paid 25.5k towards my mortgage; 15k of that was extra to principal.

Paid off a vehicle loan one year early (2k).

[rennigade]

I have more money now than I did on Jan 1 2015.

[FIREseeker]

Why 42% and not 50? You're so close!

[disneysteve]

Tom, you are doing great. What a huge change from when you started here.

[LivingAlmostLarge]

Great job. Are you sure it makes sense to contribute after tax to the 401k? I ask because of your tax bracket if rolling to a IRA makes sense? Have you talked to a CPA and tax attorney?

[corn18]

Great job. Are you sure it makes sense to contribute after tax to the 401k? I ask because of your tax bracket if rolling to a IRA makes sense? Have you talked to a CPA and tax attorney?

The plan is to take the after tax contributions and roll them into a Roth IRA every year. My plan allows that which is way cool. It's called a mega backdoor Roth. It's a non taxable conversion on the after tax contributions. I can convert any earnings into a regular IRA.

[Goldy]

We are on track for out best year of savings to date assuming something big like a job loss doesn't happen. On track to max out both 401k's for 36k (plus 22k match), on track to max both Roths for 11k, on track to max HSA for 6k, and also paid 24k of principal on our mortgage. However, the place where we have made the best improvement was in discressionary spending. The past few months we have been well under our zero based budget with some months up to $1000 in the black.

[bjl584]

Well, my debt went up in 2015 because I recently purchased a new home and have been putting a lot of work and money into it.

But, my savings and investments have increased. And, I've continued to pay down my student loans. I also paid my truck off back in the Spring.

I've cut my savings rate down to my taxable brokerage account since buying the house, but I still contribute 10% to my 401K, and I fully fund my Roth IRA.

I also recently got engaged, so finances will be combined after the wedding.

Overall, 2015 has been good to me.

[rigz]

I was working on the massive excel budget spreadsheet on my flight to NYC and thought I would do a progress check vs. plan.

Income: As expected
Expenses: spend to date is within 0.2% of plan
Savings: exceeding plan by 7% (on track for 30% savings rate this year)

quick question - if your income didn't go up, and your expenses are the same, how did your savings go up by 7%?

[corn18]

Great question. Had to think about that myself. I carried a cushion into 2015 from 2014 that I was able to apply to savings. Looking through my spreadsheet, I can't figure out exactly how I did it, but I'm glad it's there.

[LivingAlmostLarge]

But if you are paying taxes on the amount going in say 35% you may not pay much taxes depending on how you structure your withdrawal? Based on income? Is this always the best way of investing? Have you talked to a CPA?

[GrimJack]

When I started getting SS, I changed my TSP contributions to take that much out of my paycheck so my income did not change but my contributions increased from 15% to 40% (hmm, that is actually enough information to figure out what my income is - roughly speaking). I do not earn a lot but I do not spend a lot and get 6 months off every year. I started saving quite late in life but started investing much earlier. I have money in TIAA-CREF account, Vanguard accounts, and TSP. I am starting to consolidate - mostly by moving funds to TSP since it has the lowest fees around - I just wonder if I should keep my funds in TSP after I actually retire.

I am thinking about reducing my contributions to TSP for a while to buy my FERS contributions for my time in the USMC and the 3 years I worked as a full time temp at NOAA. At first, I was thinking of using funds from one of my Roth IRAs but I think is a smarter move.