posted by geeblock

Also I know u can retire on OC money lol 

What about ways you save on a daily/weekly/pay period basis?

Wife and I are debt free thankfully. I worked for a start up that went public last yr and got a nice cash influx from that. Been maxing 401K, IRA, and Roth since I was about 22 yrs old as well as living frugally. I'm prob sitting on way too much cash by most advisors standards but looking to buy a house soon and that ain't a joke in the bay area.

Also have a brokerage acct that I funnel money into and work with a family friend( financial advisor) on a retirement plan. Wife works for the state so she has her retirement plan plus we're looking into public sector 401k like options out there. If I could convince my partner to move back to Ohio, we'd probably be set for retirement by our early 40s, but prob the bay area ain't no joke when it comes to COL.

posted by iclfan2

Wife’s dad was a principal, do it as soon as you can! The benefits are insane. And then when you retire, if another local school district needs a temporary principal, you can get paid plus your 90%+ pension. 

The thing about the principal route for me looks like this.. I’m 22 years in so I should have did it many years ago. But you can’t coach and principal and I coached baseball for 15 years. My first job in 97 I made 24,600 . I do the same job and make 80,000 22 years later and it won’t change. Principals make 93,000 and work hella hours and I get off at 245 so I priced myself out w while ago. I would lose money at this point if not for the retirement part, also with the way the world works now If something happens at your school even if you aren’t there they can fire the principal.. so I’ll wait. Plus in a few years there is gonna be a severe teacher shortage and principal shortage. 

I should also have said I have zero debt and my SO has zero debt 

Both my full time and part time job matches 5% so I do that.   If I do ten more years at my part time job I will also get a retirement there as well as my full time employment.

Save cash and just starting to get into investing.

More or less what some have said already.  

Max out IRA, max out 401K, brokerage account, fixed income (sine most bank rates are trash these days),  and HSA (although I haven't taken full advantage of it, I mostly just contribute up to my deductible ever year).  I now just need to get my wife on board to doing the same shit.  Her parents make a lot of money, but have been AWFUL at savings, so I have been slowly breaking her to do hoard more.  One nice they have though is their bank grandfathered them with a 6% interest rate on their savings.  

Like COA, I want to buy a house, and my wife is on board to moving out of DC.  There is a solid chance I can keep my DC salary at lower cost of living locations.  Also, my wife and I still enjoy life.  We travel a lot and we go out on weekends.  

posted by O-Trap

What about ways you save on a daily/weekly/pay period basis?

Learned this years ago and did it and stopped until about 3 months ago.

Make an excel spreadsheet to break down the money in the savings and checking account. The savings at one bank I have broken down into 8 subcategories of things I want/like to save for like Home improvements, new car, car repair, vacation, baseball, boat, concerts, etc etc.  Each pay period I dump money into it so I just dont see a figure in savings and wonder what it is for, I have it earmarked for something.

Same thing with checking account.  It is broken down into a few categories so when I see that total I know what it is all for.

Then I transfer money into another account that is strictly for bills that get autopay.

It has totally changed my life, financially, as I no longer see a total in the account and have to wonder what part of it is for bills, what part for fun, vacation, repairs, improvements etc.   Each pay period I take about 15 minutes to divvy out the money to the accounts and break it down to where I want to earmark it for.   The final checking account number doesn't look amazing all the time, but knowing that money is free and clear of any obligations has been freeing

I have maxed out Roth the last two years. My wife and I both utilize work retirements (I have 401k with 50% match up to 6%, my wife has pension -- right now depending on what happens to Kentucky pensions). I do a LOT of shifting of money from checking to saving to hopefully keep a decent amount in saving for emergencies.

We knew the last 4ish years would be rough raising kids and trying to aggressively pay debts. This last year was the roughest and will ease up come June. We currently pay nearly $30,000 a year in childcare costs and student loan payments. One child comes off childcare in June, another in June 2020. So, things will get MUCH better over next two years. By July 2022, we hope to be student loan free and shortly after will be childcare free. 

Looking forward to that. It'll be great. We live fairly frugally. Rarely eat out. Enjoy spending quality family time. Choose not to do much for holiday gifts and do family functions/trips instead. We will upgrade our house situation in the next few years when kids get bigger and debts are lowered.

posted by SportsAndLady

That a ROTH IRA? 

I cannot contribute to a ROTH, so we contribute to a traditional IRA then do a back door conversion every year for both me and the wife.

posted by geeblock

Retirement age 67 life expectancy 78. So basically you guys are not enjoying life so you can do well for the last 11 years of your life. Had a coworker retire last year. We got out of school on a Friday and he died Friday night. He was 66 years old. I save in a 403b a little but I would rather take vacations and go to steeler games etc and enjoy my life now while I can enjoy it. No one is promised tomorrow. This choice is easier because I don’t have kids and don’t plan on having any 

you can't know my situation. i'm living pretty damn good on top of all the saving. people like my parents were in the situation you are describing, saving about 60% of their take home pay all the time. for what it's worth, both of my parents died young and didn't use any of the money that was squirreled away.

for reference all of the savings that i described in my post accounts for about 35% of my take home pay so i have a decent amount of fun money every month. 

posted by j_crazy

I cannot contribute to a ROTH, so we contribute to a traditional IRA then do a back door conversion every year for both me and the wife.

Curious as to why you take the time to backdoor it each year and lock that money up? I am in a similar situation with not being able to do a Roth, but I haven't tried to do the backdoor method yet. I think the backdoor also screws us up bc we have IRA's from 401ks from leaving companies and there is some rule on the taxes when you already have differed ira's. 

posted by iclfan2

Curious as to why you take the time to backdoor it each year and lock that money up? I am in a similar situation with not being able to do a Roth, but I haven't tried to do the backdoor method yet. I think the backdoor also screws us up bc we have IRA's from 401ks from leaving companies and there is some rule on the taxes when you already have differed ira's. 

I'd be lying if i told you i know all the ins and outs of it. I do it because the distributions of ROTH are non taxable, plus as far as i know there is no RMD's for ROTH, so I can leave that money to grow at the end of my life. I know that i have to create a traditional IRA every year, i make the max contribution, then convert it before its ever invested into a ROTH and invest it with the rest, then close the traditional. I do all this during the month of January. Then during tax season i have to complete and file a form (forget the number) that documents my contributions to the IRA's (for the previous year) since that income is not deductible when i file my taxes. It's a lot of headache and paperwork, but worth it to shelter those IRA moneys from whatever messed up tax code is in place when i'm 59.5.

posted by Commander of Awesome

I'm prob sitting on way too much cash by most advisors standards but looking to buy a house soon and that ain't a joke in the bay area.

 

Buy in Sonoma county and commute. Marin county is awful to buy in unless you go to Novato, and even then you'll get broke down like a shotgun. 

Man i'm slacking compared to you guys lol.
I max 401k and max an IRA that I rolled an old 401k into. The rest stays in my account to use as needed. Hopefully the 401k and IRA will be enough.

Ehhhh, unless you have highly variable income, or expect to be in a higher bracket in retirement (perhaps because of inheritances), then I don't see the point of backdoor Roth.  If your tax rates remain constant, then the value of the Roth IRA and 401k are identical.  Most people are going to come out ahead putting that conversion cost into a brokerage account and paying l-t capital gains on the returns.

When you do the conversion, you're taxed at ordinary rates....and if you put that tax instead into a brokerage account, that can grow to be a sizeable amount (investment returns subject to 15% long-term capital gain), which means your income bracket in retirement has to be significantly higher than now for a Roth conversion to make sense.

posted by kizer permanente

Man i'm slacking compared to you guys lol.
I max 401k and max an IRA that I rolled an old 401k into. The rest stays in my account to use as needed. Hopefully the 401k and IRA will be enough.

You're much further ahead than the average American. 

I have 2 safes one for ammo and the other is cash, gold 

I put 10% into my 401k and 10% into company stock. My oldest daughter is in college, so as soon as the stock hits long term, I sell and use that to pay her tuition. Once she's out of college I'll probably find another way to invest that money. (I've had bad luck picking stocks and I know people who have been screwed because they were too heavily invested in company stock.)

posted by FatHobbit

I put 10% into my 401k and 10% into company stock. ...

Unless you are high-enough up or otherwise in the know to basically be an "insider", buying your company stock is a HORRIBLE diversification play.

If things go south, you're liable to be whacked twice - once on your paycheck, the other on the stock.  The academics even go a step further to argue you shouldn't overinvest in your industry, like don't overweight airlines if you're a pilot for Delta.

posted by gut

Unless you are high-enough up or otherwise in the know to basically be an "insider", buying your company stock is a HORRIBLE diversification play.

I think it depends on the health of the Company and discount. I get a 10% discount at mine, and am high enough up to know the direction of the Company and believe it will go up. My wife gets a 15% discount at a humongous health insurance company, and it’s 15% off of the lowest price during that month. We don’t put a ton in but it’s free money as long as they go up, and little risk that they go down THAT much. We can also afford the risk. But I agree in not putting your retirement in your own Company or putting it into stock prior to maximizing your 401k or other savings tools.  

posted by gut

Unless you are high-enough up or otherwise in the know to basically be an "insider", buying your company stock is a HORRIBLE diversification play.

If things go south, you're liable to be whacked twice - once on your paycheck, the other on the stock.  The academics even go a step further to argue you shouldn't overinvest in your industry, like don't overweight airlines if you're a pilot for Delta.

 

I'm sure he gets a nice match from his employer on purchasing his company's stock. Otherwise, there is practically 0 reason to buy your own company's stock.

posted by iclfan2

I think it depends on the health of the Company and discount. I get a 10% discount at mine, and am high enough up to know the direction of the Company and believe it will go up.

Everyone should take advantage of the discount.  But if they aren't high enough up to understand if the company will outperform public expectations, then they should flip the stock as soon as whatever holding period requirement passes.

Most people aren't high enough up to know that.  I'd argue at a Fortune 100 that it's a really tough bet to take even at the EVP level.

STRS which will probably be broke by the time I retire in 20 years.  Nothing for my wife.  We will get SS for her, as well as my STRS match in my death.

posted by gut

Unless you are high-enough up or otherwise in the know to basically be an "insider", buying your company stock is a HORRIBLE diversification play.

If things go south, you're liable to be whacked twice - once on your paycheck, the other on the stock.  The academics even go a step further to argue you shouldn't overinvest in your industry, like don't overweight airlines if you're a pilot for Delta.

 

We get a 15% discount on the price and they also look back 6 months and we buy at that price if it's lower. This month was the first time in 5 years with the company that we didn't buy at the 6 month look back price. But I agree with your points about being diversified which is why I sell as soon as it's long term. 

Our stock is currently at $268 and I have friends who bought at $35 so they made a shit ton of money and they think I was crazy to sell. I did miss out, but I don't like putting all of my eggs in one basket. I think (know) I made the right decision but man...