I’m still pretty baffled by tax code. In my most focused moments I can be found following links to read about tax opportunities that work best for the early retiree lifestyle. Luckily the authors and bloggers that direct me to these sites usually clearly explain the premise of the idea before I reach the IRS page so I am not overwhelmed by the jargon. But with my own W-2 soon to be posted I wanted to be prepared for my first tax season, which will be in some ways easier and in others more difficult than previous years. This year is easier in that it is the only one where I have paid taxes and held only one job at one company with no gaps or unemployment. It is more difficult because as a result of my Roth IRA mishap last spring I have a few hundred dollars of money in a taxable account. Since it is a Vanguard Target Retirement Fund it includes both stocks and bonds as well as domestic and international versions of both, which all create some added complexity. Continue reading “2014 Taxes: Surprise!”
Category: Finance
Unexpected Expenses and Releasing Worry
Today I arrived home after a full, but surprisingly stress free day at work to find a “not a bill” from my insurance company. This document which stated that it was “not a bill” on the front page said that I owed $361 and change for a procedure I had in November that the insurance company assured me was completely covered. This made me unreasonably angry and resulted in me calling the insurance company and emailing/texting several people for information. Apparently I can’t contest this document, its supposed charge and the multiple pieces of incorrect information it holds until I receive the “real” bill. In the grand scheme of things even if I was lied to and end up having to pay these charges this seemed to represent a larger problem that’s been in the back of my mind: unexpected costs. Continue reading “Unexpected Expenses and Releasing Worry”
Challenge: Maxing My 401K in 6 Months
I just received my first paycheck of 2015. I was so excited to see it that I accidentally awakened at 5am to view the paystub that’s sent at 4am. I wasn’t excited to see all the money I could spend, but how much that would be left with after trying to max my 401K in 6 months and the challenge of living on the remainder. After I opened it I was excited to see how much was going into my 401K. It was over $1,500 in one pay period, which is about how much I would input into my IRA every few months. A few months of work done in two weeks because of the miracle of tax-advantaged accounts. I was so excited. Continue reading “Challenge: Maxing My 401K in 6 Months”
State of the Union: 2014
I thought it would be good to create an annual State of the Union to remember what I did each year regarding my investments and why. This was a big year – the first year I really dove in and learned how to have my money make money of its own.Through my reading of the books and articles I listed in my first post I’ve gone from knowing basically nothing about the stock market and calling my parent’s mutual fund manager to ask what 401K plan to enroll in to at least an intermediate level. And with that knowledge has come a sense of calm and an understanding that flexibility and knowledge are the only kind of security.
Continue reading “State of the Union: 2014”
My 10 Year Plan
Based on my end goal of financial freedom I’ve accumulated information from various books, blogs and traditional retirement calculators to determine how much I need to save to be able to live off of indefinitely. Overall I’m basing my calculations on the updated Trinity Study from 2009 that reinforces the 4% safe withdrawal rate for investments with a 75% stock, 25% bond asset allocation even when adjusting for inflation every year. Mr. Money Mustache makes a lot of excellent points about how this study in itself even builds in a large safety margin by assuming that a person would not adjust spending to account for economic reality, such as a recession, or substitute goods to compensate for the inflation of an individual item.