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Help Please, Retirement % question.

April 28th, 2011 at 02:35 pm

Facts:
Divorced Female
age 34.5
Custodal Parent of a nearly 8 year old.

Homeowner with a 30 year Mortgage
134,000 loan balance 29.5 years remaining
ALL housing costs total 22.5% of gross income
My House Value approx: 206K
Utilities, Property Taxes and House Insurance currently is $500 per month.

The median home here costs $166,320. Home appreciation the last year has been 2.07 percent.
Compared to the rest of the country, My City's cost of living is 4.00% Lower than the U.S. average.

Emergency Fund of 8.5 Months Total Household Expenses

Current Retirement
TSP (401K) $75,923.01 Current Value
Roth IRA $7,925.39 Current Value
Total: $83,848.40


The Questions:
How much or what percent of my income do I need to be putting into retirement? I get confused with complicated retirement calculators. I want to live in my paid for home but take a few Nice Vacations a year. By Nice I mean a week or two in duration and to places out of the US, or all exclusive cruises (could be US based). I am not sure how much to budget for those kind of vacations Because I have NEVER taken one. :0(

Am I still BEHIND in investing or am I where I should be and can just invest normally instead of playing catch-up?

Did I forget any information you would need to calculate your answer?

Thank you!

Is a 16.5% return worth 30 years of delayed gratification??

April 27th, 2011 at 08:02 pm

Let me explain....Lately I have been really second guessing myself. Can I really keep this up to another 13 years.

If not I better make changes. Currently I am investing the MAX into my retirement. Because I do this it results in an earned income credit of $2640 more than I would get if I didn't save any in pre-tax dollars. This is basically 16.50% return on the deposit BUT I can't touch it until I am 65 years old.

I wonder is that 16.5% or $2,640 worth it, or should I start funding my Roth IRA and investing in the stock market then when I make a career change I can slowly sell my stock and use it to make my mortgage payments.

I guess option 2 is to instead of putting money into the Retirement account put that amount into my mortgage and then refinance/downsize when I make the change. But will I be refinancing with a higher interest rate? Applying 16,500 a year would take 8 years to pay off my mortgage. If I made it 8 more years in this job I would be crazy to quit.

Truthfully I have been unsatisified with my work life for about 2 years but I have been hanging in because I did not see any other choice. If I change jobs unless I downsize I will be house poor.

I wish I had been able to sell my house when I got divorced because then I would have had a smaller mortgage and would feel like I could make a change. Right now if you figure reducing my income by that 16,500 per year I need a job that makes 36K a year or approx $16 an hour, just to keep maintaining without any retirement savings.

I need a personal cheerleader, the reward is AWESOME if I can hold out in this job another 13 years. The reward is good if I can hold out in this job part time for another 9.5 years.

I am just getting burnt out, I am tired of working 40 hours a weeks plus having to work one weekend which means once a month I have a 12 day streatch without a day off. Once a year I have to leave my son with family for two weeks minimum. Next year I will gone from home for a whole year. I will make approxmately $500 more per month BUT my bills because of this go up MORE than $500 per month.

Last year I signed a 6 year extension but truthfully I am starting to think I should request a hardship discharge. The 6 year extension does not mean I could not switch to part-time, which would be alot easier. I could also go part-time then IF my part-time does not work with my new job request ING then possibly Discharge based on employment conflict.

Everytime I leave for Annual Training, for Job Training, Flood Duty it is getting harder and harder mentally on my son.

I need to start planning short term instead of long term because I don't know how much longer until I burn out. I guess another problem is I am tired of fighting the weight battle. I am allowed to weigh 149 pounds or % body fat. At 149 pounds I wear a size 7/8. My body naturally falls at 165 so the % body fat option has been my option for YEARS. Right now I need to drop weight to get down to my % body percentage. Some times I just wish I could eat what I want and exercise because I enjoy it instead of doing it because someone is going to be putting a tape measure to my body or counting my reps or timing me and judging me.

Roth and 401K Retirement

July 30th, 2010 at 01:42 pm

Got My end of quarter statments that ended 30 June 2010. Should not have looked.

My Roth went down BUT since I know how much I have put in I looked at it and said to myself oh well $80 profit for 2 years is not bad. Note year 1 was only 1,000 deposited.

Then I looked at my 401K, It is down, it is down about $400 MORE than I put in this quarter. Which means I lost $4,900. Man that hurt to see that. So I am mixed, part of me is glad that I reduced my savings amount, I mean IF I am going to LOSE all I put in and then some for the quarter why put in so much.....But then I think the market is down. I should be buying.

Then to top it off I see a TIP on this website about the child care credit. I start to thinking IF I am not contributing the max to my 401K this year will I get the Child Care Credit this year?

I am thinking maybe I should just increase my 401K back up and just figure out ways to get my other goals accomplished. I have been thinking of taking in a roommate. I saw two ads for rooms/roommates wanted for single mothers and am thinking this might be the way for me to go. I am going to let everything settle for a few more months and if I am still as tight as I am currently I think I will start with a 6 month lease renting out one or two of my basement rooms so that I can get a little more wiggle room.

But in the mean time, I am (to quote Dave Ramsey) going through all my stuff and "selling anything not nailed down until the kid thinks he is next"!

The positive side is my XH comes back to town Monday Night, so we will sit down and discuss his visitation schedule. I figure I will only have to pay for daycare for 4 weekend this coming year. The sad thing is that the 2 week training this summer we both have the work and so I will need to pay for that. BUT this means if he will take his visitation that should save me $600 in daycare costs this year.

Temporary Buyers remorse, and Change of Retirement Savings

July 14th, 2010 at 01:51 pm

Well I went back to the store and bought the furniture for upstairs. In 1 to 2 weeks I should have furniture for my house. Later that evening as I was thinking of the total bill I started to regret it.

I got a great deal on the furniture, I really do need furniture as it makes it hard to sit down and relax when you only have wood kitchen chairs to sit down in. But being the tight wad that I am I have a hard time spending money on myself.

Truthfully this is the first Me Purchase I have made in well 11 years. The last Me Purchase was my Car in 1999. I guess I am stressing because I charged it to my credit card and unless I want to pull the $ out of savings about half the charge might sit one cycle on the CC. Of course my rate is 8% so that is not bad considering. But as a pay in full credit card person this extra month freaks me out.

__

I would like to have a fully funded 12 Month EF, truthfully I do not need that much as my job is really secure but it makes me feel better.

Today I reduced my retirement savings from 36% of my pay to 15%. This will bring me about an extra $700 per month into my take home. I plan to use the extra money to fund the Emergency Fund, The House Payment Fund and The Escrow Fund. (Basically I have the Emergency Fund broken down three ways) I figure if something were to happen then why breakup the fund to those three things when I can just break them up now.

Once the Emergency Funds are funded I need to save for the Deck and for a larger house repair fund. The Deck is a Need as it is a safety thing. I have a walk out lower level so without the deck if there was a fire at the front of the house the only way out the top floor would be the two story windows. The house repair fund is currently being fed $100 per month. I would like at least $2000 in the account. The deductible on the homeowners insurance is 1000 and I want to have atleast 1000 for repairs.

Once that all happens then I will raise back my retirement savings. It really hurts to reduce my retirement saving BUT truthfully if I continue how I am saving for retirement I will have $50K per year income and I am currently living off of $29K per year with the mortgage payment so I should not be stressing.

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I hope to have a rummage sale this weekend to help pay for the furniture and to also reduce the clutter in my life.

I was trying to think of ways to increase my income. I could get a parttime job (but this would require permission from my employer). I could sell stuff, which is why I am having a rummage sale/sales. Or I could think about having a roommate or two. I am not ready to go the roommate route because I like being able to live my life without having to worry about noise from other. Also if I get a parttime job I would have to line up daycare. So I am not sure what I will do for extra money once I sell everything that I can sell.

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Hopefully I will get clearity as time goes on, I just feel so pulled in so many ways.

I need to stop!!!

April 8th, 2010 at 07:29 pm

I dont know why I do it but I find myself running numbers over and over.

Today it what I would have in retirement IF I kept up my level of retirement savings until 2024 or age 48. At age 48 I would need a job change and so my saving would decrease. I figured if I STOPPED at age 48 with no cost of living adjustments and no interest accrueing after that age; at age 65 I would be living off of 53K per year. That is IF everything goes as planned.

Also this is factoring a 10% gains per year until age 48. But this is also figuring no savings at all after age 48 and no gains after age 48.

My retirement plan also includes a paid in full home by age 65. Now I have 14 years until that age magic age 48 number. I would really like to have money saved up so I could buy a paid in full home at the age of 48. Then I would only need to work partime the 17 years until I reach age 65, if I had no mortgage payment at the age of 48 then I would only need spending money. See I would have enough to pay my bills without the mortgage but no extra for fun, so my working would be to bring in FUN money!

On the other hand if I started drawing out my Roth IRA principle money I could maybe retire at 48. Because if I have a paid in full house why would I need 53K a year from age 65-90? Right now we are living off of 28,331 a year IF you subtract my husbands child support payments; and that includes 12,660 being mortgage, taxes, and insurance for house.

Okay time to get out of my Dream World.

Morning Madness A Forgery Found! Roth IRA

March 4th, 2010 at 02:31 pm

This morning I am getting ready to leave the house, I am leaving a bit early because I need to stop and gas on the way to work.

As I am putting my sons folder in his back pack; I notice the blue hippo webkinz inside (it is show and share day), and a crumpled orange slip. I look at the slip and what is it, a slip from the teacher with a tick mark on it. Which means he got talked to again yesterday about needing to get to the task at hand. The bottom of the note has writing- My husbands name and my name, misspelled but there.

This leads to a long discussion about forgery. My son cant write cursive so it was not even close. I left the forgery on the note and signed above. We talked to him and we are not going to hide the fact he tried to pull a fast one, not a very good fast one but one none the less.

Do you ever feel like sabatoging yourself? See that sidebar over there with the money I have saved to get us through my husbands ELECTED unemployment until a new full time job opens in Septemebr. I soooooooo want to take that money and fund a Roth IRA for last year. I have been running my retirement number and need to start maxing the Roth yearly. I put nothing in for last year and am oh so tempted to then when money gets tight the hubster will either have to get a job or I will be forced to get creative with spending. I wonder if funding the roth IRA was why I have not filed my taxes yet!

What would you do????