A California native transplanted in southern Illinois.I've been daydreaming lately, looking at nice little condos in various locations online. I've been calculating the size of my nest egg under different scenarios. The more I contemplate my situation, the more I think that the biggest obstacle to my dreams is my negative home equity.
I've decided to increase my Simple IRA contributions to $250 per month, which is 3k per year. My employer's contribution will be another 1.5k. Together, that is approximately 9% of my annual gross (my gross including overtime and bonus).
I will continue my automatic monthly Roth contribution of $150 per month (1.8k per year), which is a bit more than 3% of my annual gross.
If I were to continue along at that rate until age 65, and assuming I enjoy 5% annual growth, I would end up with enough to live comfortably (though frugally) in my little condo, even with a small mortgage. If I enjoy a return greater than 5%, the picture only gets brighter.
So for now, that is all I will contribute. When I receive my annual overtime, tax season bonus, and Christmas bonus, none of it will go to retirement savings. Instead, I will focus on cash savings and my mortgage. I want to be in a position where I can sell my house whenever I decide the time seems right (without touching retirement savings). I have a long, long way to go to be in that position. So, wish me luck.
I have also recently decided to trim my cash allowance from $60 per pay period to $20. Too much of that money was being spent grabbing a sandwich or a latte. It wasn't good for my bottom line or my waistline. So, I have gotten back in the habit of keeping lunch foods at work.
I received $1.50 from Hausernet yesterday, and have already turned it into a mortgage chip.
Contemplation
September 27th, 2013 at 07:56 pm
September 27th, 2013 at 08:28 pm 1380313698
September 27th, 2013 at 08:32 pm 1380313971
September 27th, 2013 at 11:38 pm 1380325097