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Extra Income Allocation

February 1st, 2011 at 02:49 pm

So, after setting aside money for my car insurance, I will have just over 2k in extra income from my income tax refunds. I have tweaked my extra income allocation and plan to do the following:

30% - Emergency Fund
20% - Credit Card Debt
20% - Egypt Fund
20% - Roth
10% - Mortgage

In about 2.5 months, I will have 4 - 5k or so extra income, and will do the same with that.

Year End Number Crunching

January 12th, 2011 at 09:40 pm

At the end of the year, I like to look at the current value of my nest egg and make some projections.

In my tax-deferred accounts:

My minimum goal is 600k.

If I stop contributing now and earn 7%, I will have 487k at age 65, 558k at age 67.

If I continue contributing at my current rate and earn 7%, I will have 632k at age 65, 731k at age 67.

In my Roth:

My minimum goal is 150k.

If I stop contributing now and earn 7%, I will have 33k at age 65, 38k at age 67.

If I continue contributing at my current rate and earn 7%, I will have 131k at age 65, 155k at age 67.

I also crunch what I will have if I earn 5%, 6%, 8%, or 9%. Those 8s and 9s sure are pretty! However, I think 7 is a more reasonable assumption.


Christmas Party Night

December 18th, 2010 at 10:56 pm

So we had our annual Christmas dinner, and it was an enjoyable evening as always. I did get a very nice bonus this year for $1750, which I felt was very generous. Also, it is just nice to feel that your efforts are appreciated!

So, I am considering how to best use it. It will almost pay the remaining balance on my Chase Freedom in full. However, I am leaning towards $1500 to Chase and $250 in my Roth. I do fret that I won't hit my Roth goal of 150k.

Extra Money

December 11th, 2010 at 01:37 pm

I have been thinking I need to have a standard allocation for extra income. I don't mean tiny amounts such as from decoy mail, but the occasional large chunk of extra money. In the past, I have decided on a case by case basis how to best use each cash infusion, but I want to stop doing that.

Here is my extra money allocation:

40% credit card debt
20% Roth IRA
20% regular savings
10% Egypt savings
10% mortgage

Once my credit card debt is gone, I will decide on a new allocation.

There is a reason I have been thinking about this lately. I usually get a Christmas bonus. I hope that will be true this year as well, but of course I can't count on it. Also, it is almost the time of year for seasonal overtime at my place of employment. I will literally be able to work all of the overtime I can stand for several months. The way it is handled is to record the overtime, then pay it all in one sweet check at the end of the high-volume period. In addition, a bonus is traditionally paid.

Retirement Goals

December 11th, 2010 at 11:45 am

I have set some specific financial goals which I would like to reach before retirement. Reaching them is possible, though not a slam-dunk. This is another big reason I decided I had to get my over-spending in check. Here they are:

1. Have 600k in traditional IRA. This is for regular monthly income. At a 4% withdrawal rate, 600k would provide 24k annually (2k monthly) of income. Supplemented by SS benefits, this should afford me a modest yet comfortable existence.

2. Have 150k in Roth IRA. This money is for covering large irregular expenses which will come up from time to time. Home repairs, home maintenance, vehicle replacement. The point of having this fund is so I can (hopefully) avoid debt.

3. Be mortgage free. I am uncertain at this point if this will be in my current home, or if I will sell and move elsewhere. Wherever I am living, I would like to not have a mortgage.

I am single, so this nest egg is intended to support only one person.

My Nest Egg

December 5th, 2010 at 10:54 am

My retirement nest egg is in three different accounts: a traditional IRA, a Simple IRA (employer's plan), and a Roth IRA.

My plan is to eventually use my tax-deferred monies for regular monthly income, and to use my Roth for big-ticket items such as a new roof or vehicle replacement.

Here is my current situation:

Traditional IRA (held at Wells Fargo):
Vanguard Total Stock Market ETF $38,257.36
Vanguard Small Value ETF $7,955.75
Vanguard All World Ex US ETF $29,988.00
Vanguard Total Bond Market ETF $20,150.00
iShares Tips Bond Fund ETF $9,985.68
cash $78.58
Total: $106,415.37

Simple IRA:
American Funds Target Ret 2030 $9,625.80

Roth IRA (held at Vanguard):
Vanguard Target Ret 2025 $7,663.43


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