We have fully funded our 2009 Roth IRA’s; $5,000 to my wife’s Roth IRA & $5,000 to my Roth IRA!
It feels good to hit this goal, especially since we only contributed $3,125 to each of our Roth IRA’s last year.
Once our planned 401(k) contributions go in this month, we’ll have contributed a total of $19,437.41, or 15.87% of our gross income, to our retirement accounts (401k’s & Roth IRA’s) for 2009.
My wife found out yesterday at 30% of her company received an email that morning explaining they were laid off. We feel terrible for her coworkers that were laid off, especially right before Christmas.
Thankfully, my wife kept her job, but it was certainly a wake up call. So, I ran through the numbers to see how we would have been affected if she would have been part of the lay off.
The 1st negative impact would have been losing the $2,770/month income she takes home and her quarterly bonuses. Next, would be her company car and $110/month in cell phone and internet reimbursements. Finally, she’d lose her insurance and 401(k) plan (which she contributes 15% to).
We took a look back at what unemployment paid her before she found her current job. I was surprised it was a little over $400/week after taxes. That more than I remembered and supplements ~60% of her regular paychecks. Cutting back a bit on our retirement contributions and unnecessary spending would make up the difference. Losing the company car would be tough, but since we just paid off our $450/month auto loan, we’re in a better position that ever to take on another (small) auto loan, if necessary. Health isurance is very important, and since my wife is young and healthy, she easily qualifies for good health insurance that only costs $80/month.
Working through this drill was reassuring. Should her company do another lay off in a few months, and if she is let go, we should be fine. One possible wrench is my job. Sales are starting to soften a bit at my company, but we’re introducing innovative new products in February that should increase sales. Worst case scenario, I believe I’d be keep on until at least May. In the meantime, we’ll start socking away cash for added security. And of course, say our prayers.
November was a strong income month and reasonable spending month (click on spreadsheet below).
Our expenses totaled $8,434.66, but $2,925.74 of that was to pay off our auto loan. That brings us down to $5,508.92 in other expenses. Not to shabby when you consider we purchased Christmas gifts, took a road trip to see my family, and went over budget in our “Goceries” and “Household Items”.
The big boost in income in November came from a $4,872 ($2,255.97 net) quarterly bonus my wife received. In other good news, my company increased my salary another 2.1%. We also earned $75.00 in credit card cash back rewards and $0.63 in interest income from our online savings account.
December is here already and it’s an “extra” check month for me. Plus, we’ll be receiving $330 worth of reimbursements that my wife is due. Our expenses should be pretty normal, with the exception of a trip out of state planned at the end of December.
This was our best net worth increase month ever. Our net worth in November increased $9,438.27 from last month, to a total of $63,650.18 (click on spreadsheet below). Our previous record increase was September 2007 with an increase of $8,496.14.
What Worked
We got a lot done this month. Thanks to my wife’s $4,872 ($2,255.97 net) quarterly bonus, we paid off our 6.5% auto loan! Now we have an extra $450 to save/invest each month. We also contributed a total of $4,257.22 to our retirement accounts (401k & Roth IRAs), a large portion of which was contributed to our Roth IRAs in an effort to reach the $5,000 max contribution by the end of the year. We saw our retirement accounts increase to a total of $6,178.11! On top of all of that, we socked away $500 into our savings account.
What Didn’t Work
Nothing, everything went WAY better than we expected.
Next Month
God willing, December should be another strong month. We’ll likely miss our $75,600 net worth goal for the year by a good margin, but we’ve made great headway, all things considered. I’ll be posting a review of our 2009 goals next month.
As a follow on to my post yesterday regarding our increased retirement contributions, I checked our retirement account balances this morning and we just broke the $50,000 mark. I’ll provide the specifics when I post our net worth spreadsheet at the end of the month, but it feels great to be making solid progress. In December 2008, our retirement accounts totaled $23,506.87, so it’s doubled in less than 1 year.
We’ve done a good job of increasing our retirement account contributions this year. Thus far, we’ve contributed $3,802.39 to my 401(k) and $3,976.48 to my wife’s 401(k) and a total of $8,400 ($4,200 each) to our Roth IRA’s. That puts us at $16,178.87 in total contributions to our retirement accounts so far for the year.
By the end of the year, another $617.91 will be contributed to my 401(k) and another $1,040.63 to my wife’s 401(k). We hope to contribute another $800 to each of our Roth IRAs to fully fund them for the year. If we’re able to do that, we’d have a total retirement account contribution of $19,437.41 (roughly $1,620/month) for 2009. That’s a huge increase over our $12,111.56 retirement contributions in 2008 and our $12,330.19 retirement contributions in 2007. We’re feel very blessed to be able to sock this kind of money away for early retirement.
Both my parents and my wife’s have paid off their auto loans early to save a ton on interest. Now we get to join the club. Thanks to my wife’s $4,872 ($2,255.97 net) quarterly bonus and our accelerated payments, we just paid off the 6.5% auto loan on our 2006 car. The loan was originally scheduled to be paid off April, 2012 and at the beginning of 2009 our balance was $15,586.49. It feels great to have this paid off early. We now have $450 a month to save and/or invest.
We passed the net worth milestone of $60,000!
My wife’s quarterly bonus help us reach this new net worth milestone. We hit our last net worth milestone of $50,000 in August. We’ve been blessed to have a strong second half of 2009. Based on my estimates, we may hit a net worth of $70,000 in February.
My wife received her quarterly bonus today. She was 5th in the region in sales and received a $4,872 ($2,255.97 net) bonus! In addition, she received a special Teamwork award.
$730.80 of the $4,872 was deposited into her 401(k). The $2,255.97 check will be spent as follows:
$487.20 to tithe
$1175.74 to our auto loan
$593.03 to savings
My wife is doing awesome in her job and, at this rate, our goal of early retirement is all the more possible.
Quick update:
I just returned from a business trip, and earned another 6,180 Delta SkyMiles. I now have 57,135 Delta SkyMiles.