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Retirement Calculators and Using What I Have

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At the start of a new year, I always find myself reflecting on my financial goals. Recently I’ve been focused on retirement and making sure we’re on the right track. I’ve been playing around with various retirement calculators to measure our progress.

I’ve been surprised to find out how unhelpful many of the free retirement planning tools available online are. Many of them don’t tell you whether they’re showing you numbers in today’s dollars or future dollars, so it’s hard to contextualize their results. Some also do a poor job of explaining the assumptions they’re using such as inflation and rate of return. Has anyone else noticed this and been frustrated by it?

Retirement Planning Tool

After several hours of searching, I finally managed to find a tool I like. Just to be clear, I don’t have any kind of affiliation with this tool or company. I just thought I’d share it in case you’re looking for a good retirement planning tool as well. It’s called NewRetirement, and although they offer a paid subscription, the free tool suited my needs.

However, I should mention that the tool is very conservative. As I understand it, the rate of return that it uses for its “average” confidence level is 3.5%. For pessimistic, it uses a 2% return. Personally, I use 5% in my retirement planning. So I chose the “optimistic” confidence level, which is equivalent to a 5% return. There’s also a bit of a learning curve when it comes to using the tool. But luckily there’s a NewRetirement forum on Reddit where you can go to ask questions.

I liked the feature that allows you to estimate how increasing your contributions will affect your retirement income. You can also change the general and medical inflation rate, which was helpful for me as future medical costs are a big concern of mine.

Are We On Track For Retirement?

Luckily it seems like we’re on the right track. Right now we’re contributing about 21% of our income to retirement including employer matching. We’re planning to increase our retirement contributions once we’re done building cash reserves in about a year. But even without bumping up our contributions, my estimates show that we would have surplus income in retirement.

I know that life can often throw curveballs though, so we’re not planning to rest on our laurels in this area. I want to make sure we’re always contributing as much as we can. That way if something bad happens like extended job loss, we won’t be short in retirement if we can’t contribute for a while.

Extracting More Value From the Things I Have

Another area I’m focused on right now is extracting more value from the things I already own. I saw a comment in a minimalism forum I’m a member of that resonated with me. There’s a lot of useful life in the things we own that we may not be using. For example, a book you only read once that just sits on the shelf has a lot more entertainment value in it that you can tap.

Seeing the books on my shelf as a form of waste has changed my perspective. I usually think about wasting money in terms of food spoilage or buying unnecessary items. However, viewing the board games that aren’t being played or clothes that aren’t being worn as a form of waste has motivated me to extract more value from my belongings.

My partner and I have a lot of board games from our childhoods. So this month we’re challenging ourselves to play through all of them at least once. Instead of going out to coffee shops to occupy ourselves during the weekend, we’re going to stay home and enjoy the entertainment we have.

What are your financial goals for the new year? Are you doing any savings challenges in January?

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2024 Financial Goals

Use What You Have

2024 Financial Goals

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Happy New Year!

I wish everyone a healthy and happy 2024!

‘Tis the season for new year resolutions or intentions. In the spirit of planning the coming year, I wanted to share my 2024 goals. For a look back on 2023, make sure to check out my review of my 2023 financial goals.

Just like last year, I’ve set my financial goals in 4 broad categories: short-term savings, investments, debt, and travel.

Short-Term Savings

I started 2023 with loooots of different short-term savings that I kept in many different Capital One 360 savings accounts.

In my budget I still have many of my same short-term savings goal categories (e.g., car repair fund, semi-annual fees, etc.). However, I’ve removed my savings for student loan payments and replaced it with a new short-term savings category strictly for home repairs. And then I’ve opened a new brokerage account and am going to start investing money there.

Which brings me to my next category of longer-term investments:

Investments

In this post I talked about some new financial goals as I was mulling over open enrollment options.

Here’s what I’ve done:

2023

New for 2024

HSA: $5500/yearHSA: $6860/year
FSA: $700/yearFSA: $1000/year
403B: $125/check = $3250/year403B: $215/check = $5590/year
529: $50/month/child = $1200/year529: $60/month/child = $1440/year

Total: $10,650/year

Total: $14,890/year

This is slightly different than what I’d originally said in the post above. That’s because I was planning initially to increase my HSA contributions to $7750/year. However, I neglected to take into consideration the fact that my employer provides $1440/year for family HSA plans as part of employee benefits. That means I’m at the max contribution level at $6860.

My HSA contributions will now be lower than I’d originally planned, but I wanted to still be at a similar threshold for investments overall. So, I increased my 403B contributions by a comparable amount.

And, as mentioned above, I opened a brokerage account as a longer-term savings vehicle that I have outside of my normal retirement accounts. I haven’t included it in this table because I’m not going to be making recurring contributions. It will be more like here and there, stashing extra money away if/when we have it.

I’m really proud of this level of investment, as it represents a sizeable proportion of salary. I should mention this is on top of the 7% that is automatically deposited into my “normal” retirement account (and my employer matches a full 7%, so 14% of my salary is invested in retirement).

These increases WILL make my paychecks smaller (obviously), but I’ve already adjusted my budget accordingly. It doesn’t hurt that I’m also expecting another raise on the near(ish) horizon.

Debt

In my Review of 2023 post, the big thing was that I paid off my car in October and officially entered 2024 consumer debt-free. My only remaining debts are my student loans and my mortgage.

The debt plan for 2024 is to basically continue with how things were going in the past. We will continue to pay double mortgage payments twice/year and make the minimum payments on my student loans, riding them out the next two years until they’re forgiven through PSLF.

Travel

Travel continues to be a big priority for us. In 2024 we have one big trip planned (husband and I going to Italy in summer!). In the Fall I’ll have a sabbatical from work so I hope to do a couple of quick weekend trips during that time, too. I’m tentatively planning one with just me and the kids, and then one with me and my mom. No destinations in mind yet, but it’s fun to start thinking about (and saving up for) our upcoming adventures.

Did you set financial goals for 2024? If so, what do they entail?