Three words – retirement, retirement, retirement.
Math was never my strongest subject, but it’s been said Albert Einstein referred to compounding as the 8th wonder of the world.
At age 30 I started making a livable wage, where I’d be able to pay all my bills, and operate independently without the need for a roomate, or any outside assistance. I took advantage of my company 401k using a mix of pre-tax and post-tax dollars. Fast forward to today….
Almost 5 years later I have $35k in my retirement. $35k is more than the average American family (https://www.cnbc.com/2016/09/12/heres-how-much-the-average-american-family-has-saved-for-retirement.html) in the 32-37 age range. Considering I’m not a family and it’s just me I’m doing alright. However alright isn’t enough.
It’s 2018. My earnings are the highest they have ever been in my entire life. With income cometh taxes. As a single income person in an apartment, no kids, having graduated college a decade ago, the amount of government services I use is far lower than other groups. Without giving away my salary, if I didn’t contribute anything to retirement I’d have to pay uncle sam the equivalent of *411* hours worth of work. *10* weeks of work just for taxes and I don’t even own a home. Not on my watch.
So after a lot of back and forth between paying my last debt off at 1.9%, vs 20% of my salary in taxes I decided to amp up the retirement, raising my contribution total from 6% to 20%. That lowers my burden to 328 hours or ~8 weeks. Yes I will owe taxes later on in life, but presumably come retirement I will be in a lower tax bracket. Also betting that social insecurity won’t be around.
Will I be taking home less money than before? Absolutely. However without $2k/mo I was paying on credit cards I’ll still have more disposable income vs even 2 months ago. I even might be able to double up on car payments, but taking things one step at a time…
Speaking of car payments I made my first principal only payment this week, $100. That puts me at $19,980.57 as of 2/24/18. 1.9% is only $380/yr in interest. Some folks pay more than that on a credit card in one month.
Last but not least I’m learning to enjoy life more. Money is important but you can’t let it stress you out. Especially after reaching huge milestones…. A few examples of mine:
1999 – Started my first job at $5.15/hr
2001 – Finished HS
2003 – Finished Associates Degree
2005 – Finished Bachelors Degree
2008 – Finished MBA
2011 – Left Long Island for Dallas
2012 – Got job in current industry
2013 – Got a raise, then got better paying job in industry, started a 401k
2016 – Paid off student loans
2017 – Got a promotion, incurred $7k+ in medical debt
2018 – Medical debt gone, new job, maximizing 401k contributions for the first time in my life
Still want to travel and experience life more. The money stuff should just be a footnote. A couple nice things are cool, just don’t get obsessed with them. Don’t do stupid things like being invested solely in bitcoin, or a single stock with no diversification.
Beyond that, I’m working on my environment, overall stress levels and health. My best friend who is also my ex moved away with his husband to Massachusetts. I’m still looking for a relationship after almost 39 months of being single. Seems like folks are getting engaged or married left and right on social media. I’m lucky if I get a second date. Emotionally I’m a bit beat down. Horrible track record dating-wise, but this isn’t really the right venue. Keep fighting the good fight. ❤