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My Easy 401k to SEP IRA Rollover – Stop Procrastinating!

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I worked for the Reynolds and Reynolds company (formerly Universal Computer Systems) from June 2005 through July 2011.  In those years, I always contributed the minimum necessary to receive the maximum company match – 6%.  I also ended up working there for 6 years, so I was fully vested.  But after I left, since I couldn’t simply transfer the 401k balance to our Roth IRA’s, I just shifted it all to the back burners of my mind. Handling My 401k to SEP IRA Rollover Fast forward to 2015.  My hubby and I finally opened a SEP IRA to fund with as much pre-tax self-employment income as allowed.  I knew I could move my stagnant 401k into that SEP IRA but didn’t want to put in the effort to find out exactly what I needed to do.  Then 2016 was consumed by life and loss.  By the beginning of this year, I realized I couldn’t keep putting life decisions off until everything was rainbows and sunshine since that isn’t how real life works.  Adulting…ugh.  😉 I carved out a few hours of a day a few weeks ago and called the company that holds our SEP IRA and asked what I … Read more

How Can I Save a Million Dollars for Retirement?

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This is a guest post from Pauline of  Pauline is a blogging buddy of several years.  Enjoy! When we talk about saving for retirement, a number that comes back often is $1,000,000. “I want to retire a millionaire”. “You need at least a million to live well”. “I couldn’t sleep at night if I had less than a million”. But how exactly do you save seven figures over the course of your career? Well, today, I have good news if you are in your 20s or 30s – time is on your side, and achieving a million dollar net worth by the time you retire is not as complicated as it seems. The Math of a Million Assuming an average market return of 8% per year, saving a million dollars will take: 42 years if you save $250 per month 34 years if you save $500 per month 26 years if you save $1,000 per month The 42 years solution really only works if you are 23 and plan on working until you are 65. Not my thing, and likely not where you are at. On the other hand, saving $1,000 a month is a bit steep if you … Read more

Our Financial Plan for 2016

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Is it really cheaper to get a roommate? Living with another person is a way to save on rent, but what about the other costs of a housemate that you need to add to your budget?

After working out all of the tax numbers last time, I started immediately thinking about our overall plan of attack for 2016. We have many plates spinning in the air at once, and I rather they didn’t go splat (I could have said “crashing down” but splat sounded better). Current Expenses In the expenses department, we have income taxes to save for, property taxes on two houses to save for, one mortgage, health insurance, one car payment right now (0.9%…I’m keeping it), and then the stuff like food, utilities, life insurance, monthly fun, pets, etc. Altogether, a monthly nut between $5500-$6000. We generally bring in $7000-$9,000. We use the extra for savings and fun. Current Savings and Plans In retirement savings, our main accounts are two Roth IRA’s and a SEP IRA. I am aiming to save around 25% of all of our pre-tax earnings into those accounts every year. That means $20,000-$25,000 per year. In 2015, it was $11,000 into the Roth IRA’s and $11,000 into our new SEP IRA. For 2016, we’ve already funded the $11,000 into the Roth IRA’s and will need to put aside the $10,000+ for the SEP IRA over the next 8 months. In … Read more

Stole from Ourselves Temporarily

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We base our estimated quarterly taxes on what we paid in total on the previous year’s tax return.  That means that we paid the IRS a total of what we owed for 2013 in 2014.  Since we made much less in 2014, that then means that our tax return is going to be substantial in a month or two.  Substantial like somewhere between $7000-$9000. Since we are 99% certain of this, and I also thought oil and gas stocks were at a solid low point last month, I stole $5500 from our emergency fund to throw into my hubby’s Roth IRA for 2015.  We invested it heavily in a couple of oil and gas companies.  We’ve made $225 so far on our stock purchases, but the hope is they continue to rise for at least the next year or two.  🙂 The Trick The trick to stealing from one of your personal income investments to grow another seems to be following your own terms for payback.  For example, I made myself a promise when I was using the $5500 from our emergency fund that I would pay it back with our tax refund.  No ifs, ands, or buts about it. The first … Read more

Still Want to Retire…

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Four years ago, I posted a response to another blogger who wrote about wanting to go to work whether he had the money to retire or not.  Thousandaire had asked the question below.  He answered that he would want to keep going to work every day. If you had millions in the bank, would you retire at 46? I don’t mean retire where you go work another job. I’m talking where you spend the rest of your life pursuing hobbies and spending time with family. My Retirement Plans in 2010 Back in 2010, I responded with my retirement plans checklist (scroll down further) and these paragraphs: I know a few people who define themselves through their jobs.  I also know a couple of people who have found their dream job and enjoy waking up to it every morning.  I do understand that those people may not want to retire until they physically cannot get out of bed anymore.  More power to them. For the rest of us though, retirement is the ultimate dream, right?  It is definitely what gets me up on weekday mornings.  I blog because I enjoy it, but I go to my “real” job everyday to keep up … Read more

Current Retirees

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If you haven’t heard about it yet, MoneyTips principal Michael Dubrow and FinCon founder Philip Taylor are hosting the Retiree Next Door social movement today!  There are more than 70 bloggers and podcasters participating – all hoping to bring some attention to retirement planning.  You can download the Retiree Next Door eBook free of charge from now through September 30, 2014. The Current Retiree at a Glance Moneytips sent over the survey results that they gathered from more than 500 retirees from all over the United States.  Here were the most interesting results to me: 81% are fully retired 54% have net worths between $500,000-$5,000,000 58% are male 48% are 70-79 years old 46% have a graduate degree 85% rely on Social Security in some way 73% carry Medicare Their top concern overall is healthcare costs 66% had a Traditional IRA 23% regretted a stock decision at some point 44% spend less than their monthly income, which means that 56% spend more! Only 14% were self-employed 52% lived on a monthly budget 36% never calculated what they needed to save before they retired 51% didn’t save for retirement before their 40’s! 10% still bring in rental property income My Plans That’s a lot of … Read more

Retirement Savings Laziness

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When I read 11 Retirement Saving Tips for Twentysomethings (& Older Folks Too) over at Len Penzo, I realized that Mr. BFS and I are not impressing ourselves now as much as we did in our 20’s.  We were 20-somethings that were amazingly proud of our grasp of the future.  But now that we are actually content with our jobs – the online business and our hobby jobs – we stopped counting down the days until retirement. My View of Our Retirement Savings I’m very happy with my 20-something self and a little disappointed with my early-30′s self. I started my first “real” job at 22 – one month after I graduated from college and 3 weeks after I got married.  I vaulted into my 401k as soon as they allowed it after 90 days, putting in 6% to get their maximum matching.  When I was 25, I opened a Roth IRA and have been maxing it out every year since then.  At 27, I convinced my hubby to open and max out a Roth IRA annually too. But now that we are both self-employed and happy, we still only max out our Roth IRA’s and make a few stock investments every year. At age 29-30, we threw the majority … Read more