Good day EarthShakinRaz.
Sheesh, another banner open for the market. I wonder how high it can go before everyone decides it's too good to be true and bails out? Morning, TD.
Don't know, but it's been quite the ride!
I got 1.2% on my liquid savings last year. I decided 6 months salary was too much liquid, so I dropped it to 3 months and moved more into the market on Dec 15. That's grown 6% since then, and at end of month I made us much in dividends on that money as I'd earned in interest on it past twelve months. Now I'm not even sure I should keep 3 months salary liquid. But that's what all the experts say to do.
Between you and Tony this has been a fascinating banter day.
I was about to post a photo of my empty wallet.
Yours is empty? Mine is full of moths where the money should be.
Yeah, yeah...I expect all you guys have a lot more assets than I do. I've been on the Banter longer than I've had any money invested other than my state retirement account. I'm a latecomer. And I had to break my leg to pay for it. I'm trying to make up for a lot of lost time.
Oh, yeah, I'm just...fooling with you guys. Definitely...
I've got twelve years to retirement at the state. I have a net worth of maybe $250k. I've got two kids in college which is probably going to cost me $150k before all is said and done. At current projections, assuming no major crises, social security doesn't go bankrupt, and no more than two moderate recessions, I'm looking at retiring on a state pension of about $2k a month and social security of about $2k a month, and if I'm lucky maybe $300k saved up and $300k in home equity by then. That makes me better off than most Americans, I'm told, but likely about a million short of ideal with very little margin for error or another Great Recession (which set me back about 38%).
Of course, if I get cancer or die on the motorcycle, then the wife will be a millionaire, so there's that.
Do keep in mind that there is a "catch up" contribution available for 401K from age 50 on. You can deduct up to 6K above the regular maximum of 18K. Adds a nice little something both in reducing taxable income and deferred tax savings.
I work for the state. No 401(k). I have something similar, except no matching and I can't increase the payroll deduction amount unless I change agencies. And there's no way to do a catch-up contribution. I could defer salary, but that doesn't pay off as well as getting the money into the market.
That account has been doing pretty well lately. 14% or so. But it's a retirement-date targeted fund, and has no options for configuring or weighting. Completely under control of the state Investment Board.
Interesting. Don't doubt that the state can screw up any plan, but the critieria are set by the IRS, not really the plan.
https://www.irs.gov/newsroom/irs-announces-2017-pension-plan-limitations-401k-contribution-limit-remains-unchanged-at-18000-for-2017
Yes, and I believe it's a 403(b) plan, but as the instructions state, catch-ups can be contributed "if permitted by the plan." Ours, it would seem, doesn't...though there may be some mechanism available that I am just unfamiliar with.
Even so, in the current market I'd be inclined to drop my money into my personal Roth than hand it to the state, because I have more flexibility. But I'm running the numbers to see what effect the new tax law is going to have.
