$100,000 in principal by Age 30 – 2007 year end recap

$100,000 in principal by Age 30 – 2007 year end recap

I figured this would be a good time to check up on my $100,000 by age 30 goal. I have a feeling that I’m actually falling behind on this one as I know I have over $3,000 in Roth IRA deposits that I am behind on. I’m pretty sure I have the money to make the deposits and they will likely be deposited in the next couple weeks, but unfortunately they will not make this report.

The whole idea of this goal was to make sure that I was in a good situation in regards to my retirement planning. You can go ahead and read the original post here, but idea was to give myself an aggressive savings goal that would have me well on my way in my retirement planning. You can see where I currently stand vs my original plan below.

The gameplan

Year

Age

Roth IRAs

Traditional 401k

Roth 401k

Total Contributions

2004

24.5

$6,000

$1,146

$0

$7146

2005

25.5

$8,000

$8,268

$0

$16,268

2006

26.5

$8,000

$0

$9,380

$17,380

2007

27.5

$8,000

$0

$11,424

$19,424

2008

28.5

$10,000

$0

$9,710

$19,710

2009

29.5

$10,000

$0

$10,281

$20,281

Totals

30

$50,000

$9,432

$40,795

$100,227

The Actuals

Year

Age

Roth IRAs

Traditional 401k

Roth 401k

Total Contributions

2004

24.5

$6,000

$1,146

$0

$7146

2005

25.5

$8,000

$8,268

$0

$16,268

2006

26.5

$8,000

$0

$10,592

$18,592 +$1,212

2007

27.5

$4750

$13,852

$2050

$20,652
+$1,228

Totals

28.5

$28,750

$22,761

$12,648

$62,658
+$2,440

As you can see I’m currently a little head of schedule. Part of this is due to me switching jobs and making a lot more money and contributing to a traditional 401k, instead of a Roth 401k. So it actually looks like this goal is going to end up being pretty easy for me in the end. In fact by my calculations – I’ll probably beat it by $5,000 or $10,000 dollars. That bad news is I can’t raise it any higher because I’m already planning on maxing out my 401k and IRA contributions going forward so there is not anywhere else to contribute money into.

I’m actually a little disappointed here as up until this year I really really had to push myself financially to meet my goals and stay on track. I had to live incredibly frugal and spent hours and hours studying, learning, and finding new ways to save or make money. Now with my new job things are coming way too easily and I need to find new ways to challenge myself.

Look for a new series of goals early next year dealing with finding ways to retire early. I’ve always sort of envisioned myself changing career paths in my late 30s or early 40s and I think it’s time I start concentrating on the financial feasibility of such a goal. In the meantime I’ll keep updating my little chart on this goal, but for the most part assuming I don’t lose my job or become financial irresponsible – it is in the bag.

  • B.Bradham

    >>>

    Have you looked into an HSA (Health Savings Account?) It is a bit of a PITA: you must have health insurance that qualifies to let you have an HSA (It must be high deductible and I don’t know what else. Also, you cannot be covered by any other health insurance besides this high-deductible insurance policy.)

    The point is, I’ve read of healthy people using these as an additional retirement account. HSA’s are tax-deferred and do not affect contribution limits on retirement accounts in any way.

    You can only take money out of HSA’s for qualifying medical expenses but that rule changes when you hit 65. At 65 you can take money out (or not if you don’t need it) for any reason at all with no penalty.

    HSA’s are not like FSA’s (Flexible Spending Accounts) where you must spend the money by the end of each year or lose it. An HSA’s balance rolls right over at the end of each year and continues to accrue.

    So, if you are a healthy sort who doesn’t run up a lot of medical expenses, this might be another avenue to put aside cash tax-deferred for retirement.

    I don’t do this myself, because my employer pays entirely for my health insurance and they don’t offer a high-deductible plan that would qualify me for an HSA.

    Just something to think about if you are still casting about for ideas on how to set aside more money for retirement.

  • MFJ

    Thanks for the great idea – unfortunately or fortunately depending upon how you look at my health insurance has a $0 deductible so I cannot qualify. I’ve actually pushed HR to start looking into plans with large deductibles so I can take advantage of it, but unfortunately I don’t see that happening in the short term.

    I mean long term they will be forced to do it as it’s the only thing that will align people’s spending with the health care costs and motivate them to stay healthy, but alas I’m out of luck in the meantime.

    Thanks for the great comment!

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