Retirement Nestegg Report – March 2011

Retirement Nestegg Report – March 2011

Another very strong month for my retirement nestegg report despite the fact that the SP500 was slightly negative for the month. Once again my investment performance, especially my individual stocks have greatly outpaced the SP500. I also had a rather large 401k contribution this month due to a rather large bonus I received at work. I also got my annual raise (4%) which bumps up the contributions somewhat.

I have not contributed to my individual stock accounts since 2008 since we are saving for a house, yet those accounts are growing so fast that they are still outpacing my 401k where I am contributing about $15,000 a year. Maybe making me rethink that logic, but at my current contribution rate through work it is guaranteeing I am getting 100% match of my 401k contributions up to 9.5% – so in reality I am contributing 5% of my salary to get 14.5% total contribution which is pretty kick butt and hard to pass up and rely on my continued stock picking prowess to beat the essentially 100%+ match I get through work. What I should be doing is stopping saving for that stupid house.

Anyway here is the report.

Traditional Rollover IRA – $14,191.79 (+4.15%)
My Roth IRA – $50,545.87 (+4.39%)
Wife Roth IRA – $28,615.95 (+1.41%)
Current Traditional 401k – $91,874.98 (+3.99%)

Roth/Traditional % = 42.73 % (tax free)

Total Retirement Nest Egg $185,228.59 (+3.70%)

Monthly Contributions $2,740.04 (401k)
SPY Performance -0.04%
My Monthly Investment Performance +2.17% (+2.21%)
My Monthly Individual Stocks Performance +3.42% (+3.46%)

  • Why did you choose a ROTH IRA? I put all my clients into traditional IRA’s because that way they have more buying power when they invest in the market.

  • MFJ

    I chose Roth IRA for a number of reasons.

    1. My tax rate is essentially zero so I’d much rather take care of the taxes now on a small amount of money rather than having to worry about it later when my tax rate will be higher.
    2. I believe tax rates in general will be much higher in the future – or at least won’t be any lower.
    3. Your point about purchasing power is moot if you max out the accounts like I did each year.

    There is no right or wrong and no one can know for sure – which if you look at my report I am split about 50/50 post-pre tax retirement accounts. Each persons scenario will be different as to whether Roth/Traditional will be a better fit for them.

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