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FMF on Hiatus
Well, as they say, all good things must end. Or at least take a break.
I started this blog over nine years ago simply to chronicle my financial thoughts and progress. Now, nearly a decade later, it's time to put down my keyboard. Whether that's for a moment or forever is yet to be determined. But as of now, it's clear that I need to take a break.
The simple reason for this is that maintaining the blog is much more time and effort than I have at the moment. Even to write one post a week. Even to manage guest posts. It's just too much. Because running a functioning blog is not just posting. It's also managing comments, answering emails (and I get 30-40 a day!), keeping up with trends, looking for story ideas, and on and on.
At this point I just have other things in my life that are more pressing/important. Namely:
Help a Reader: Maxing Out after Reaching 401k Limit
Here's an email I recently received from a reader:
Some background info: My baseline gross salary is $74k, but with recent overtime it's looking like I'm on pace to make closer to $85k this year. I've been contributing 30% pre-tax dollars to my company 401k plan. They match 50% up to the first 8% I contribute, so basically I get a free 4%.
On my previous pay period, I hit my max $17,500 pre-tax contribution limit. In that same pay period, there was also a new line item for after-tax contribution spillover, so now I have $280 of after-tax money in my account.
My max employer match is 4% if I put in 8%. I just called my benefits office and they clarified this is applicable to both pre-tax AND after-tax contributions to the retirement account.
I'm 25 years old and don't have a Roth IRA setup yet.
Reader Profile: KP
The following is the latest post in my "Reader Profiles" series. Each post in this series details the financial situation and challenges of an FMF reader. The purpose of this series is to help us all identify with people like us (in similar situations -- not all will be, of course, but eventually I'm sure you will find someone like you here), get to know the frequent commenters on the site, and hear some financial wisdom/challenges from people other than me.
If you're interested in contributing to this series, then drop me an email. The series seems to be very popular with readers and I need a steady stream of new ones to keep it going.
Help a Reader: Dealing with a Pension
Here's an email I recently received from a reader:
I was hoping to get some help from your readers in determining my best option.
I received an offer from a former employer with whom I am entitled to receive a pension when I turn 65. I am currently 51.
I have 3 options:
1. Do nothing. When I turn 65 I would receive $187 a month for life with a 100% survivor payment for my wife.
2. Take a lump sum payout now of $13,705 which I could take as cash, rollover to an IRA or Roth IRA.
3. Take an immediate annuity that pays $67 a month for life with a 100% survivor payment for my wife.
What's your advice for him?
The New Retirement Rule?
I'm not sure they were trying to do this, but I think Time magazine just came up with the new rule for having a great retirement nest egg. Their thoughts:
Save 15% of pay for 30 years and you will be fine. Save for longer, and it gets much easier.
A few thoughts:
10 Things Americans Waste Money On
Dave Ramsey lists 10 things Americans waste money on as follows:
1. Credit card interest
2. Deal websites
3. Appetizers
4. ATM fees
5. Overdraft fees
6. Speedy shipping
7. Designer baby clothes
8. Unused gym memberships
9. Premium cable packages
10. Daily coffee trips
Personally, I think some of these are wastes (like #1) and others are just personal preferences (like #3). I'm much more "spend your money however you like as long as you still save a bundle" today than I was a few years ago. Everybody has things they like and things they don't. So as long as they practice moderate and selective frugality, it all works out for the best IMO.
That said, here's how I rank on these:
Costs of Commuting
Personal Capital lists the surprising costs of commuting. The author begins with this story:
I usually leave the house each morning at 6:50. I hop in the car and drive to the train station, usually getting there around 7:05. I spend eight minutes waiting on the platform, using that time to catch up on news or download a podcast for my train ride. My train arrives at 7:13, and I get off at 8:02. From the train station, I walk 1.2 miles to the office, usually arriving by 8:30. My total commute time? An hour and forty minutes, one way.
Ugh. How brutal is that? An hour and forty minutes each way. This would not be living for me.
They then give some stats on commuting:
A Film About the Retirement Crisis
Most people like movies where the main characters get into a world of hurt but then, somehow, escape at the last minute and all is well.
The movie I'm about to tell you about is not like that. At least not completely.
The first part is what you'd expect (the world of hurt part), but unfortunately there's no happy ending.
Yep, it's a film about the retirement crisis in America. Here's a video summary of the movie:
The film covers several people planning to retire with absolutely no financial plan to do so. As you might imagine, that plan isn't going well.
A few key quotes:
The Wealthy Look at Money Differently
The Business Insider says that the way millionaires view money is different from everyone else. Here are their thoughts and my comments on them:
1. The wealthy focus on earning.
I have to agree on this one. That's why I post so much about managing your career, growing your investments, and investing in real estate.
2. The wealthy use leverage.
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