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Thread: Money

  1. #751
    Darth Small Macheath's Avatar
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    Quote Originally Posted by Drewbie View Post
    50%? Do you just front load the first part of the year, hit the cap, then feel like a raise on the backside?
    Basically, yeah. Fill it up as soon as possible, live off savings (frugal months) while my paychecks are tiny. There are a few reasons to do this, if you have the flexibility. One of them is, you don't have to think about whether your 401(k) is taken care of for the year if you fear a layoff, or you're considering leaving your company.

    Quote Originally Posted by zlordsahan View Post
    Last couple of weeks were rough though and may have taken a bite of these contributions.
    I felt a little bad about it. Jamming money in during the huge spike in January, just to watch it all leak back out. Oh well.

    Quote Originally Posted by Drewbie View Post
    My wife's company does a 50% match with no cap.
    Intuit is crazy, they do a 100% match up to $10k total. So I should get $28,500 in my 401(k) by the time I'm done contributing and they've trued up.

  2. #752
    Tiny Dancer Drewbie's Avatar
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    So your's is just slightly better, with less incentive for employees to max themselves out or really go beyond $10,000. Either way, I'm very jealous.

  3. #753
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    Hey, we front load our 401(k)s too! Our employer allows 100% and does a true-up, so we max out ASAP. Bonuses are between the normal paychecks in February, so our full bonuses go straight into the 401(k) which helps max out faster.

    I just checked and I'll be maxed next payday which is March 2. Wife will max March 30. Then it's wait until the last paycheck of the year to get the 50% of 6% match if still employed and build up a big pile of money to live off for first quarter of next year.

    We have a lot of fun around bonus time telling people who are complaining about tax withholding that our full bonus will go straight into the 401(k). If they press it we tell them our net paychecks have been zero since the beginning of the year. Real fun at happy hours.

  4. #754
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    Using creditKarma for taxes- so far so good. It was nice that I could upload my 2017 taxact return to prepopulate some data. For some reason it wouldn't read the W2 upload, but whatever. There is a pmi deduction that congress may or may not extend, so if I file now an they DO extend, I'd have to amend later to claim it, but presumably we're talking no more than ~20$. Also state taxes are again 0$. Mainly because there aren't many (in my case any) deductions and hitting the right withholding generally keeps them accurate.

    Side bonus- getting to see my actual credit scores. Much better (and higher) than Mint's estimate.

    I'm freaked out a little bit by the 401k "stuffing" you guys do early on, and also jelly at the maxing out of such. My wife's does a double match, but it caps out at 5% from the employee (ie +10% from employer). Anything beyond that isn't matched. When I did a stint back at J&J we did some 457Roth stuff to pack away a little extra, but when I stopped so did the "extra".

  5. #755
    Darth Small Macheath's Avatar
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    I just put together an "accounting" spreadsheet with my last two years of income, taxes, extra mortgage payments, and lumps shipped over to Vanguard:

    • 42.74% of my income went to various investments
    • 9.30% went to my mortgage
    • 21.46% is bills, car payments, insurance, groceries, "fun", etc.
    • The rest is taxes and emergency fund, I guess?

    Sometimes I wake up at 2 AM and think to myself "omg am I saving enough for retirement?" But I'm largely okay with those numbers.
    Last edited by Macheath; 03-21-2018 at 12:03 PM.

  6. #756
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    If you count your house as an investment that means you're saving over 50% of your income. I think you'll be fine.

  7. #757
    Darth Small Macheath's Avatar
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    I just got an ad for the "Chase Sapphire Preferred" card, and was deciding whether to apply for one.

    So far, I've avoided crazy "points/miles-based" reward programs in favor of straight cash back. My current "Citi Double Cash" card does more or less what it says: a total of 2% cash back, which is extremely easy to figure out. What's the cash value of a Sapphire mile?

    Well, the Chase offer trumpets a 50,000 point reward (if you spend $4000 in the first 3 months). They proclaim that the cash value of 50k points is $500, or $625 if you use it for airfare/hotels ("miles"). The normal accrual rate is 1 point per $1, but that exchange rate is the interesting part.

    In the best case (airfare), $625 for 50,000 points is an 80:1 ratio. So if you spend $2000 in a month and get 2000 points, then exchange those for airfare dollars, you'd have yourself $25 in value, or the equivalent of 1.25% cash back.

    The 50k point "bonus" reward after signup is hard to pass on. But on the other hand, this Sapphire Preferred card has a $95 annual fee (after year one), so that offsets it a bit.

    Can anybody make a case for airline mile rewards over cash? Because right now I can't see any reason to think about it further. Do they make all the exchange rates complicated (2X points for dining! Points for miles at participating programs!) to obscure the fact that it's just not as good of a reward?

  8. #758
    Darth Small Macheath's Avatar
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    Quote Originally Posted by Macheath View Post
    In the best case (airfare), ... the equivalent of 1.25% cash back.

    (2X points for dining! Points for miles at participating programs!)
    Maybe the above is the key. You get this card, you use it exclusively for dining (and anything else that gets you 2X points), then you exchange your points for airfare, and voila: suddenly your exchange rate equates to 2.5% cash back.

    But that extra 0.5% (over Citi Double Cash) on dining purchases is going to have a hard time balancing the $95 annual fee. That's roughly $8/month in fees, which means you'd need to spend $1600/month on dining alone and exchange all the points you earn for airfare, just to break even.

  9. #759
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    Not sure if this belongs here, but my wife and I want to put a will together, mostly so the kids go to the right one of Karen's sisters if we both die. We're not sure where to start. Legal zoom has will stuff but we think maybe having an actual lawyer work on it might be the better option. Has anyone else tried to do a will?

  10. #760
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    I play the credit card game, so let me chip in with my personal experience.

    To get the most return, you will need to diversify which cards to use. The Costco Citibank card gives me 4% cash back on gas, 3% cash back on restaurants ans travel, so I usually use it for those. The American express Cash gives me 3% cash back on groceries and Department stores, so I use it for those. For everything else, I use the Citi Double cash back for the 2%. Also, I have Chase Freedom and Discover both of which offer quarterly cash back promotions (eg. 5% cash back at Target, or Home improvement stores) so I use those if appropriate. For Amazon purchases, which is a sizable amount, I stick with Amazon Prime Card for the 5% cash back.

    Yes, that may sound complicated but it's really not and the cash back I get at the end is significant. To make things easier (particularly for my wife), I maintain a little table that I update every quarter to remind me which card to use for each category. I keep it on my phone and check it when I'm in doubt.

    I got the Chase Reserve card last summer before going on a cruise. I used the bonus to pay for hotels and tours costing over $600 so it was well worth it but I don't use it anymore. I have no plan to pay the $95 annual fee and will close the account shortly. [Note: Closing a credit card account will reduce your 'Available credit', which will bump your credit utilization suddenly, which will hurt your credit score. Depending on the credit limit on that account, the hit may be very hard (I've seen a 40 point drop in FICO after a 15,000 credit line drop). The trick is to transfer your credit line to another Chase card before closing that account.]

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