FCL’s Alternative Frugality 2023

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ChristmasTrees
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Joined: Fri Aug 28, 2015 12:53 am

Re: FCL’s Alternative Frugality 2023

Post by ChristmasTrees »

Missing you!!!!!!
floridacatlover
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Joined: Fri Aug 28, 2015 7:21 am

Re: FCL’s Alternative Frugality 2023

Post by floridacatlover »

It turns out that I don’t need the extra $1k that I started taking from my IRA in February. For both months I’ve put it back into my regular savings. I thought about stopping the withdrawal but decided to continue taking it and pay the taxes while I’m not yet collecting SS. I’m pretty sure I won’t need it this year.
HappyDaze
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Joined: Tue Oct 15, 2019 11:11 am

Re: FCL’s Alternative Frugality 2023

Post by HappyDaze »

Florida, if I'm not being too nosy (and I can be, I know this), do you have a traditional or ROTH IRA? My brother has a ROTH and swears it's the way to go - but I say not necessarily because if you're having money put away pre-tax, you are lowering your taxable income (which for me has been a huge benefit). Yes, I will pay tax on the money later, but it will be when both my income and expenses are a lot lower.
"All his life he tried to be a good person. Many times, however, he failed. After all, he was only human. He wasn't a dog."

Charles M. Schultz
floridacatlover
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Joined: Fri Aug 28, 2015 7:21 am

Re: FCL’s Alternative Frugality 2023

Post by floridacatlover »

HappyDaze wrote: Fri Mar 31, 2023 8:25 am Florida, if I'm not being too nosy (and I can be, I know this), do you have a traditional or ROTH IRA? My brother has a ROTH and swears it's the way to go - but I say not necessarily because if you're having money put away pre-tax, you are lowering your taxable income (which for me has been a huge benefit). Yes, I will pay tax on the money later, but it will be when both my income and expenses are a lot lower.
I have both. The IRA that I take money from is actually a converted 401k from work. So that is a big chunk of my savings and is taxable because like you my contributions lowered my taxable income when I was working. If I’m remembering what you’ve said in the past, also, you get a really substantial % match from your employer, far more than I ever received and that is a big plus.

At some point I also started saving in a Roth IRA and also converted some money and paid the taxes on a “profit sharing” plan from the company I worked for in D.C. I’m “saving” that money to use if taxes increase or I’m in a higher tax bracket.

I will say looking at the federal government’s finances and debt, I believe that no matter who is President and in Congress in years to come, taxes will go up even for the middle class. That is my guess.

Don’t worry too much about Roth vs. traditional. You are saving and that is the important thing in my opinion. You are going to be fine I’m absolutely sure.
HappyDaze
Posts: 4186
Joined: Tue Oct 15, 2019 11:11 am

Re: FCL’s Alternative Frugality 2023

Post by HappyDaze »

Thanks, Florida. Sounds like you have quite a diversified portfolio. I think that is great.

Yes, my employer contributes 3% upon hire (if employee contributes 1%). After 5 years, employer contributes 5% (if employee contributes 2%). After 10 years, employer contributes 7% (if employee contributes 4%).

I have always made sure I'm getting the maximum employer contribution. I am currently contributing 20% on my own and getting the 7% from employer. I wish I could afford to contribute the $30K per year max contribution for people over 50.

I am the person who explains benefits to new hires. When we talk about the retirement plan I tell them "please enroll - please do not leave free money on the table."
"All his life he tried to be a good person. Many times, however, he failed. After all, he was only human. He wasn't a dog."

Charles M. Schultz
floridacatlover
Posts: 8056
Joined: Fri Aug 28, 2015 7:21 am

Re: FCL’s Alternative Frugality 2023

Post by floridacatlover »

HappyDaze wrote: Fri Mar 31, 2023 11:34 am Thanks, Florida. Sounds like you have quite a diversified portfolio. I think that is great.

Yes, my employer contributes 3% upon hire (if employee contributes 1%). After 5 years, employer contributes 5% (if employee contributes 2%). After 10 years, employer contributes 7% (if employee contributes 4%).

I have always made sure I'm getting the maximum employer contribution. I am currently contributing 20% on my own and getting the 7% from employer. I wish I could afford to contribute the $30K per year max contribution for people over 50.

I am the person who explains benefits to new hires. When we talk about the retirement plan I tell them "please enroll - please do not leave free money on the table."
That employer match is SO good. Anyone who doesn’t take advantage of it is foolish. Our match was only 1 1/4%!

I could never afford to contribute even close to the limit of the 401k but I’m a squirrel and did what I could do and was helped by a good stock market for many years. My biggest financial mistake was taking my pension at 55. I lost a lot. (Most companies today don’t even have pensions so I’m thankful for what I get even though there is no COLA with it.) It wasn’t by design but looking back at mom’s “diary” (calendar), her eyesight started failing drastically almost to the month when I retired and took the pension. So I never regretted it and feel that God planned it that way.
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