State of the Wallet: November 2013

So, how's your money doing?  I've made some progress towards my goals, although not as much as I'd like.  When we last left, these were my goals: 

  • Kris' 401k contribution needs to be moved to 10% - DONE!
  • Kris' 401k needs reallocation to lower fee funds - DONE! (I didn't need to move anything)
  • Build my $5K-$10K emergency account - WIP (a very slow WIP)

I'm thrilled that we're now putting 10% of our salary (both of us) into our 401ks.  Kris' work adds on another 10% and mine adds 3% additional.  I've calculated that if we do this for 9-10 more years, we will have more than enough for our post-59.5 years (thanks in part to us having contributed to our 401ks for 9 or 10 years already).

Kris' money is in TIAA CREF since he works in the educational/medical field.  I'd heard that TIAA CREF has craptacular offerings for investments so I wanted to make sure that Kris' 401k money was invested in the lowest fee options.  The good news is that they were and the bad news is that the lowest fee options were around 0.5% fees.  I prefer Vanguard's 0.17% I get in my 401k but what can I do? 

The emergency fund growth is going slow but I was able to put money INTO my savings account in October- the first time in a long time.  I'll keep this up until I build up my emergency money. 

Another good thing I did recently was to sign up (and NOT sign up) for benefits during open enrollment at work.  

  • I was able to realize I was paying a lot of money for stupid junk (like a critical illness indemnity policy that gives me $15k if I go to the hospital sick).  I mean, really?  Why was I paying $20 a month for that?  If I have an emergency fund and disability payments, I'll be fine.  Plus, the odds of my becoming gravely ill are low.
  • This year I had the option of signing up for an HSA (Healthcare Savings Account) since our health plan at work is an HDHP.  I had an FSA (Flexible Spending Account) before and it is great but the money expires at the end of the year. HSAs are AWESOME.  They are (1) an investment account (2) a debit card accessed account (3) a TAX FREE account and (4) a non-expiring account. For 2014, an individual can contribute up to $3330 to their HSA.  You can only use the money for medical expenses but, since the money doesn't expire, you can stockpile tax free money in it and let it grow until you actually get sick!   And, once you turn 65, you can use it for anything (but you'd pay income tax on non-medical expenses).  An HSA is an incredible tool- use it if you can!  My work is putting in $450 and I'm pitching in another $2000.  I'm planning on buying a new hearing aid next year- now I can do it income tax free!

Okay, so my goals to work on coming up are: 

  • Build my $5K-$10K emergency account 
  • Open my first non-retirement investment account -this is the money to get me from early retirement age to when Kris turns 59.5, at which point we'll be able to withdraw from the 401ks

Happy money, everyone!  Anyone make any great monetary choices recently?