I recently shared, that we saved $85,300 in 2016. It was an amazing goal to hit. This year, we are going to set the bar a slight bit higher and target a goal of $93,100.
Here is the $93,100 goal broken down by pre-tax and post-tax investments:
- 401K Plan contribution $13,000 + Company Matching $4,500 = $17,500 My contribution to my 401K plan will be lower than it was last year due to restrictions from my employer. They will still match me up to $4,500.
- Husband’s 403B Plan $18,000 and 457 Plan $18,000 = $36,000 My husband will continue to contribute the maximum to his two retirement accounts.
- 2 Backdoor Roth IRA’s = $11,000 We will fund 2 backdoor Roth IRA’s this year through Vanguard.
- Kids Savings (529 Account or Investment Fund) = $4,000 We will either save money in 529 accounts (which are deductible on our state tax returns) or we will invest in an after tax index fund. We are undecided between the two options because we would like more flexibility on the use of funds when they come of age.
- Index Investing = $15,000 We want to invest up to $15,000 into index funds through Vanguard.
- Mortgage Additional Payments = $9,600 We will continue to pay an additional $800 a month towards our primary mortgage principal balance.
So there is the $93,100 broken down by type of investment. $53,500 is in pre-tax accounts & $39,500 is post-tax accounts. This is also $7,800 more than we saved last year. My 2016 number did not include my 401K company match, while this year I decided to include it. Adding back my company match in last year’s final number, the difference from my 2016 final number and my 2017 goal is only around $3,300.
Honestly, it may take a little more of a concentrated effort to hit our 2017 goals. Our child care expenses will increase because we have two children. Not to mention, I had the limit imposed by my company on how much I can contribute to my 401K plan and will have a smaller bonus due to the time I took off for maternity leave.
Luckily, there is less effort needed to hit the pre-tax contributions plan because they are automatic. We also set our additional mortgage payments on autopilot. The post-tax investments, such as, index investing, kids investment funds & Roth IRA’s require more manual action. This may increase the margin of error in not being able to hit those particular goals.
Like you, I still struggle with prioritizing our goals while balancing the now and future. I would love to redo our backyard and take a nice family vacation this year. However, I am not sure we will be able to do those things AND hit all of our 2017 plan numbers.
It will be an continuous balancing of the budget to really see how much we can accomplish this year and I am ready for the challenge.
If there is one thing that I want you to get out of this post, its that you too can save aggressively towards your financial goals. I often hesitate on revealing our actual savings number because I don’t want to discourage you if you cant save as much as we do. It’s really not about the actual number. Its about challenging yourself to save and invest as much of your income as reasonably possible.
Did you set your 2017 savings & investment goal yet? How are you planning to hit your numbers?
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