401k: Not Just A Bunch of Numbers and a Letter Anymore

I’m one of the lucky ones whose employer makes matching contributions to a 401k. For that reason alone, I contributed enough money to get that company match when I hired on, but only just enough to get that match. Free money, right?

In the past few years I’ve been promoted and have gotten a few modest (cost-of-living) raises as well, but I’ve never increased my 401k contribution. I had a “set it and forget it” mindset, though, and it never occurred to me to contribute more to it even though I make a little more money now. If I wasn’t getting more company match, then anything that I added above that was money that would go into nothingness, and that I wouldn’t ever get to enjoy it.

I was falling prey to a common fallacy with retirement and financial independence: it’s so far away I’ll never get there.

Recently, though, with my adventure into a simpler way of living I’ve realized that minimalism is a route to financial independence. For me, retirement isn’t 62 or 65, it’s more in the 42 to 45 range. That’s only about 15 years away! I can easily remember what I was doing 15 years ago: I was about to start high school. Really puts this time frame into perspective! At least, I don’t feel like high school was that long ago…

Anyway, this made me realize one thing, in bold neon letters: I need to step up my saving game!

Of course, I was doing this somewhat indirectly. I don’t buy stuff just for stuff’s sake anymore. I sold a ton of my junk and I don’t order non-consumable things on Amazon with reckless abandon like I once did. However, this is all after-tax saving, and the more I looked into it the more I realized there was more I could be doing for myself.

So I increased my 401k contribution a few percentage points. Even though my company won’t match my contributions above the amount I was already making, the tax shelter that the 401k provides is kind of like getting free money anyway. Even though I’ll have to pay taxes when I make withdrawals (one day!), my tax-free earnings can grow unfettered until then.

I started off with a 2% increase above what I was already contributing. This amounts to well under $100 for me per paycheck which won’t hurt me at all, and will account for well over $1000 per year at my current pay rate. I’ll look to increase this even more in the near future in order to increase my savings percentage and progress with my goal of becoming financially independent. Right now my savings rate is about 20% but with some more lifestyle changes hopefully I will be able to increase this even further.

Photo courtesy of Wikimedia Commons

It’s Saturday, October 24th!

Spend $25,000 to Save $9,000? by J. MONEY, budgetsaresexy.com. I don’t make quite enough money to have these problems just yet, but it’s interesting to see how the tax code works sometimes, and how the government kind of wants you to save for retirement.

A 23-year-old Google employee lives in a truck by Kathleen Elkins, businessinsider.com. I would definitely do this if my company served breakfast, lunch, and dinner for free. And if they made me work 100% of my waking hours. Relevant Dilbert.

How much is your job really costing you? by Steve, thinksaveretire.com. Unless you live in a truck, probably a lot more than you think. And if you live in a truck because you work 16-hour days, it’s probably costing you more than money, too.

My Three Favorite Really Stupid Reasons Not To Save For Retirement, proceeduntilapprehended.net. I’ve fallen guilty to every single one of these. No more! On a related note, I just upped my 401k contribution, so that’s cool.

BONUS: What I’m listening to this week!

Good Charlotte is in my fall music playlist, and since I’m currently in Oklahoma City and it feels more like fall here than it does in Florida, I pulled out some music that I used to listen to in middle school for all the nostalgia.

Photo: This is why I’m in Oklahoma. My first time climbing a wind turbine, and what a view!

Saturday Links! September 5, 2015

Welcome to the next great month! It might be fall for you, but it is still very hot here in South Florida. It’s great how technology can span the distances so well, and allow me to provide you with this great reading material.

Your job vs. your work: Retirement police, listen up! by Steve, thinksaveretire.com. A great piece about why people want to retire early, and it often involves much less golfing than you would imagine. If it were me, my hobby-turned-profession would be working on classic cars, or writing, or surfing, or any number of other cubicle-less activities.

5 Ways to Make Minimalism Work for Your Budget by Sam Lustgarten, nosidebar.com. A gentle reminder that minimalism and living inexpensively don’t necessarily go hand-in-hand. You can let anything get out of control. Be aware of everything you do, even if you’re doing less of it.

Shadow Work and the Rise of Middle-Class Serfdom by Brett and Kate McKay, artofmanliness.com. I’ve certainly noticed this in my daily life, I just never realized there was a name for it. One thing I have noticed, however, is that when conveniences are added to our lives, we rarely use them as opportunities to slow down. Rather, we use them as opportunities to cram more into our lives.

BONUS! What I’m listening to this week:

The latest from my favorite West Palm Beach band, Raggy Monster.

Photo: Spring 2010, surfing in the Outer Banks of North Carolina. I took a week long surf trip on the road with my truck and one of my friends from high school, covering every surf break from Virginia Beach to Jacksonville. 

Saturday Links! August 22, 2015

The Routine is the Enemy Of Time, retire29.com. An interesting view on living life, and a way of life that asks us to pay attention to each moment before they all disappear.

Three Months of Early Retirement, livingafi.com. Early retirement has been a dream of mine for a long time, and it’s good to read about someone who’s just taken the leap. There’s hope out there!

What We Won’t Miss About Working, ournextlife.com. Speaking of which…

BONUS! What I’m listening to this week:

Just a good, honest jam.

Photo: Got a great deal on this surfboard, a Meyerhoffer XYZ, which arrived in the mail this week. Unfortunately there probably won’t be surf good enough to ride this board for another month or so. To maintain my minimalist cred, I’m selling a 7’2″ board that’s been sitting in my garage for a while. If you’re also interested in surfing, this is the deal about the funny shape:

Saturday Links! July 11, 2015

I’m rich Baby! (And follow your Heart) by Mr. 1500, 1500days.com. How much money do you really need to be happy? What makes people rich? It’s certainly not a $700,000 kitchen remodel. At least, not in my experience. More stuff doesn’t necessarily equal more happiness.

The Health Benefits Of Early Retirement Are Priceless by Financial Samurai. I linked to a few articles last week about how great and non-boring it would be to retire early, and also it might be easy to just let yourself do nothing but watch TV all day if you retire early without anything to do. But consider that your job actually might be the thing that kills you, not the fact that you got out of it early.

A New Financial Reality at pewtrusts.org. A new study finds that “three-quarters of Gen Xers … have higher family incomes than their parents did at the same ages, but only a third have higher wealth.” Common explanations for this is the disproportionate increase in property values and education expenses, but I bet that spending habits play a huge part of this too.

BONUS! What I’m listening to this week:

I haven’t stopped listening to this album since it came out last year. Fantastic!

Photo: Last week, I showed you a picture of the pineapple I grew in my yard. Did I mention that I also have a grove of banana trees that make these cute little bananas? The only downside is that once the tree produces fruit, the tree dies and you have to cut it down. But these trees grow like weeds to it’s really not too bad!

Saturday Links! July 4, 2015

Mortgage as a Forced Savings Account to Build Wealth by Financial Samurai. An interesting way to think about your mortgage is as a savings account that you absolutely have to put money into. An upside to buying a house is that your asset will probably appreciate as you’re saving, but the downside is that your savings account probably isn’t very liquid.

What Would Happen If We All Stopped Paying Our Student Loans, Together? by Jennifer Schaffer, Vice. An interesting take on the student debt problem wich involves forming what looks like a “debt union”. Really, it’s about using a “debt strike” as a tool to promote social change, because there is definitely a problem that no one seems willing to address on their own.

Yo ho, yo ho, an FI life for me! by Mr. 1500, 1500days.com. “FI” stands for “Financially Independent” in case you were wondering; Mr. 1500 is on a 1500-day mission to build a portfolio large enough to retire on. He touches on one of my pet peeves about retiring early: people asking you if you’ll just be bored once you don’t have to work anymore. ABSOLUTELY NOT. There’s so much to do! I think people that are afraid of this are more likely to have this happen to them.

BONUS! What I’m listening to this week:

The late-90s Britpop resurgence had some gems in it, and not all of them were Oasis.

Photo: I grew this pineapple in my back yard. It’s huge! It’s almost like I’m living in Hawaii!