I closed on my condo on October 3, which has allowed me to completely shift my savings focus towards socking away the maximum into my two retirement funds and building up a 3-month emergency fund. I already began opening savings accounts as the vehicles to help me achieve my financial goals. A list of my goals and the most recent update of my financial goals can be found at my goals page.
Set up and fully fund a solo 401k ($0/$9,492)
I have yet to set up a solo 401k for my self-employed income. I have done some research on my available options for a solo 401k. I will be requesting information from Fidelity and T. Rowe Price about setting up a solo 401k, however, I am still hoping Vanguard will offer a solo 401k by the end of the year. I have until December 31, 2008 to set up my solo 401k and still fund it for tax year 2008. For the same reason, I believe Vanguard will be pushing hard to initiate a solo 401k account by the end of the year.
My goal for the solo 401k was increased this month as I received more self-employed income, which increases my maximum contribution.
Fully fund my Roth IRA ($0/$5,000)
I am hoping to be able to fully fund my Roth IRA by the 2008 income tax due date. I have decided to fund my solo 401k before my Roth IRA for tax sheltering purposes. If I don’t put all of my self-employed income into a solo 401k, then I will have to pay taxes on both sides of the Medicare and Social Security.
Save for an 3-month emergency fund ($0/$7,762)
I finally got around to calculating an “exact” value for my monthly expenses. I put exact in quotations as I still have not received an electrical bill. Also, I estimated my gas and food expenses, which seem to vary greatly, although I imagine that if I lost my job, I would spend less money on gas and food. My monthly expenses included the following expenses: mortgage, property tax, car payment, assessments, car insurance, cell phone, cable and internet, electric bill, gas and food.
My savings efforts have shifted almost completely towards retirement savings. I do have money saved for retirement accounts, however, I have yet to invest any money in a retirement account for 2008, as I am still waiting it out with the hopes of opening a Vanguard individual 401k. I am in the process of opening savings accounts to store retirement funds until I set up my individual 401k. One important consideration when goal planning is the first time home buyer tax credit that I will receive when I file my income tax return. I also have a few more purchases to make for my condo, but it is almost completely furnished.
- Deals For Opening ING Direct Orange Savings And Electric Orange Checking Accounts
- A Rundown of Self Employed Retirement Options
- Goals Update for End of April 2009
- Financial Goals Update as of September 1, 2008
- Financial Goals Update as of October 1, 2008