Merry Christmas and Happy New Year to all of my trillions of readers out there! With 2015 almost gone and 2016 right around the corner, it’s time to 1.) see how we did last year and 2.) establish some goals for the upcoming year.
A year ago I wrote that our goal was to save $106,250 in 2015. Currently, we have contributed $104,250 to our various accounts, and we are just a little short of hitting our goal. I’ll need to check with my CPA to make sure that I earned enough to top off my IRA with the final $2,100. (Fortunately, I’ll have until April 15th of 2016 to contribute to my IRA if necessary.) Here is what we did in 2015:
Wow, I can’t believe that we were able to cram so much money into our accounts this year. As a working-class guy with simple tastes, six-figures of savings is a lot of moola to me. How did we pull this off? Our secret…yeap, you guessed it: hardcore savings! By living a frugal lifestyle based on my top-secret tax efficiency model (if you can’t keep a secret, don’t click that link) we’re able to live comfortably, minimize taxes, and save the majority of our salaries.
We plan on starting 2016 in full front-loading attack mode. On January 1st we plan on sending $2,000 to our son’s education savings account at Vanguard. During the first week of January, we also plan on making a 2016 contribution of $5,062 to our health savings account at Elements Financial Federal Credit Union. We’re not maxing out our 2016 HSA contributions because we only plan on having a high deductible healthcare plan until October 1st of 2016. (In other words, we’re getting ready to FIRE at the end of the current school year!)
In preparation for our departure from work, we plan on maxing out our 457 accounts while cramming the remains of our paycheck into our 403b accounts. Since my wife will turn 50 in 2016, she’ll be able make catch-up contributions to her 457. By hammering our 457 and 403b accounts we’ll be able save 100% of our after-tax wages from January to August of 2016. It’s amazing what a 100% savings rate does for your bottom line! Here’s what we plan on accomplishing financially in 2016:
Even though 2016 will be an abbreviated work year for us, we plan on making the best of it by using our 100% hardcore-savings approach. In addition to our retirement account contributions, we plan on adding $100 a month to our mutual fund and $25 a month to our son’s UTMA account; both accounts are at Vanguard. Finally, we’ll keep adding $25 a month to our son’s 529 plan. All in all, we should manage to save about $80,000 in 2016.
Saving money in 2016 will be great, but we are really excited about the endless possibilities that await us. While our plans at this point are tentative, we do plan on moving to Florida and taking an extended trip to Mexico in 2016. More to come and stay tuned…