1. I love reading these posts and following you on Tiwtter. It’s so inspiring. Our 403b is currently through AXA…and I can’t bring myself to swallow the fees, especially since there’s no match involved. Womp womp. Really interested to hear how you liked front-loading your bills. Excellent way to travel hack! Thanks for all the food for thought!

    • Penny, how did I not respond to this comment? Are you still stuck in an AXA product. If so, my condolences! I enjoy your posts and tweets too. I hope your teaching year is going well. Ed

  2. Awesome summary of your front-loading summary. I front-loaded for the first time last year in 2015. I maxed out my 401k by September. This year I want to beat September, and am well on my way thanks to reading your site and MF!

  3. Interesting approach. We actually contribute evenly everything to equal monthly payments. As a result, we also invest the surplus money each month. It comes down to the same investment we make.

    What point am I missing?

    Maybe I have missed it, but what doe you live of in the front loading months? Savings that get refilled lateron?

    • Greeings Amber Tree,
      We live off a combination of sources. First, we take $18k of IRA distributions using the 72T provision. Second, we have 457 accounts that we can tap as needed. We like 457 accounts because they do not have penalties on withdrawals before 59.5. Finally, we also have some savings from the sale of our home in LaGrange, GA. These sources of income make it possible to go “all in” on our tax-advantaged accounts.

      Thanks for the question, Ed

  4. Eric

    Hmm, interesting. However, I guess I don’t get it. I only see downsides in this approach (maybe only in my situation).

    1) The taxes would be the same
    2) I would miss out on employer matching in the 401K
    3) More investment risk with less emphasis on dollar cost averaging
    4) Why give loans to utility companies

    With that said, it is great that you have a system that works. I am just struggling to see how this makes a lot of sense in many situations.

    • Hi Eric,
      1. Our system works for us by minimizing taxes while maximizing savings. We always try to keep our tax obligations within the 10% tax bracket. I don’t see us paying more than $900 in federal income tax in 2016.
      2. Most teachers don’t get an employer match on 403b or 457 accounts. I know we don’t, so we just take care of business as early as possible.
      3. We do not do any real investing in our 457 or 403b accounts because they are in variable annuity products. When “stuck” in variable annuity accounts, we hold our money in “stable value” funds. These funds are like money markets and earn about 2%. When we roll our money over to IRAs, we can then invest the money. We would never attempt to invest our money within a variable annuity platform because the costs are too high.
      4. For us, pre-paying utilities works because it increases our peace of mind when we know we’ve got bills covered for 3-6 months. In the book Happy Money, the concept of “pay now, consume later” was mentioned as a way to increase money happiness. In our case it does work. We always have our Netflix account and internet bill paid in advance. Doing the same for electric and water bills was really worth doing because we used the payments to hit a travel rewards bonus of 50,000 miles at American Airlines.

      Thanks for reading and good luck working your system, Ed

  5. That AA card with the 50,000 mile bonus is fantastic. I got the matching US Airways card before they merged and got another 50,000 miles from that. I think its tough to think about the negative impact to your credit score but if you just get over it and apply to these cards you can cancel them and start over again. Novel way to think about saving for retirement thx!

    • MilMoola, we’re big fans of travel hacking these days. We plan on using some miles this fall when we go to Mexico and beyond. Thanks for reading and the comment. Ed

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