Saving for Retirement 2014
Posted on | June 16, 2014 | No Comments
I’ve had a busy few months and now I’m finally getting a chance to think about my finances again. I’ve decided to increase the amount I’m contributing to my 401k. This will reduce my taxable income now and defer taxes on the amount I set aside to a future date. The maximum allowed by the IRS this year for me is $17,500. I changed the amount I’m contributing such that in a full year, I will contribute the maximum I’m allowed. However, since I’m starting out in the middle of the year, I won’t reach the maximum this year.
I also plan on maxing out my Roth IRA contribution for 2014. I should have $5500 set aside by November. I’m not in too much of a hurry right now to fund it for this year since I believe that stocks are priced too high right now. I have a high percentage of my account in cash waiting for a correction so that I can buy additional stocks at a discount and increase my meager dividend income. If the economy holds up, the amount of money my stocks generate on a yearly basis will start to make a difference.
In addition to putting aside money for retirement, I want to also make sure I’m addressing my debt. I have an outstanding 401k loan that I want to pay off as soon as possible. Unfortunately, I can’t pay it off by sending additional principal payments each month. It has to be paid in a lump sum. I’m going to give myself one year to have it paid off.
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