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Balancing cash goals and retirement goals

July 9, 2009

I wish I could be like all the coolest pf bloggers who are maxing out their 401ks this year.  $16,500 of tax deferred money saved up for retirement.  Nice.  Plus Roths, plus company matching.  PF super stars!  Maxing out my 401k is my pf dream.

But it just doesn’t make sense for me yet.  I have my E-fund done (yesssss!!!!!), but there are a lot of other cash goals coming up in the next few years.  I can’t quite afford to put in over 20% of my salary to be locked away until I’m old.  Never mind the fact that T isn’t saving much of anything for retirement yet, and once we are married, we’ll at least want him to be maxing out his Roth IRA as soon as possible.

In theory, in the next few years I will:  have a wedding, go on a honeymoon, get a newer car, and put a down payment on a house.  Wild stabs in the dark at actual sums needed and time for reaching these goals, and the goals themselves may change… But my calculations show I should be saving over $2250 cash each month.  Uh…   Obviously, my time line may be shifted, and T will graduate and get a job, and maybe we won’t buy in L.A. at all and we can get by with a much smaller down payment.  Still though.


I’m hitting the wedding/honeymoon goals, but that other stuff will just have to wait.  Whenever I’m tempted to up my retirement contributions to what it would take to hit the maximum, I remind myself of my cash goals, and refrain.  Now is not the time.

[Note:  I’m saving an average of $416/mo in my Roth and about $850 + partial match in my 401k.  I just have to remind myself that, yes, that is enough.   Perhaps even too much, considering.  Goals will be evaluated again once we are married and finnish merging money.]

6 Comments leave one →
  1. Bonnie permalink
    July 9, 2009 6:06 am

    SP–What do you think a good average down payment is for a house in LA?

  2. July 9, 2009 7:14 am

    @Bonnie – i honestly have no clue, I haven’t looked into it yet. I do not think most people put down 20%. i haven’t looked at prices lately, but I think the absolute lowest budget you could start with is about 300k.

    40k is low (if we want to put down 20%) but T has some cash as well and I’d expect he’d have a non-student job by then. That goal is too far away to even have good numbers!

  3. July 9, 2009 9:01 am

    I find it a challenge to balance goals as well – it can be hard to resist the urge to bump up one savings acccount or another. Could luck maintaining – we can and will get there (eventually)

  4. July 9, 2009 9:05 am

    Oh man welcome to my world. I want to save up for the wedding and reduce my debt at the same time but you can’t do it all at once, or you can but something gets shortchanged. Good luck on your savings goals.

  5. July 9, 2009 1:26 pm

    I’m impressed with the amount that you put into retirement each month. Considering all of the things you want- house, car, wedding, honeymoon- I’d say it’s pretty “cool” that you make such smart decisions with your money!

  6. July 9, 2009 3:35 pm

    I like your blog. It has a very down to earth feel. Seeing your numbers helps encourage me to be in your situation. I’m 20 something too but I’m the complete opposite. I’ll be following you!

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