2016 Financial Year in Review, Goals for 2017
Happy New Year! Now that 2016 is officially behind us, I wanted to take a moment and review some of the financial aspects of the SRGO household from the previous year. In my last post I talked about random happenings in the world in 2016 as well as some of my personal goals for 2017. This post will focus on some of the financial goals I had for the past year and whether or not they were met, as well some of my plans for the coming year.
Financial Goals for 2016
Continue to pay student loans
I continued along my path toward PTFO-ing by aggressively paying $10k a month towards my loans. My initial goal for the loans was to have them paid off within five years of graduating residency (June of 2014). I initially calculated that I would need monthly payments of about $5,800 to meet this goal. I started there and was able to gradually ramp up my payments to $10k a month. At this rate, I will be done with my loans by December of this year, meaning I would have paid off my loans in about three and a half years instead of five.
Contribute the maximum to tax-advantaged accounts
I was able to max out my 401k and HSA to the tune of $56,350 total. We were not able to max out Random Gal’s 401k this year, coming up about $1k short. She cut back on her hours about half way through the year, but we forgot to increase the percent withholding from her paychecks to compensate for this reduction in work hours and pay. We have since made adjustments and shouldn’t have any issues for next year. We were both able to fully fund Backdoor Roth IRAs of $5,500 each. In total, we contributed about $98,500 to tax-advantaged accounts. Combining that with the $11k we were able to invest in our taxable account, we were able to save almost $110k this year for retirement.
Start saving for Little Random Guy’s education
I wanted to get a little bit of a head start on saving for Little Random Guy’s education, so I started a 529 plan a few months before he was born. I’ll go over the details of his savings plan in a future post, but in short I contribute $500 a month to his 529.
Goals for 2017
Pay off my loans before December
This will be one of my main goals for the year. If I continue with my $10k a month plan I’ll be done in December. I really, really want to pay off my loans before then. If I increase my monthly payments to $12,500 a month, I will be able to pay off the loan by October. If I up it to $14k a month I’ll be done by September. I think I will shoot for the October goal and just make extra payments if I can along the way. Man, I can’t wait to finally be free of my student loans!
Continue to fully fund all of our tax-advantaged accounts
This should be straightforward as our contributions are pretty much automatic. This time around, though, I’m going to make sure that my wife’s 401k is fully funded. We also max out our Backdoor Roth IRAs early in the year, usually in January if we have the funds.
Be more consistent with our taxable account investments
In the end, we ended up investing $11k in our taxable accounts during 2016. I ended up making three separate investments throughout the year but with no specific plan in place. This year, my plan is to make scheduled purchases. At this point I’m deciding between monthly versus quarterly investments, although I am leaning toward the monthly schedule at the moment.
Continue to fund LRG’s 529 plan
Again, should be attainable. I manually make transfers every month, so perhaps I will automate the contributions this year.
Set up a living trust
This will be the other main thing I want to accomplish this year. Now that I have a son, estate planning has moved up on my list of important things to do. To be honest, estate planning is one aspect of personal finance that I am still a little weak on. So, my goal for this year will be to learn more about this topic and have a living trust set up by the end of the year. Dads Dollars and Debts summarized his experience with setting up a revocable living trust through LegalZoom. It’s nice to know that this option is available as it’s much cheaper than going through a lawyer.
All in all, I think it was a good year financially for us. We were able to put away a good chunk of change towards retirement, and I’m getting closer to being student loan debt free. Hopefully I’ll be able to hit my goals for this coming year. I’ll be sure to keep you all updated.
Thanks for reading, and have a happy and healthy New Year!!