One bright spot for the year

There have been a lot of things that have been challenging this year, but one bright spot has been my 401K. I will be unable to achieve many of my 2006 goals, but my retirements accounts will be about $20,000 over where I had hoped they would be at the end of the year. I mentioned that all my retirement accounts went over $150,000 in an earlier post, and thanks to a good market they continue to grow.

Here is a simple snapshot of the 401K for the year:


That’s assuming a quiet rest of the year for the market. I did a quick back of the envelope calculation assuming slightly less contribution/match for the next 10 years, followed by 10 years of contributing half of that will easily give me one of my long-term goals of having over $1 million in my retirement accounts. All that’s needed is an average return over the next 20 years of around 7% per year—not even a stretch goal given market history.

The company handling our 401K plan recently changed the format of their quarterly statements. In one section they show the source of the money coming into the account, and I was surprised to be reminded that when I started here 10 years ago I only had $9,000 to roll over from my previous company’s plan. I have done everything wrong a person can do when it comes to funding my retirement, and to somehow be in what I view as a favorable position is an incredible relief.

My sins? Got the rest of the day for me to list them? I’ll keep it relatively short:

- First job out of college was with a company that did not have a retirement plan. The good news was that I did actually open an IRA in my mid-20s. The bad news was I barely funded it.
- Next job: the company had a pension plan that vested after 5 years with the company. They did begin offering a 401K halfway through my stay there, but since the employee match was much less than at my wife’s company we increased her 401K contribution amount instead. Which didn’t help me very much when we got divorced. Oh, and length of stay at the company? 4 years, 11 months.
- Next couple of jobs: started contributing to a 401K, but usually limited my contributions to the amount my employer would match.
- Current job: stopped contributing for at least a year shortly after my divorce because I “needed the money.” You can guess what I would do with the ‘extra’ money—frivolously spend it (yeah, I enjoyed every minute of it).

So in posting this I’m hoping it gives encouragement to anyone looking at their retirement statements and wondering when “the payoff” for saving will come. Quicker than you think...