Single, 24, no kids, living with 6 other young adults in a large apartment. Twin Cities, MN.
Current salary before tax: $85,000 (Average throughout 2015: ~70k)
Pre-tax deductions: 401k max
$18,000Income Taxes: ~
$15,000 or
%30 from state and federal income taxes.
Current expenses (yearly):Total: $16596
rent * | $4370 | grocery * | $2392 | credit extended † | $2248 | car | $1568 | restaurant | $1276 | travel | $954 | alcohol ‡ | $840 | moving | $784 | gifts | $500 | roller derby | $416 | utility | $283 | hobbies | $245 | bike | $212 | other | $197 | clothes | $89 | home upkeep | $76 | public transit | $72 | fees | $70 |
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* These were about 1.35x higher than they "should" have been, because I have assumed all financial risk for the shared living situation, and we weren't able to fill all the rooms right away, or because someone left and we had re-fill the room.
† this is money I spent on things shared with my house that I have not been paid back for but could theoretically be. I listed it as an expense since historically I have not been paid back for this stuff and while I may be in the future, I wouldn't count on it.
‡ I tended to share the booze with everyone :)
Assets:$16,000 in 401k, 100% total market equities, 50% US, 50% international. High ERs, like 1.5%, because my company's 401k is garbage.
~$3000 in bitcoin.
~$2500 in checking account.
Liabilities: 0!Debt paid down in 2015: $18455I want to make sure of two things:
1. That I can eventually roll over the 401k into a Vangaurd IRA or Roth IRA so that I don't get eaten by the fees and so that the money has a way out before I hit 65.
2. That I can do the Roth IRA conversion ladder to minimize the amount I pay in taxes while allowing myself to begin to draw down my investments before I hit 65.
I am trying to get about $300,000 or $400,000 asap, at that point I will quit my job. I'm hoping to get there around when I turn 30.
I work as a software developer so I am hoping that I can continue getting raises up to about $140,000 a year.
I don't plan on buying a house unless I can go in on it with other people and buy it with cash. Something like start an LLC that would own the house, and each person has part ownership of the LLC.
I know that there are a few obvious things I could do to decrease spending:
1. Start being harder financially on your housemates!
2. Ditch the car!
3. Stop drinking and going out to eat so much!
For #1, I am hesitant to because sharing a house is very beneficial for me even with this stuff, and the people that have trouble paying, while its not entirely out of their control, they don't make much money and are working on getting on their feet so I don't feel bad about it.
For #2, I would love to, but right now I work as a consultant/contractor, so I might have to go somewhere out of bus or bike range in a month, I don't really get to pick my assignments. Although right now I can bike to work which is nice.
For #3: Well... Yeah, you're right ;). I'm definitely cutting back on drinking.
What are some things I might have omitted and things I should be thinking about? I am relatively new to financial planning, and I don't know what to focus on at this stage in the game.
How can I monitor the tax laws and retirement account rules that relate to my plans of using the Roth ladder? Do I need to hit the 401k plan's fine print with an electron microscope? Are there any watchdogs for federal or state rule changes that I can subscribe to? Something else I'm not thinking of?