The organization I work for is funded largely by state tax dollars. Obviously, the Covid situation will result in fewer tax dollars going to the states. Leadership at my organization has decided, rather than layoffs, to reduce everyone's salary, and reduce the amount they contribute to retirement.

The salary adjustment is on a sliding scale that ranges from a 0.5% cut to an 8.0% cut, with lower salaried people receiving a 0.5% cut, and the highest salaried people receiving an 8% cut. My salary is in the range where there is a 1.0% cut, which amounts to about $52 per month. If you want to do the math, you can now figure out my salary.

The amount that is contributed to our retirement has been cut in half, regardless of salary.

It's been clear since March that something would have to happen, and I prefer this method over layoffs. Everybody bleeds a little, rather than a few on the chopping block.

The changes go in effect September 1. Our fiscal year begins October 1, and that is historically when we are given our raises. I can't imagine anyone will be getting a raise this year, or that will wipe out the gains of this negative adjustment.

All in all, I'm happy to still have a job.

About a year ago I set a financial goal for the 2015 year. My goal was to gave a 250K net worth by the end of the year. I missed that. By a long shot.

My net worth a year ago was $227,074. My net worth today is $227,948. An $874 increase.

Of course the stock market is tanking, that's a big factor.

I've also taken on more debt - to renovate that barn that I was talking about last time I was actively blogging, and braces for DD1, that I blogged about in April/May.

Also, when we were lining up the barn loan, our house was appraised. It wasn't fully appraised. We got what is called a BPO - Broker's Price Opinion. That's a drive-by appraisal.

I had our house listed on my balance sheet at 85K, and the BPO came back at 80K. Who knows, if the broker had walked through the house, he might have been closer to an 85K number, but to "official" number was 80K, so I changed my balance sheet to match that, so that's a 5K difference.

I wish I had recorded and saved what my retirement fund balance was a year ago. I have no idea, but I know it is less than it was a few months ago.

I suppose it only makes sense to set my 2016 goal back at 250K for 2016. We'll see how I do this year.

Happy New Year! It's Jan. 5, so maybe I'm a bit late.

I'm not sure if I've ever set a New Year goal in this blog. After I post, I'll check the archives to see for sure, but I don't think I have.

My financial goal for this 2015 year is to end the year with a $250,000 net worth - a quarter of a million dollars.

My current family net worth is $227,000 - 23K short of 250K. To reach the goal, we'll have to increase net worth by about 2K per month - or $1,916.67 per month to be a bit more precise.

We currently have three debts - house, mini van, and pickup. We'll be making average principal payments of about $1,080 on the house, $300 on the van, and $140 on the truck. That's $1,520 average monthly decrease in debt. The rest will have to come from growth in retirement investments. Between my employer and personal contributions, I invest about $780 per month into retirement.

Between investment and debt reduction - that's about $2,300 per month increase in net worth. As long as the stock market doesn't tank, I should reach my goal. We'll see.

Some of you my disagree with how I calculate net worth. I include home equity as well as vehicle equity, and even include $3,700 for household items. Basically, if we were to sell each and every item my family owns, how much would be left.

I do estimate home and vehicle equity low.

My July retirement fund value was just a bit more than $160,000. I looked back, and in February it was almost $143,000. That's a 17K increase in five months - average increase of $3,400 per month!

Good times.

Anyone who has been following my blog for most of the past three years knows that I spend a lot of time putting together financial projections of all sorts. That includes my retirement, even though it's 20 plus years away.

I've got a retirement tab on my master spreadsheet. It includes an accumulation phase, where I estimate how savings will grow, and a depletion phase where I estimate how well that fund will stand up under various scenarios.

I've struggled for some time deciding what kind of number to plug in for Social Security payments, and to a lesser extent when to plug in a beginning age for collecting SS.

Until recently, I've used a 15K number (annual), and begin drawing at age 72. I thought of those numbers as low-ball estimates.

I know that there is a prevailing attitude among many in the SA community (particularly people younger than about 45) that they are making retirement plans assuming that there will be no SS 25 or 30 years from now, and that they will consider any SS payments to be gravy in their retirement.

While they may be right - there may be no SS 25 or 30 years from now - I'm betting that there will be SS in some form, reduced from where it is now. I just don't know what I can expect for a reasonable guess as to what that amount will be. I don't think anyone younger than 50 does either. The law is clearly subject to (and expected to) change.

So, I set to come up with a more reasonable, and still conservative number to plug in to my spreadsheet. I did some very quick "research" on the internet, and found a site that quoted that SS trust fund reserves would be exhausted by 2033 (oddly enough, a few years prior to my own retirement), and after that tax income would be sufficient to pay about three-quarters of scheduled benefits through 2087.

I also went to the Social Security web site, and found my current projected monthly payments at ages 62, 67, and 70.

I took the number projected at age 67, multiplied it by 0.75, and plugged it into my spread sheet, starting at age 70.

It turns out that I wasn't that far off with my previous estimate. My new number is $2,000 greater per year, and I'm starting the payment two years earlier in my projection now.

Certainly every single number in that projection is subject to a great deal of change. What I really want is a target retirement fund figure to shoot for. That number will change. However, I think my estimate now is a bit more refined than it was a few days ago.

I'll continue to go in and adjust things from time to time. Hopefully in another 15 years, I can have a very solid plan for retiring 5-10 years after that.

If anyone is interested, this is the page that I quoted above: http://www.thenewamerican.com/economy/commentary/item/16497-the-future-of-social-security

For the past couple of years I've done some extra financial reflection in the month of October. It was three years ago this month that we finally woke up, and started to pay serious attention to our finances.

A couple things happened that month. DW received a freelance check (that was in the days before four kids, and she did some freelance work). I think it was a couple thousand dollars. We also had our second of three sets of renters move into the our for sale house. I think the house had been vacant since July or August - a couple months anyway. We were also about $450 past due on one of our CCs. That CC had a whopping 32.99% APR.

Within the same week that we received DW's freelance check, we received a letter from the above mentioned CC. The CC company (Advanta) was offering us a deal - if we paid the $450 that we were past due, they would cut our interest rate to 16.99%. We jumped on the deal, and sent the check that day. Advanta kept their end of the bargain, and cut our interest rate. Most of the rest of DW's freelance check went to various other debts.

That bit of momentum got the ball rolling for us. I dug in, and totaled all our CC balances, compared the balances to each card's interest rate, and realized that (after the $450 payment, and interest rate cut on the one CC), we would still be paying very nearly $200 per month in CC interest alone.

The first step I opted to take was to find a 0% APR transfer to a new CC. My credit score was in a shambles, and I didn't qualify for a new card at that time. Another thought I had was to borrow against my retirement fund. I actually went to a bank, and picked up the forms to apply for the loan. I think they were offering an 8.99% APR on the loan. I don't remember for sure, but I may have filled out the paperwork, but I never did submit it.

That previous August, I had stumbled upon the SA forums when my mom and dad had a question for me about retirement savings. I had asked the question for them, and passed on the answers, and never did return to SA until I was faced with the question - should I borrow against my retirement fund to pay off CC debt (or, shift unsecured debt to a lower APR with my retirement fund as collateral, to be more precise). Thankfully I asked the question, and thankfully the forum regulars steered me away from that choice.

DW did qualify for a 0% APR 3% balance fee card that next January. The limit was $750. We transferred that, minus the 3% fee, and ended up doing two more balance transfers until the Advanta debt was paid off this past January.

It would be another six months before I found the Blog side of this site, and those of you who have been following my blog for most of the pat 2 1/2 years know the rest of the story in gory detail.

You also know that we've stumbled at times, and have had help along the way. But, as I remember that seemingly unbearable, rocky mountain that we faced three years ago, I can't believe that we've turned it around.

A year ago I resolved to increase my retirement savings by 1 percentage point each year, until my contribution plus my employer's contribution is at 20% of my gross salary. I'm currently at 16%. Last October, I increased from 15% to 16%, and now it's time to make the jump to 17%, sometime in the next month. The issue is to log back into my retirement account and slog through the pages, and figure out how to do it again. Maybe I'll get aggressive, and do it yet this month.

But, this prompted me to update the excel spreadsheet I set up a year ago to project retirement. My employers current requirement (emphasis on current) is that I have to work until I'm 62 to keep my health insurance. So, working at least until I'm 62 appears to be a given. Crossing fingers that I stay with my current employer.

I'm tempted to go into a degree of detail here about my projection sheet, but there are just too many variables, and unknowns at this point, so I won't. I'll just say that I can make a projection that works until I'm 100 and DW is 98 at a retirement age of 64, which is 23 years and two months from now. Clearly, a lot can change between now and then.

I will say one thing on my projection. I assume a 1.5K monthly, 18K annual SS payment starting at age 72. I see another debate has popped up recently in the forums on this. The prevailing opinion of the regulars is that they are not counting on SS in their retirement planning. Maybe I shouldn't be either. But, I think a monthly 1.5K payment starting at age 72 is conservative.

For now, I'll pump as much into my retirement as I can, while taking care of present needs and wants. Hopefully when I get to that 62-64 age range I have a few years left in me to continue building my nest egg.

This past weekend, my in-laws gifted my wife $30,000. For more background on the gift see my most recent post in the forums.

Steps that have been taken so far:

The checks were deposited into our account on Monday.

The credit card was completely paid off this morning.

We scheduled the builder to begin work on our back porch today. It is raining.

We scheduled an appointment with an attorney to set up special needs trusts for our boys. We'll be meeting with the attorney this Friday afternoon.

Our emergency fund is housed at DW's home-town bank, and that transfer has not been made yet.

Our girls already have 529's set up, but we have not allocated any new funds toward them.

I received some good advice from my forum post. We may pay off the truck (10K) and set up an automatic monthly payment for a Roth IRA for DW for the amount that had been going to the truck payment.

Still not sure exactly how everything will be spent and allocated. It will not be spent on a luxury car or a Caribbean cruise.

$30,000 represents a bit more than half of my annual salary. Heck, 10 years ago, I wasn't even making 30K in one year. I (we) are overwhelmed by the generosity of this gift. It gives us the flexibility to attend to some savings goals that have been sorely neglected, as well as make some needed improvements around the homestead.

This past weekend, my in-laws gifted my wife $30,000. For more background on the gift see my most recent post in the forums.

Steps that have been taken so far:

The checks were deposited into our account on Monday.

The credit card was completely paid off this morning.

We scheduled the builder to begin work on our back porch today. It is raining.

We scheduled an appointment with an attorney to set up special needs trusts for our boys. We'll be meeting with the attorney this Friday afternoon.

Our emergency fund is housed at DW's home-town bank, and that transfer has not been made yet.

Our girls already have 529's set up, but we have not allocated any new funds toward them.

I received some good advice from my forum post. We may pay off the truck (10K) and set up an automatic monthly payment for a Roth IRA for DW for the amount that had been going to the truck payment.

Still not sure exactly how everything will be spent and allocated. It will not be spent on a luxury car or a Caribbean cruise.

$30,000 represents a bit more than half of my annual salary. Heck, 10 years ago, I wasn't even making 30K in one year. I (we) are overwhelmed by the generosity of this gift. It gives us the flexibility to attend to some savings goals that have been sorely neglected, as well as make some needed improvements around the homestead.

The negotiations with the short sale continue. I'm the pessimist, and lean toward thinking this deal is dead. DW is the optimist (and a better negotiator than I), and knows that this is how the game is played. Still, I believe that this deal has a less than 50% chance of closing. The negotiations are between our bank, and the buyer, so we just sit back and watch at this point.

A number that I've not reported on in a while is my credit card debt to retirement savings ratio. That's a number that I (to my knowledge) made up a while back. Seven years ago, that number was 100%, we owed about 30K in credit debt, and my retirement savings was about $30K. In August 2011, that number was 20%. My retirement savings was 5 times greater than my credit card debt.

Today that ratio is 1.66%. For every dollar I have in credit card debt, I have about $60 in retirement savings. I know that the number is meaningless. It's not as if I'm using my retirement savings as collateral against credit cards.

But, I still remember that day seven years ago, when I realized that CC debt was equal to retirement savings. That was one eye opening experience. And, ever since, I've used it as sort of a personal proxy of financial health. I also like it, because it tells two stories - decrease in CC debt as well as increase in retirement savings.

I have solid net worth figures for Jan. 1, 2012 and Jan. 1, 2013. I had to do some financial forensic work to come up with a Jan. 1, 2011 value. I hadn't started posting here by then. The asset side is fairly solid, but the liability side is an estimate.
What I came up with is:

2011 net worth percentage increase = 19.6%
2012 net worth percentage increase = 78.9%

My retirement portfolio is my asset of greatest value. Thus, the performance of those funds greatly influences the change in net worth. 2011 was a crappy investment year, and 2012 was a better year.

And, of course, there is rapid debt payoff. While I was probably paying off debt a bit more aggressively in 2011, in 2012 much more of my payments went
toward principal, rather than interest.

I couldn't help myself. I projected my Jan. 1, 2014 net worth, based on projected decrease in debt plus monthly contributions to retirement, no asset growth. My projected net worth percentage increase for 2013 is about 32%.

I'll come back here in a year, and see how I did.

I've been gone for a few months, but with a new year, I thought I'd get started back up again.

I hope everyone had a Merry Christmas (or Happy Hanukkah), and a Happy New Year!

Despite holiday spending, we've managed to pay down quite a bit of credit card debt. Our current total is $1,963. Down from $4,587 in October. My goal remains total payoff next May.

We've also decided on our 2013 house project. We need something done with our back porch. My MIL is disabled, and has a great deal of difficulty entering our house the way it is. Also, it just plain looks very bad. We'll hopefully be getting a bid next week for a spring/summer project, but for now we're planning on saving $800 per month.

Just yesterday, I also began contributing an additional 1% of my salary per month to my retirement plan. I'll increase that again once the CCs are paid off. For those of you who may have been following my thread on the forums, I decided to stick with my employer, rather than the Roth. There were no transaction fees.

I've been doing a bit of thinking about retirement. Maybe it's because my parents are retiring right now. Maybe it's because I'll be turning 40 in a couple of months. Another big part is that we've turned the corner on our massive debt problem, and positive financial growth seems much more real now.

Anyway, retirement for me is still another 20+ years away. But, as far as that goes, 20 years ago I was a sophomore in college.

Anyway, there are two big unknowns in developing a solid plan. The first is - what is critical mass?

So, what will my spending be in 20 years? Dunno. I can project salary increases based on some conservative raise figure. Then take 80% of that? I won't be paying a mortgage by then. I hope not, anyway. Some say you need 25X spending. But, I think that assumes 4% draw down, and 4% growth, so you end up with the same amount you started out with. I'd rather start out with a figure and assume conservative growth, and somewhat liberal spending. If growth minus spending takes me to 100 years old, and the number at the end is positive, I figure I've done alright. The figure I've tentatively reached is $1.13 mil. But, that assumes SS income. Which, brings me to question 2!

Will Social Security be around 20, 30, 40, 50 years from now? My guess is yes, but it also seems like a good idea to figure that it won't be. That scenario has me working another 2 1/2 years, drawing less from the pot, and starting out with a figure closer to $1.3 mil.

Obviously, the SS question will be much clearer, for me anyway, 20 years from now. I have time to plan. But, maybe I should seek the advice of a professional on this one.

My retirement fund is at six digits. Today. And, just barely. I was close the last time the markets boomed, but didn't quite get there.

A year ago, I reported on this blog that for every dollar I had invested in retirement, I owed 20 cents in credit card debt. Today, for every dollar I have invested in retirement, I owe 6 cents in credit card debt. Six years ago, that was a one to one ratio.

On the personal side, my youngest daughter sprained her ankle a couple of days ago. I took her to a playground while DW was at an appointment. It isn't a very nice playground, and the traffic compacted track around the merry-go-round has tree roots growing in it. She tripped on one of the tree roots. So, it just goes to show that there is a reason for the extreme and expensive safety measures at the modern play grounds.

I did some thinking today about what I'll to have saved before I retire. Part of that equation is life expectancy. The on-line tool I used calculated my life expectancy at 84 years. Don't ask me what site I used. I just googled "life expectancy calculator" and used one that looked good.

The 84 years result sounded OK. My maternal grandfather lived to 71, maternal grandmother, 79 and both paternal grandparents lived until they were 89. Actually Grandma was within a week of her 90th birthday. So, good genes on Dad's side and not as good on Mom's. Actually, it was probably lifestyle choices as much as anything, and I'm probably a blend of both.

I'm still not sure what I'll need to have saved to retire. It's still 20+ years away. I've heard 25 times salary. If I figure modest pay raises, that comes to about $1.9 million. Not sure that's going to happen. I've also heard that you'll need funds enough to cover 70-80% of your pre-retirement income. But, I'm not sure what kind of withdrawal that figures.

Like I said, I'm still looking at a horizon of 20+ years, so this is something to consider, but not obsess over. For now, I'll concentrate on reducing then eliminating debt.

I keep looking at my retiremt fund balance. Once per day. As you know, it's like looking at a yo-yo, that doesn't seem to return back to the hand each time it's dropped.

I know that there are crazy weird things happening right now, and today's balance will have little in common with the balance 6 months or 6 years from now. But, it's kind of interesting to see what I hear on the news translated directly into my own retirement fund.

After yesterday's post, I found myself fixated with my debt to retirement fund calculation. I ran a projection. I assumed my monthly contributions to my retirement fund plus modest gains (thanks again, congress) plus my projected decrease in CC debt.

I project that by March 2012, my ratio should be 14.6%. Of the three factors I mentioned, (contributions, fund growth and CC reduction), I have control over two of them. My contributions are pretty much fixed at 15% of salary. I could increase contributions, but I probably will not. I have absolutely no control over the market. The one factor I can really work on is CC reduction.

Let's see if I can continue to whittle down on CC debt, and meet my short-range goal of a 14.6% CC debt to retirement fund ratio.

This isn't a real financial benchmark ratio, as far as I know. But, 5 years ago, it was about 100%. In other words, I owed about as much on credit cards as I had saved toward my retirement - $30,000.

I calculated this ratio again, and it is now 20%, even with the pathetic performance of my retirement fund over the past several weeks (thanks, congress). Or, for every dollar I have saved towards retirement, I owe twenty cents in credit card debt.

Of course, my goal is to have that ratio down to zero.