Sunday, March 24, 2013

When does getting a check for $4K in the mail suck?

When you get it because your 401K plan has failed the IRS' non-discrimination test and the amount is being refunded from your 401K contribution for 2012 and will increase your taxable income in 2013!!! Boo. Sooooooooooooooooo annoying.

I do everything right to save for retirement and the government penalizes me at every turn -- my IRA contribution (which I max out every year) is not deductible. Now my only tax advantaged account which I am legally allowed to contribute $17,500 to (or whatever the # is) is reduced by several thousand dollars -- more than 20% of my contribution returned!!! I think the government should encourage everyone to save, and if "high income" savers save more they shouldn't be penalized. In reality, the government probably does not do this because they care about encouraging lower income savers, but because they want to get their hands on as much income as possible from high-income earners so they can tax it.  Ugh. Well, I'm just going to have to save more in my taxable account and spend less to make up for the government's constant blocking of my attempts to save in tax-advantaged accounts.

Sunday, March 10, 2013

Plugging Along

Not too much new to report, but I realized I didn't post in February which is probably the first month in a long time that I haven't.  I'm in the midst of doing my taxes and despite the evil AMT it looks like thanks to my mortgage interest I will get approximately double my refund of last year. I should be looking at a sweet $6500 refund check(s) between state and federal. 

In terms of spending, I've been spending A LOT on the health & wellness category. I started another alternative medicine therapy to try to get a chronic condition I have under control. It's costing me $90 a week. I already pay $100 a week (or more) for an alternative treatment. Thank goodness for flex spending. I checked and I have a balance of like $1,800 I think that I have to use by June which will be no problem at all. I've also for the last month or so been trying to cut back in other areas to make up for it including eating out, buying clothes and furniture and anywhere else I can think of.

The market is on FIRE, which is awesome, but I also have a lot of cash from my bonus and from selling loser investments at the end of last year just sitting in my brokerage account waiting to invest. I'm not making what I call the "great investment mistake of 2007" again, so holding the cash until the line trends in the other direction. That said, for the last few years I have kicked myself for not following the sell in May & go away adage. I think I'm going to get hosed moving forward on taxes on investment gains though so I don't think I should sell my portfolio. Plus, all those transaction fees bite into gains.

I'll post a networth update in early April.