Hi Money Minder,
I just need another set of eyes on my numbers to reassure me I’m on track. My annual income is $158k, and my net worth is around $580k (home value at purchase price). I only pay off my credit cards in full each month. I didn’t start saving seriously for retirement until my mid-30s.
My retirement savings rate is about 24%, including my HSA contributions. I have two brokerage accounts where I put $400 each monthly – one for long-term savings and the other for retirement (which I count towards retirement). I don’t include 529s or any pension-related contributions or matches, but I do count my full 401k match as it vests immediately.
My fixed monthly expenses add up to $3,486.32, and my variable expenses, which I stick to religiously, total $2,300. My monthly retirement contributions amount to $3,555.60, and I save an additional $1,750 monthly.
Currently, my cash account balances are $60,000, and my investment balances total $403,750, with tax-advantaged accounts in low-cost index funds and a few individual stocks.
It would be great to hear your thoughts on my financial situation and any suggestions for improvement. Thanks for your help!
Seeking Advice
Response from THE MONEY MINDER:
Hello There,
Congratulations on your disciplined financial approach and commitment to saving for your retirement! It’s clear that you’ve put a lot of thought and effort into structuring your budget and investments to secure your financial future. With an annual income of $158k and a net worth of $580k, including significant retirement savings and personal investment accounts, you’re on the right track.
Your retirement savings rate of approximately 24% is impressive and reinforces your commitment to building a strong financial foundation for the future. Treating your HSA contributions as part of your retirement savings strategy is a smart move, especially given its tax advantages for healthcare expenses in retirement.
Your detailed breakdown of fixed and variable expenses shows a clear understanding of where your money is going each month, and your manageable debt load, particularly with a mortgage at a low interest rate, reflects responsible financial management.
Maintaining healthy cash reserves in your checking and savings accounts, along with diversified investment balances, demonstrates a well-rounded approach to financial security. Your focus on low-cost index funds and established stocks like Microsoft, Apple, Nvidia, and Google in your investment portfolio indicates a thoughtful approach to long-term wealth accumulation.
Overall, your financial picture looks solid, and your proactive savings and investment strategies should set you up for success in the years to come. Keep up the good work, stay diligent in monitoring your progress, and continue to adjust your financial plan as needed to meet your long-term goals.
Best wishes for continued financial success,
THE MONEY MINDER.
