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In spite of my not having worked the first three months of 2018 (against my will, for once), financially the Warckens crushed it last year. I didn’t start working until the first week of April, and just to show how much of a sugar mama I am, I made more in my first two weeks of employment than Greg had made all year up to that point. Granted, Greg doesn’t work full time and we took plenty of advantage of my unemployment.
Quick background on us: I am an associate-prepared registered nurse (RN). I’ll have been a nurse eight years next month, and have always worked in intensive care, mostly on cardiac units. I started travel nursing in 2015 and have never looked back. My husband, Gregory, is a part-time ramp agent and trainer for the subsidiary of a major airline. He’s the guy who brings the planes into the gate and loads/unloads the bags. He brings home the flight benefits, I bring home the bacon.
You can read about my unemployment struggles, but long story short I found a seasonal ICU position in Tucson and worked one 13-week contract, then extended another 8 weeks before we left Tucson to go travel and farm like we do every fall. I liked the job and had good rapport with my coworkers and my manager, and he was gracious enough to give me another seasonal contract starting in December.
Note: a seasonal contract is different from a travel contract. My contract is for 36 hrs/week (three shifts) for 13 weeks, same as travel nursing, but I’m employed by the hospital, not an agency, which means a lot of things. Namely, there isn’t a third party involved. I don’t have to live 50 miles away from my hospital, and/or maintain two households for tax purposes. I don’t get a tax-free housing stipend like I would with a true travel assignment, and I don’t have access to any employer-provided health care or retirement match. But that’s fine because we’ve been on Obamacare since 2014, and have independent life insurance policies. As for all my now-taxable income, I make three times hourly as I did at my last travel assignment. But the great news is… I’m eligible to contribute to my hospital’s 401k, I just don’t get any match. Not wanting to appear too rich to ol’ Uncle Sam, I contributed the company-max 50% of my pre-tax income to my 401k in 2018 (the federal contribution max was $18,500 in 2018). Which brings me to all the ways we crushed it in 2018:
I maxed out my 401k for the very first time!
It took a solid month to be able to start contributing to my hospital’s 401k, so I was a bit short of the contribution limit when my second contract ended. $653.38 short to be exact. Luckily, while Greg helps his parents farm in North Dakota, the local health department is happy to bring me in to give flu vaccines to the local schools, senior citizen centers, and businesses. It is like, the best job ever, and I am so happy they’re happy to have me every year. Oh, and I get an unmatched 401k there, too. Enter the $653.38 I was missing to hit that $18,500 for the year. Actually, I accidentally went almost $700 over the max limit, but a few phone calls and emails got me the money back, taxed, on my next paycheck.
Greg (nearly) company-maxed out his 401k!
Greg’s company-max is just 40% of his pre-tax income, but he does receive a 3% match (woohoo free money!!). He was only contributing 15% in 2017, and although I changed his contribution to 40% before the end of the year, it took until April for the change to go through his company. He called, he talked to HR, he talked to the investment company, no one could figure out why the change wasn’t going through the system. Old Lady Warcken’s head about exploded. Finally I tweeted a rant and @’ed his investment company. His contribution limit was raised to 40% his very next paycheck. Coincidence? I think not.
We both maxed out our traditional IRAs!
The federal contribution max for 2018 was $5500 per individual. Initially my plan was to spread out our contributions over the course of the year in 12 monthly installments, but I got impatient in March and just filled them up and forgot about them. We contribute to traditional IRAs, not Roths, because we’re not planning to work until our traditional retirement ages. Traditional IRAs are funded with pre-tax dollars, and allow us to take the tax advantage now, instead of later when we may not be working as much, or at all. I read the Mad Fientist, and listen to his podcasts, and love his simple explanations of complicated tax issues. He has this great article on Traditional IRA vs. Roth IRA in regards to early retirement.
We maxed out Greg’s HSA!
My health insurance isn’t eligible for a health savings account, but Greg’s is, and the federal contribution limit in 2018 was $3,450 for individuals and $6,900 for families. For those who don’t know, according to hsacenter.com, “A health savings account (HSA) combines high deductible health insurance with a tax-favored savings account. Money in the savings account can help pay the deductible. Once the deductible is met, the insurance starts paying. Money left in the savings account earns interest and is yours to keep.”
We are fortunate to be able to use Greg’s HSA not for medical expenses, but as a triple-tax-sheltered retirement account. The money isn’t taxed going in, it isn’t taxed on any earnings, and it isn’t taxed when you withdraw it for medical costs. Or after the age of 65, which is our plan. Again, the Mad Fientist has a great article on the subject: Ultimate Retirement Account. If you are eligible for an HSA, drop what you’re doing and read that article posthaste.
Note: I am a card-carrying member of the Muscogee Creek Nation, and therefore qualify for a Native American healthcare plan through the Affordable Care Act. I don’t qualify for an HSA because I don’t have a deductible. If you are Native American, I would encourage you to do your research.
We side-hustled our way to funding Greg’s HSA for 2019!
I set up a dedicated side hustle savings account, and through our super lazy side hustling, we put over $3,600 in it over the course of 2018. The federal HSA limit for individuals went up to $3,500, so we made more than enough to cover. Giving plasma is by far our most lucrative hustle, but I also threw in any random money we received this year- a bingo win, a $10 bill on the ground, our auto insurance dividend. Any money we didn’t earn through our jobs went into this fund.
We invested 71% of our pre-tax income!!!
This deserves three exclamation points indeed. Or three hundred. My goal was 50% for the year, but why give 60% when 70% feels so good?
Jamie 401k: $18,500.00
Greg 401k: $4716.85 (plus $426.56 employer match)
Jamie IRA: $5500.00
Greg IRA: $5500.00
Greg HSA: $3450.00
Grand Total: $51,369.64
Our Vanguard brokerage account is where we invest after all the tax-sheltered accounts are maxed out. Like I said, my goal was 50% pre-tax so every paycheck I set aside the extra money that didn’t go into our 401ks. 10% of all of Greg’s’ checks were put into the brokerage fund (he could only contribute 40%, so the 10% makes up the difference), and after I hit the federal max, 50% of my checks went in there.
That was definitely the hardest part of investing this year. Mentally it’s super easy to contribute pre-tax income through your employer because you never see it. Out of sight, out of mind. It’s a bit different when you get, say, a $5000 paycheck and you have to physically take $3000 out of it for your future retirement. Remember: the best investment is the one you’ll actually make.
We hit a retirement milestone!
Not including any social security benefits, my goal for our actual retirement is to have over $1,000,000 in the bank. That would equate to a modest $40,000 yr/income for this Frugal Fred and Frannie. Our ultimate retirement dream is to be campground hosts in a national park, or maybe a nice wildlife refuge, so health-willing, we’re both planning to keep earning through early retirement, and even after our traditional retirement ages.
Using Dave Ramsey’s investment calculator, I figured out when would hit that magical million. Greg turns 40 in February 2019 so I used that, and his 65th birthday, as benchmarks. If we could get to $200,000 in investments by the time Greg turned 40, we could have over a million when he retires at 65, based on a conservative average return of 7%/yr. We hit that goal September 13, 2018 (not that I was, and currently am, keeping track on a daily basis).
What that means is… if we really wanted, neither of us would have to contribute to any investment or retirement account ever again, and still retire millionaires. This is like being on coast retirement, and really takes a lot of pressure off keeping “real” jobs with “real benefits” and always striving to max out our retirement accounts.
But what do we look like, a couple of degenerate gamblers? Lulz, jk, I literally wrote this from the Palms Casino Resort in beautiful Las Vegas, NV. But we gamble with our disposable personal allowances, not our future retirement/wellbeing, and like any normal human beings we have to take into account things like inflation, and illness or injury. Bad shit will happen. It. Will. Happen. Be ready for it. That said, we’ll keep contributing as long as we’re working. And good thing, as October, November, December were pretty awful for the market in spite of investing another $13,600 after hitting our $200,000 mark, we finished 2018 with just over $185,000 in investments. No matter! That’s why we’re in this for the long haul. Hell, now everything’s on sale, it’s the perfect time to keep dumping money into the market!
I ran some other numbers, just for fun- if we contributed $1,000/mo until Greg turns 65, $2,000/mo, and $4,280/mo (what we averaged in 2018). I would definitely encourage you to run your own numbers to see when you could get off the hamster wheel. #lifegoals #lifeplan
We funded a hard money real estate loan!
That means someone else gets to buy real estate with our money and pay us back a set amount of interest (in this case, 4%) with monthly repayments over the next seven years. This is our lazy man’s way to invest in real estate without putting in the time, effort, and capital that goes with being a landlord.
We sold our camper!
This is a win and a loss. I miss camper living dearly, but we sold her for $5,000, or $1k less than we bought her 2.5 years before, and were able to use the money to almost entirely cover our rent in Tucson for five months. Furnished rentals in Tucson are not cheap, but we did have a solid roof over our heads during the summer monsoons, and chickens, and a saltwater pool in a really great neighborhood. It worked out. I shop for another camper on a near-daily basis.
We finally got (term) life insurance!
This has been a years-long process of being turned down multiple times for “lack of employment” and “questionable hobbies” like “scuba diving” and “rock climbing” and “travelling to third world countries”. Now that I’m pregnant we actually need life insurance and we’re not doing those things, so the timing just happened to work out perfectly.
Oh yeah, I’m pregnant!
It feels weird to put an exclamation point on that because I’m easily the least excitable pregnant woman I’ve ever met. Before you get all all judgey on me, we weren’t planning this. I’m 35 and Greg will be 40 next month. You know what a 35 yr old pregnancy is considered these days? Geriatric. I’m the senior citizen of first time mothers.
I had a hard time accepting my contribution of another human being to this over-populated world, but I’m learning to live with it. Until I hear food production is the number one CO2 contributor on the planet, then I just want to crawl under a rock for adding yet another mouth to feed. I’m going back to my original plan of breastfeeding until this kid is seven. Teen.
I’m maintaining my sanity by seeking out those who have the planet’s best interest at heart, and pretending those that don’t… don’t exist. I’m not alone in wanting to save the earth, and I can’t do it by myself. But I do know, without a doubt, one person can make a positive impact and thereby change the world. Every time I take my own cup somewhere, I’m contributing. Every time I drive 20 mph below the speed limit, I’m contributing. Every time don’t flush after I pee, I’M CONTRIBUTING. I love learning about others’ environmentally-friendly ways, and I really, really, really love when someone tells me they started, or stopped, doing something because of me. Like giving up straws, or plastic ketchup ramakins, or styrofoam cups. That shit keeps me alive, people, and gives me great purpose. And I’m super fortunate and grateful to be married to my biggest “look at everything you do to make this world a better place!” supporter.
And speaking of that supporter, my Greggle’s love and encouragement has been, hands down, the best part of creating this new life together. I didn’t want to have my own babies- not because I don’t like kids or want to be a mother- but because the world has enough babies, and I was sure I would be one of those lunatic women who cried and raged and treated her husband like shit for nine months, and blamed him for all the horrible things happening to her. Turns out I’m just the opposite and a real pregnancy champ. I had a bit of low-lying nausea for maybe the first month, and since then I’ve felt nothing but great with even more love, respect, and admiration for the man who got me into this mess. He is the best man I’ve ever known and if there is a smaller version of that human running around, well… the world will inevitably be a better place.
Other 2018 highlights:
We reached the tops of four new states, we saw two new countries, we backpacked, we hiked, we birded, we conquered. It was a great year.
Goals for the new year:
Have a healthy baby. So far, so good! Chromosomal tests look great, and baby is kicking up a storm and growing like a weed.
Take an indefinite maternity leave. This is why I preach preach preach making hay while the sun shines. You never know when plans will change, when you’ll get knocked up in a tent in a national park (this baby is surely destined for great things). But I do know I’m so happy and grateful not to worry about going back to work in six weeks and sending our baby off to strangers to care for. No judgments, we just want something different.
Max out our traditional IRAs and Greg’s HSA for 2019 with the money we side-hustled and put in savings in 2018.
Decrease our investment rate to an actual 50% to account for unexpected baby expenses, and to make up the cash allocated toward that hard money loan. I like having cash around, it helps me sleep at night, which is my ultimate investment goal.
Not spend any unnecessary money on this baby. I don’t want new shit. I don’t want to support consumerism. There is plenty of used everything circulating around this country. When I was home for Thanksgiving I had a super great minimal impact baby shower where my friends and family brought me their hand-me-down clothes, cloth diapers, books, blankets, high chairs, toys, baby carriers, a pack n’ play, and I’m sure I’m forgetting much more. It was so fun and I’m so grateful for the used stuff! When I’m done with it I’ll be so happy to pass it on to someone else. I’m keeping track of everything we spend on this thing and so far we’re up to $14.50. $10.50 for a winter hat from Poland, and $4 for new nipple pads and used bottles from Goodwill. Oh relax, I boiled the hell out of them. Then used the boiled water to wash the rest of my dishes! #minimalimpact
Max out my 401k. I have six paychecks until the end of this contract and the federal maximum contribution increased to $19,000 in 2019. Again, I can only contribute up to 50% of my pre-tax income so this is going to take some serious overtime on my part. But I’m feeling great and the sun is shining, so why make hay in three shifts a week, when you can make it in four? And four feels so good I might as well work five. I’ll just sleep when I’m on maternity leave! lololololololol WTF have we gotten ourselves into?
Every year since Greg and I started dating has been better than the last, and I’m just sure 2019 will be our best yet.
I hope everyone else’s new year is happy and healthy, financially sound, and environmentally friendly!