End of 2014 – Retirement Accounts Update

The year is coming to a close, and it’s a good time to  review and check out how my retirement accounts have been doing these past six months. The last update I gave was in the middle of 2014 and these accounts are also a big part of why I finally hit a positive net worth. I continue to make my student loans a priority because of their interest rates, but living at home has also enabled to me contribute a sizable chunk of change to my retirement accounts as well. The S&P 500 has been relatively stable since May when we look at then compared to now, so I don’t expect huge gains from the stock market. My contributions have been continuing though, so there is always progress!

As a refresher from the last time I updated you on my retirement accounts, I had hit $25,000 total saved which was a huge accomplishment for me. This is what my my retirement accounts looked like in May of 2014:

You can see that my Roth IRA and 401k make up a majority of my retirement contributions, as the pension is simply just a flat 3% of my salary with a very low interest rate based on the Fed lending rate. I made the $5,500 contribution to my Roth IRA earlier in the year so I don’t expect to see any huge gains from May to December with that account.

I contribute 8% to my 401k and my employer matches 3% up to 6%, so that is another 3% of “free” money that I am getting from my company. I expect this to be the area that shows the largest increase which will mostly be comprised of those contributions from my company and from me personally. So without any further interruption, here’s what my retirement accounts look like at the end of 2014:

As you can see from the above, I have posted gains across the board which is always a good thing! I’ve gained almost $6,000 in value in the past 6 months and have also passed the $30,000 mark. With my student loans hovering around $38,000 I’m quickly approaching the date when the amount I have saved for retirement is more than my total student loan balance. If you had told me that would be true two years ago when i started paying off my student loans I would have never thought that would be even remotely possible. In fact, two years ago I had no knowledge on even HOW to invest and save my money for retirement. The extent of my personal finance knowledge was a checking account, savings account, and a CD.

My current investments for my retirement accounts consist of index funds. I’m invested in a target retirement fund at both Vanguard and through Charles Schwab (the manager of my company’s 401k plan). They are both the lowest cost funds that I could choose and consist of around 80% stocks and 20% bonds at this point. When I have more money available in my Roth IRA I plan on allocating into individual index funds with lower expense ratios to create what will most likely be a simple three-fund portfolio.

Going into 2015 I feel like I’m in a good position and ready to start turning the corner when it comes to my finances. Although I do plan on moving out in early 2015, I’m still hoping that I can work a large contribution into my Roth IRA to hit the maximum limit of $5,500 for the year. In the past two years I have maxed out the contribution right at the beginning of the year. While it might have been more prudent to throw that money at my student loans for the guaranteed return, I have gotten lucky with the market outperforming that recently. Besides you can only make that contribution once a year and then you lose it. I want to take advantage of compound interest and invest as much as possible while I’m young!

Image Source: Jay Mantri


    1. Thank you, and I agree with you that there is always a first time for everything – especially when it’s a positive goal. I wish you luck heading into 2015 as well.

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