So I managed to make it through the busy part of the year alive and in one piece. Besides work, March was a pretty uneventful month, except for the markets. Market volatility seems to be here to stay, which has the potential to mess up the steady, even progress I had been enjoying up to this point. I still haven’t lost enough in one month to outweigh the new contributions and thus cause a month-to-month decrease in Net Worth, but I’m sure that day isn’t far off.
I did manage to execute a rollover of my after-tax 401(k) sub-account, better known to some as the so-called Mega Backdoor Roth. I had been putting this off for some time because I didn’t know how complicated the process would be. Turns out all it took was a single phone call to my company’s benefits hotline and they took care of the rest. By doing so, I was able to move my after-tax (non-Roth) 401k contributions and its associated earnings (about $40,000 in all) out of my 401(k) and split it into my Roth IRA (contributions) and Traditional IRA (earnings). The benefit of doing so is that any future earnings within the Roth IRA will be tax-free forever! This maneuver effectively sidesteps the $5,500 contribution limit to the Roth IRA and lets me put much more money in there. At a higher level, I think it’s definitely not fair that only certain people with 401(k) plans which allow this are able to do it, and this loophole should either be closed for all or opened for all. Then again, if enough people knew enough and cared enough to pressure their congress-critters to make that change, maybe we would have a much better tax policy overall to begin with! </political rant> The bottom line is that I will continue to do this until it gets taken away from me or I retire, whichever happens sooner. It is also the reason for the shift in my progress chart from after-retirement to before-retirement.
All that being said, here’s how my spending looked for last month:
Projected time to FI (assuming 6% growth and 4% withdrawal rate): 5 years, 6 months.