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2015 retirement contribution goals

October 26th, 2014 at 01:18 pm

The IRS increased its contribution limits for 401(k) for 2015, and after crunching some numbers, I should be able to easily max out my contributions for the 401k, 401k catch-up, IRA and IRA catch-up, to the tune of $30,500.

Right now I'm contributing to a traditional 401k in the hope that these contributions will lower my taxable income enough so that the traditional IRA contribution I made earlier in the year, before I knew I'd have a perm job, will be fully tax-deductible. To be fully tax-deductible, I have to get my taxable 2014 income down to below $61,000, or at least below $71,000 for partial deductibility.

I THINK I can do that, and this is one reason my current 401k contributions per paycheck are so high, at $1,000 per paycheck.

But next year I will do a Roth 401k and Roth IRA as I'm trying to create a more balanced mix of Roth vs. traditional retirement accounts. I've read about some interesting tax strategies you can use when withdrawing retirement money as income, and having the ability to withdraw a combination of both traditional and Roth IRA monies offers the best tax savings.

Right now, I have much more money in traditional IRAs as I have never felt my tax rate in retirement would be higher than it is now. But for the reason just stated above, I will attempt to create greater equilibrium in Roth vs traditional retirement monies.

Update on my mother:

After my mother told me she didn't want to take the meds which could slow progression of dementia or take the driving assessment, I called the doctor's office to let them know she changed her mind, and was there anything else they could do. I left the message on the nurse's answering machine but the doctor called me back later that same day.

He was very concerned about her not wanting to take the driving assessment, based on her test results, and he stressed that if she would not take the test or took it and failed and continued driving and then got in an accident, that she would be 100% liable because it would become known that she was driving against doctor's orders. She could be sued for everything she has.

I asked the doctor if he would compose a letter on his letterhead reiterating everything he'd just said to me and send me the letter, which I would then go over with my mother.

I called the driving school and cancelled the original appointment; they agreed to do a driving test with her on a Saturday, when I can take her there myself and make sure it gets done.

If she does flunk the test, I have the very unpleasant vision of having to take my mother's car keys away, as well as the car. I'd have to get my sister to drive over with me so that one of us could drive away my mother's car. I would then sell the car for $2,000 or so to a private party and deposit that money in the joint checking account I have with my mother, to be used to help defray the cost of having an aide come to the house a few days a week. This was something my mother already rejected out of hand, but if my mother couldn't drive herself, she'd have to have someone to drive her to grocery shopping and doctor's appointments at the very least.

Although the hourly rate of around $15 to $20 an hour seems reasonable, even having someone come just 2 hours a day twice a week really adds up, to $4,000 on an annual basis. My mother gets just $942 a month from Social Security ($11,304 a year) but she does have $130K in savings. We would have to dip into savings a bit to cover the aide or other transportation options.

(There is a regional, low-cost shuttle bus for seniors that I looked into once before, but they have a fairly involved process and rules for making reservations which seemed a bit beyond my mother to remember. If you are a no-show just a few times they stop accepting your reservation; i guess that was a problem with some riders in the past.) I'll have to call senior center to see what other options there may be.)

To sell the car, however, I need the title, which I noticed was still sitting on my mother's desk when I was there yesterday. She had it out because we had been talking about buying her a new (used) car and we thought we would trade in her current car when we bought the new one from a dealer.

However, after having my mother's mechanic check out her current 96 Subaru wagon with 110,000 miles, he said there was nothing wrong with it save for an issue with the rear differential that if it got worse, would cost more to fix than the value of the car.

So I don't think we would want to sell her current car now anyway as the mileage is not too bad and although it looks like an old car, mechanically it's in decent shape. It just needs new tires, which I'm wondering if I should replace with just middle of the road new tires so that I could sell it more easily.

So though I was tempted to take the title when I saw it on her desk, I was afraid, if she saw it was missing, that she'd go nuts looking for it again after she had such a hard time finding it to begin with. So if I wind up having to take the car keys, I will need to remember to also get the title as well.

Right now I'm in a holding pattern, waiting to receive the doctor's letter this week which I will then show to my mother. I also need to talk to my sister about it, who's been largely out of the picture.

I did go an AARP meeting Friday night for caregivers. It wasn't exactly like a support group but she did go over various resources and such that I haven't had a chance to dig into. I have so little time to make phone calls and such since I have just a half hour during my workday, during my lunch break, when I can make a private call or two on my cell phone sitting in my parked car in the parking garage. If I can't reach someone and have to leave a message, it's a problem since if they call me back at my work phone, I can't have a personal conversation there.

In January, that situation should improve quite a bit as the company, in another cost-saving measure, is going to squeeze 200 people now on 3 floors onto 1 floor of the building. To do that, they have to reconfigure the seating (get rid of the cubicles in favor of long rows of side by side desks...UGH) and most people will be required to work at home to some extent.

I am hopeful that I'll be able to work at home at least 2 days a week, maybe 3, and have already let my boss know I'm really concerned about my ability to write (it's difficult now) when people will be sitting in such close quarters. There are some very loud people who talk in their normal speaking voices or louder as they talk to coworkers sitting further away and there is no custom of hushed conversations as there were in other workplaces I've been in. It amazes me that people can be either oblivious or just not care whether they're disturbing others.

3 Responses to “2015 retirement contribution goals”

  1. Another Reader Says:

    Check with your state DMV to see if they have a procedure to insure elderly drivers are capable of driving safely. In California, you can report poor driving of an elderly family member to the DMV and they will require a driving test. If your mom failed the test here, her license would be canceled.

  2. FrugalTexan75 Says:

    I hope that you do get to work at home for a few days a week - that would help solve some of your stressors.

  3. Dido Says:

    So sorry things are so stressful with your mother now. It is so hard when you need to become your parent's parent.

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