Tuesday, November 11, 2008

Gettin’ Things DONE

I’m on a roll!

I dropped off two pairs of shoes at the cobbler and paid up front ($24) for heel repairs and a good shine. Not too bad, although I could completely replace both pair for the price (one is a $13 payless pair, the other I got for $5 at a shady discount store). However, I like both and they’re perfectly broken in. It seems like a good investment.

I made almost all the arrangements necessary for Peanut’s birthday extravaganza surprise. I still need to arrange transportation, but that can be done the day of. Yay! I’m so excited I just want to tell someone what I’m doing, but I want this to be a big surprise to him so I’m keeping my mouth shut.

I got another spa mystery shop and booked my appointments for a facial and an eyebrow wax. I’m a little ambivalent about the eyebrow wax—the last one I got left my brows WAY too thin for my tastes, and I’ve been trying to grow them out ever since. But a waxing service is required for the shop, so I’ll suffer through. J I’m still trying to get the holy grail of spa mystery shops, the massage and body wrap. MMMMMM...

I got all my paperwork for 2009 benefits, including my health care reimbursement account, an d tuition reimbursement taken care of. Ah, relief!

Yesterday in the mail, I got an offer from my company that I can now invest in a Roth 401(k) in addition to a traditional 401(k) as part of my work benefits.

I debated signing up but I don’t think it’s as valuable as it might be.

1. I will probably be in a LOWER tax bracket when I retire, so it makes sense for me right now to use tax-deferred investment options. This is not the case for most people, and I can only hope I’m assuming this correctly. Yes, I’m at a fairly low federal tax rate right now, and I expect that it will increase as my earnings go up. However, living in New York City, I’m also subject to New York State and New York City income tax. I do not intent to retire in New York City; in fact, I will probably live in a state that has no income tax at all. So while my federal tax rate might be higher, I won’t be paying city and state taxes, and my overall tax liability will be lower. For that reason, I have a rollover traditional IRA in addition to my work 401(k) but I have not opened a Roth IRA and will not be opening a Roth 401(k) any time soon.
2. It doesn’t sound like there’s an extra match—I get a 6% match for contributing to my 401(k). I currently contribute 10% of my pre-tax income. If I could get an additional 6% match by contribution my after-tax income to the Roth 401(k) I would jump all over that—it’s free money! But it sounds like the company will only match 6% on my total income, so there’s no opportunity for more free money.
3. I won’t have the money next year. Unless Peanut and I move in together and cut living expenses, next year will be pretty tight for me. I allocated more than $200 per paycheck into my HCRA to pay for Lasik surgery and when I get reimbursed, that money can’t just go back into my regular budget—it needs to be set aside for student loan payments.

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