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Trying not to count my chickens

December 26th, 2021 at 05:22 pm

My company often gives us a bonus if we meet our revenue goal for the year.  They announced at the monthly company meeting earlier this month that we had met it, so I am very optimistic that we will be getting a bonus. 

This used to occur at year-end, but a couple of years ago, they changed it to giving it out at the end of February so that the books could be formally closed for the year before they figured the percent that they would use (the bonus is typically some percentage of your base salary).  In past years that we've gotten a bonus, the percentage has been 10% or 20%, but that was before they increased everyone's base salary by 20% at the beginning of 2020, so I'm not sure what percent bonus to expect.  There was no bonus in 2020 and, with higher base salaries, the percentages for bonuses are likely to be lower. 

If we get 10%, I'll be able to wipe out one of my debts completely.  Then in January of 2023 (bonus or no bonus) I will be able to wipe out a second debt (0% balance transfer credit card), and that will bring my debts down to my mortgage, a HELOC, and one other loan (plus monthly credit card debt that is paid off) by early 2023.

I don't think I'm going to have all of my debt paid off by the end of 2025 as I had once hoped, but if we get a couple of additional bonuses between now and then, it's still possible. 

By January, my debts should be less than 10% of my net worth, and my assets about 11.5 times my net worth, which is a big improvement from 5 years ago, when my debts were over 20% of my net worth and my assets were 5.6 times my net worth. 

My retirement assets are at about 8x my annual income, which is still too low to retire (ideally you have your retirement assets at least 10x your annual income, or better yet at 12x your income or more), but, as less of my income will need to be devoted to debt reduction by 2023 (assuming no more really major debts--I'm already assuming there will be some fairly large veterinary bills and capital expenditures), I should get to "retirement-range" assets (10x income) by my mid-60s (I'm 61) assuming that we don't have a protracted slump in the markets.  (I'll be looking at my allocations during this next week that I have off and considering how much more conservative I want to get--I remain at about a 60/40 allocation overall).  I'm currently saving 22% of my income to my 401(k), and getting another 3% contribution from my company.  Any additional savings will be put into conservative investments in a taxable account because I need to increase my liquid reserves.  I was also really happy to see that my retirement savings from my current job (which I have been at for 5 years and 2 months) are at about 106k even before the 12/31 contributions.

1 Responses to “Trying not to count my chickens”

  1. PatientSaver Says:
    1640730951

    Fantastic!

    One thing I do miss from when I worked at a few larger and more professional organizations is the generous bonuses around this time of year. It was so exciting.

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