Still have to wait for the final 12/31 numbers, but they should be close and I'm rounding in any case. Total assets, around $1,070,000 (high in November was $1,085,000). Added around $129,500. Total debt, around $50,750, a significant decrease of about $23,500--a big improvement over my typical $10k decrease a year. Motivated in part by the acquisition of the company I work for, which lit a fire under me for getting debts paid off just in case I don't like the way things go under the new entity (which, since we were acquired by a private equity firm, will probably be sold again in another 3 years). Total net worth around $1,019,250--first time I end the year over a million.
I have two beneficiary IRAs which operate under the "old" (pre-SECURE Act) rules, so I have annual RMDs (required minimum distributions) to take. While I have the debt, I have been taking my RMDs near the beginning of the year and using them to pay down debt. I will do that again this week. After that, I expect the total debt balance (around 25k of which is what's left on the mortgage) to be down to around 44k).
We may or may not get a bonus--I still have no good idea how the new acquiring company works, other than that if there IS a bonus, it will come early in the year, along with an announcement of raises (again, waiting with great anticipation). With my old, much smaller company, they kept the employees apprised each month of how the company was doing, so we had a pretty good idea of whether bonuses would be coming or not, since bonuses were based on the company meeting a certain profit margin. In any case, if there IS a bonus, I have one additional chunk of debt (a balance transfer credit card) that I will pay off and then will add the additional funds to a sinking fund for all of my "irregular" annual expenses.
I plan to manage things a bit differently this year--in the past, I've paid the credit cards down to a certain balance (typically, three with a $500 balance) and as long as I paid off the prior month balance, I didn't incur any interest charges. In 2025, I plan to leave the base balance at zero rather than $500 on those 3 cards. As the debt is coming down, I will be adding the excess to a government money market fund in my brokerage account for those big sporadic expenses, like annual insurance premiums. I hope to build that fund up over the year--but whether or not I am really able to build it up depends on whether or not a bonus is forthcoming. With no bonus, the additional funds I add in to the sinking fund will be spent during the course of the year.
As for my annual goals: I kept up the exercise at the beginning of the year and have been getting back to it during Q4, but the middle of the year was kind of a lost cause. I did NOT run the planned Turkey Trot again but will plan to run it in 2025. I also gained back about 10 pounds. Not a great year for my health goals, but it could have been worse. Wealth goals are right on target (as revised mid-year). My systems/habits/routines goals did not have much progress. If we do get a bonus, my big plan is to hire some help for the decluttering. I think that's the only way to ensure it gets done before I retire. The other thing I will do is to re-organize my vacation days, which I have been using to take long weekends, but it's been 2 or 3 years since I had as much as a whole week off at a time. One nice thing about the new company is that I will get an additional 5 PTO days, and I will plan to take perhaps a couple of 2-week periods of time off to make some progress. The problem with lots of long weekends is that the order in which I address my needs when I have time off is to first, catch up on rest, then to catch up on my social life, third to catch up on chores....which leaves no real time for any project that might take longer, like clearing out the items I don't use from the kitchen cabinets or sorting and filing the research papers I collect. In any case, Goals for 2025 will essentially be my 2024 goals updated, which is pretty much how it always works, now that my education and career change goals are history (but they were very much what governed me during my early days of blogging here).
Well, it's all of 8:30 pm on New Years Eve and I am pretty much ready for bed. I've been watching a lovely little series called "Portait Artist of the Year" on Amazon Prime (10 seasons available; they also have 8 seasons of "Landscape Artist of the Year"). It's just the right pace for a pre-bedtime winddown. Happy New Year everyone!
January 3rd, 2025 at 05:00 am 1735880438
I am personally hoping to get ahead of my RMDs before it ever turns into an issue. However, I need to sit down one of these days and figure it all out.... This is kind of a new territory for me to be honest.
January 3rd, 2025 at 09:51 pm 1735941100
DH has to take RMDs for the first time this year. And since we married in the spring, our taxes will be a whole new ball game for both of us. Fortunately he's smart and we've met with our respective financial advisors before the end of the year.
If you only owe $25K on your house, that's wonderful! You have done a fabulous job of saving and paying down debt.
Good luck on preparing for the Turkey Trot. Do you have to dress up for it or just your walking/running clothes?
January 5th, 2025 at 02:34 am 1736044460
I've actually run 2 "virtual" 5ks so far this year--one on 1/1 and another today, 1/4. One was just a "fun run," no time keeping, and for the other, you had to send proof of your time by taking a photo of your stats on your wearable device. I ran the second race for the first time last year with a time of 1 hour & 8 minutes, and today ran the same "course" in the same conditions in 50 minutes, so I'm getting faster, but not fast. I put "course" in quotes because I'm running indoors in my office space--we have a big open office set up and that's where I run when it's dark or too hot or too cold. I'm definitely slower outdoors with hills and weather!
Yes, RMDs totally change the tax game. Rob, if you as a couple do any charitable giving, do it directly from your husband's IRA (assuming it's an IRA--you can't do this from a 401(k) or 403(b). If the check is cut by the custodian in the name of the charity or it is send electronically by the custodian to the charity, then the amount of the donation can be deducted from the amount that is taxable. This is known as a "qualified charitable donation," (QCD) and it can reduce the taxes on your RMDs. You have to be over age 70.5 to do a QCD, but since RMD age is now 73, anyone who is subject to RMDs can do QCDs, so long as they are charitably inclined.
Tabs, you are wise to try to get ahead of the RMD tax hit. For most people it increases their tax bracket, and also may make Medicare premiums more expensive and could make more of Social Security taxable, among other effects. We have some clients who take funds from their IRAs before RMD age to bring the eventual RMDs down (while being tax-aware) and others who do Roth conversions up to the top of their current tax bracket, especially if it's a lower tax bracket like 12%.
January 5th, 2025 at 09:13 pm 1736111622
January 9th, 2025 at 04:37 pm 1736440636
January 11th, 2025 at 04:15 pm 1736612139
Some people are charitably inclined, others are not. You don't do QCDs just for the tax benefit, but because you are already charitably inclined.
You can't get around QCDs (unless you donate or do a Qualified Longevity Annuity), so then if you have a Required Distribution, your choice is how much of that amount you pay to Uncle Sam in income tax and how much you give to a charity consistent with your values. And for most people, because they need the income to live on, it's probably a mix, a small amount to QCD and a larger amount which is taxed.
February 5th, 2025 at 02:14 pm 1738764893