Ask the grumpies: Potluck dishes

Debbie M. asks:

What’s good for potlucks?

Spinach balls! Pasta salad.  Casserole?  Cookies.  Cake.  Rolls.

This is a hard one for #2– lately I’ve been bringing things like “soda” and “cups” to pot-lucks.  It’s not that I don’t like to cook, it’s just that I don’t have the time or that’s what I’m assigned.  I think the last pot-luck I was assigned to bring Pocky.

One pot-lock I brought a chicken pate thing that nobody ate at all.  It was delicious later with my RAs, but sad at the time.  (#1 has tried this recipe and ATE IT ALL UP!)

My Swedish rose cookies are always a hit (butter cookies with a thumb-print of raspberry or strawberry jam in the middle).

If asked to bring a salad, I will often make champagne salad , which was my mother’s potluck standard.  It’s kind of like a healthy ice cream, for some definitions of healthy.  I make it with whipped cream instead of cool-whip.

#1 is too tired to cook most of the time, but I generally try to bring something I’d like to eat; something easy; something that’s ok at room temperature; or something I had lying around anyway.  Ain’t nothing wrong with bringing a store platter of hummus, pita, cheese, grapes, etc.  I can barely get up the motivation to cook my OWN food sometimes!

Golly gee wiz, I just don’t know.

Grumpy Nation:  The potluck season is upon us.  What is good for potlucks?

Ask the grumpies: IRA limits and 401K limits?

Katie asks:

I just started a new job in which for the first time, my employer offers to match my contribution to retirement.  I already have a personal Roth IRA, and I’m trying to untangle contributions limits, etc.  I know the total amount you can contribute to all Roth IRA accounts is $5,500, but does that also include the employer contribution?  E.g. If I personally contribute $5,500 to both accounts and my employer adds their contribution, will I be over the limit?  What about contribution limits to a Roth IRA versus a traditional IRA?

To our knowledge, your employer shouldn’t be offering to do anything with your (personal) IRA.  Also to our knowledge, the IRA limits are completely separate from your work contribution limits.  The IRA is an individual retirement account.  Your employer will offer a 401(K), a 403(b) or a SIMPLE IRA.  Wikipedia has a nice table comparing 401Ks to IRAs.

So if your income is low enough to max out the personal IRA, you can max out the IRA and your 403(b) and your 457.  You have separate limits for IRA vs. 403(b).  If you have a 401K, those limits are the same as for the 403(b).  Here’s a table with the number limits.   In 2014, the limit for employee contributions is 17,500.  You would also be able to add the full amount to the IRA on top of that.  (And if you have a 457, you can add 17,500).

Employer contributions limits are different than employee contributions.  Wikipedia says that the employer + employee limit for 2014 is the lesser of 100% of your income and $52,000 [update: corrected– it doesn’t look like they can do 52K and you can do 17.5K… again, talk to someone who knows these things if you’re in this situation].  Where it might matter what you do is the income limits– if you make enough money you may not be able to contribute to a Roth IRA or get any tax credit for a traditional IRA.  In that case you could put money in a traditional IRA and then back-door convert it to a Roth.

If your employer is offering a SIMPLE IRA, then you can contribute up to $12,000 in 2014 and your employer can contribute either 2% of your salary or match 3% of your salary, with a cap of $260,000 for 2014.  You would still be able to max out your personal IRA on top of whatever you do with the SIMPLE IRA.

Standard disclaimers apply– we’re not tax attorneys, talk to real experts, etc.  Probably the best people to talk to about this stuff are the relevant HR people at your place of employment.

Addendum from Katie:

I have a personal Roth IRA which I began some years ago and as a graduate student, I was never eligible for any benefits or to receive matching funds from my employer.  Now I have started a postdoc, and am eligible to receive retirement benefits.  My employer offers a 403(b) Savings plan and a 403(b) Roth.  I would prefer the 403b Roth because I would rather pay taxes on the smaller, present amount, than the future, larger amount.  I know, however, that there is a limit to the amount you can contribute to a Roth IRA.  So my question was in several parts I guess.  One, what is the difference between a 403b Roth and a Roth IRA?  Two, is the contribution limit applied individually to all Roth accounts, such that you can contribute up to the limit to each account, or does the limit apply to your contributions to all of your Roth accounts added up together?  And three, are there differences when the account is a personal one versus an employer account?

The Fidelity rep informed me that the limits apply individually to each account, so I can contribute the maximum to each if I could afford it.  I’m still unclear, however, on what the difference between the types of accounts and how personal accounts differ from employer accounts.

Think of the 403(b) as a bucket and the individual IRA as a different bucket.  You can fill either bucket with Roth or traditional funds in any mix (subject to income limits you probably aren’t hitting as a post-doc), but the 403(b) bucket will only hold $17,500 this year and the IRA will only hold $5,500 this year.  (Next year you get slightly bigger buckets).  Only your employer can give you the 403(b) bucket, and you need to be making at least 17.5K (otherwise they can only give you a smaller bucket).  You need to make at least 5.5K to put money in your IRA bucket.  If you are making more than 23K/year then you can legally max both out (though you may want to do things like eat).  I’m not sure if you’re allowed to max both out if you’re only making 17.5K/year (as in, can you double count the 5.5K).  I doubt many people are in that situation since most people need to say, eat.

Roth just means, as you noted, that you pay taxes now and not later, whereas traditional means you lower your taxable income for this year but have to pay taxes on earnings in the future when you will hopefully be in a larger tax bracket.  Roth vs. Traditional doesn’t mean anything for how much you can save (at least in the first order sense, you can actually save slightly more with one of them because of how taxes are taken into account, but it hurts my brain to think of which one… in reality it isn’t as important as what tax bracket you think you’ll be in in the future compared to now).

 Does that answer your question?

Ask the grumpies: How much to save when your salary is small?

Leah asks:

I comfortably live on my salary with no issues. I easily put away 50% each paycheck (between savings and retirement). But my salary isn’t huge. Should I be digging deeper to find some less-easy money to amp up my retirement or savings account? I’m contributing to my 403(b) but not really my Roth IRA because I don’t know how to use my bank’s interface. Yes, lamest excuse ever.

Also:  How does my spouse saving for retirement impact my savings? As in, is it okay to not save quite as much? I’m saving, but I’m not saving 15% of my income for retirement. [Ed:  this means 50% of her income is going to general savings + retirement, but less than 15% is going to retirement]

And: I started saving at 30 for retirement. How much do I have to save?

It’s only been a little over a year since you asked this question, and it’s not like your family situation has changed at all, say, by having an adorable baby.  (*Cough*)

If you’re really only living on 50% of your paycheck, then that means you’re doing fine for retirement. Saving 50% starting in your 20s (even late 20s) will allow you to have more money than you need later on, if you keep those living expenses low.

However, some of your living expenses are probably subsidized by your husband.  So you’re probably not really living on just 50% of your income.  You will need to figure out as a family unit what your joint savings and joint spending is and what it’s likely to be in retirement.  What kind of retirement do you envision as a family?  What risks are there in the future?

As a general heuristic, you want to save 10-15% of your (joint) income for retirement.  If you didn’t start until you were 30, then you probably want to aim closer to 20% (or more).  But again, this is going to depend on what your husband is doing.  Even if you have separate finances in most areas, you will most likely be sharing living expenses now and in retirement, just assuming that you want to keep living with each other.  (And in the unthinkable event of divorce, many states are community property meaning they cut your assets in half no matter how many assets there are.)

In terms of whether or not you should dig deeper… well, that depends a lot on what’s going on now and being able to predict the future.  You do have a child now, and for the child’s sake, you want to make sure that he doesn’t have to support you during your golden years.  At the same time, babies are a lot of work and you may have more time and more money to devote when the baby is school-age.  A lot of things change over time.

As a side-note, when your salary is *truly* small, because you’re one of the “47%,” Social Security will replace a large percentage of your income.  And, correlation-wise, you’ll die younger.  But that’s not really your situation.

Yes, not wanting to figure out your bank’s IRA thing is lame.  Don’t use your bank for the Roth IRA (unless the only way you are going to do an IRA is through the bank, but that would only be the case if the bank was super easy to use, satisficing is always better than doing nothing).  Give Vanguard a call and they’ll help you figure out what to do, assuming you have enough money to put away in a Roth IRA.  Stick it either in an S&P 500 index fund or in their Target-Date retirement fund.

So, um, take that advice for what it’s worth given your changed circumstances from when you asked it.  We can elaborate in the comments!

Grumpy Nation, anything to add?

Ask the grumpies: Curriculum development

Leah asks:

Also, are there primers out there on curriculum development? That’s always a challenge for me. I have a hard time seeing the year as a whole when I try to plan individual days.

There must be, right?  As college professors we’ve only had to plan one subject for one semester at a time.  We could give general tips but there must be books out there, right?

The stuff for college professors tends to focus on activities, or the first day of class, or how to get students involved with creating the course.

Teach Like a Champion, which you should get if you’re teaching just because it’s great and full of tips, only has one short chapter on the big picture (Chapter 2).  What it says on the topic is good, but it doesn’t say very much.  Obviously there are entire classes on how to make lesson plans in teaching colleges, so there’s got to be more out there.  But we don’t know what is wheat and what is chaff.

Grumpy readers, help us out!  Any suggestions on books for Leah?

Ask the grumpies: Umbrella Insurance

SP asks:

 What is your opinion on umbrella insurance.  I saw in one comment (I did search your blog) that at least one of you has it.  My current quote [in CA] is $184/yr for $1M of coverage (deductible not clear right now).

Umbrella insurance is something you get if you have substantial assets someone could potentially take from you if they pursued a frivolous lawsuit against you (or even a not so frivolous lawsuit!  but we assume our readers will only be pursued by frivolous suits).  It also fills in some of the gaps from your other insurances, but in our opinion the lawsuit thing is the big thing.  $184/year for $1M seems reasonable.

The insurance is nice because you won’t go broke if you lose one of these suits and because the insurance company has skin in the game, they will often go to bat for you and help you out with the lawsuit itself (so I’ve heard, anyway).

If you are the type who thinks that a potential lawsuit may not be a random act of chance, then be sure to read the fine print on your policy.  Many things that could be your fault are excluded from the insurance plan, and if one of those is your particular vice, the umbrella policy isn’t going to help you if you get sued.  You also may be excluded if you run a home daycare, and I’m sure there are other exclusions for other higher risk (of lawsuit) occupations.

We got ours at the point that we had “real” assets that we were willing to pay something under $200/year to insure that we didn’t lose them.  We also thought at that point our assets might be attractive enough for someone to bother going through a lawsuit to get them if given the opportunity.  We bought umbrella about 3 years after getting real jobs, but I don’t know what our net worth was at the time, just that it was high enough that $200/year seemed worth it to our loss averse selves.

So that’s our thoughts on umbrella insurance.   Grumpy readers, what are your thoughts on umbrella insurance?  Do you have it (and why or why not)?  When did you get it?

Ask the grumpies: Obligation to house a sibling?

Kellen asks:

Let’s say I have a sibling, older than me, who has received enough bail outs from our parents that they don’t want to bail this sibling out anymore. That is–they want to help, but they feel like it’s enabling said sibling to continue not standing on their own two feet.

Now, sibling just moved to a small town very far away because sibling’s partner moved there for work. Sibling has no job, no money, and maxed out credit card. Sibling would need financial help to even pay for the gas and probable car repairs needed to drive across the country to move close to the family. One suggestion from parents is that sibling must stay in the small, far away town, find a job, even if it’s bagging groceries, and save enough to pay sibling’s own way.

Now, here I am, in a very good spot in life, just made it to saving 50% of my income this month. I don’t know if it’s good for sibling to stay in this small town with no money, and learn to hold down a job, or if, as family, there’s some obligation to help sibling get to where I am and stay in my (sort of) spare room (which is really our office/living room space) while sibling finds a job around here (in the big city).

Also, sibling has a degree as an elementary school educator + a masters degree in something like team-building activities (?), but has been trying to work as a general contractor. So sibling is not completely without qualifications, but kind-of without qualifications to do the kind of work sibling likes (working outdoors, doing labor). Also, I only know people who work in offices, which sibling has 0 experience with, so I can’t really help sibling find a job.

So, this is the kind of question that if the grumpies could answer it, they’d be able to sell the answer and make millions and millions of dollars, maybe billions once you add in speaking tours and private consulting with very rich people.

In terms of whether or not you have an obligation to invite hir to where you are and stay in your spare room.  The answer there is no.  It sounds like your sibling has worn out your parents and they may be right that ze needs to figure things out before someone else comes to the rescue.  And it sounds like sibling probably isn’t in a situation where your help would actually be help rather than enabling.  Sibling is an adult.  There aren’t children involved.  Your parents have tried to help and have decided that that kind of help isn’t helpful.  What you can offer may not be helpful either.  Your parents may be right that sibling has to hit bottom and build hir way up before ze can actually make use of any help you could give.  They may be wrong, but it’s not like their decision has to be a permanent one.  Time will provide more information.

We can also tell you from personal experience that it is seriously irritating to house a user.  Housing someone like #2 when she needs it is great!  She’s thankful and does chores both asked (without complaint) and unasked and is basically a pleasant person to be around, and she gets stuff done that she came to do and so on.  Housing someone who is used to being bailed out gets seriously annoying when he doesn’t hold up his end of what he’s supposed to be doing, complains that you don’t keep the a/c low enough (and that he’s the one who has to move his car morning and evening to comply with the HOA) even though he’s not paying rent, assumes he’s staying longer than you thought you had agreed (say, until the out-of-state house sells), and wastes all his money on things like fast food.  And you get to hear how his wife won’t move to town and get a job because then she’d lose free babysitting from her mom that you suspect the mom didn’t exactly agree to.  It is super stressful.  *koff*

You do probably have a familial obligation to keep your ears open and keep in contact with your parents to make sure that someone is keeping a long-distance eye on said sibling.  But you do not have an obligation to invite hir to live with you.  And if said sibling seems to have turned things around a bit and seems to be on a path where it’s clear that you can help in some way that doesn’t have the potential to majorly blow up, then it would be nice of you to help.  And if said sibling hits a true rock bottom, it would be nice of you to help your parents pay for attorney’s costs or counseling costs or for you to help said sibling get into whatever (government or nonprofit) programs or systems that might help.

So we can’t tell you what to do, but we can give you permission not to invite your sibling to stay with you when your parents have given many second and third and fourth chances that seem to have hurt rather than helped.

What say you, grumpy nation?  Got any better advice?

Ask the grumpies: How to best use credit card rewards?

CPP asks:

What is best to do with accumulated credit card reward points? The fact that AmEx keeps nudging me to use them to pay my bill makes me think that is the worst thing I could do with them.

That’s probably a better question for Holly at Club Thrifty.

I’m seriously lame with my CC points and don’t try to maximize them in any way.  I just take the cash back option, and not even the “correct” cash back option since I’d get more cash back if I switched to a card for “high spenders” rather than the citicard I have that limits to $300 cash back/year.  I like our citicards because they don’t have the ridiculous points system, they just give 1% cash back.  It’s easy with the lowest mental load.  Because really, my time is worth more doing real work than it is chasing the optimal credit rewards (which always eventually disapparate and then you have to chase the newest optimal system).

I have heard that the best use of points is usually for travel, but that’s going to depend a lot on your card’s specific situation.  You’ll need to sit down and see how much of a return they give you for points for each of the different options they provide you.  Cash back should be your baseline and then you should see if there’s an amount of travel that you prefer to same number of points for cash back, or whatever your other options are (do you get a bonus for applying the cash back to your bill rather than to them cutting a check?).

So, that’s really a non answer from us.  However, we know that some our readers must know better than we do.

What should CPP do with his AmEx CC rewards?

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