We maxed out our 403(b)s this year and then maxed out DH’s 457. That is putting away a LOT of money for retirement. This would be the first year we let an IRA deadline come and go without funding anything. I’m not sure how to feel about that.
I keep thinking, it’s only 5K… most years we have more left than that after getting through the unpaid summer. But you know, two of them are 10K, and 10K is kind of a lot of money, especially when your take-home pay has been dramatically cut because you’re putting away a huge amount of money into retirement accounts already. And we’re doing the ROTH option on about half the work retirement accounts as it is.
If only we made more money! Then we could do everything. Stupid lack of COL raises and increasing benefits costs.
The other places for the money would be emergency fund (and we’ve been spending a LOT on trying to keep me fed… also, potential new baby expenses) and pre-paying the mortgage.
Deep down I know that we’re going to need the money sooner rather than later. Even if DH gets tenure he’s not entirely happy with his job, and having a big cash pot would allow him more flexibility to try new things. We’d get more happiness about having slush now than we will from whatever tax advantages we’ll have in the future. Probably…. assuming we continue on at least a similar income/savings trajectory.
But I’m also a creature of habit and it just *bugs* me that we’re not taking advantage of the Roth this year even though we can. That’s totally irrational. Though the Roth would probably maximize our returns given certain guesstimates about future tax increases and so on, it won’t maximize our overall utility.
It is so much easier to optimize money than it is to optimize happiness.
(NOTE: #2 is all Roth’d up in here. Maxing it out hurts my savings a lot but it makes me feel better.)
Did you contribute to a 2011 IRA this year (note: there’s still time)? How about your other retirement accounts? Or did you meet other spending/savings goals instead?