Friday Deep Thoughts

Hey Bitches. It’s Friday and I’m sure you’re all trolling the internet trying to make this day go as fast as humanly possible so you can get to the good stuff. The weekend.

But I’m in a bit of a mood today, and I thought I’d pass it on to all you lovelies.

If you follow me on Twitter, you’ll see I posted an article this morning by the Washington Post – The new reality of old age.

You guys. This fucking article is terrifying.

There is an entire industry that has sprung up around these folks who are aging and yet cannot leave the workforce.

Is this going to be you? Or your siblings? Or your parents?

I hope not.

I hope it’s not going to be me, either. Though, I know nothing is ever guaranteed.

So, I’m giving you one task today. Just one. If you do not currently have a Roth IRA set up (no I’m not counting 401Ks or employer provided retirement accounts – I’m talking your own, individual retirement account) I want you to start one.

Head on over to Vanguard’s website and click on “Open Your IRA today!”

This takes less than 15 minutes to do. You can put in a very small amount to start and build your way up to investing, but it’s something you can do today.

Setting it to auto deposit even $50 a month (one night out to eat?) can have a huge impact on your financial future! The most you can put into a Roth IRA is $5,00 a year, but I think sometimes people feel that if they’re not maxing it out, it’s not worth it.

I’m here to tell you it IS worth it.

Let’s run the numbers real quick and then you tell me if it’s worth it or not.

If all you put in was $50 a month for the next 30 years and you got a 7% return on your investment, you’d still have $19,000 more than you have today. That’s something, right?

Year Starting # Yearly Contribution Total Interest 7%
1 $0.00 $600.00 $600.00 $642.00
2 $642.00 $600.00 $1,242.00 $1,328.94
3 $1,242.00 $600.00 $1,842.00 $1,970.94
4 $1,842.00 $600.00 $2,442.00 $2,612.94
5 $2,442.00 $600.00 $3,042.00 $3,254.94
6 $3,042.00 $600.00 $3,642.00 $3,896.94
7 $3,642.00 $600.00 $4,242.00 $4,538.94
8 $4,242.00 $600.00 $4,842.00 $5,180.94
9 $4,842.00 $600.00 $5,442.00 $5,822.94
10 $5,442.00 $600.00 $6,042.00 $6,464.94
11 $6,042.00 $600.00 $6,642.00 $7,106.94
12 $6,642.00 $600.00 $7,242.00 $7,748.94
13 $7,242.00 $600.00 $7,842.00 $8,390.94
14 $7,842.00 $600.00 $8,442.00 $9,032.94
15 $8,442.00 $600.00 $9,042.00 $9,674.94
16 $9,042.00 $600.00 $9,642.00 $10,316.94
17 $9,642.00 $600.00 $10,242.00 $10,958.94
18 $10,242.00 $600.00 $10,842.00 $11,600.94
19 $10,842.00 $600.00 $11,442.00 $12,242.94
20 $11,442.00 $600.00 $12,042.00 $12,884.94
21 $12,042.00 $600.00 $12,642.00 $13,526.94
22 $12,642.00 $600.00 $13,242.00 $14,168.94
23 $13,242.00 $600.00 $13,842.00 $14,810.94
24 $13,842.00 $600.00 $14,442.00 $15,452.94
25 $14,442.00 $600.00 $15,042.00 $16,094.94
26 $15,042.00 $600.00 $15,642.00 $16,736.94
27 $15,642.00 $600.00 $16,242.00 $17,378.94
28 $16,242.00 $600.00 $16,842.00 $18,020.94
29 $16,842.00 $600.00 $17,442.00 $18,662.94
30 $17,442.00 $600.00 $18,042.00 $19,304.94

And if you did manage to max out that Roth IRA?

Year Starting # Yearly Contribution Total Interest 7%
1 $0.00 $5,000.00 $5,000.00 $5,350.00
2 $5,350.00 $5,000.00 $10,350.00 $10,867.50
3 $10,350.00 $5,000.00 $15,350.00 $16,117.50
4 $15,350.00 $5,000.00 $20,350.00 $21,367.50
5 $20,350.00 $5,000.00 $25,350.00 $26,617.50
6 $25,350.00 $5,000.00 $30,350.00 $31,867.50
7 $30,350.00 $5,000.00 $35,350.00 $37,117.50
8 $35,350.00 $5,000.00 $40,350.00 $42,367.50
9 $40,350.00 $5,000.00 $45,350.00 $47,617.50
10 $45,350.00 $5,000.00 $50,350.00 $52,867.50
11 $50,350.00 $5,000.00 $55,350.00 $58,117.50
12 $55,350.00 $5,000.00 $60,350.00 $63,367.50
13 $60,350.00 $5,000.00 $65,350.00 $68,617.50
14 $65,350.00 $5,000.00 $70,350.00 $73,867.50
15 $70,350.00 $5,000.00 $75,350.00 $79,117.50
16 $75,350.00 $5,000.00 $80,350.00 $84,367.50
17 $80,350.00 $5,000.00 $85,350.00 $89,617.50
18 $85,350.00 $5,000.00 $90,350.00 $94,867.50
19 $90,350.00 $5,000.00 $95,350.00 $100,117.50
20 $95,350.00 $5,000.00 $100,350.00 $105,367.50
21 $100,350.00 $5,000.00 $105,350.00 $110,617.50
22 $105,350.00 $5,000.00 $110,350.00 $115,867.50
23 $110,350.00 $5,000.00 $115,350.00 $121,117.50
24 $115,350.00 $5,000.00 $120,350.00 $126,367.50
25 $120,350.00 $5,000.00 $125,350.00 $131,617.50
26 $125,350.00 $5,000.00 $130,350.00 $136,867.50
27 $130,350.00 $5,000.00 $135,350.00 $142,117.50
28 $135,350.00 $5,000.00 $140,350.00 $147,367.50
29 $140,350.00 $5,000.00 $145,350.00 $152,617.50
30 $145,350.00 $5,000.00 $150,350.00 $157,867.50

C’mon now? Who wouldn’t want an extra $150k to help pad their retirement savings? And while 5k a year sounds like a lot, $416 a month does not. $96 a week sounds like even less.

And if you’re side hustling anyway, that extra money could and should go into your Roth to help build those retirement funds! Or if you’re job hunting with OneSheet and you do end up with a higher paying gig, you need to put that extra money aside and not give into the lifestyle creep!

If you only do one thing for yourself this weekend – set up that Roth. It’s easy. It take 15 minutes of your life. And you can set it and forget it.

I’ll delve into Roths in more detail next week, but you can do it. I know you can!

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1 Response

  1. JCBulldog says:

    Heads up, a couple of mistakes in the article. First is a typo I think… $5500/yr max. But the table has that error too. Also, the table isn’t calculating correctly, I think. You say you have ~$157k after 30 years, but that’s essentially just the contributions made over that time ($5k x 30 = $150k). The correct calculation should of maxing ($5.5k/yr x 30 w/ 7% int) gets you to about $556k… A much more worthwhile trade-off.

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