I'm moving out of state. I'm quitting my job. I'm renting out my house. I'm starting a business. I'm trying to max out my 403b before my last paycheck. I'm trying to live on $660/month (plus the money from my roommates who pay for my mortgage). I actually think this will all work out. Craziness!
Moving Out of State
I am thrilled to have finally made the decision to move further south. I've been in the Northeast now for almost a decade and I am SO tired of the cold, the brown slush, the SALT, the pot holes, the greyness. The sunny skies south of the mason-dixon line have been calling me for a while!
Quitting My Job
This one was tougher. I've stuck around here as long as I have because I love the work I do and the people I work with. But it is time. My last day of work is June 5th. My last paycheck is August 31st.
Renting Out My House
The idea of putting my house on the market, hoping to find a buyer, and coming back up here for closing was not at all appealing to me. I figured I might as well see what kind of potential there was for renting out the house. I do have some experience being a landlord, I have a rental property a few miles away.
On May 7th I posted some pics on Craigslist with a pricetag that sounded good to me. I got 17 emails within 24 hours. I made appointments for the following week with 3 people. They came, they saw, they loved it, they wanted it. It's true, my house is very cute.
I offered it to the ladies who wanted to rent it furnished for an extra $100 a month (yay, I don't have to move my decade-old stuff...!) They are coming down on Thursday to sign the lease. So, starting July 1st I will get $1295/month for a house that costs me $840/month in mortgage, insrance and taxes. That's right, that's $455/month more than I have to pay. I told you, cute house.
Starting a Business
Now this one will be quite an adventure. I've done a lot of research, I think I have the right market, the right demographic for my services, and some funds for start-up costs. I'm excited to see how this turns out!
Maxing out the 403b (or Trying to)
I was all set to max out my 403b by the end of December. But now that I won't be getting much of a salary once I start my business, I want to put away as much as I possibly can while I'm still getting a paycheck here. I've upped my contributions to the point that my paychecks are about $660/month. I do have some roommates now who pay me enough to cover my mortgage. So, that $660 has to be enough to cover utilities, groceries, gas, internet etc. Oh, and and a $750 charitable contribution pledge. I think I can do it. I may post the exact budget some other day.
Definitely big changes ahead.
Showing posts with label 403b. Show all posts
Showing posts with label 403b. Show all posts
Monday, May 18, 2009
Thursday, February 28, 2008
Salary Negotiations: More Money For Me and Savings For My Employer
We renew our contracts in May. It may be a little early for me to be thinking about salary negotiations right now but I had an idea recently that's got me all excited.
I have mentioned before that I love my job. I also happen to love the people I work with and for. I believe strongly in this organization and I want them to succeed. I know a little about their financial situation and am well aware that they can barely afford the salaries they pay us. On the other hand, I am also at the point in the mental game of money that I am no longer willing to settle for a pittance for my efforts.
What I want is a win-win situation. I don't want to overburden the budget of this organization, and I want satisfactory compensation.
I have a pretty good personal budget that is easy for me to follow. After I pay off my debts this year I am going to have a lot more money on my hands each month that I can save. I was trying to figure out a way to put that money into a retirement account for some tax benefits and I thought of my 403b. (A 403b is similar to a 401k but is for certain non-profit organizations. Any funds deposited are tax deferred, i.e. I won't have to pay taxes on the deposits or the gains until I begin to withdraw at retirement).
Unfortunately I am already making the maximum employee elective contribution of $15,500 so I can't put any more money in. However, my employer is allowed to add money into the 403b beyond my contribution max. Currently my employer does not offer a company match to our 403b accounts.
If I can negotiate a lower salary amount but request a company match, I can keep my overall compensation exactly the same but still come out ahead because I won't be paying a chunk of that money in taxes.
Here's the part that really sweetens the deal though- this package can save my employer money as well. They will not have to pay FICA taxes on the amount they contribute to my 403b.
I can go one of two ways with this- I can help my employer out by keeping my total package the same but benefiting from the tax savings, or I can ask for a higher total package that keeps my employer's outlay the same but gives me even more benefits. Either way, I come out ahead without adding any extra burden on my employer.
I will have to check with our 403b administrator to see if coming up with this individualized package for me is going to have any negative ramifications on the whole system. But apart from that, I love this idea!
Can you spot any possible pitfalls or glitches in my reasoning? I would love to hear your thoughts... please comment!
I have mentioned before that I love my job. I also happen to love the people I work with and for. I believe strongly in this organization and I want them to succeed. I know a little about their financial situation and am well aware that they can barely afford the salaries they pay us. On the other hand, I am also at the point in the mental game of money that I am no longer willing to settle for a pittance for my efforts.
What I want is a win-win situation. I don't want to overburden the budget of this organization, and I want satisfactory compensation.
I have a pretty good personal budget that is easy for me to follow. After I pay off my debts this year I am going to have a lot more money on my hands each month that I can save. I was trying to figure out a way to put that money into a retirement account for some tax benefits and I thought of my 403b. (A 403b is similar to a 401k but is for certain non-profit organizations. Any funds deposited are tax deferred, i.e. I won't have to pay taxes on the deposits or the gains until I begin to withdraw at retirement).
Unfortunately I am already making the maximum employee elective contribution of $15,500 so I can't put any more money in. However, my employer is allowed to add money into the 403b beyond my contribution max. Currently my employer does not offer a company match to our 403b accounts.
If I can negotiate a lower salary amount but request a company match, I can keep my overall compensation exactly the same but still come out ahead because I won't be paying a chunk of that money in taxes.
Here's the part that really sweetens the deal though- this package can save my employer money as well. They will not have to pay FICA taxes on the amount they contribute to my 403b.
I can go one of two ways with this- I can help my employer out by keeping my total package the same but benefiting from the tax savings, or I can ask for a higher total package that keeps my employer's outlay the same but gives me even more benefits. Either way, I come out ahead without adding any extra burden on my employer.
I will have to check with our 403b administrator to see if coming up with this individualized package for me is going to have any negative ramifications on the whole system. But apart from that, I love this idea!
Can you spot any possible pitfalls or glitches in my reasoning? I would love to hear your thoughts... please comment!
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