Taxes

I am starting to prepare my 2011 tax returns.  It's important for the filing of the FAFSA I am going to do, though I am not 100% sure I need to do that for graduate school - must research and find out.  So far everything is coming in as it should, I've gotten my day job W-2 and the 1098-E's for my student loans.  I even received a 1098-T for the $400 or so dollars I paid for my Accounting I class this summer, which must be something new because I don't remember getting one when I attended undergrad over six years ago.  I know I had the cash out of my DTB IRA, so that's an additional $6K I have not yet accounted for in my income.  I'm not sure what form I need for that though, so there is a lot of information I need to collect before finalizing anything. 

Right now, H & R Block is showing I will get $900 back from federal and $4000 from State.  I realize these are not legitimate numbers, as I said I cashed out an IRA this year, and I'm really just hoping to break even.  I contributed more to my 401(k) and had an additional $50 per paycheck withheld for state taxes to compensate for both the IRA cash out and my second job.  So the estimates are far from realistic at this point, BUT wouldn't it be nice if they were?

That large of a return would pay off more than just the Christmas debt I saddled myself with this past holiday.  It would give me extra for school, or vacations, or to put away for Christmas this year.  Is this what homeowners feel like?  I know they get a larger return than I normally do because of the property values and mortgage paid, etc.  But of course that has to go back into upkeep of the house and property taxes.  Could I possibly stop having an additional $50 withheld from my paycheck every two weeks?  That would bring at least an additional $100 into my budget every month.  I will have tuition payments this year.  Perhaps I could rely on the regular withholding again. 

It's just the thought of having to pay the government money at the end of the year freaks me out.  It's not that I don't want to pay taxes at all or that I think they're too high, etc.  It's just that I'd rather pay too much and have the government act as a sort of savings account than have to keep estimating throughout the year to make sure I don't have to pay when I file.  The saving of money has never been easy for me, so owing the government would not be easy on my finances.  It's the intense pressure of owing money to someone or some organization that causes me to freak out.

Good Habits

As of today, all my credit cards are officially paid off. I've raised the 401(k) contribution to 6% and already created my budget spreadsheets for this year and next. Ideally speaking, I could save $20k in six years and have a decent down payment for a house. This does not include potential raises, so hopefully by the time I save a down payment, I can afford the monthly mortgage payment. That or find a roommate to pay for half of it.

Just a short entry today. I am tired, but don't want to break my entry streak.

401(k) Contributions

Part of being a responsible adult is preparing for one's retirement.  I would love to have a retirement like my father's; he doesn't have to work and can take a lot of the vacations he wants to.  Granted he is also living in a house with a very low mortgage and his partner is still working full-time, so expenses are not so difficult.  Using the Merrill Lynch online calculators & advisors, I am told that I should be contributing 9% of my current income level if I want to have a reasonable retirement.  My current contribution level is 2%, with my company contributing half of what I do.  I don't know if the Merrill Lynch calculators take my company's contribution into account.  If they don't, then that means I need to contribute at least 6% of my income in order to reach 9% annually.

Also, having just cashed in the IRA I had from my old job (to pay some expenses), I feel that I need to really contribute more to my remaining retirement fund.  I figure I have about 32-35 years before I can actually retire so hopefully I can suck up the blow to my finances now so I won't be as financially strapped in the future.  (Side note: at my age, my father only had 25 years left until retirement.)  Just looking at the number of years I have until I could retire makes it seem a long way away.  Even if I were to look at my dad's retirement age, it feels so distant from where I am right now.  I mean, age-wise, I am half-way there.  But thinking about how long it has taken me to get to the point of 30 years, it feels like it will be a very long time before I retire.

Though, thinking about how my life has taken up 30 years of time, it doesn't feel that long.   I don't know if it's because most of it has slipped from my immediate memory or because it feels like I am still beginning.  Is this what people mean when they say that time goes by faster than you imagine?  I don't think it passes by faster than one imagines, I think it passes by just as it should, but our memory of the time passed condenses as we load more information into our brains.  So we feel like time has moved faster than it really has because we remember less of the mundane.  As it is now, I really have to try to remember certain things from childhood.  Even then it's not specific, only images and things known from "some half-remembered dream." 

Do I remember every walk from the Anderson Avenue house to get a soda from the Fire Station on Union Avenue?  No, but I know we went more than once and usually when we were bored in the summer.  I know what that walk is like and I can fill in the gaps of memory even if it's not exactly as it happened.  Kind of like the frog DNA in Jurassic Park.  Other note:  Why did Mom walk us all the way over to the Fire Station on Union Avenue just to get a soda?  We could have walked up the street to the Acme or High's.  Was it part of her diet regime?