I mentioned in a previous post that I have a deadline set for the start of my retirement. And that I have a list of prerequisites to determine whether I’m in a safe-enough-for-me position to retire sooner. Each quarter I evaluate my progress against those prerequisites, and my quarterly check-in for this is aligned with my birthday instead of the standard calendar quarter. That’s because a couple of my prerequisites are based on my 60th birthday so the calculation is simpler.

Result for this check-in: It's not time to retire now, but I’m continuing to make progress!

In order to pull the plug immediately, I’d have to have these things accomplished:
(1) Retirement account on target for 7 figures on 60th birthday
(2) College savings on target for full funding
(3) Mortgage paid off
(4) Savings of basic expenses until 60th birthday set aside
(5) No consumer debt

Currently my progress is:
(1) 100+%
(2) 50%
(3) 39%
(4) 6%
(5) 8%

Assumptions for these calculations: average annual return on investments will be 5%, no further contributions to investments, full funding = 40 semesters (8 x 5 boys), $36,000k annually for basic expenses, starting consumer debt was $10k. (At one time I had negative progress on this! For the record though, it’s at 0% interest.)

The next time I check-in on this progress will be around my birthday.

So here we are just a couple of months after DS2 graduated and flew the coop. Now DS3 starts college this month. A fresh new round of cobbling together funds to pay the semester’s expenses. This is what Fall 2020 looks like financially:

Total bill from the university for housing, food, tuition, & fees - $10,637. It’s slightly less than I expected, maybe because now the semester ends just before Thanksgiving.

This is how it’ll be funded:
$1,000 scholarship
$2,597 balance of 529 account from old state
$4,000 cash set aside
$ 25 scholarship
$3,015 withdrawal from current 529

I wanted to transfer the funds from our old state’s 529 plan to the current plan after we moved just for simplicity’s sake but the old state informed me that I’d lose the ‘earning enhancements’ that had been paid into my account by the state if I transferred it. It’s just 2%, but still, it’s free money. I didn’t want to leave money on the table so I kept the accounts open. We had accounts there for DS1, DS2, and DS3. I’ve always pulled that money out first so I could close the account. This is the last kid with an account there so finally I’ll be able to close it completely.

Our current state doesn’t provide any contributions but it does provide a state tax exemption for money contributed to a 529 account – ANY 529 account – up to the gift tax exclusion which is around $15k per kid. Since I could choose any 529, I did research back then to find a good one. I selected the Utah plan and I’ve not been disappointed. The fund choices are good (Vanguard), the website is easy to use, and it’s easy to make withdrawals. For that withdrawal, I completed the request online on their website and the money was in my account in two days. In contrast, the old state’s plan doesn’t offer online withdrawals. I had to print out forms, including a tax form, then scan and e-mail them in. Now I’m still waiting for a paper check to arrive. I hope it gets here before the tuition is due. Otherwise I’ll have to temporarily transfer money from a savings account. Grrr.

I set aside $4000 cash per year (at least) from my income so that I’ll qualify for the American Opportunity Credit deduction on our taxes. It provides a refund/credit of $2500 if $4000 was spent on college tuition. It doesn’t provide the credit for money spent on college-related things like housing & food but I’m using 529 funds for that. You also can’t get the credit if you used all 529 funds because that would be double-dipping. You also have to have an AGI of $160k or less. As I type this, it sounds complicated but it really isn’t. Like most things financial, you just have to know the rules.

That $25 scholarship? I’ve waited 10 years to use that! DS3 participated in an after-school bowling camp during the winter of third grade. He’s high energy so I just wanted something active for him to do indoors while I worked in the afternoons. It was a neat setup: the bowling alley sent a bus to school to pick up the kids. They gave them homework time, pizza for snack, and then taught them to bowl. At the end of the week (or two? I can’t remember.), there was a bowling tournament for the kids and DS3 won the $25 scholarship as a prize. We laughed about it and told the grandparents that he already had an athletic scholarship for college at age 8. A couple of times over the years I got paperwork about the scholarship and had to create an account online, updating passwords sometimes. The online request to get the money was straight-forward but they won’t send it to me – it must go straight to the school. It makes me chuckle to think of the person in the bursar’s office who will receive that official scholarship check for $25! So really, I probably worked hard for that 25 bucks but again – it’s free money. I reminded DS3 that his bowling performance is helping him now! I don’t know if he’s bowled since then.

We’ll still have books and the costs related to setting up his dorm room. So I expect to spend another $500 or so. Then I’ll start thinking about next semester.

Despite the continuing market volatility, July was a good month for the net worth. It’s up by $39k.

Since I set up my numbers in Excel last month, now I get to see the total picture that reminds me of my overall progress even during months that don’t look so healthy. I like projecting the lines forward on the graph to see when I might expect to hit milestones.


2011-2020

I’ve shared before that I track the principal payments for our house debt each month. Well this month something exciting happened – the debt dropped down to 5 digits. I’ve still got a long way to go, but it’s motivating to see that progress milestone.


5 figures!

It’s also about 2 years into my 5-year plan so hopefully I can stay on course. To do that will require a progressively increasing principal payment.

Yes, I know it’s August! I’ve had a couple of busy weeks and didn’t get around to this.

My 2020 goal #2 is to adopt a permanent health-enhancing habit each month. My new health habit for July was to disconnect one day a week. For me it’ll usually be a Saturday since I work and I’m often getting prepared for the week ahead on Sundays (unfortunately).

On my disconnected day, I will avoid screens. Computer screens, TV screens, ipad mini, and phone.

NEW HEALTH HABIT #7:
Have one disconnected day each week.

BENEFIT:
• Spending more focused time in my relationships
• More likely to spend time outdoors
• Less stress caused by reading ratings-seeking controversial news stories
• Increased productivity since there aren’t distractions
• Less guilt from wasting time on thoughts and activities that really aren’t important
• More time for reflection
• Become more present and authentic.


COST:
Upfront – zero
Ongoing – zero

There might be a cost savings because I can’t order online! 😉

2020 health habits so far:
(1) Fast one day per month
(2) Consume fresh organic juice at least 3 times a week
(3) Stop storing food in plastic containers
(4) Spend at least half an hour outside every day
(5) Drink 32 oz filtered water every day
(6) Do strength training exercises twice a week
(7) Disconnect one day each week.

I remember that CJ once did something similar to this one year for a resolution.