Euclid Update for 6 December 2012

Updating the Euclid resulted in setting a few limit orders to put available cash to work.  Limit orders were set to purchase shares of VOE, VBR, DBC, and VB.  Even though these asset classes are within target, I am trying to bring the current percentage holdings closer to the target percentages.  I also set a TSLO to sell shares of TIP as the Bond & Income asset class is above the 15% target.  I’m also considering moving the allocation of B & I down to as low as 10% and moving that additional 5% into one of the REITs asset class so as to increase income.  I’m anything but bullish on bonds going forward.

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Retirement Rule #4: Maximize Contributions to Employer Retirement Savings Plan

If you are fortunate and work for an employer who has any sort of matching savings plan, by all means take advantage of this offer and maximize your contribution.  To do otherwise is to leave good money on the table.  For example, assume your employer will match dollar for dollar any contribution you make to a saving plan up to 4% of your salary.  Further, assume you are earning $40,000 per year.  Four percent (4%) of $40,000 is $1,600 a year and if your employer will kick in another $1,600 that is $3,200 per year invested in your your retirement.  Over a thirty to forty year working career and earning a few percent over inflation, such a plan will add up to significant sum of money.  While it may not completely meet the needs of retirement, one can supplement it with an additional taxable account and social security.  One also hopes that the amount of the annual salary will increase over time and savings will also increase over a working life.  The rule to keep in mind is to max out the amount the employer is willing to match toward a retirement program.

Your taxable wages will be reduced if this money is going into a tax deferred account.  I found this to be a huge advantage over the years.

Review:  Set up your savings plan, plan for your retirement requirements, educate yourself, and now – maximize employer contributions.