Too much in old age retirement funds

Mr. LL and I have been maxing out our tax-sheltered retirement accounts since we have been married (403(b) and pension/teacher retirement fund for me, 401(k) for him).  When we finally crunched the numbers the other day using FireCalc, we realized that we have all the “old man money” we need.  Even if we never contributed another dollar, our current stash would compound and be enough to last us until we’re well over a hundred if we retired in 2039, when Mr. LL is 65 and I am 56.

This was both a revelation and a catalyst for big decisions.  If we have enough for when we’re older, we can start focusing solely on our “young man money,” non-tax sheltered early retirement funds that we will be able to start drawing on within the next five years or so, and that can last us until 2039.

However, this does mean that the tax man takes a big bite of our potential savings.  We are currently able to save up to $42,000 tax free each year, and with our marginal tax rate we end up saving over $11,000 in taxes.  If we both stop contributing to our old man money, then we end up reducing our young man money savings by that much.

The day after we crunched the numbers, I canceled my 403(b) contributions, but I will not be able to change my teacher pension contribution to anything below 5% of my salary, so I will always have to save something toward old man money.  However, my husband is still mulling over whether he wants to take the plunge and stop or reduce his contributions, since it flies in the face of what he has always done, and also reduces our total salaries.  It would be a big step, but it would allow us to retire and pay off our house that much sooner.


Cost analysis: Powdered vs. fresh milk

I have bought powdered milk for about 6 years, but only recently did it occur to me to take another look at whether it results in any cost savings.  When we drink milk, we drink fresh milk, but our primary dairy comes from the powdered milk we put in our quick cook oatmeal every morning.  When we first started buying it, it saved us money.  Does it still?

Cost Analysis:

We can buy a gallon of milk at Trader Joe’s for $2.99.  At Fred Meyer, it costs $14.89 per 4 pounds of powdered milk, which makes 5 gallons or 20 quarts.  That comes out to $2.978 per gallon, which is a little more than 1 cent per gallon savings.  Not terrific.  However, just the other day 4 pounds were on sale for $13.56, which comes out to $2.712 per gallon, or more than $.27 per gallon savings.  This is nicer.

There are 16 cups per gallon, and we normally use 1/2 cup per bowl of oatmeal = 32 servings per gallon.  We can get 160 servings out of 4 pounds of powdered milk.  Assuming that we go through the full container in the next 3 months (or 11.4 weeks), we will save $1.39 over that time.

If I keep buying Fred Meyer dry milk at the usual price, I will save $0.06 every 3 months.  If we buy Walmart brand dry milk online (along with other goods to equal free shipping), it will cost $13.68 for 4 pounds.  Total savings: $0.254 per gallon, or $1.27 approximately every 3 months.

Bottom Line:

It is cheaper overall to buy powdered milk, but not that much cheaper.  The main pros are that it’s convenient (takes less time to cook than cold fresh milk), portable (my husband can take the dry ingredients to work, and we can take it camping), and lasts a really long time so we rarely ever experience spoilage.  The possible con might be that it’s not as healthy as fresh milk, but I haven’t really found anything conclusive on that.  Powdered milk is just one small cost cut that adds up to bigger cuts in our grocery bill.

DIY: Peanut butter

My husband and I have different peanut butter preferences – I tend to be a Jif girl, while he is a Trader Joe’s creamy salted peanut butter guy.  We eat peanut butter every day as part of our breakfast, so we go through a lot of peanut butter in a month.  Jif costs between $2 and $3, depending on whether I have a coupon or it’s on sale, while the Trader Joe’s peanut butter costs $2.79 per pound.

We decided to see if we could make peanut butter in our Vitamix blender.  We once tried to make it in our old KitchenAid blender, and the results were gritty and uneven.  A pound of peanuts (roasted, unsalted) at TJ’s costs $3.29, so we knew that this initial experiment would not end up saving us money.  However, if the peanut butter turned out well, and we could get bulk peanuts for less than $2.79 a pound, we would be able to control the ingredients and consistency and avoid additives and trans fats.

We re-roasted the peanuts in the oven at 350 degrees for 10 minutes, let them cool slightly, then poured the nuts, a bit of salt, and a teaspoon of canola oil into the blender.  Within minutes, we had a steaming, creamy peanut butter that tastes really different from store-bought.  It is very nutty and delicious, and I could eat it with a spoon.  We had a good time cleaning out the blender.

So creamy and delicious

So creamy and delicious


Cost analysis:

No savings for our experiment, but if we can find bulk peanuts for less than $2.79, it would be worth it.

Cleaning out the kitchen with bread-baking

Another of my goals has been to start paring down the amount of excess food that ends up sitting in my freezer and pantry forever.  It started when I was looking through the pantry and noticed a ton of bread and whole wheat flour in various containers, some of which I haven’t used in ages.

I used this whole wheat quick bread recipe for my whole wheat flour, and this no-knead yeast bread recipe for my bread flour.  Both were quick, easy, and required very few ingredients, all of which I already had.

The whole wheat bread has the texture and density of banana bread, and we’ve been using it for peanut butter and jelly sandwiches.  I have also been using the yeast bread for croutons instead of going out and buying a loaf from the grocery store.  It’s been a great way to clean out the pantry and a way to cut our grocery bill too.

Insourcing instead of outsourcing: Housekeeping

Due to my extreme reluctance to do cleaning chores such as vacuuming and cleaning toilets, one of my first purchases after getting full-time employment was to hire a housekeeping service.  Thus began the Era of the Housekeepers, during which we used two different companies and had 4 different cleaners who ranged from stellar to about as good as we could do ourselves.  Once we got to this point, it was only a matter of when we would take these chores on – insource rather than outsource.

I was reluctant to lower my quality of life in this respect, but enough changes had snowballed to the point where housekeeping was the lowest hanging fruit – the expense that we would get the most out of cutting (to the tune of $2400/year).

So Mr. LL and I split the chores – I do the kitchen and sweep and mop the floors, while he does the bathrooms and vacuums.  I still hate cleaning, but every time we do it, we “pay” ourselves by investing $100 in our retirement funds.  In 5 years at 5% interest, that will be worth $13,924.59.  Pretty sweet.

Being mindful about money makes mistakes hurt more

A funny little psychological quirk that comes up when you’re counting pennies and dollars and trying to cut expenses is that when you do make a money mistake, it hurts more.

Example: Recently I went to Safeway and saw that our brand of vitamins were on sale at half price ($5.49 per 100-count vs. $10.99), which was a better deal than the 200-count ($16.99).  I snapped up 2 of them thinking it was a good deal.

Then afterwards I wondered, do we really need brand name vitamins?  Surely there are generic brands that pass the U.S. Pharmapoeia’s dissolution test and would cost a lot less?  At the point at which I began thinking about researching this, Mr. LL let me know that actually, Safeway had charged us the full price ($21.98) for 2 100-count vitamin bottles.  I had already opened up and discarded the vitamin boxes by that time.

I remember thinking about it and cringing, since I had been able to make other grocery cuts that saved us about $11 that week, and the mistake of not checking the scanner and/or receipts for correct pricing really ate up a big percentage of my carefully planned out savings.

So sometimes I have to remind myself that money mistakes happen, and there’s no point in beating myself up over them as long as I learn better next time.

Cutting transportation costs

It says something about our spending in 2012 that we were able to almost buy a bike at REI with the dividends earned with my REI Visa card.

Mr. LL had been considering a bike commute for the 3 miles to and from work in downtown Seattle.  Considering that we would save approximately $100/month in transportation costs ($90 for a monthly bus pass and $9.99 for a Spotify subscription he used primarily to listen to on his bus commute each day), it seemed like the break-even point could potentially be in 6 or 7 months.  And he would get more exercise than he was getting in his occasional gym time before office job routine.

In March, we went with the Marin Hamilton bike, a good, bare-bones bike for commuting, and still only paid about $150 after dividends for the bike and all its accoutrements (patch kit, lights, fenders, bike rack, etc.).

A couple of weeks ago one of the tires went flat, and so he spent some money for new tubes, and kept the patched one as a spare.  There will be maintenance costs in the future, but overall, we broke even on the initial purchase in less than 2 months, and we will continue to  save about $100/month minus any bike maintenance costs.

Plus, he’s lost 8 pounds from all the extra exercise.