Retirement Frustration

As I mentioned a while back, I've started up my retirement contributions again. They're small mind you, but they are there. When I received my last pay raise the entire raise went into retirement savings. No pain no gain? That seems to me like a gain without the pain to me. What really spurred me into action was an e-mail from my employer saying that they were re-instituting part of their contribution matching program. The program had been cut during the downturn as a cost savings measure. Better to keep more people employed with most of their benefits than keep fewer people employed with all of the benefits. For employees working at the company for 1-5 years, they would match up to 2% of your pay, providing you put at least that much into the account. My last raise was 3%, so I met that requirement. My 1 year anniversary was earlier this month, so as of this pay period I'll be receiving their contributions as well.

When I signed up for the contribution matching, they had a little section on the form where you put down which funds you wanted the money dispersed between. I selected a couple funds with low MERs (management expense ratio - the percentage of your fund that goes to them every year), and submitted the form. A couple weeks later I received a letter from the company holding the mutual funds, saying that the funds I selected were not available in my program. I'm not entirely sure if it's because I didn't have the minimum balances for the funds, or if they're not available to my company's plan? They had another form asking for different funds, which I never sent back to them. The money has been sitting in the account making whatever their interest rate for cash is (super low).

Not having the cash in an actual fund isn't going to stop me from getting my employer's contribution, so I've been just letting it sit there. A 67% straight return is better than nothing in the short term.

The reason why I didn't select one of their other funds is because they have absolutely ridiculous MERs (2.5%-3% was common, and even higher). What's really frustrating is that they don't tell you that when they send you the paperwork to fill out.  I received another form this week, with a list of mutual funds again. They list the Gross Annualized Rate of Return for the last 1, 3, 5 and 10 years, but no other information. Besides the fact that you can't predict the future returns based on the past, the Gross ARR is meaningless. If anything, I'd wan't to see the Net ARR. There would be a lot more negatives on this sheet if they did show that, that much I can promise you. It's frustrating that they don't show you the fees, they just mention in small print that you can contact them or find them online.

Grrrrr.

So, for the time being, I'm leaving my money in cash. I'll let it accumulate for a while and see if the other funds open up for me. If they don't, I'll probably just let the money build up and then periodically make a bulk transfer from it to my other institution which has cheaper fees. Better to get free employer money in a crappy account than not.

Up and down and up and down…

While my paycheck did come with an unexpected downfall in the form of overtime paid out as straight time, I completely missed something else on it. I got a raise. It wasn’t earth shattering, but I’m certainly not going to turn my nose up at another 3% annually. The last time I got a raise, I pledged to save it and not adjust my standard of living to include it. All was going well until my property taxes were adjusted for the year, and my mortgage (which includes the property taxes) went up another $50 every paycheck. Good bye raise savings. It’s time to institute the raise savings again.

The beef came in cheaper than expected, but the groceries and dry cleaning came in over. My coupon that would have saved me $10 on the dry cleaning (bringing me under the budgeted amount) expired 3 weeks ago, but I found 540ml cans of tomatoes on sale at the grocery store for $1 a piece (60% off!). So far over all I’m still under budget on this pay check.

Actually, that’s not entirely true. I had an unexpected expense related to work that I may be able to get them to pay for. I’m applying to the university to take a couple courses which will increase my usefulness to the company. All going well they’ll pay for it. If not, it will just increase my raise potential and hopefully get me some more interesting work to do. The application fee was $75, which went on my credit card. It didn’t wipe out the entire payment I put on it this pay check, but pretty close. Hopefully work will decide to cover that.