2020 has been a difficult year, and it has been hard to figure out where to start in terms of wrapping it up. However this is a financial blog, so lets start with the finances.
At the end of 2019, we had $539k in assets and no debt. We ended this year on a net worth of $700k in assets and no debt. W00t! In 2020 we came close to maxing our Roth IRA rollovers and 401k contributions. This has helped with the growth of the retirement savings in a big way, as well as post tax contributions to our other investment and savings accounts. The market was good to us this year.
Personally I ended last year at $150k and this year at $200k. Not bad but I know I can do better next year, although to be fair, we did drop ~$12k towards the end of the year. Our kid got married and we paid off their car as a wedding gift.
With regards to my health, this has been a difficult year. As we move into 2021, the wife and I are still quarantining ourselves as we are both considered high risk. Exercise has been sparse, and that has had an adverse effect on my health, pushing my A1C number up. But, all of this spare time has made me focus on why I have the chronic health issues that I have. I have been researching the causes of my issues and have made some interesting discoveries, one of which is that a simple over the counter drug can dramatically reduce my blood pressure. That was a joy to find out.
Plans for 2021
Our long term plans include eventually find a permanent home to live in, after doing some travel when we first retire. We realized that we will need accessible cash for a home down payment, but most of our money is currently tied up in retirement-specific savings. A healthy cash cushion is nice to have anyway, so for 2021 we plan to put just enough into the 401ks to get the company match, continue to fund our IRAs and HSAs to their limits, and put the rest into post-tax savings. That cash will go into individual investment accounts where it will be held in a combination of bonds and stock (50/50 most likely). This will help protect value in times of a down market, but also will help with growth when the market is good. We know we will take a tax hit due to not maxing out the 401ks, but it still seems to be the best course of action for this year. We’ll re-evaluate where we are in a year before deciding what to do for 2022.
To make 2021 even better, I did get a promotion at work and that came with a salary raise and the chance to participate in the bonus scheme. I don’t believe there is going to be a 2020 bonus as the year has been a tricky one for the company, but perhaps in 2022 I will get my bonus. What ever happens, all the spare cash I earn is to go into the savings.
I can’t complete the end of year wrap up without at least mentioning COVID. In March 2020, we moved to downtown Denver, to be close to the wife’s office as she was commuting an hour each way every day. We also figured that we would enjoy the city lifestyle, with cafes and restaurants and shops in walking distance as well as parks and paths. Unfortunately, the day we moved into our small and expensive city apartment was the same day lockdown was announced. Cat shifted to working at home and never did get to walk to her office, and although we’ve done some walking on the trails along the river, we still haven’t really experienced the city lifestyle.
As COVID has shifted everything for the foreseeable future, Cat will probably not need to go back to her office, and I work remotely anyway, so we need a larger place where her desk doesn’t take up half the living room. As tired as we are of moving every year, our lease is up in Q1 and we plan to move again, this time to a rental house in a smaller town or suburb. From our initial searches we learned that can find a 3-4 bedroom suburban house for significantly less than we are paying for our little city apartment. That will provide us with greater savings, we can both have an office, and generally more space. It also gives us a little more sustainability in case one of us becomes unemployed unexpectedly. For restaurants we may have to use the bikes instead of walking, but I am sure we will survive. We also hope to have our vaccinations this coming year, as we do want to travel to see family.
So that wraps up 2020. Thankfully we have been on the upper part of the K shaped recovery. I feel a lot of gratitude for the luck that we had this year. And I think that is the place to end this, hoping that our luck continues, and if we keep working hard, we will reach FI and still be alive to enjoy it. After all, that is the overall goal.