A Few Things I’m Thankful For

As I penned this blog on the back of a barf bag while stuck on a Southwest plane waiting to have it’s malfunctioning electro-optical peanut butter sensor repaired, it seemed an appropriate time to remind myself of a few of the many, many things I’m grateful for.

• I’m grateful I don’t have a pension: This is not because I think teachers and state employees’ pensions are in danger, because they’re not. I’m grateful because the workplace retirement plans such as a 401(k) and 403(b) that my employers offered provided me the opportunity to control my own destiny. Rather than “serving my time” until I hit 27 years and could retire with a fixed income, being able to save and invest for my own future offered freedom.
• The University of Kentucky 10% match: Our clients work in a variety of professions and UK, by far, offers the best workplace retirement plan match. Hands down.
• Tax-advantaged saving: I love the ability to save pre-tax – not only does it reduce our taxable income, it allows us to save even more each month. Consider this:
  • Saving after-tax: Of $1,000 in income, roughly $250 goes to taxes, $750 to your retirement plan;
  • Saving pre-tax: Of $1,000 in income, all $1,000 goes to your retirement plan.
• UK’s multiple savings plan options: Private employers are limited in their retirement plan offerings, but a public, non-profit can offer both the 403(b) and the 457(b). So, a faculty or staff member can save:
  • 5% of their salary to receive the 10% match, plus;
  • $19,000 to the 403(b) Voluntary plan (the IRS max in 2019), plus;
  • $19,000 to the 457(b) plan (the IRS max in 2019), plus;
  • An additional $6,000 to each of those plans if you are 50 or over.
• Compound earnings: So, you’re 40, work at UK and want to work until you’re 60 and then you want to travel the world. How much can you accumulate by then? A little math:
  • You make a round $100,000 and have $100,000 already saved for retirement;
  • You contribute 5% to receive the 10% match = $15,000 per year total;
  • You contribute the IRS max to the 403(b) Voluntary = $19,000 per year;
  • You contribute the IRS max to the 457(b) = $19,000 per year;
  • Your investments earn 7% on average each year;
  • You will have saved $2.7 Million by age 60. Now, that’s compounding!
• UK Fidelity investment options: With 260 investment options, constructing a fully diversified portfolio without too much duplication is quite possible. And, there aren’t any costly, unnecessary annuities disguised as the TIAA Retirement Fund either.
• My family, most important of all:
  • I’m thankful for my parents’ unconditional love;
  • I cherish my two kids who I love and like;
  • I’m eternally grateful for my wife, Lisa, who has always seen potential in me, even when I might not have seen it in myself.

Merry Thanksgiving!

Steve Byars, CFP®

P.S. I’m also grateful for U.S. Patent No. 7,041,042 that is held by the maker of the barf bag that accepts a ballpoint pen so smoothly.