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So I just wanted to add a tip here for low income folks who have access to:
-employer 401k
-A High Deductible Health plan (HDHP) thus can open a Health Savings Acct
Husband was to go on Medicaid for 6 months next yr in 2018. No more.
His CPAP machine uses tiny cloth filters replacing them once a month (suppose to be once a wk)
Phoned the manufacturer a few yrs ago who quoted me hundreds of dollars for just 4 filters
I contacted the Company just now....and they offered to sell us 3 filters for $50
That's just $17.00 a mo.
To qualify for Medicaid-only for him meant I keep contributing to my employers 401k to reduce MAGI.
Yet the 401k fees are over 1% per month= 13% per yr and my stocks produce almost 3% per year but that is.a LOSS of 8% per year. I'd owe around $500,00 401k fees PER MONTH very quickly.
Big mistake to start contributing to this lousy employer 401k plan even with 4% one time match
At open enrollment, I'll pick a HDHP and start contributing to a health savings acct (HSA). I now pay $37.50 a month for myself for Kaiser, a waste of $$ and i never use it. It's not a HDHP.
My usualm401k contribution will be ceased and I'll divert $$ to the HSA . IRS rules only allow $5500 per yr but that's ok. Could then buy filters and pay for his yearly dental cleaning via pre-tax dollars
Please all...check your employers 401k fees online at your account. DO NOT believe their front page summary when you go online. Hit account and manually add up all of the fees vs gains. You could be shocked. Now realize each month what percentage is taken out of your contributions.
Last edited by NancyDrew1; 04-11-2017 at 04:29 PM..
I bought a foreclosure for house $24k 2 bedrooms and 2 bathroom in a middle income neighborhood. Rented the other room and turn the living room into a music studio.
Keep in mind this was the beginning post house bubble.
For those who are working minimum wage jobs (or close) which do not require a degree, AND are living comfortably enough, how do you get by?
Some examples of answers could be....
Do you do anything unique or creative? Maybe include such as...
Do you own your home?
What do you do for a living?
What is your retirement outlook?
Will you continue to live similarly, better or worse? assets?
What do you do for medical care? do you have a health plan?
My employment situation has changed drastically in the past six months and it has taken a toll financially, emotionally and physically. But the good news is that I'm coping and coming to grips with my new reality.
Here's a brief overview of my story-
I was an Independent Insurance Agent for a couple of years before going to work for a large insurance company as a Premium Auditor in 2012. I loved my job because I could travel to a customer's location, audit their records in two days or less, then return home and review my findings and submit my write-up over the next three days or so. Most weeks I spent 45-50 hours working and another 8-10 hours traveling. It worked out fine for me, especially since 35+ of my work hours were usually at home. I earned a $52k base salary and my bonus (based on certain aspects of my audits, especially when I uncovered fraud or unethical behavior by the agent who wrote the policy) was around $9k in 2015.
Changes started to happen in 2016 including new leadership, a reduction in our bonus program (I only made $1,725 in bonus in 2016) and mandatory 4-year college degree for all newly hired auditors. Previously, a 4-year degree was strongly preferred, buy my combination of a 2-year degree, some work toward a 4-year degree and 10+ years in accounting and insurance was more than sufficient to meet the work/education requirement...until that changed....and they applied it retroactively!
I was given two choices- I could accept a token severance package and still work for the company on a contractor basis for 'simple' audits. There was no bonus potential, all work was done in the field (no working from home) and I'd be lucky to make $40k/year. I would also pay self-employment tax and lose all my company benefits, which make my annual earnings equivalent to $26-28k/year. There was also no guarantee that they wouldn't change the requirements at any time and I would still be out of of a job. The other option was to take the token severance package and move on to another job. I chose the latter...
I'm very fortunate that my sister and I own two rental properties which provide some extra income for both of us. More importantly, we inherited them from our grandmother and they are fully owned, so they are assets against which I could borrow as a last resort to prevent financial ruin or homelessness. I also have about $50k (in addition to 401k and other retirement savings) that my grandmother also left to me. So I have a safety net that many in my situation lack.
I also inherited my house from my other grandmother and it has no mortgage. It is currently on the market for $179k and I have about $12k in debt from the work needed to get it ready to sell. I'm anxiously awaiting a buyer. To save money and keep the house 'show ready' all the time, I decided to move in with my parents next door. They have a large ranch-style house with a 2,100 square foot basement finished as an in-law suite (kitchen, living room, 2-bedrooms, bathroom, separate entry/exit and 1-car drive under garage). So I have my own private living space that just happens to be directly under my parents....or so I tell myself to avoid the reality that I am (on some level) 42yrs old and living with my parents!
I own a 2006 Mazda3 and 2012 Mazda CX-9 that are both paid off and in excellent condition. So I have no car payment and very reasonable maintenance and insurance costs.
The loss of my job was devastating to me on numerous levels and I think the toll on my emotional/psychological health was by far the worst. That stress, depression and anxiety only aggravated several existing health issues. It took me about six weeks to finally update my resume, swallow my pride and start looking for a new job. I was disappointed when my search produced very few results.
Last March, long before any of this happened, I started working on the weekend at a local pet store. It was just for fun and I didn't really need the extra cash, so I just deposited it all in savings. I was working 12-14 hours per week for $11/hour. I increased my hours to 24-28 hours (they limited part-timers to 28 hours per week due to the ACA's requirement to provide health coverage to employees who work over 30 hours per week). About four weeks ago, my store manager approached me and asked me to accept a 'management training' position. It would only be a raise to $13.50/hour (I know for a fact that the District Manager has limited to the position to $12.50 in the past and she fought to get the $13.50. I have access to the store email and read her communications with him about it). But I do get access to a very good PPO insurance plan for less than $200/month, dental and vision coverage, vacation, sick pay and several other benefits. Considering that I was paying $338/month for one prescription and $210/month for another that weren't covered by my Obamacare HMO that I was paying $322/month for, I'm going to be just over $650/month better off with the new health coverage.
I'm still working on swallowing my pride that I will only be making $13.50/hour ($28,080/year). Adjusted for inflation, I actually earned more working at Kroger in 1998 for $9.65/hour ($14.63 in 2017 $). But I am trying to look at the positives and how fortunate I am. I like the job, I have emergency savings and I have a very comfortable place to live indefinitely (I pay my parents $300/month rent which they try to refuse every month). My new position will lead to a much better paying one in 9-12 months (on average). I couldn't afford my own apartment or a new vehicle right now, but at least I can afford groceries, gas and car maintenance, paying rent to my parents and having a few dollars left to take a vacation later this year.
The current federal minimum wage is $7.25/hour. Even at 40 hours, that is only $290/week (or $15,080/year). At $13.50/hour, I'm not earning a "living" wage where I could be totally self-sufficient as a single person. Perhaps with a spouse/partner (who earned equal or more) it might be possible to make ends meet, but just barely. For the past 10 years, I've earned more than double my current pay. I feel like I'm starting all over again, climbing the corporate ladder and paying my dues (in sweat and hard work), much like I did 20 years ago at Kroger and subsequent jobs. It's a lot harder to do it at 42, but I try to be positive.
I'm thankful that I have a job and I give it everything I have when I'm there. I have hope that hard work will pay off eventually, as it always has in the past. Again, I am just thankful for my family and the financial security blanket they have provided (inheritance from both grandmothers and cheap rent from my parents). Through all of this, I've learned to appreciate my family more than ever. My best friend (or 30 years) has also been my number one source of emotional support as well as blunt, uncensored 'advice' and several financial gifts including two fully paid trips to visit him in Pittsburgh and a trip to visit my cousin in Los Angeles.
I feel like I've just rambled/vented about my situation and probably didn't answer your questions completely. Maybe you (or some other readers) will find something I said beneficial or in some way encouraging.
I thought of this after re-reading the OP's questions and after I had already made the LONG reply directly before this one. It seemed like a separate, short posting would be read by more people and might be helpful in some way....
To the question, "Do you do anything unique?"- This isn't exactly unique, but it is a change in behavior that has saved me at least $50/week in grocery expenses. In the past, going to multiple stores to buy their sale itemst was not worth the effort and wouldn't save enough to merit the time, effort and even the cost of the extra miles. After my drastic financial change, I found ways to shop for certain items at three different stores to save as much as possible. I buy all of my bottled water at ALDI ($2.79 vs $5.99 case). I also buy most of my produce, meat and frozen veggies from there. The store where I work is adjacent to Target and there are several items that I buy there because they are much cheaper than other stores. For example, I love a certain brand of popsicle called Outshine (frozen 100% juice) and they cost $5.49 at my local grocery store, but I just bought them for $3.49 per box on sale vs. $5.49-$5.99 at the major chains in my area.
I only need to go to ALDI twice per month and it's less than one mile off my regular travel path to work. Considering that I buy 10 cases of bottled water at a savings of $3.20 each ($32.00 on 10), I save $64/month on water alone. BTW, I wish I didn't need to buy bottled water but the minerals in my well make it very unpleasant tasting.
I go to Target at least once per week and buy certain items (like the aforementioned popsicles) and save $10-$25 per trip compared to my regular grocery store. I simply walk about 100-feet in the opposite direction of my car as I leave work to get there. It's a quick and easy trip after work.
Something else important to mention is that I check the sale flyers before I shop and I make a very specific list and I don't deviate from it! If I think that there might be some items I'm forgetting, I give myself a very small budget (usually $10) for items not on the list. I've learned frugal habits and techniques that I wish I had been using years ago!
My employment situation has changed drastically in the past six months and it has taken a toll financially, emotionally and physically. But the good news is that I'm coping and coming to grips with my new reality.
Here's a brief overview of my story-
I was an Independent Insurance Agent for a couple of years before going to work for a large insurance company as a Premium Auditor in 2012. I loved my job because I could travel to a customer's location, audit their records in two days or less, then return home and review my findings and submit my write-up over the next three days or so. Most weeks I spent 45-50 hours working and another 8-10 hours traveling. It worked out fine for me, especially since 35+ of my work hours were usually at home. I earned a $52k base salary and my bonus (based on certain aspects of my audits, especially when I uncovered fraud or unethical behavior by the agent who wrote the policy) was around $9k in 2015.
Changes started to happen in 2016 including new leadership, a reduction in our bonus program (I only made $1,725 in bonus in 2016) and mandatory 4-year college degree for all newly hired auditors. Previously, a 4-year degree was strongly preferred, buy my combination of a 2-year degree, some work toward a 4-year degree and 10+ years in accounting and insurance was more than sufficient to meet the work/education requirement...until that changed....and they applied it retroactively!
I was given two choices- I could accept a token severance package and still work for the company on a contractor basis for 'simple' audits. There was no bonus potential, all work was done in the field (no working from home) and I'd be lucky to make $40k/year. I would also pay self-employment tax and lose all my company benefits, which make my annual earnings equivalent to $26-28k/year. There was also no guarantee that they wouldn't change the requirements at any time and I would still be out of of a job. The other option was to take the token severance package and move on to another job. I chose the latter...
I'm very fortunate that my sister and I own two rental properties which provide some extra income for both of us. More importantly, we inherited them from our grandmother and they are fully owned, so they are assets against which I could borrow as a last resort to prevent financial ruin or homelessness. I also have about $50k (in addition to 401k and other retirement savings) that my grandmother also left to me. So I have a safety net that many in my situation lack.
I also inherited my house from my other grandmother and it has no mortgage. It is currently on the market for $179k and I have about $12k in debt from the work needed to get it ready to sell. I'm anxiously awaiting a buyer. To save money and keep the house 'show ready' all the time, I decided to move in with my parents next door. They have a large ranch-style house with a 2,100 square foot basement finished as an in-law suite (kitchen, living room, 2-bedrooms, bathroom, separate entry/exit and 1-car drive under garage). So I have my own private living space that just happens to be directly under my parents....or so I tell myself to avoid the reality that I am (on some level) 42yrs old and living with my parents!
I own a 2006 Mazda3 and 2012 Mazda CX-9 that are both paid off and in excellent condition. So I have no car payment and very reasonable maintenance and insurance costs.
The loss of my job was devastating to me on numerous levels and I think the toll on my emotional/psychological health was by far the worst. That stress, depression and anxiety only aggravated several existing health issues. It took me about six weeks to finally update my resume, swallow my pride and start looking for a new job. I was disappointed when my search produced very few results.
Last March, long before any of this happened, I started working on the weekend at a local pet store. It was just for fun and I didn't really need the extra cash, so I just deposited it all in savings. I was working 12-14 hours per week for $11/hour. I increased my hours to 24-28 hours (they limited part-timers to 28 hours per week due to the ACA's requirement to provide health coverage to employees who work over 30 hours per week). About four weeks ago, my store manager approached me and asked me to accept a 'management training' position. It would only be a raise to $13.50/hour (I know for a fact that the District Manager has limited to the position to $12.50 in the past and she fought to get the $13.50. I have access to the store email and read her communications with him about it). But I do get access to a very good PPO insurance plan for less than $200/month, dental and vision coverage, vacation, sick pay and several other benefits. Considering that I was paying $338/month for one prescription and $210/month for another that weren't covered by my Obamacare HMO that I was paying $322/month for, I'm going to be just over $650/month better off with the new health coverage.
I'm still working on swallowing my pride that I will only be making $13.50/hour ($28,080/year). Adjusted for inflation, I actually earned more working at Kroger in 1998 for $9.65/hour ($14.63 in 2017 $). But I am trying to look at the positives and how fortunate I am. I like the job, I have emergency savings and I have a very comfortable place to live indefinitely (I pay my parents $300/month rent which they try to refuse every month). My new position will lead to a much better paying one in 9-12 months (on average). I couldn't afford my own apartment or a new vehicle right now, but at least I can afford groceries, gas and car maintenance, paying rent to my parents and having a few dollars left to take a vacation later this year.
The current federal minimum wage is $7.25/hour. Even at 40 hours, that is only $290/week (or $15,080/year). At $13.50/hour, I'm not earning a "living" wage where I could be totally self-sufficient as a single person. Perhaps with a spouse/partner (who earned equal or more) it might be possible to make ends meet, but just barely. For the past 10 years, I've earned more than double my current pay. I feel like I'm starting all over again, climbing the corporate ladder and paying my dues (in sweat and hard work), much like I did 20 years ago at Kroger and subsequent jobs. It's a lot harder to do it at 42, but I try to be positive.
I'm thankful that I have a job and I give it everything I have when I'm there. I have hope that hard work will pay off eventually, as it always has in the past. Again, I am just thankful for my family and the financial security blanket they have provided (inheritance from both grandmothers and cheap rent from my parents). Through all of this, I've learned to appreciate my family more than ever. My best friend (or 30 years) has also been my number one source of emotional support as well as blunt, uncensored 'advice' and several financial gifts including two fully paid trips to visit him in Pittsburgh and a trip to visit my cousin in Los Angeles.
I feel like I've just rambled/vented about my situation and probably didn't answer your questions completely. Maybe you (or some other readers) will find something I said beneficial or in some way encouraging.
For what it's worth, I think you are doing wonderful. And you may be able to combine both work experiences to do something in the pet industry. Who knows. You also have the option, after that house sells, to invest in real estate. Just in case you do not increase your income, you'll be making $13.50 w/benefits+ whatever the rent provides you. That is almost free in a sense due to write offs or you can open a SEP, and use the rental for your retirement income. Pay all bills and make all deposits for the real estate using the SEP. So it's not about your hourly wage at a job, but your wage total minus expenses. Maybe use that $$ when the home sells to buy a Duplex and live in one side for a while since you are not married right now, you can be flexible regarding housing.
So I just wanted to add a tip here for low income folks who have access to:
-employer 401k
-A High Deductible Health plan (HDHP) thus can open a Health Savings Acct
Husband was to go on Medicaid for 6 months next yr in 2018. No more.
His CPAP machine uses tiny cloth filters replacing them once a month (suppose to be once a wk)
Phoned the manufacturer a few yrs ago who quoted me hundreds of dollars for just 4 filters
I contacted the Company just now....and they offered to sell us 3 filters for $50
That's just $17.00 a mo.
To qualify for Medicaid-only for him meant I keep contributing to my employers 401k to reduce MAGI.
Yet the 401k fees are over 1% per month= 13% per yr and my stocks produce almost 3% per year but that is.a LOSS of 8% per year. I'd owe around $500,00 401k fees PER MONTH very quickly.
Big mistake to start contributing to this lousy employer 401k plan even with 4% one time match
At open enrollment, I'll pick a HDHP and start contributing to a health savings acct (HSA). I now pay $37.50 a month for myself for Kaiser, a waste of $$ and i never use it. It's not a HDHP.
My usualm401k contribution will be ceased and I'll divert $$ to the HSA . IRS rules only allow $5500 per yr but that's ok. Could then buy filters and pay for his yearly dental cleaning via pre-tax dollars
Please all...check your employers 401k fees online at your account. DO NOT believe their front page summary when you go online. Hit account and manually add up all of the fees vs gains. You could be shocked. Now realize each month what percentage is taken out of your contributions.
It's unrelated to the thread but there is almost no way your 401K fees are 1% a month.
It's unrelated to the thread but there is almost no way your 401K fees are 1% a month.
You are uneducated. The fees can START at 1% per month. The fees on my first $1000 were HIGHER than that.
When they tell you their fees (and this is "pooled" amongst all employees taking part in the 401k- the WORST) and they say "I charge 1%" they mean 1% PER MONTH or 12% per year. They do not say 12% per year.
At the time, my Vanguard funds produced 2.5% if it had stayed that way. So 2.5% PER YEAR
I should've been ahead. Those gains are recorded in my account.
But the ADMINISTRATOR FEE, FAR OUTWEIGHED it all. The other fees, not so much
When I had $1200 invested, I was charged $12.50 fees.
This is basic math. I clicked and read each fee listed, then added them up.
Starting at having 10K invested, which would've happened in just one year, my fees would've been-
10k/1 yr=$125 month
Sorry but at the beginning of 2018, I have no desire to pay $125 a month just to park my 12K.
That is INSANE.
So insead, I have a HSA opened at First Tech Credit Union which pays 1% PER YEAR. Sure not much but I don't loose anything. Sure I will only be able to save $4500 a year but that's fine with me. Trump is big on HSA's, and it's the one thing he's never waivered on. So eventually, hopefully, he will allow people to contribute more. He's for the rich guy, and this would allow for a larger tax shelter. Do I Mean hopefully?? Not really. It just makes the RICH, much richer. Sure it will help us but not in balance with the rich and the poor would be worse off. So I know the right thing is NOT to expand HSAs too much beyond whatever the yearly deductible is for the individuals HDHP
I can loose $125 per month or make $3.50=$4.50 per year.
By law, the 401k providers must send a fee disclosure every quarter. ASK FOR IT UPFRONT.
This means you can be charged fees, and not even know about them. You ought the see these fees!!!
I finally got a hold of mine, they emailed it early "as a courtesy" yet I'll probably get charged an undisclosed fee for just asking for it!
Imagine putting in 1K into your HSA bank account each month then finding out at the 4th month, you will be paying out $40 a month FROM THEN ON OUT.. JUST TO PARK YOUR MONEY
My son pays a quarter of a percent fee. He works for Apple. His employer match is about the same as mine BUT of course, remember, the employer match is ONLY ONCE and with that initial paycheck. So it delays fees for 4 months (if you get a 4% match). Apple will increase the company match the longer he works there. He's only 25
PEOPLE SAVE MONEY IN YOUR HEALTH SAVINGS ACCOUNT (HSA) AND YOU CAN EARN 1% PER YEAR on those funds. Sure you may not be able to take them out until age 65 (versus age 59.5) BUT if you took them out in a year you were not working, you pay the 20% fine ON TAXES OWED. So you can still take out about 10K for a single person, without paying taxes, if you have no other TAXABLE income for that YEAR.
Aside from the obvious, you can use your HSA to pay for qualified medical expenses.
The HSA Is the best invention YET for certain people.
The one thing I will say, is if you are low income and contribute to certain retirement acounts (which includes the 401k) you can earn what's known as "The SAVERS CREDIT" aka an IRS non-refundable credit. This means after you do your taxes, and you look up what you owe at the bottom, you could get 10 or 20% off of that amount due to IRS. The savers credit offers 50% but realisitcally, if you are donating to a 401k, that money is being removed from taxable income anyway so your tax liability is so low you wouldn't lkely qualify for the 50% credit. Of course if you have NO TAX Liability, then you do not benefit from the savers credit.
You cannot benefit from that tiny perk in using an HSA but it is MUCH BETTER overall.
I also need to correct a mistake in my previous post. You can contribute up to $3500 a year, not $5500. Sorry for that. And you can add $1000 per year if you are age 55 or over.
So unless you need to get on Medicaid due to yourself or your husbands health issues, then sure, lower your MAGI and donate to the lousy 401k to stay alive. It can be the feasible way to go if you stay on Medicaid for just 1 year or so, as the fees are low since you haven't accumulated enough in your 401k for those fees to outweigh what you'd pay having an HDHP+HSA
Last edited by NancyDrew1; 04-15-2017 at 02:25 PM..
Thank you for that.
I am looking into that ROTH option now. I already opened an HSA with First Tech Credit Union. Your link might very well be a better solution Thanks so much!!
I have a total of $2500 in my 401k already.
So it's too late in a sense.
I've limited it to contributing 6% because my employer donates 3% then a half of a percent up to 4% which means I have to contribute 6% to get the employer match.
So I wont loose personal money on the empoyer match but I am toast regarding teh $2500.
Even with my Vanguard funds doing so well, especially the S&P 500 Admiral. Well not until trump decided to go to war and the transportation industry hit a little due to that guy being beat up and drug off of the United Airlines flight. He needs reconstructive surgery for his face. So he will get millions, likely
Last edited by NancyDrew1; 04-15-2017 at 02:39 PM..
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