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CNBC
a day ago
- Business
- CNBC
34-year-old aims to save $12,000 a month and retire by 45—take a look at his full budget breakdown
Derrick Morgan Jr. wants enough money to retire by 45 — and he's saving more than $12,000 a month to make it happen. The 34-year-old trademark attorney runs his own law firm helping entrepreneurs register and protect their brands — a practice he built after offering his services on Fiverr during the Covid-19 pandemic. What began as a solo side hustle is now a nearly $500,000-a-year business that Morgan runs with help from a paralegal and an AI assistant. But he isn't taking the company's success for granted, which is why he puts roughly 40% of his $350,000 income into investments to achieve his goal of early retirement. "I don't know how long my business is going to thrive," he says. "So I make sure I pay myself first — I front-load my investments." Morgan says his approach to money has been shaped by "The Richest Man in Babylon" by George Samuel Clason, a bestselling personal finance book that emphasizes saving before spending. One lesson that's stuck: pay yourself first. "I just make sure I invest as much as I can and then live off of the remainder," Morgan says. That philosophy guides his monthly budget, most of which is put into investments that include a solo 401(k), backdoor Roth IRA, health savings account and taxable brokerage account. He also earns $440 a month in rental income from a condo he owns in Chicago. "I do put a lot into my brokerage account after I max out the retirement accounts because I want to be able to pull from that earlier" than traditional retirement age, he says. Retirement savings vehicles generally have restrictions on when you can access the money. Lately, Morgan has been putting money into a boutique hotel development project in Mexico. In March 2025, he contributed $14,500 — his largest monthly expense. He expects to finish making payments within a few months and plans to catch up on retirement contributions later in the year. "I invest in real estate because I don't want all my wealth tied to the stock market," he says. Morgan travels often and dines out regularly, but he's still intentional about keeping his overall spending low. His home is a furnished apartment in Mexico City that costs about $2,000 a month — roughly half what a similar place would cost in Chicago, he says: "It is affordable, but it's not cheap." Here's what he spent in March 2025: Morgan doesn't own a car, relying instead on public transportation, rental bikes and rideshare apps. Some business expenses, like his phone, are covered through his company. He pays out of pocket for health care and carries $42,000 in student loan debt, which he is actively repaying. Morgan says his drive for financial independence comes from growing up with limited means. "I grew up very lower middle class, so we just didn't have a whole lot," he says. "Money was very tight — we couldn't afford this, we couldn't afford that. So it's kind of like a freedom thing, for sure." He doesn't plan to stop working entirely — just to have options. "When I do quote-unquote retire, it's more so I can focus on just living freely, but also doing more of those passion projects instead of working to necessarily make money."
Forbes
2 days ago
- Business
- Forbes
Getting To Know You Tuesday: Brad Garland
Brad Garland Raeley Stevenson Brad Garland is a Certified Public Accountant who understands the concept of giving back. He serves as a partner and founder at Honeycomb CPAs & Advisors—and he's a dad—all while staying busy in his community in Huntsville, Alabama. Brad is also a founding member of the Accelerate chapter of BNI. He serves the Community Foundation of Greater Huntsville, the Huntsville-Madison County Public Library, Kinertia (the entity that curates TEDxHuntsville), and the Liberty Learning Foundation. He sits on the Auburn University's School of Accountancy Advisory Council and is also a co-founder of Rocket City Scholarship Granting Organization. Here's what else Brad had to say: Where are you now? I'm in a historic school turned multi-use space – above a brewery, below a tattoo studio, next to a ping pong facility. What's your job title, and what does it mean? Partner of a CPA firm, meaning curating and managing the team, the clients, and the culture of a practice in the community. Tax, law, and accounting are such broad topics. What's your area of special interest? The tax world has always been a fascinating one – a mix of understanding personal needs of the taxpayers while navigating the ever-changing tax code that's the result of political forces in the local and national economy. What's the first thing you typically do while at work? Make myself a cup of coffee! If you had an extra couple of hours open up in your day—outside of work—what would you do? Honing my Mario Kart skills so my kids don't taunt me. What's one tool or resource that you couldn't live without at work? I use a trackball instead of a mouse, and it makes navigating PDFs, websites, and emails much easier. If you weren't working in the tax profession, what would your dream job be? Paleontologist—but maybe indoors? What's the best tax or financial advice that anyone ever gave you? Invest in Roth IRA early – especially before kids and the messy middle. What books or magazines are on your nightstand? Some X-Men graphic novels and 'Rise of the Creative Class.' What would I be surprised to know about you? I was an extra in the movie 'Big Fish.' If you had the opportunity to make one change in the tax code tomorrow—an extra credit, a disallowed deduction, whatever—what would it be and why? Raise the Form 1099-NEC threshold. Adjusted for inflation, it should be at least $10,000. ( Note to readers : The One Big Beautiful Bill Act raises the Form 1099-NEC and Form 1099-MISC thresholds to $2,000 beginning in 2026.) What was the best tax conference, continuing education (CE), or continuing legal education (CLE) event that you ever attended? This year's RightNOW event with Rightworks was insightful and fun. What has been the biggest change that you've seen in the tax profession in the last five years? Staffing—with record numbers of CPAs leaving the profession, and not enough coming in to replace them, it's created a staffing challenge but also, an opportunity for new CPAs. What are you most concerned about or excited about with respect to the profession moving forward? Tax law complexity—for proper consulting, projections, and planning, the tax law needs to be established in a timely and reasonable manner. Last minute (or even, mid-year) changes make it difficult for taxpayers—and their CPAs. If Uncle Sam handed you a huge refund check right now, what would you do with it? Go on a long summer vacation! You can find Brad on LinkedIn and X (formerly Twitter). This article is part of our Getting To Know You Tuesday series—a chance to get to know all kinds of tax professionals and understand that the field of tax is bigger than April 15. If you'd like to nominate tax professional to be featured, send your suggestion to kerb@ with the subject: Getting To Know You Tuesday. Forbes Getting To Know You Tuesday: Arielle Tucker By Kelly Phillips Erb Forbes Getting To Know You Tuesday: Nicole Davis, CPA By Kelly Phillips Erb Forbes Getting To Know You Tuesday: Dorothy K. Butler By Kelly Phillips Erb
Yahoo
2 days ago
- Business
- Yahoo
Cash in as a couple: How to get on the same page about money
If you're feeling like you're not on the same financial page as your partner, or you don't understand your partner's financial habits, you're not alone. More than 3 in 5 Americans (62 percent) in committed relationships keep at least some of their money separate from one another, according to Bankrate's Financial Infidelity Survey. Separate finances can make it challenging to plan together. The good news? With the right approach, your finances can become a source of connection instead of conflict. Enter CRUSH: the five-step process my husband and I use every month to align our money mindset, build wealth and reach our goals together. It's helped us save enough to retire in our forties, and we teach other couples how to do the same. Whether you're just starting out or already earning more as a couple, this approach will help you take intentional, values-based action (and prevent your next money argument). Here's how to CRUSH your money goals as a team. C: Curate your accounts together It's hard to make smart decisions together if you don't both have access to the full financial picture. Start with the facts: What do you have, and where do you have it? Curating your accounts means getting organized and deciding how you'll manage your obligations and assets. Ask yourselves: What types of accounts do we have? (checking, savings, credit cards, loans, investments) What accounts do we need? What structure works best for us: joint, separate or a hybrid? There's no one-size-fits-all answer, but you do need to agree on how to share or divide financial responsibility. Lay everything out in a way that allows you to get the full picture at once. This could be a simple spreadsheet or an app that automatically tracks your net worth. How to crush this step Spend one hour together this weekend listing every account you each have: Cash accounts Credit cards Loans Investments Property Decide which accounts you'll manage jointly or separately. The point here is not the balance of each account, but rather mutual awareness of how many accounts there are between the two of you, and whether they are all necessary or duplicative. My husband and I decided to have a joint checking account and a joint brokerage account, but maintain separate savings and retirement accounts. This helped us consolidate the total number of accounts we had to manage. R: Reverse into independence individually, and as a couple This might sound counterintuitive, but financial independence within a relationship can make the partnership stronger. Instead of assuming one partner will handle everything or defaulting to traditional roles, ask: How can we support each other's independence? That could look like: Each partner maxing out their Roth IRA or creating their own cash flow cushions Having individual and personalized 'fun money' budgets Supporting career shifts, starting a business or personal development Yes, you can have a joint checking account and individual financial aspirations. The goal is to reverse the idea that independence and togetherness are opposites. Independence supports a thriving relationship, especially when it's done with mutual respect. When each person is stronger, the couple is stronger. How to crush this step Create individual money goals for the next quarter. Maybe one of you wants to save for a personal retreat, and the other wants to invest in a professional certification. Write down the goals and hang them where they're visible to both of you. My husband and I love to post these on our refrigerator. Check in during your monthly budget meeting to share your progress and offer encouragement. U: Understand your net worth (and how to grow it) Too many couples only focus on income and monthly budgets, but not on their joint or individual net worth. This is the figure that truly shows your financial health, and I'm always surprised by how many couples don't know this number at all. It's the total of what you own (assets) minus what you owe (liabilities). Sit down together to calculate your combined net worth. Then make it a habit to check in quarterly to track how it grows. To grow your net worth together, divide financial responsibilities based on each partner's strengths. For example: One partner may be great at staying on top of everyday expenses like bills, food and housing. The other might prefer to focus on keeping credit in check and finding solutions to paying off student loans faster. One person might feel more comfortable talking to a tax advisor and looking for investments that help you save on taxes. The other might enjoy researching and managing your retirement accounts. How to crush this step Assign account 'leaders' based on your strengths. One of you can track and pay off debt, while the other handles your investing or saving strategy. Review your progress and update your numbers in your net worth tracker. Think of each account as having a primary leader and a backup. In my relationship, my husband is the primary leader for our budget and monthly expenses, and I take the lead on our investments. That doesn't mean I don't know what we're spending or that he doesn't know how we're investing. Instead, each of us is responsible for taking the lead on decision-making within those accounts and communicating updates to the other. We still align on decisions that involve any major shift in strategy. This strengths-based approach ensures both partners are engaged and reduces the risk of one person carrying all the mental load. S: Spend intentionally (with survive, revive and strive) Overspending is a budget killer. Bankrate's Financial Infidelity Survey found that 33 percent of Americans in committed relationships have spent or are spending more money than their spouse or partner would be okay with. The challenge with traditional budgeting is that it can feel restrictive or confusing, especially when you want to coordinate two people's spending habits. That's why I recommend my 3-bucket budgeting approach: Survive, Revive and Strive. It's a simple and values-driven way to organize your spending, and it's slightly more focused on saving than the 50/30/20 budget. Survive (50% of monthly income): Your essential expenses, such as rent or mortgage, groceries, utilities and insurance Revive (25% of monthly income): Spending that recharges and supports your lifestyle, like travel, meeting friends and hobbies Strive (25% of monthly income): Money for your future dreams, including investing, saving for a home, starting a business or taking a sabbatical How to crush this step Print out your bank statements from the past several months. Go through each expense and sort them into Survive, Revive or Strive. Use this as a starting point to build a monthly spending plan based on your real-life values, discuss where you have different approaches and plan potential solutions for next month. Rather than statements like, 'You always spend too much on this,' agree upon more future-focused spending with statements like, 'What makes sense for us next month?' H: Heal your money wounds with patience Most of us carry ideas about money from our childhood, past relationships or cultural upbringing that shape how we think, spend and save. And odds are that not all of those experiences with money were positive. To build true financial intimacy, you'll need to unpack those money wounds together. My husband and I both grew up in immigrant Filipino families, but despite our similar cultural backgrounds, we grew up with many differences that shaped our views. Money isn't just math. It's deeply emotional. His mom was the breadwinner, while my father was the primary provider. He grew up in the rural South, and I was raised in the heart of New York City. He is the second of three children, and my father had seven children in his first marriage and two in his second. Those differences created different, and often contradictory, money beliefs that we didn't hash out until many years into our marriage. This step can bring up a lot of emotions, so go slow and be patient. We journal our answers together, and we've worked with a couple's counselor when things felt tense. How to crush this step Set aside 30 minutes this month for a reflective conversation about money before you make your next monthly budget. Use one prompt like: What was money like in your home growing up? What's your biggest money fear? What money habits are you proud of, and which do you want to change? Listen without judgment, and thank each other for sharing. It's scary to admit these fears, but I regret that my partner and I waited too long to start this habit. Final thoughts: The real relationship flex is mutual financial freedom Money can be one of the most stressful factors in a relationship, but it doesn't have to be. Reaching your financial goals can strengthen your partnership if you don't leave it to chance and generational trauma. When both people in a relationship feel seen, heard and included in the financial journey, you're no longer just managing money. You're building a future together with pooled versus competing resources. I often work with couples where one person leads and the other follows. Instead, I encourage you to create a shared vision where both of you feel empowered to contribute, grow and support one another on the path to mutual financial freedom. Start with just one step. Choose a letter in CRUSH to explore together this month at your next money date. The more you communicate and collaborate, the stronger your relationship — and your finances — will become. Solve the daily Crossword
Refinery29
3 days ago
- Business
- Refinery29
A Week In Brooklyn On A $94,800 Salary
Welcome to Money Diaries where we are tackling the ever-present taboo that is money. We're asking real people how they spend their hard-earned money during a seven-day period — and we're tracking every last dollar. Today: a project coordinator who makes $94,800 per year and who spends some of her money this week on a tuxedo T-shirt with cleavage (it's not every day you buy one of those). If you'd like to submit your own Money Diary, you can do so via our online form. We pay $150 for each published diary. Apologies but we're not able to reply to every email. Occupation: Project coordinator Industry: Local government Age: 25 Location: Brooklyn, NY Salary: $94,800 Assets: Checking: $2,290.94 (I always keep at least $1,750 in here, which is rent and an additional $500); savings: $23,967.61 ($15,000 is my emergency fund, $7,000 is for my Roth IRA for 2026, and the rest is my 'discretionary' fun money); Roth IRA: $16,478.89; brokerage: $101.41; pension: $9,201.96 (which will be paid out to me as half of my average salary of my entire career. So if I stay with my job until I retire and my salary never goes up, that looks like $45,485.17 a year); 401(k): $1,589.39 (I just started contributing this year and I do it at the same percentage rate as my pension, which is 4.5%). Debt: $28,126.42 in federal student loans. Paycheck Amount (bi-weekly): $2,195.51 Pronouns: She/her Monthly Expenses Housing Costs: Rent: $1,250 (my roommate and I split this evenly, so our rent is $2,500 total). Loan Payments: $0 Utilities: $40-$100, depending on the season and how much we are running our A/Cs. Wifi: $24.99 (my roommate and I split this, and it is $50 total). Phone: $88.12 Spotify: $19.99 Steaming: $0 (I get Netflix and Apple TV from my phone carrier, my parents give me access to Hulu, HBO Max, Disney+ and my brother handles Peacock). NY Times Digital Access: $4.34 Apple iCloud: $2.99 Every Dollar: $19.59 (this is a budgeting app). Laundry: $60 (I load $30 onto a card twice a month). Gym Membership: $22.99 Pilates Membership: $130.65 (this is for reformer Pilates. I do a work exchange program at a yoga studio for unlimited free yoga and mat Pilates classes). Savings: I save around $800-$1,000 a month in my HYSA. Pre-Tax Deductions: Health insurance: $73.96; paid family leave: $14.11; pension: $163.63; 401(k): $153.29; FSA: $12.50; commuter card: $66. Post-Tax Deductions: Union dues: $25.45 (this covers vision and dental as well). Was there an expectation for you to attend higher education? Did you participate in any form of higher education? If yes, how did you pay for it? I think the expectation was there, but my parents never had to push me in that direction. I always cared a lot about my academic success while my parents were pretty ambivalent. My mom barely graduated high school and didn't pursue further education, and my dad went to local college for undergrad and has no graduate degrees. I went to a specialized magnet high school, took many APs and did many extracurriculars, and ended up going to a highly ranked school for my undergraduate degree. I think my parents are proud but also a little bit like, 'What did you do all of that for?' I was able to pay for it with a combination of federal aid, federal loans, and a 529 plan from my parents. More on that below. Growing up, what kind of conversations did you have about money? Did your parent(s) educate you about finances? My dad is supposedly pretty good with his money, although he shared absolutely no information with my brother and me. I didn't know about retirement savings, investing, how much to save/spend, nothing. I think he just said not to spend it all at once, lol. Meanwhile, mom recently told me that she doesn't even know how much her paycheck is. I was like, awesome! We grew up 'middle' middle class and my dad was very frugal. More like, stingy. We never had allowances, just birthday and holiday money from relatives that we would use when we wanted something. My parents often do things as cheaply as possible, especially when it comes to their house. I thought we were poorer than we were growing up because our house is not well-taken care of. I now realize that both of my parents are not good at cleaning, both have slight hoarding problems, and see no point in investing any real money into their living space. Shoutout to all of the kids who never really had friends come over because their house was 'embarrassing' — I see you. The first time I remember having a frank conversation about money with my parents was when I was deciding on colleges. My dad and I had a talk where he showed me my 529 account balance and said that I needed to qualify for significant financial aid to go to any of the schools I was dreaming of. Luckily, I ended up qualifying for financial aid that covered my entire tuition and I only had to pay for housing/food costs, which was paid for with my 529 account and federal loans. What was your first job and why did you get it? I started teaching classes and getting paid under the table at the same place I did my main extracurricular when I was 14 for some spending money. The first W2 job I had was at a local swim club working in the snack shack, which my aunt and uncle helped me get. The only time I haven't worked since then was my first year of college, since my original financial aid package had a work/study stipend and then they took it away right before I started school. I worked again starting the summer between freshman and sophomore year and haven't been unemployed for more than a few weeks since that time. Did you worry about money growing up? I didn't worry that we would not have food on the table or a roof over our heads, but I was told 'no' a lot. My mom was a stay-at-home mom until I was in the middle of elementary school, then she began working different part-time jobs. She didn't want to, but she has said that money was too tight for her to stay home. All of my mom's money was for me and my brother to have fun things, like extracurriculars and nicer-than-basic clothes. I was involved in a very expensive extracurricular as a kid that my mom very much loved and was very involved in. My dad was always talking about how much it cost, and it made me worry that my extracurricular was hurting our family financially in ways I couldn't see. Although my mom was happy to fund my extracurricular activities, if we ever went shopping and my mom bought me things but not herself, she would become agitated and say that she spends all of her money on me. This made me worry that we were really not doing well financially. I think my dad's stinginess has always fueled my mother's anxiety about money, even though things aren't so tight anymore. Do you worry about money now? I do. Many of my friends grew up upper middle class or just plain old wealthy, and I know that they have a head start financially. I feel like I know a lot more about finances than my peers because I have to be really intentional with my spending if I want to thrive. I want to be able to buy property one day and I need to strategize how I would do that, especially if I want to stay in New York. At least once a week I look at StreetEasy and spiral about how much owning a home would cost. But I have my emergency fund and I am doing well with my retirement savings now, so it's time to build that wealth that can hopefully become a down payment. At what age did you become financially responsible for yourself and do you have a financial safety net? Fully, at age 25. I got off of my family's phone plan when I turned 25 last summer and got off of my family's insurance plan at age 24. I was taking care of everything else once I moved to New York at age 23. I could definitely move back home with my parents if I needed to, but I don't think they would give me money (because they just gave me a lot of money lol, more details below). Do you or have you ever received passive or inherited income? If yes, please explain. When I was in college, my parents paid for my groceries, apartment and utilities when I moved off campus. I never bought my own car, I always got my mom's old car (once when I first started driving and then again when she upgraded; the first car was sold and I took her second hand-me-down car). My parents always paid for the insurance and maintenance, as well as gas when I was in college. When I moved to New York, my dad sold my car and gave me part of the profit, which I think was $3,000. My mom paid the broker's fee for when I moved into my current apartment, which was $2,000. Recently, my grandmother passed and my mom and uncle sold her house. My parents decided to give me and my brother each $2,000 from my grandmother's life insurance and $50,000 each from the sale of the house. I received $25,000 this year and will receive $25,000 next year. This was an incredible, amazing, generous gift that I'm very thankful for — shoutout mom and dad. There is also a wedding fund set aside for me, although I don't know how much it will be. Day One: Wednesday 6 a.m. — Good morning! I flew back from a solo trip to Paris on Monday and I'm still feeling the six-hour time difference. I writhe around in bed for a little while before my cats realize I'm awake and demand attention. I get up to get ready, journal (Artist's Way hive, rise up), and eat breakfast. I choose to wear a black mock-neck sweater, jeans, and platform black Doc Marten boots. Today it's just Chobani yogurt and granola for breakfast because my roommate's girlfriend, Z., is cooking breakfast for my roommate, N., in honor of her first day at a new job. We all chat but secretly I harbor resentment because I wanted to make scrambled eggs. 8:15 a.m. — I take the subway to work and use my transit card to pay for it. I read A Moveable Feast by Ernest Hemingway, which I bought at the Red Wheelbarrow Bookstore on my vacation. It's a great window into what Hemingway's life was like while living in Paris and trying to make it as a writer. 12 p.m. — I still have so so so many emails to get back to. Help. I heat up leftovers from lunch yesterday, which were from a knock-off Chipotle near my office. I had the energy to buy groceries before crashing on Monday, but not to actually cook anything yet. I crack open a cold one (a Black Razzberry La Croix) and work while eating. I graze on some other office snacks (mainly potato chips) to round out my sad lunch. 4'30 p.m. — I brought Pilates clothes to work so I could head straight to the class, but I forgot my Pilates socks so I have to stop home anyway. I use my transit card again for the subway. It's a mad dash to get home, change clothes, and make the speedy seven-minute walk over to the studio. 6 p.m. — I grab some odds and ends groceries on the way home (strawberry vanilla Olipop, bread, broccoli, a shallot, Chameleon cold brew concentrate). I shower and then make a new dinner recipe that I found on Instagram Reels. It's a Green Goddess pasta sauce made of broccoli, spinach, and silken tofu, and I made some chickpea pasta to go with it. Usually I make dinner with my girlfriend, R., but we're taking some space right now. We haven't talked for two weeks and yesterday we had our first conversation about what reconciliation might look like. It was hard and there's still a lot to figure out. I reflect on all of this as I eat my pasta and watch Queer Eye. These gay men are very comforting in my trying times. $20.34 10 p.m. — N. and I make the gluten-free Trader Joe's chocolate chip cookies and watch some of Queer Eye together before we both decide to turn in. N.'s new job is full-time in person, but I get to work from home tomorrow. I doomscroll on Instagram for 45 minutes and then pass out almost immediately after I turn off the light. Daily Total: $20.34 Day Two: Thursday 6 a.m. — I wake up to pee and almost start getting ready. And then I'm like, why would I do that when I could sleep more? I go back to bed until closer to 9 a.m., which is when I log on when I work from home. 8:30 a.m. — That's better. I do my morning skincare (rinse my face with water, Good Molecules hyaluronic acid serum, Vanicream daily facial moisturizer, my prescribed 1% clindamycin and 5% benzoyl peroxide cream, and Madagascar Centella Hyalu-Cica sunscreen) and then journal at my desk. I like to use my TV as a speaker and usually listen to music all day when I work from home. I put on Samia, since I'm going to see her tomorrow at Brooklyn Steel. I also make myself a coffee, which is just half cold brew concentrate, half water, and a little bit of oat milk. 11 a.m. — In a meeting and eating breakfast, which is scrambled eggs with avocado and hot sauce with peanut butter and banana on toast. I often eat late when working from home because I get distracted/lazy. I wear my headphones while in the meeting so I can putter around my apartment and clean things while I listen. I'm definitely the more clean roommate and do an entire top to bottom weekly clean of vacuuming, swiffering, cleaning the bathroom, etc. I grew up in a messy, cluttered, dirty home, and having any mess in my home makes me very anxious. My dream as a kid was to live in a home where you can put your hand on the kitchen counter at any time and not be touching a sticky surface with food on it. 12:30 p.m. — I was assigned to do something annoying for work so I decide to make a second coffee. Once I already started making it, I remember I finished the oat milk earlier. I run to the corner store by my apartment and grab some more. Another reason I never want to leave my apartment is because I love this store — it's 24/7, they have good hot food/sandwiches, and they're basically a fully fledged grocery store. $4.99 2:30 p.m. — I heat up some pasta leftovers and eat some pineapple. I used to never eat fruit (maybe like, one apple a month) and in recent months I've forced myself to have at least a little fruit everyday. I employ my favorite work-from-home hack, where I set a timer for 30 minutes to work and then do one cleaning task in my apartment. It really helps me feel productive in getting some work and some chores done and keeps me moving. R. and I text a little and agree to get coffee and go on a walk tomorrow morning. I think it'll be nice but I'm also a little nervous to spend time with them. 6 p.m. — Time for my yoga shift. A month after I moved to New York, a friend recommended that I do work exchange at this yoga studio and I was able to get a shift. I show up, do some laundry and cleaning, take a class, and then mop the floors after. In addition to taking class while on shift, work exchange employees can take unlimited classes at either studio location. I've also met some really great friends through this position and feel like I've created more community than if I was a paying member of the studio. 8 p.m. — I stay and chat with my yoga teacher a bit after I'm done cleaning. She's become a good friend and I hope I'm as cool as her when I'm 40. I have no time but I run into Walgreens on my way home anyway to buy a new shampoo and conditioner. The one I have is just way too heavy for my fine hair and it's driving me crazy. I land on the L'Oreal Elvive Hyluranic + Pure and find some digital coupons on my Walgreens app, which brings my total from ~$13 to $8.70. I wish I had the time, patience, and apartment space to become an extreme couponer. I think I'd slay at that. $8.70 9:30 p.m. — I finally make it to trivia with friends. I order a burger and fries and a ginger ale. Last time I was here, I didn't let myself indulge in this bar's incredible burger and I regretted it. It's nice to hang out with everyone for a little while and catch up. One of my friends went on vacation with her college friends and had lots of drama to spill. We discuss how trivia always has questions about sports and boy movies and how we should host a trivia that only has questions about girl things. $23.78 11:30 p.m. — Did my nighttime skincare routine, which is CeraVe moisturizing face wash, Mediheal madecassoside blemish pad, Embryolisse Lait Creme Concentre Moisturizer, Ilia bright start activated eye cream, and my prescribed clindamycin tretinoin cream. Read A Movable Feast and pass the fuck out. Daily Total: $37.47 Day Three: Friday 7:30 a.m. — Good morning! Another work from home day. I get up and do my skincare routine and journal quickly before I meet up with R. I'm feeling nervous but also excited to see them and also to try this coffee shop, which has been on my list for a while. 10 a.m. — Just got back. The coffee shop was adorable — part of the space is a used bookstore, as well as coffee and pastries and fun unique snacks. I got a pistachio cream latte with oat milk, R. got an espresso tonic, and we split an almond croissant. I pay. We chat for a while and have some laughs. Walking back, we have a more serious conversation about where we're both at. We agree that we want to continue going on these little dates and seeing how it feels as we go. We hug goodbye and it's a little sad, but I'm feeling hopeful that we can work things out. I check my work email while walking home and realize I totally forgot to do something that was due for a meeting at 9 a.m., but my coworker covered for me. $19.33 12:30 p.m. — I make some scrambled eggs, avocado toast with pickled red onion, and some pineapple for breakfast. I work in my 30-minute spurts but instead of cleaning or doing other things around my apartment, I just lay in bed for five minutes on my phone before going back to my desk. Can't win 'em all. I'm all caught up on my normal podcasts (Berlant & Novak, Binchtopia, So True with Caleb Hearon, Las Culturistas), so I put on the new Amy Poehler podcast. I put in a Chewy order for the cats (which will last for a month) of Purina Pro Plan Chicken & Rice formula, Arm & Hammer Clump and Seal litter, and a restock of chicken-flavored Greenies. Do Greenies actually help with a cat's dental health? Who's to say. $61.66 3 p.m. — I decide work is mostly done and I go do laundry. I load $30 on my laundry card twice a month, and I have enough on my card to do this load without adding more money. Once I switch my laundry to the dryer, I go to the gym. I do the elliptical for twenty minutes, do some of the leg machines, and finish with a Pilates abs video that kills me every time. I grab my laundry on the way back home and put it away while N. and I discuss dinner. Our friends are coming over for the concert soon and we decided that we'd provide a big family style dinner and ask everyone else to bring some wine/alcohol. 6 p.m. — Dinner time! This group is a mix of vegan/vegetarian/gluten-free, so we always have to be creative. We ended up making crumbled tofu, white rice, roasted carrots, radishes, oyster mushrooms, lettuce, and ramp kimchi with a sesame vinaigrette. It was banging. We drink wine and play two rounds of Code Names. Our last friend arrives with a handle of tequila (oof), so we all do a shot before we go. 8:30 p.m. — Some people got drinks from the bodega for the train ride but I don't want one. I end up having to take sips of theirs anyway because we can't finish the drinks before the concert. My head is already starting to hurt from mixing all of the different kinds of alcohol. N. gets one more drink at the venue, but I just get a water cup. We hang in the back for the concert, which I'm happy with. My friends and I chat during the show about what happened with me and R. and why we're taking space. Their support means the world but talking about it makes me sad still. 11 p.m. — After the concert we try to go to a restaurant/bar where one of our friends works, but it's super crowded. The group splits off where some people go to a bar but I decide to go home with N. and her girlfriend. My headache does not feel great. After we get home, I walk to our corner store and get my roommate a Blue Gatorade Zero and myself some mozzarella sticks, because I deserve it. We all watch Moonstruck in the living room for a little bit before heading to bed. $6.51 Daily Total: $87.50 Day Four: Saturday 9 a.m. — Good morning! My head is still hurting a little bit but I guess that comes with the territory. I haven't mentioned this yet but I am on my period and I use a menstrual disc instead of pads or tampons. It's really convenient and saves a lot of money on buying tampons every month. I do my skincare and then journal in bed listening to The Marías. I've been breaking out pretty badly, which usually means one of my acne prescriptions has expired and is not as effective anymore. I order a refill that I will pick up at Walgreens by my office. I make some breakfast of scrambled eggs, avocado, pineapple, and Evergreen peanut butter banana frozen waffles. I think the main demographic for the waffles are almond moms buying for their almond babies, but they are absolutely delicious. Just call me an almond baby. 11 a.m. — Time for heated mat Pilates class at the yoga studio! It's the same teacher as my Thursday night shift and she's always delighted when she sees me here. If you can't tell, my current fitness/nutrition situation is that I work out often and eat pretty healthy when I cook for myself, but I also eat junk food whenever I crave it. Life is too short to be restrictive. There's a meme that circulates every once in a while that's like 'My body type is that you can tell that I workout but you can also tell I never say no to a cookie', and that's how I feel too, lol. 12:30 p.m. — On my way home, I peruse the farmers' market by my apartment but don't end up buying anything. I shower and exfoliate and shave and moisturize. I think I'm the last lesbian on planet earth who shaves her armpits. I have ambitious plans to clean out all of my junk drawers/bins and sort through what I want and don't want. Before I start, I heat up the last of my leftover pasta and put on a Spotify Jeff Buckley radio mix, which has lots of Big Thief, George Harrison, Radiohead… You get the idea. I also plug in my laptop so I can maybe take it to a coffee shop later. It's a MacBook Air from 2018 but she's already shitting the bed. Probably because I rarely remember to turn her off. I'm sorry, laptop. 6 p.m. — When we talked on Tuesday, R. and I decided to go on a proper date on Saturday. Dinner and a movie, very classic. Now it's actually happening. We meet up and take a nice 20 minute walk to dinner. It was delicious — I had a nice glass of white wine and R. had a non-alcoholic beer. We split a radicchio salad, meatballs, and a huge serving of chicken parmesan with buccatini. I had been wanting to try this restaurant for a while and I'm glad it lived up to the hype in my head. We only cry a little bit at dinner, which is a win. 8:30 p.m. — We have some time before our movie and we decide to skip the restaurant dessert and get ice cream. It's my treat, since R. got dinner. I get a scoop of the brownie s'mores flavor, while R. gets vanilla soft serve with peanuts. I tease them for having the taste palette of an old man. We talk and cry a little more on the walk from ice cream to the movie theatre, but it was a really productive conversation. I think we're both feeling good heading into the theatre. $13.39 9:30 p.m. — Movie time! We both get club sodas with bitters, which are a great option if you want a drink at a bar but don't want alcohol or soda. I pay for the drinks since R. got the movie tickets. The movie is supposed to be very serious but we both find it to be kind of ridiculous. We end up laughing through a lot of it, which was really fun. My favorite thing to do after a movie is read the Letterboxd reviews, and I read the best ones out loud to R. $10 12 a.m. — Finally back at my apartment. I totally didn't finish everything I was doing before I left — absolutely devastating. I sort through the last of my things, do the dishes in the sink, and clean and refill my cat's water fountain. N. is sleeping at Z.'s for maybe the second time since they've started officially dating, so I have the apartment to myself. It feels so good it's not even funny. I get ready for bed and crawl under my covers around 1:30 a.m., and fall asleep almost as soon as my head hits the pillow. Daily Total: $23.39 Day Five: Sunday 6 a.m. — My one very cuddly cat wakes me up by headbutting me. I get up to pee, but I know I need more sleep to function correctly so I head back to bed. My cat likes to be the little spoon, so we both fall asleep like that. 11 a.m. — Oh my god nooooooo. I wake up again because someone rings our buzzer. I assume it's my Chewy order from the other day, so I jump out of bed and run downstairs to let them in. I probably look insane with my bed head. It's not my Chewy order, but N.'s new bedroom furniture that she ordered. Luckily the delivery driver is able to bring it up the stairs. 1 p.m. — It takes me a while to get my day started, but I do eventually make some cold brew, journal, and eat breakfast. I make scrambled eggs, a Trader Joe's hash brown, and a little spring mix salad with balsamic and red onion. N. sends me her half of the rent ($1,250). I write the rent check for $2,500. I love that our landlord does old-school paper checks, mostly because my checkbook has baby animal pictures and I love it very much. I also order a new pack of sponges from Amazon. They're expensive but they're really good sponges that last. When you have no dishwasher, these things really start to matter. Z. does dishes at our apartment often (so sweet), but doesn't wring the sponge out literally at all (drives me absolutely nuts). These sponges can withstand her habit of that and still take a while before they smell not so great. $16.32 2 p.m. — I go to the gym even though I don't want to. I feel like I won't be able to sleep tonight if I don't exert myself physically. Also my gym membership was charged today (listed as a part of monthly expenses), which reminds me that I have to actually go here to make that money worth it. I do the stairmaster for 25 minutes (going between levels three and six between warmup, actual workout, and cooldown), and do a 15-minute full-body dumbbell workout that I find on YouTube. It is hard. There is not a set of 10 or 12.5 pound weights to be found anywhere, so I use 7.5 pounds. I still feel the burn, so it's okay. 4 p.m. — I shower and get my butt over to a coffee shop in the neighborhood that has decent lunch. I truly have zero groceries and N. and Z. are doing some elaborate cooking, so I couldn't make something even if I wanted to. I order a hot latte with oat milk and a chicken sandwich. I pretend like the price of it is normal. I write this Money Diary, plan my groceries for the week, and search for a therapist. I haven't been in therapy for about a year, but I've been doing it on and off since 2019. My first therapist was still my most impactful. I'm determined to find a therapist that does Internal Family Systems, and I'm also interested in EMDR and Jungian dream analysis. I have dreams that are very vivid and I think my subconscious is actually screaming things at me, but I don't always know what they mean. $24.22 6 p.m. — I was texting R. about their plans for the rest of the evening and we both want to get groceries. We meet up and take the train to Whole Foods. First, we stop in Ten Ichi Mart and get a little bite to eat. We split a chicken karaage bowl, a milk tea and a side seaweed salad. R. pays. We eat and chit chat and then make our way around the store. R. gets more snacks and gets each of us a little daifuku. 9 p.m. — Finally done at Whole Foods! We really took our time. I get stuff for overnight oats as well as two easy dinner things. I'll probably have to go to Trader Joe's by the end of the week (a single tear rolls down my cheek). I get almond milk, strawberries (which were somehow $6.99 before coupons, but I only paid $3.99), sea salt and pepper no-shell pistachios, red pesto pasta sauce with mascarpone, kale and cheese tortellini, coconut water, Greek non-fat yogurt, broccoli, a banana, old-fashioned rolled oats, an Asian-inspired salad kit, and a can of chickpeas. When I get home, I make 'PB&J'-inspired overnight oats. I also make lunch for tomorrow by combining the salad kit, roasted chickpeas and pan-frying some crumbled tofu. I literally feel like superwoman. If you've noticed that I cook almost entirely vegetarian for myself but I do eat meat, it is because I am scared of cooking meat and poisoning myself and everyone I love <3 $49.47 11 p.m. — I do lots of dishes, clean the whole kitchen, unpack the Chewy order that arrived, give the cats some Greenies, take out the garbage, do my skincare, and feel really tired and insane. Goodnight! Daily Total: $90.01 Day Six: Monday 7 a.m. — I had the worst night of sleep in the history of sleep. I changed my alarm at 1 a.m. from 6 a.m. to 7 a.m. so that I still had a fighting chance. The cats were fighting loudly and I was just filled with so much anxiety and dread. Does anyone else experience periods of depersonalization where they don't feel real? I need therapy real bad. [Diarist's note: this was a tough week, not knowing if J. and I would break up or not — and that just happens sometimes! I am totally fine now.] I do my skincare, journal, and get ready. I eat some of my oatmeal and it's actually soooo delicious. I take the train to work. 1 p.m. — Helppppp. I'm tired and I have a headache. I end up microwaving my bagged salad, tofu and chickpea concoction while in a meeting. I need to pick up my prescription from the pharmacy by my office, but there's no way to escape. At some point, I buy tickets for R. and I to see a movie at AMC tomorrow. I am deeply passionate about only going to see movies on Tuesdays because of the discount. $16 4:30 p.m. — The coast is clear and I barely took a lunch break, so I make my big escape. I stop at the pharmacy first and pick up my acne medication ($16.32, which I will get reimbursed from my FSA fund in 10,000 years from now). The pharmacist has to hand mix it for whatever reason, so it takes a while. I then go to Target to get some more toilet bowl cleaner, bathroom cleaner, and nail polish remover. I return a random Vaseline stick that I got this past winter that I found while cleaning things out, so my purchase total of $12.05 goes down to $4.55. $4.55 5:30 p.m. — My train is super delayed and I have to get home to drop off my stuff and go to clown class (lol, what?). I'm staying calm and reading my next book, Parable of the Sower. It is not a very calming book but it is engrossing, which keeps me from panicking about being late. Once I get home, I eat some tortilla chips and pack my 'talent' for class. I take the train to class but only for a few stops. It only shaves about 10 minutes off of the commute to take the train vs. walk, but I have my prepaid transit card and I'm running late. I also noticed my landlord has cashed my rent check ($2,500, listed in monthly expenses). 10:30 p.m. — Take the train home with a couple of people from class. When I get home I realize that the only prepared food I have is the same thing that I had for lunch and that makes me want to scream and cry and throw up. I order food from the Greek place that is right on my block. I haven't had food from them in many months because I had a traumatizing stomach ache last time. This time I am 100% fine and I eat every last bite of my chicken pita while sitting in bed. Heaven on earth. $9.80 Daily Total: $30.35 Day Seven: Tuesday 7 a.m. — I swear I'm usually a 6 a.m. riser, but I just can't seem to sleep the past two days. I resolve that tomorrow night I will take one of my CBD gummies to knock me out. I have a big event that I'm in charge of at work today, so I skip journaling in order to get to the office earlier. I don't need lunch since my work event will provide lunch. I realize that I said what I was wearing day one, but never did again. I'm wearing a black short sleeve button up shirt that I got at a boutique in Mexico City, Aritzia pants, and Miista clogs. 9 a.m. — In the office! I always bring my coffee in my Owala travel cup (it is the best), but today I wish I topped off with coffee before I left. I know I'm going to need it. My clown teacher said that we needed to wear something that made us feel silly/goofy for our class show. While in the bathroom, I scroll on Depop and find a tuxedo T-shirt that also shows some fake cleavage (I can't imagine why someone designed this). I make an offer for $10. 12 p.m. — My workplace has their first Pride event of the season today, so I head over with my coworker to grab some snacks and Pride swag. I grab a bunch of Pride flags for everyone on my team. I also grab myself a slice of pizza, half of an oatmeal raisin cookie, a handful of grapes, and a little kale salad that was homemade. I see my roommate charged me for electricity ($47, listed in monthly expenses). 1 p.m. — Time for the event! I help my coworker grab food from the caterer and set it up in the conference room. The speakers arrive extra early, so I go down to grab them and we all mingle and get first dibs on the food before my entire team arrives. The presentation is about trans healthcare and how it's being affected by recent legislation. A lot of other teams at my workplace know a lot about this topic, but my team is still at the level where we're learning about why it's important to share pronouns and why gender-affirming care is healthcare. Still, I think everyone got a lot out of the experience. There is a lot of leftover food, so I make myself a small plate to take home and maybe eat for lunch later in the week. 4:30 p.m. — Time to get out of here! The Depop seller accepts my offer and I order my tuxedo boob shirt. I also email a girl in my clown class to see if she wants to hang out sometime. Making friends is scary but I want to surround myself with people who inspire me creatively. I make the commute home, reading Parable of the Sower and wondering if I was weird all day at work or if it's weird that I sent a social invitation via email in the year 2025. $16.89 6:30 p.m. — Time to see a movie! R. picks me up at my house and we head to the train. We go to Target and get poppi sodas and some mini peanut butter M&M's (R. pays, it was around $10). We also pick up burgers and fries to eat during the movie (R. pays again, it was around $21). I get confused on which theatre we're going to and we end up walking to the wrong theatre first, which is a 25 minute walk away from the right one. We power walk and still make it to the 8 p.m. start time with several minutes to spare. 10:30 p.m. — The burgers and fries were excellent. The movie was a horror movie that had some really scary body horror scenes. R. likes scary movies but is also really squeamish. I help out the vibes by whispering to them and making dumb jokes the whole time. We take the train and R. drops me off at my apartment. 11:30 p.m. — Did you know that watching a horror movie and then reading dystopian science fiction that feels really scary and realistic is not a good recipe for falling asleep? I toss and turn and put on my I Can't Sleep podcast. I battle existential dread while I listen to the host explain what mochi is in excruciating detail. The Breakdown Conclusion 'I think this is a pretty typical week of spending. I love to go see movies and go out for food and coffee, which is evident in this diary. I already track every dollar I spend with a budgeting app, so I'm pretty aware of where my money goes. Since writing this, I did start therapy, have bought more things on Depop (that are less weird), and I do still need a new laptop. R. and I are still dating (yayyyyyy) but there's definitely a lot to work on and some wounds that are still healing.' Money Diaries are meant to reflect an individual's experience and do not necessarily reflect Refinery29's point of view. Refinery29 in no way encourages illegal activity or harmful behavior. The first step to getting your financial life in order is tracking what you spend — to try on your own, check out our guide to managing your money every day. For more Money Diaries, click here. Do you have a Money Diary you'd like to share? Submit it with us here. here or email us here.
Forbes
4 days ago
- Business
- Forbes
Roth IRA Vs Traditional IRA How Much Will You Withdraw For Retirement?
Woman contemplating Roth IRA vs Traditional IRA decisions Roth IRA vs Traditional IRA retirement savings decisions are some of the most important financial choices you'll make when planning for retirement. Choosing between these two types of accounts can significantly impact their future income, tax burden, and financial flexibility. That said, there are two retirement phases to consider regarding this decision: saving up for retirement and how much you will spend in retirement on a.k.a. withdrawals, a.k.a. distributions a.k.a. decumulation. In this first part of a two-part series, I will start with the end in mind, spending. In this article, we'll explore the implications of withdrawals in each type of account, why the tax differences matter, and how aligning your strategy with your values, such as passing on savings to heirs or making charitable contributions can help you retire with both peace of mind and IRA vs Traditional IRA: Understanding Traditional IRA Taxes The first step in retirement planning if you have a long-time horizon is deciding how much income you want to spend. As horizons shorten, the question becomes how much income will my resources and current savings allow me to spend? Distributions from Traditional IRAs are taxed as income, while Roth IRA withdrawals are tax-free. While there are many potential retirement income strategies, to simplify the tax analysis, we will assume a flat annual income. Let's consider a simple scenario: Provisional Income determines how much of your Social Security is taxable: Provisional income = Half of your Social Security + Other taxable income = 50% × $25,000 + $X (Traditional IRA/401(k)/403(b)/457/TSP withdrawals) Provisional Social Security Income Because you'll be withdrawing at least $50,000, currently 85% of your Social Security will be taxed. 85% × $25,000 = $21,250 taxable Social Security Withdrawals from these accounts tax both the original savings any matching contributions and all of the growth. Assume $63,000 gross withdrawal from IRA/401(k)/403(b)/457/TSP: 2025 tax brackets for single filer (estimated): Federal income tax brackets Single filers for scenario Total federal tax = $1,160 + $4,266 + $4,708 = $10,134 Income Realized After Tax on Social Security and Withdrawals Ultimately, to net the $50,000 you had to pull more than what you IRA/401(k)/403(b)/457/TSP Tax Scenario Traditional IRA Federal Tax Scenario This calculation does not include state taxes. Depending on where you reside in retirement you may have to increase IRA vs Traditional IRA: Understanding Roth IRA Taxes If all your retirement savings are in Roth accounts (Roth IRA or Roth 401(k)), the outcome is very different from the Traditional IRA/401(k)/403(b)/457/TSP scenario. Here's a detailed breakdown of how much you'd need to withdraw to get $75,000 in post-tax income, assuming $25,000 from Social Security and needing $50,000 from your Roth accounts. Current Federal Tax RulesSocial Security Provisional Income Calculation Provisional income = Half of Social Security + taxable income = 0.5 × $25,000 + $0 = $12,500 Roth IRA tax scenario That means you need less in Roth savings to achieve the same spending power as you would in IRA/401(k)/403(b)/457/TSP. As you know, retirement is not a point in time but over time. Unfortunately, a time period that is unknown as my 96-year-old mother approaches her 97th birthday. Inflation has changed her spending needs since she retired at 62. Wish you had more money in Roth accounts? In 'Use Roth IRA Conversions to Cut Your Taxes and Boost Retirement Income' I explore how conversions can help manage taxable income and reduce Medicare IRMAA (Income-Related Monthly Adjustment Amount) IRA vs Traditional IRA: Required Minimum Distributions Traditional IRAs have RMDs whereas Roth accounts do not. With RMDs, the government says that you have had a tax holiday for quite a while and we need to start collecting revenue. This can speed up the depletion of your accounts for your own use, much less for heirs that you may have hoped would reap the rewards of your unused funds. For more on IRA withdrawal rules, visit the IRS Required Minimum Distributions (RMDs) IRA vs Traditional IRA: Income Related Monthly Adjustment Amount (IRMAA) In addition to this consideration, you should also consider Medicare's IRMAA. This adjusts the monthly premium on your Medicare premiums. While IRMAA has a tiered system similar to the tax brackets, it is not as kind. Medicare Income Related Monthly Adjustment Allowance First, once you hit the tier, you are in that tier, there is no averaging of the brackets. Furthermore, if you are 1$ over, you are in the next bracket. In this case, your required minimum distribution, not your needed income, could push you into this new IRMAA bracket. I know a few people where their RMD pushed them into a higher IRMAA IRA vs Traditional IRA: Taxes Over a 30-year period Consider the following assumptions of a 30-year period Roth vs. Traditional IRA comparison assuming:30-Year Account Depletion Comparison (Inflation-Adjusted) If you were to fully deplete each account over 30 years to meet your retirement income goal (adjusted 3% annually for inflation): Roth IRA vs Traditional IR Account depletion You can easily see that you would need $1.39 million more in Traditional IRA/401(k)/403(b)/457/TSP than in Roth to generate the same after-tax income over 30 years. Roth accounts provide a major advantage in tax efficiency and simplicity, especially in retirement years with predictable income Thoughts Roth IRA vs Traditional IRA Savings All of the Roth IRA vs Traditional IRA scenarios were simplified in order to highlight the difference in savings from a future tax perspective. While many financial professionals have suggested diversifying the savings approaches. Under the scenario that I have laid out, clearly there is one winner. Many mistakenly believe that there IRA savings gives them a much larger current deduction than it already does. If you target the zero tax of Roth, you are taking tax increase risk off of the table. Also, your cognitive powers are likely going to decline somewhere during a long retirement period. This may nullify the great tax diversification you had developed during your younger days. All of this said, I don't believe in one size fits all. Your circumstances may be unique. I hope that this article on Roth IRA vs Traditional IRA encourages you to build your own scenarios and to stress test and build your own and stress test them.
