Tuesday, December 05, 2006

Out with the old... Warning: boring financial talk inside

Last week, I faxed in my 2007 benefit paperwork. I'm reserving $2,500 in health care flexible savings, and $5,000 in child care. Both are at the maximum, though our child care will be more than double that.

Why the extra health care cash? I'm thinking it's time to get Lasik. My kids keep kicking me in the face, tackling my head, rolling onto me, and so forth. Were my glasses to be crushed tomorrow, I'd be hard-pressed to replace them for under $300. I also foresee that the cost of glasses will continue to escalate, especially as even better lenses and technology is available.

Annoyingly, all the other benefit elections except the Health Care and Dependent Care Savings are for the period from January through September. I leave the obvious deductibles problem this creates as an exercise for the reader.

The 401k paperwork is also in my bag, waiting to be compared. They offer managed portfolios! Just check one of three boxes and have them manage a portfolio for you, be it aggressive, balanced, or conservative, at the mere cost of ANOTHER quarter of a percent on top of whatever else they buy. Also, their definition of aggressive means, "Still a lot of bonds in here, for some reason." They do offer sector funds, including a Vanguard REIT. I'm a big believer in REITs as a means of diversifying a portfolio.

The interesting choice: the 401k can be split as a percentage between a traditional 401k and a Roth 401k. Since there's no employer match, I'm having a lot of trouble with this decision. On one hand, Roths are fantastic for just about anyone. On the other hand, paying taxes on the initial deduction is painful.

I was counting off the numbers for a friend of mine on Friday, and did a couple of quick count-on-my-fingers calculations using the Rule of 72. We went to Urban Outfitters and looked at various books and horrible, horrible hipster gear. I recommended various stuff based on websites I've seen, managing to convince him to buy 2 copies of Snakes on a Sudoku by internet-Renaissance-man Francis Heaney, and also somehow twisting his arm into buying a StuffOnMyCat.com desk calendar. Someday, I'll buy those PostSecret books, too.


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