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Playing catch-up

January 18th, 2007 at 07:46 pm

Tomorrow is payday, my first for 2007. I know I need to catch up on my Roth IRA contributions for 2006. I've only put in about half what I'm eligible to put in for 2006, leaving me with about $2000 to go before April 16 if I'm going to max it out.

If things go well, and I'm consistently employed through that time, I anticipate making it just out of contributions of 15% of my gross pay.

If I'm not (the more likely alternative), there are two ways it could go:

1) I become unemployed in the middle of February, start living off my emergency fund, stop contributing to my Roth IRA, get my tax refund check, continue living off emergency fund and tax refund check, become poorer and poorer till I find a new job/ get on a new project at the place I'm currently employed, fail to max out 2006 Roth IRA.

2) I become unemployed in the middle of February, stop contributing to retirement, but get re-employed before the middle of April. In this case (if I get put on a project that's going to last at least 6 months) I'll take what I need to max out my 2006 Roth IRA from my emergency fund. I can re-grow my emergency fund- and I'm not going to let it get below $1000- but I don't want to miss my chance to contribute the full amount for 2006, if I have any alternative.

Then it's on to thinking about 2007...

Testing this weekend to get on a new project at work. Hope that it goes well; I would rather stay employed than the alternative.

4 Responses to “Playing catch-up”

  1. Amber Says:

    Good luck on the project

  2. miclason Says:

    Good luck!

  3. fern Says:

    you left out one thing that will make a difference in your cash flow situation...if you become unemployed, you can file for unemployment benefits, right?

  4. meaghanchan Says:

    Fern: That would be true, except that from what I understand my company has made it quite difficult for some previous employees to get unemployment benefits. With luck they will be there, but I don't want to count on them.

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