Roth IRA Goals Update

Let’s start off with a definition of Goal from Merriam-Webster.com: The end toward which effort is directed.

Now a recap of my Roth IRA goal: My plan is to fund both my wife’s and my Roth IRA plans $4000 each for 2008 for a total of $8000. This comes out to about $154 a week combined for us. I would open up an account at Vanguard and invest through them.

So how am I doing? Toward the end of last year I opened up Vanguard accounts for both my wife and I. I started each with $1000 and bought their STAR fund (VGSTX) which is a fund of their funds. It’s also the only account with a $1000 minimum (the others are $3000). Once the account grows above $3000 I’ll look into other funds. I set up a direct deposit between Vanguard and my ING Direct account which makes the contributions real easy.

I haven’t answered the question yet, have I? The truth is I haven’t added any more to the fund for 2008. I was all set to make contributions, even set up an automatic deposit, but we were hit with so many expenses this month. My college tuition, my wife’s college tuition, books (which are ridiculously expensive) for the classes, two birthdays for our children, expenses from the end of 2007… I know, I know…I see you holding the world’s smallest violin between your fingers. If I can buy my daughter an American Girl doll then I can contribute to our Roth IRA’s!

Let’s go back to that definition of Goal: The end toward which effort is directed. Our goal of $8000 in our Roth IRA’s is the end goal. I still have time to reach it. This week I’m going to look at our accounts and see what we can contribute. We’ll put something in there! We’re also expecting a tax refund this year and part of that money will go into our Roth IRA’s. And rather than go crazy and spend the government stimulus check that’s coming later this year, we’ll take at least some of that and contribute to our Roth IRA’s. I’m also going to check into setting up an automatic payment for our Vanguard accounts.

So are we reaching our goal? Maybe not for January but I have a plan in place to reach our goal by the end of the year. A goal needs to be flexible and re-evaluated as time goes on. When the year has ended we will have achieved our goal.

Thanks go out to Lynnae at beingfrugal.net for posting an update on her 2008 goals and tagging me for an update on mine.

How have your 2008 financial goals been?

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Editor’s note: I have egg on my face! I inadvertently wrote 401(k) instead of Roth IRA when I originally published this post. I’ve changed the terms in the post above. “K” and “A” rhyme. It sounded correct when I wrote it. My apologies for any confusion. Remember, always proof-read!