Balance

My coffee grinder and coffee came in on the same day a few days ago. Let me say, hand grinding coffee in the morning is pretty awesome.

Now on to more mundane matters. I had my first interview the other day. Everything seems to have gone well, I'll know for sure in a month or so (its a long wait =/). I'm pretty excited about this company, its got a lot going for it. Something became pretty apparent while I balancing the budget and its has something to do with entering the workforce and playing the retirement game. Despite a having fairly competitive engineering salary a problem arises and its this: after everything, I'll still be as poor as when I was in school. How can that be you might ask? Its actually quite simple... it takes a lot out of your paycheck to take full advantage of the retirement vehicles that are available to you. Take 401k for instance, the industry average at this point seems to be a 3% match for every 6% that you contribute to your 401k. So say you earn a nice round 50k a year (no this is not all that competitive but whatever), you have to put 3k in your 401k and you're company will give you another 1.5k. Which is a nice little bonus for retirement, but that'll leave you with 47k of taxable income and lands you in the 25% tax bracket if you file as a single. Living in California means you'll be taxed about 35% plus whatever deductions made towards social security and other things, so in the end you probably lose about 40% of that 47k to the government leaving you 28k. That's 2350 per month (+/- some). Then there's car payments, rent, utilities, and food. If we put all that at a modest 1850 (and I'm talking about fairly modest living) that leaves you with about 500 a month.

Sure that's a pretty nice allowance each month... but if you take full advantage of stuff like the Roth IRA, that 500 becomes a little less than 80/mo and we still haven't talked about health insurance. And then it occurred to me... what if I were a Mormon? or part of some other religion that takes a certain chunk out of your salary each year. To my knowledge, the Church of Latter Day Saints helps itself to 10% of your annual income. Before or after tax I don't know... but that's a pretty hefty chunk. So how do they do it? The church most likely has some sort of incentive, such as its own little retirement package, similar to an IRA or the fed's TSP. If its like that, being a Mormon might be a pretty sweet financial deal (not to mention its implications of faith). Another note on retirement is this... I can see why kids my age don't care much for these retirement vehicles as it erodes your monthly allowance by a lot and retirement just seems to damn far away. Granted, I have a harder time understanding why more young people don't take up their 401k, as it essentially means more money, and it should stay with you no matter what company you go to (given that you follow the proper protocols). Unless, of course, the plan just plain sucks.

Of course, all my calculations are pretty generalized with a ton of rounding. Budgeting in this way has typically kept me out of trouble as it gives me a lot of wiggle room with my expenditures. One thing I got over other people though... after Japan, I've become pretty infatuated with living the ascetic lifestyle. A lot of this has to do with the opportunity to house with an artist for a few days, and then the necessity to live simple on a short 6 month stint in an island nation. However, I'll have to balance it with the scholarly lifestyle as well since grad school I intend to attend grad school at some point--I gotta keep myself sharp... My final conclusion in this rather convoluted post is this: I gotta give mad props to the parental units, because things get all out of whack when you throw in a bunch of kids.

Speaking of which... Freakonomics (I realize this book was published ages ago)... has given me a solid foundation of data in support of being pro-choice... and it makes a lot of sense despite some of the 'distasteful' thought experiments one has to go through to make such a strong argument.