In January my employer set up a 403(b) program for our company. The 403(b) is the 401(k) version for non-profit agencies. Previously we’ve only had a profit sharing program which was employer funded only.
Sadly, there was only one contribution made into the profit sharing program for over two decades so I am vested for a very low amount. After twenty years of service… I am fully vested for just around $2K. Our CEO recently retired and since the program had annual contributions prior to 1990, he left with significantly more… over $100,000. His vested amount could have/should have been significantly higher… if only contributions had been made throughout the year. Unfortunately we were in a bad place financially, and there is nothing I can do about it now. I am thankful that we are in a much better place now.
Initially I was super excited about this new way to make my money earn more but my hopes plummeted in the first two months when I saw that I was losing money! Not a lot, but losing, not gaining!
My first thoughts had been to start transferring some of my emergency fund into my 403(b) since I am over the age of 50 and can take advantage of the “catch up”. I could contribute more than a person under the age of 50… as much as $26,000. And since this money is a pre-tax contribution, I could save money in taxes. I am not making enough money to “catch up” with the whole $26,000 which I’m reading could potentially “save” me around $1000 in taxes.
I was thinking through the process of having all my paycheck go straight into the 403(b) and moving money out of my emergency fund to pay bills, buy groceries, etc. but when I saw the loss of money, I halted all preparations for going that route. I will definitely give more thought to it later, but in the meantime I was pretty disappointed to see that I was losing money. I have left my semi-monthly contribution in place, and that’s where it will stay for the time being. Maybe when I have more of my money earning solid interest I will feel more comfortable throwing money into the stock market via the 403(b).
In 2019 I signed up for two Certificates of Deposits (CD) at my credit union which were earning 3% APR. And this year I funded my first IRA!! First ever! Guys and gals, I turn 58 this year and I need to get going with my retirement savings! When I was in my 20s I had savings accounts that earned 5% interest, but I haven’t see that for decades.
I thought since I’m earning 3% APR on two CDs, (the third one has dropped to .90% (just under 1%), there must be some better, more dependable ways to grow the money I do have set aside. I decided to search the Internet for more CD opportunities which led me to Kevin at Financial Panther.
And this amazing post of his (where you can click his link to sign up, you will earn $20 and he will also earn $20 for referring you): Netspend Account: The Ultimate Guide to a 5% Interest Savings Account
When I was in my 20s I had savings accounts that earned 5% interest, but I haven’t see that for decades. I was so excited to see that there are still ways to earn more than 1/2% – 1% interest on your money! There is a process you’ll need to go through but in the end you can have up to $5000 in savings accounts, earning 5% interest. If you’re married, you can double that!
Kevin recommends to take the process slowly, one step at a time. I already had an online checking with a regular bank. Step 1 completed! Step 2 is to sign up for my Netspend account. Done! My Prepaid Debit Card has arrived by mail, and I have activated it, Step 3 complete. This weekend I will completed Step 4, which is to link my bank account with my Netspend account, and Step 5, set up the transfer information in my online bank, then schedule the transfer from my bank account onto the Prepaid Debit Card.
I’ll have to wait on Step 6, Transfer money into my 5% Interest Savings account until the money is funded on the Prepaid Debit Card, I’ll probably wait until next weekend to do that step.
This weekend I will also start the process for my husband’s account, sending him an invitation using my referral code (so that he will earn $20 and so will I).
These steps I have mentioned are very brief bullet points, there are much more detailed instructions for each step so please visit Kevin’s blog and post (linked to above). Good luck with making your money grow faster!
I am going to try to blog at least monthly here and continue the story of my financial journey.
P.S. Click here to use my referral link to earn $20 when you sign up (and I’ll earn $20 also) but honestly I recommend that you use Kevin’s link as he works hard to maintain the massive post. The comments section is just as valuable as the post for updated information.