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RSSTaking Assessment of my Portfolio in 2006, Part 2: Retirement Accounts
In the 1st part of this series I determined that the total return for my net worth was a very respectable $45,335. I now want to dig further into this and see what the driving factors were for this past year's success.
I'll start by taking a look at my retirement accounts:
I now have a Roth IRA, 401k Savings Plan, and vested Cash Balance Pension.
| | | | Contributions | Return | RoR | Dietz |
| Roth | $20,508.99 | $30,131.03 | $5,300.00 | $4,322.04 | 21.07% | 18.66% |
| 401k | $71,494.39 | $100,344.33 | $15,667.35 | $13,182.59 | 18.44% | 16.62% |
| Pension | $0.00 | $18,483.38 | $18,483.38 | $0.00 | 0.00% | |
Notes:
My Roth IRA is invested in Vanguard Windsor II Investor Shares (VWFNX).
My 401k return includes the company match.
My cash balance pension vested in 2006.
More on Dietz method.
My retirement accounts had very successful returns for 2006 when you factor in the pension benefit. I gained a total of $35,988.01 ($17,504.63 excluding pension) in these retirement accounts.
The vesting of my cash balance pension accounts for one of the main factors that significantly bumped my net worth in 2006. Unfortuntely its a one-time gain and I can't expect to see something similar in future years.
I'll continue this series by looking at my 2006 returns for my cash accounts, investment accounts, ESPP & stock options, and my rental property.
| $206,990 | |
| +$65,579 | |
| +$17,504 | |
| + $1,426 | |
| + $7,951 | |
| + $9,075 | |
| Part 6: 2006 Rental Property | |
| $317,904 |
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Comments (11)
I am a fairly new reader to your blog and appreciate the way that you are demonstrating how you have calculated your returns. It helps others figure out how to calculate their returns. I have never heard of the Dietz method and so I am learning something new. Thanks!
Posted by Amillionby40 | January 29, 2007 1:57 PM
2M: Is there a limit of $4000 in IRA contribution in 2006?
Posted by Sun | January 29, 2007 3:00 PM
Yup - my contributions made in the 2006 fiscal year include both some 2005 and 2006 contributions.
Posted by 2 million | January 29, 2007 3:32 PM
Nice retirement balance. That is one of my 2007 goals:
http://finance.webaplex.com/12/my-2007-financial-goals/
Posted by Nagel | January 29, 2007 7:47 PM
I've been digging into your numbers trying to find where you are going wrong. I'm a bit surprised that anyone could keep $64k of their take home pay (this is how i define Retained Earnings). Does this seem unreasonable to anyone? Perhaps you can do it since you own a home?
I also thought it was pretty crazy that someone could make 18-21% on their retirement accounts, but i just did the math on my account. After i remove the new contributions, i came up with 20% gain when i compare the investment gain to the final number. Wow. I'll need to watch this some more.
Posted by mlathe | January 29, 2007 10:34 PM
What if you make too much to put in a Roth IRA? I wish I could take one out, but I can't.
What are some good alternatives -- by good I mean agressive growth with lower taxes.
Posted by Query | January 30, 2007 1:01 AM
How did you manage to contribute over the $15,000 limit in 2006 for your 401k?
Posted by Eugene | January 30, 2007 3:23 AM
I’d recommend a personal finance software by Australian business Parcus Group.
Easy to use program with features including budgeting, financial planning, real estate analysis, shares valuation, life insurance…
Costs $29 so it’s not free but also not a huge investment so overall a good value for money.
You can get it on
http://www.parcusgroup.com
or
http://www.parcusgroup.com/index.html
Posted by QH | January 30, 2007 6:58 AM
Your writing always reminds me to evaluate and reevaluate the financial decisions I'm making toward the future.
I hope to hear more about your real estate experiences and connections with the finacee.
Thanks--
Posted by Katie | January 30, 2007 1:02 PM
Thanks for showing the Deitz method. In all fairness, it is really the only realistic method of calculating returns.
Your accounts pretty much hit the Dow/S&P right on, with dividends invested. Good job!
Posted by CPA1298 | January 30, 2007 10:45 PM
Hello 2million,
Well again you came up with a helpful resource Deitz method to calculate returns, thank you for sharing.
Your journey is interesting keep going.......
Posted by Finance Guide 101 | January 31, 2007 1:25 AM