As I mentioned a few months ago, I recently sent a letter to Upromise, requesting a withdrawal from my account. I am proud to say, I received a check from Upromise last week, and I’ve now deposited that check into my savings account.

I have been using Upromise to earn reward dollars for more than five years.  Instead of investing my reward dollars with a 529 Plan, I withdraw my reward dollars, once a year, and deposit them into my savings account. Please click here to read more about how to request a withdrawal from Upromise, and here to sign up while UPromise is giving away 500,000 for College.

For someone like me, who doesn’t use credit cards, Upromise is a great way to earn a few extra dollars.  I like the fact that I can register my grocery cards (those little things that hang on my keychain), scan those cards at the grocery store, and even when I pay cash, I’m still earning rewards.

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My Check From Upromise Arrived

I mentioned in the last article that I would be opening two Education Savings Accounts – one for my son and one for my daughter.  I had been planning to open the accounts with Vanguard – the same brokerage that has my SEP-IRA – but I’ve decided to stick with TD Ameritrade – the brokerage where I already have my oldest daughter’s ESA.  While I really like Vanguard’s services, TD Ameritrade offers ESAs with no minimum contributions.  Vanguard, on the other hand, requires a $1000 minimum initial investment.  Right now, I just don’t have $2000 (for 2 accounts) sitting around,  and I don’t want to wait to open the accounts.  TD Ameritrade offers several no-transaction-fee index funds, my preferred investment options.

Strangely, TD Ameritrade does not allow users to open ESAs online.  Instead, you must print (or request by mail) account application forms and then mail them back to TD Ameritrade.  I printed out two sets of the forms, one for my son and one for my daughter, and I’m going to mail them tomorrow.

It feels good to have this done.  Now, all I have to do is fund the accounts!

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Sticking With TD Ameritrade

Here are my after-tax retirement and education savings goals for 2008/2009/2010. Contributions to Roth IRAs and ESAs can be made from December of one year until April of the next year. I have three children, and I have five months to fully-fund 2008 ESAs for each of them. I’m not sure if I’ll be able to afford to do this, but I’m going to try. Also, my wife needs to fully-fund her Roth IRA for 2008. Once those accounts have been funded, we’ll get to work funding 2009 accounts. The chart should clarify. (Chart corrected.)

To be frank, I would love to fully-fund all 2009 accounts during the 2009 calendar year, but that might not be a realistic goal. Remember, while I’m working to fund these after-tax accounts, I’m also trying to fund my before-tax 403(b) and save for a future home purchase.

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Retirement And Education Savings Goals

As I sat down with my wife to talk about our financial goals for 2009, I realized that I needed to know if the contribution limits for our retirement and education savings accounts were going up in 2009.  After some searching, of both the Internet in general and the IRS website in particular, here’s what I found.  (By the way, if anyone from the IRS is reading this, it would be VERY helpful if you could create a single, easy-to-find page where all of these limits, and the limits for other types of accounts, could be listed.  Also, if such a page already exists, hook me up with a link, please.)

2009 Contribution Limits for 401(k), 403(b), and 457(b) Accounts:

$16,500 – Elective Deferrals (employee contributions)

$5,500 – Catch-Up Contributions (over 50 years of age)

$49,000 – Total Contributions Limit (employee + employer)

For more information and details, please see the following resources -

IRS 401(k) Resource Guide

401(k), 403(b) and 457(b) Contribution Limits For 2009

2009 Contribution Limits for Roth IRAs and Traditional IRAs:

$5000 – under 50 years of age

$6000 – over 50 years of age

Roth and Traditional contribution limits were unchanged from their 2008 limits.

2009 Contribution Limit for ESAs (Education Savings Accounts):

$2000

ESA contribution limit was unchanged from 2008 limit.

I’ll keep these limits in mind as I think about my 2009 goals.  As it looks now, more than 50% of our gross income will be allocated for retirement and education savings.  I’ll let you know, in just a bit, what we decide to do.

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Retirement And Eduction Savings Contribution Limits For 2009

It’s hard to believe, but in just 15 days, it will be 2009.  I have started thinking about my financial goals for the coming year.

Last year, I set some pretty aggressive goals, and I managed to accomplish most of them.  I fully-funded my 403(b) retirement account, my 2008 Roth IRA, and my wife fully-funded her pension plan.  We are still working to fund my wife’s 2008 Roth IRA and ESAs for our kids.

In April, my wife gave birth to our third child, a beautiful baby girl.  My wife is an educator, and she did not work during the months of April, May, or June.  Her income for 2008 was much lower than it was in 2007, due to the time off, so it was much harder to meet out 2008 goals than I had at first anticipated.  Of course, having the new baby also means that we’ll be able to claim an additional dependent, so our tax bill for 2008 should be lower than it was in 2007.

Due to the different timetables for when contributions can be made, it’s hard to create financial goals based on a calendar year.  For instance, all contributions to my 403(b), which are made pre-tax by my employer, must be made between January and December.  Contributions to a Roth IRA or Education Savings Account, on the other hand, can be made from January 1st of one year until April 15th of the next year.  Some of my 2008 goals will be rolled-over into 2009.  Those goals, including funding ESAs for our kids and my wife’s 2008 Roth IRA must be accomplished by April 15th, 2009.

I haven’t created my official goals for 2009, but here’s a preliminary list of things about which I’m thinking.

Retirement -

I know that I want to fully-fund my 403(b) and it’s mandatory that my wife fully-fund her pension plan.

I need to fully-fund my 2009 Roth IRA.

My wife needs to fully-fund her 2008 Roth IRA and her 2009 Roth IRA.

I also have a SEP-IRA, for income earned from blogging.  I’ll make contributions to it, so that I can reduce our taxable income.

Education -

I have three kids, ages 9, 4, and eight months.

I would love to be able to fully-fund ESAs for all three of them, for the years 2008 and 2009.  At $2000 per child, per year, that’s $12,000.

Savings -

One of my long term goals is to pay cash for a new house.  I’m not sure how this goal will fit in with my other goals, but it’s something I’m definitely thinking about.  In fact, I have given some thought to reducing my retirement contributions, for a brief time, in order to bolster my long term non-retirement savings.  We shall see.

I’m going to sit down with my wife, and we’ll discuss our plans for 2009.  Once we have decided what we want to do, I’ll let you know.  When I right my “official” Goals for 2009 post, I’ll include contribution limits and some specific figures.

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Thinking About My Financial Goals For 2009

Last December, I created some goals for 2008.  Throughout the year, I have been tracking my progress.  Here’s where I stand, with one month left in December, and with five months left to fund my wife’s Roth and my kids’ ESAs for 2008.

Technically, the 403b and my wife’s pension will be fully funded at some point in December, but I went ahead and included them in my calculations, since they are automatic contributions from our paychecks.

I have five months, between now an April 15th, to fund my wife’s Roth and Education Savings Accounts for both of my kids.  Unfortunately, I had hoped to fund my Son’s ESA for 2007, but I missed the April 2008 deadline.  So, instead o $4000, as per my original goal, I’m working for a $2000 contribution before April 2009.

Looking back, the new baby and high gasoline prices really had an impact on our finances in 2008.  I am happy to note that I was able to fully-fund my 403b for the second year in a row.

My original plan was to fully-fund all of these accounts by the end of 2008, but there’s just no way.  I like to have a cash cushion in my emergency fund, and I’m not willing to dig into it in order to make an artificial December 31st deadline.  As long as I make the contributions before April 15th, I’m cool.

How did you do during 2008?  Are you on pace to reach your goals?  Did the higher gas prices or the falling economy set you back?  Leave a comment and let us know!

More reading -

Saving For College – What Is An ESA?

Contribution Goals And Time Frames For Retirement Accounts

As a side note, I did not include my SEP-IRA contributions in my original 2008 goals article, but I am working to put some money in this business-related retirement account.  The amount will be determined when I compute my income taxes.  And, at one point, I set up automatic contributions for several of the accounts mentioned above, but I never actually pulled the trigger on those automatic contributions.  Why?  Well, I was focusing on adding additional money to our non-retirement savings account, and decided to wait a few more months to begin the automatic contributions.  Never fear, those automatic contributions will begin, in January.

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Taking A Look At My 2008 Goals

Christmas is just around the corner.  If you haven’t signed up for Upromise, now is the time!

You’ll earn money for your kids’ college – and it’s free.  Simply sign up at Upromise, register your debit, credit (boo), and grocery store cards, and you’ll start earning.  Your friends and family can also sign up and earn points for your kids.  Also, shop through the Upromise online interface, and you’ll receive even more rewards.

Oh, one more cool thing.  If you don’t want to put the money in a 529 plan for college savings, you can request that Upromise simply cut you a check in the amount of your rewards.  That’s what I do.

If you sign up for Upromise through one of the above affiliate links, I’ll make a few bucks.  Thanks!

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Sign Up With Upromise Before The Holidays

I’ve just spent a few minutes setting up automatic contributions to my Roth IRA, my wife’s Roth IRA, and three Education Savings Accounts (one for each of our children).

Contributions to these types account can be made any time between January 1st of one year and April 15th of the next year.  So, I have until April 15th, 2009 to fully-fund both Roth IRAs and the three ESAs.

There is a four month period of time – between January and April of each year – when contributions can be made for the prior year or the present year.  When making a contribution, always make a notation of the year with which the contribution should be associated.  You don’t want to send in a contribution for 2008 and have it count towards 2009’s contribution limit, or vice versa.

Personally, I’m going to push myself and try to get all of my contributions in before December 31st.  That way, I can hit the ground running in 2009 and I won’t have to deal with the period of overlap.  But, if I can’t scrape together all of the money that I need between now and then, it’s good to know that I have the four month cushion.  Of course, if I bleed over into 2009 with my 2008 contributions, my 2009 contribution schedule will be affected.

For our family, our Roth IRA limits are $5000 for me and $5000 for my wife, and $2000 for each of our three kids.  (I’ve already fully-funded my Roth IRA for 2008.  Between now and December, I’ll be working hard to fully-fund my wife’s Roth IRA and the three ESAs)

Here’s the current contribution breakdown (with my own December 2008 deadline) -

Here’s the backup contribution breakdown (with the actual April 2009 deadline) -

The automatic contributions will be made from my primary checking account and have been scheduled to be withdrawn on the day after I deposit my monthly paycheck.

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Setting Up Automatic Contributions To Retirement And Education Savings Accounts

As many of you know, I’m a big fan of Upromise.  Sign up for free, register your debit cards, credit cards, and grocery bonus cards, and you can earn cash rewards for your kids’ college.  Upromise encourages you to invest the rewards in 529 plans, but, I don’t use 529 plans to save for my kids’ college.  Instead, I like to withdraw my money from Upromise, once a year, and use the money to fund my kids’ Education Savings Accounts (ESAs).

From the Upromise site -

Can I withdraw company contributions from my Upromise account without transferring them to a savings plan, and if so, how?

You can withdraw your Upromise contributions at any time during your membership. To withdraw company contributions from your Upromise account, submit a letter in writing to Upromise requesting a withdrawal from your Upromise account. The letter must state your full name and exact amount that you would like to withdraw, up to total amount available in your account, pending contributions are not eligible for withdrawal.

For the protection of our members, we require that your letter either be notarized or contain a Signature Guarantee if the withdrawal request is in excess of $200. A Signature Guarantee is a guarantee you can obtain from a financial institution, such as your bank, that your signature is yours and that it is genuine.

Withdrawal letters should be sent to:

Upromise
ATTN: Customer Care
P.O. Box 55555
Boston, MA 02205-5555

Download Withdrawal Request Form (Direct Link Removed)

Checks are sent once per calendar quarter, so you should typically receive your check within 12 weeks of your request being received.

As you can see, Upromise makes it easy to get to your money, and then you can do whatever you want with it.  (They’ve even created a Withdrawal Request Form.  Print it out and mail it it in.  In about 12 weeks, you’ll have your check!)  Of course, you could leave your money in the Upromise account and invest it in a 529 plan.  Whatever you decide to do, it’s good to know that you can get to your rewards money, if you want.

Right now, I have more than $50 in my account.  I’m going to mail my letter Friday morning.  I’ll let you know when my check arrives.

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Time To Request A Withdrawal From My Upromise Account

Just a quick reminder -

If you haven’t signed up for Upromise, now is the time! They have extended their free $10 offer throughout June. Several readers took advantage of this offer in March and April, and now they’ve extended it until June 30th!

Click here to read more about Upromise and the free $10 offer. Or, if you are ready, go ahead and click here to sign up for you free Upromise account and save for college while you shop.

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Hurry! A Reminder To Sign Up For Upromise For Free And Get $10