By Ashley
Open enrollment season is coming! When I think about choosing benefits for next year, it actually showcases the broader financial goals I have for 2025 and beyond.
2024 Benefits Enrollment
In 2024, I maxed out my Health Savings Account (HSA) and kept a Flexible Spending Account (FSA) specifically for child care. Since my employer also contributes to my HSA, my obligation was from my own funds $6,860 For the year. At this point, I no longer use after-school child care, but I have used my FSA for summer day camps. For the summer of 2024, I had it $1000 Allocated to take care of my child FSA.
2025 Enrollment Benefits
Since the HSA cap has increased, I plan to increase my contributions. For 2025, I will maximize our HSA contributions $7110 For this year (again – my employer also contributes, which brings me to the max).
FSAs can only be used by children 12 years of age or younger. While my kids are 12 now, they will be 13 this summer. Additionally, I didn’t choose any summer camps and the girls have reached an age where they would rather sleep in and stay home than go to camp (although they have been fortunate to do some really great camps) in the past – everything from drama camp to horse camp to Sewing camp, etc.).
Also, with my childcare schedule, I only have the girls every other week, so I have less childcare in the summer. They’re gone half the time already as it is. I’m lucky in that I mostly work from home. Children can be home alone if necessary. And I want to prioritize spending time together as a family when they are with me. For all these reasons, You have decided not to enroll in a Flexible Spending Account for 2025.
Other financial goals
Thinking about and planning for these benefits makes me think about broader financial goals in general. For example, I don’t want to get the $1,000 I would have received in my FSA back in my paycheck. Better invest it elsewhere.
Overall, my goal is to continue increasing my savings and investments. My ultimate goal is to get to a place where my savings and investments amount to approximately 50% of my salary. For this reason, my plan is to increase investments in three additional categories: 529 accounts, an optional 403b account, and a Fidelity Go account. I won’t be at the 50% threshold, but I want to gradually work towards that.
529 Accounts – Pros and Cons
One of my savings goals is to increase the amount I save for each of my children for college. Currently, each of my daughters has a $529 college savings account, in which I make a modest monthly investment ($60 per month per child x two children). the Features 529 is that the money grows tax deferred and, if used for educational expenses, can be withdrawn tax free.
Main Con is that the funds in the 529 will be subject to penalties if they are not used for educational expenses. For me, this is something I need to watch carefully. I work at a university with exceptional benefits. If I’m still working there while the girls go to college (which is the plan!), their college will mostly be covered as long as they attend an in-state school. While a 529 can be used for education, broadly defined (including trade schools, housing, food, etc.), I certainly don’t want to “maximize” contributions because I fear we’ll get into a situation where the money can’t be used and is penalized when we withdraw it.
This begs the question – should I increase my contributions to my children’s existing 529 plans, or does it make more sense to open separate mutual funds in each of their names?
Right now, my 529 plan contributions are very modest ($60/month/child), but I’ve been thinking about doubling that amount ($120/month/child).). Are people suggesting we stay on this path, or move toward a higher-yield savings account and/or mutual funds for the kids? Remember – they are currently 12 years old.
I mentioned another option in passing – I’d really like to create a formal LLC. I do have some light writing assignments that I could use my kids’ help with, and if I can pay them from a business account, I can open a Roth IRA in their names. I like this idea for them, but it requires a bit of jumping jacks for me in terms of setting up an LLC and then dealing with business taxes. Thoughts on this?
Optional 403b
I automatically invested 7% of my income into my work retirement account. This matches the dollar-for-dollar value of a full 7%, so my retirement account contributions essentially amount to 14% of my salary.
Furthermore, I have historically invested in an optional 403b retirement account (this is just like a 401k, but for nonprofits like the public university I work at). I invest $215 per paycheck. I want to bring that to $275/salary.
Fidelity going
Finally, this brings me to my Fidelity Go account. This is my first account that is just mutual funds – not tied to a retirement account, 529, HSA/FSA, etc. I’ve been depositing money into my Fidelity Go account throughout the past year on and off. I don’t have an auto-withdrawal setup, and I only move funds when my budget allows. I average investment around $50-100 per month.
I would try to establish this as a more routine investment. And I want to extend myself. I’m thinking of investing about $200 a month.
Comparison over the years
| 2023 | 2024 | 2025 | |
|---|---|---|---|
| Hayel Saeed Anam: | $5500 per year | $6860 per year | $7110 per year |
| Financial Services Authority: | $700 per year | $1000 per year | $0 |
| 403 b | $125 per check = $3,250 for the year | $215 per check = $5,590 for the year | $275 per check = $7,150 for the year |
| 529 | $50 per month per child = $1,200 per year | $60 per month per child = $1,440 per year | $120 per month per child = $2,880 per year |
| Fidelity going | $0 | $50 per month = $600 per year | $200 per month = $2400 per year |
| the total | $10,650 per year | $15,490 per year | $19,540 per year |
Investment portfolio
Overall, the investment portfolio I mentioned above qualifies me to save/invest approximately $19,000 of my take-home income (plus 14% in my main retirement account).
This is a bit of a stretch goal, but I think I can achieve it. I’d like to get used to living below our means and saving for retirement. My husband is scheduled to retire in 7 years. Although he thought he would probably still work a part-time job after retirement as a way to stay busy and satisfied, I was really starting to look toward the future. I realize retirement will be here sooner than we know. Although I still plan to work at that time, I want to create a huge safety net in case plans change and we decide to move or I want to retire early, etc. I’ve also mentioned before about the inheritance and plans to eventually invest in real estate with her. For now, they are invested conservatively while we wait to see what happens to interest rates in 2025.
I would love to get collective thoughts from the BAD community on these investment ideas and strategies. In particular, I would like feedback on whether this portfolio seems well balanced. I would also like feedback on my thoughts on children’s investments (eg. 529 vs. mutual funds vs. Roth IRA). What am I not thinking about? Let me know!
Hi, I’m Ashley! Arizona on paper, Texas in heart. Lover of running, blogging and all things cheesy. Newly 40 years old, married and mother of two children, working in the academic field. Trying to finally (finally!) pay off that ridiculous 6-figure student loan debt!
