GASP…I Decreased My 401K Contribution
So before you jump on me about decreasing my 401K contribution read ahead! I initially started contributing 10% of my paycheck to my 401K; I received a full 7% match. Around September or October when my husband started working full time, I decided to increase my 401K contribution to 15%, making the a total contribution of 22%. Pretty great, right?
I got extremely caught up in everybody’s advice of maxing your 401K and contributing to your retirement, and how we won’t have enough money to retire if we don’t max out our contributions or how maybe we want to retire early in the future and we should invest as much as possible right now. And realized I might be living too much in the future by contributing so much… The realization came when my husband and I casually talked about our future plans and investments. I say casually, but it was intense. Deciding where the money goes is still a hot challenge for us as we navigate the choppy waters of personal finance.
He mentioned even though it’s great we are saving for retirement, he, also, wants us to save for a house and a small business fund. We won’t get to touch the money we put in our retirement accounts until 40 years from now.
I’m not quoting his exact words, but you get the jest. I may not always tell him, but I’m glad I have a partner who balances my crazy aggressive strategies.
I, also, read Ninja’s recent retirement post and their decision to invest about 15% of their income towards retirement. It kinda made me feel not so alone, you know?
I just put in $3,000 to our ROTH IRA A. Although right now it’s less than $3,000. This does not mean we are never going to increase our 401K contributions. Any raises will go to the 401k. Also, if our income goes up, I will have to re look at how much we are contributing to my 401k to avoid getting heavily taxed.
What will we do with the extra $100-$200? We will put it into our short term savings. There’s so much we want to do: travel, house, live, help family, fund a business. Sometimes it’s best to follow the tune of your own drum, not other’s.
Until the end of 2012, my 401K contribution will remain at 10% + 7% company match = 17%.
How do you prioritize your retirement?