Crazy about My 401k

During my first week back at work I decided to do something so crazy that I still cannot wrap my head around it.  Despite knowing I still have several thousand dollars of medical bills headed my way, my remodel getting ready to ramp up and costing a few thousand dollars, a tuition bill that should total nearly $4,000 coming due next month, and preparing for a wedding and honeymoon, I increased my 401(k) contribution to 65% of my pay.  Yes, 65%.

My April paycheck includes a bonus and profit sharing but retirement contributions only come out of the normal salary and bonus.  I had no idea what my bonus was going to be (we usually find out about a day before it is paid) and so I just had to guess when I was doing an analysis on how much I should contribute.  I underestimated my bonus (I’d rather underestimate in a calculation like this than overestimate) but I also underestimated how much my bonus and profit sharing would be taxed at.  I thought I would have a “normal” paycheck (being equivalent to my pre-disability 401(k) contribution at 17% check.  I was wrong.  I am off by about $500.  I guess that really isn’t so bad.  But this check will be smaller than my disability checks.

One thing that sort of blows my mind is that this one contribution will be equal to 81% of what I contributed last year.  I would have to seriously try at this point to not surpass my retirement accomplishments from last year.  And, my goal of contributing the legal maximum of $18,000 into an employer sponsored retirement account is seriously doable.  I only need to adjust my 401(k) contribution to a few percentage points higher than last year.  At that point, I shouldn’t have to do any funky adjustments to try to max out, it should just be smooth sailing with passive investing I don’t even think about.  The money comes out of my check before I even see it and gets contributed into the funds I selected without me lifting a finger.  That’s the way to do investing.


About His Polish Princess

I'm an engineer by day and an entrepreneur by night. I live with my Old Man, and our cat, Junior. Okay, so the cat is mine, not ours. I have some old fashioned opinions and I believe the unlikely can be achieved with hard work and a little bit of luck. I like cars and motorcycles and remodeling houses and taking risks. I love my family and my community in Small Town, USA. I believe life is one grand adventure that should be lived and thoroughly enjoyed. In 2013 I was diagnosed with an autoimmune disease and focused on natural healing. Fortunately, my disease has been in remission since 2014. In 2015 I was diagnosed with Hodgkin's Lymphoma. These things are just a road bump in life. They won't stop me from remodeling or buying houses or starting new ventures. Life is all about how you see it.
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