Tag Archives: savings

Maxing Out One Retirement Account

Today, I had Dad change his retirement account withholding.  We checked the box that says “take out the legally allowed max”.  We’ll be contributing about 16% vs the 10% we do now, which translates to approximately $250-$300 “less” per paycheck (bi-weekly).  We were already contributing so high because that was the minimum to get his company’s match (8.33%!), so we figured we’d delay debt-repayment for one month to just go ahead and max it out this year.

Dad works for a non-profit, so instead of a 401(k), he has both a 401(a) and a 403(b).  For all intents and purposes, the two together are the same as a 401(k) as far as the employee is concerned – except they’re two separate accounts at Fidelity.  We’ll be contributing $17,500 of our own money this year, and an estimated $8,500 of his company’s match for a whopping $26,000.  He wont be 100% vested until he’s there for another 2 years though.

I upped mine to 6% for this month, and once the student loans are paid off, I’ll up it 2-3% a month until we either get to the max or get uncomfortably squeezed on cash flow.  After student loan repayment, we’ll have an estimated $2300/mth to play with, so even if I maxed out my contributions, we should still be fine on cash flow.

I’m very excited to see the light at the end of the debt repayment tunnel and be able to really start saving that money.