A couple weeks ago we got the bad news that our 401(k) company match was being discontinued as of 2009. Immediately I realized I didn’t know as much about retirement plans as I thought I did. Oops!
Well, I did a little bit of research, but most of it was tainted by the fact that I really didn’t want to continue contributing to our 401(k) and I already have a Roth IRA. So here’s what I finally decided to do:
I wanted to save up 10% of my total pre-tax income for retirement in my Roth IRA, but it turns out you can only contribute $5,000 of your income to an IRA (I had forgotten about this!) So, I decided to up my Roth IRA contribution to nearly the maximum ($4,800….a nice even number) and contribute the remaining amount to my 401(k). This way I have nice even numbers, I’m still contributing to my 401(k) with tax savings, and the total amount adds up to 10%! Everyone wins.
So now we shall see how this will affect my take-home pay. Obviously it will go up since I’m contributing less AND I just got a raise….but I’m also participating in the flex spending plan and our insurance premiums went up $2 a week total. I’ll have to wait another week to find out the final number.
Not too exciting, but I thought I’d share. I feel a bit better knowing that I have all the changes made in the computer and beyond that I don’t have to worry about it at all.