May 1st brought along a 2.71% cost of living salary increase. I decided to round up and increase my 401k before tax deferral from 20% to 25%. Yay for less take home pay. This means I’ll be cash flow negative for a few months but the upside is that I’ll hit the $19,500 401k deferral limit at the end of July. Since my employer only provides one matching payment at the end of the year, I don’t have to optimize my 401k deferrals to receive the maximum match in each paycheck throughout the year.
Mrs. Dress Pockets’ employer does pay a 403b match in each paycheck so I have a mid year reminder set to drop her deferral percentage from 13% to 12%. It still chaps my hide the year a $112.88 match was lost when a New Year’s Day pay day was accelerated into the prior tax year and she neglected to tell me 😉
Mrs. Dress Pockets is also fortunate enough to qualify for a 457b deferred compensation plan (early retirement gold assuming her employer doesn’t fold). There is no match here so I will slowly increase the deferral percentage by 1% every 6 months to hit the $19,500 deferral maximum earlier each year.
- Mr. 401k $47,207 (includes before tax, employer match and after tax contributions immediately converted to Roth 401k)
- Mrs. 403b $22,652 (includes before tax and employer match)
- Mrs. 457b $19,500 (before tax)
- Mr. HSA $7,200 (includes employer match)
- Mr. Backdoor Roth IRA $6,000
- Mrs. Backdoor Roth IRA $6,000
- Joint Vanguard taxable brokerage $20,000
- Mrs. Betterment taxable brokerage $3,000
- Grand Total $131,559
Savings pedal to the floor. I’m already scheming to bump our joint vanguard contributions to $24,000 next year.
Note: There are monthly 529 contributions for 4 children. More on those another day perhaps…
