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Contributing 90% Of My November Salary to 401(k)
Posted By Jim On 11/28/2006 @ 10:36 am In Investing,Retirement | 13 Comments
Oh yeah, you read that correctly… I will be contributing the maximum percentage allowed by my employer, 90% (my employer’s max), in the month of November, in an attempt to get my aggregate 401(k) contributions for 2006 as close to the maximum as possible. According to my last paystub from my former employer and my last paystub from my current employer, I’ve contributed a total of $4,352.09 to both 401(k) plans, which is $10,647.91 less than the 401(k) maximum contribution of $15,000 per year for 2006.
Why am I doing this? I want to reduce my taxes and as someone with no children, very little in the way of debt (only student loans and a mortgage), these are the years I want to try to put as much away for the future as possible before other financial demands come along. Right now I view the income from this site as supplemental and I’ve made a point of trying to use the extra income to maximize my contributions.
On the retirement contribution front, I’ve already contributed the maximum to my Roth IRA, I’ll be contributing the maximum to my SEP-IRA (20% of self-employment income) once I finish my taxes, and I’ll try to max out the 401(k) with this little scary 90% maneuver. Before anyone starts to warn me about putting too much away and not enjoying life, don’t worry, I enjoy life plenty and I’m not one of those Extreme Savers you read about on Yahoo Finance. I save when it’s sensible and enjoy when I don’t feel like being sensible.
It’s a little scary contributing 90% of my full-time income (leaving me with a scant 10%) and relying on my site’s accounts receivables – I guess this is what those full-time bloggers feel like when they make that plunge (except I’ll be jumping into a kiddie pool knowing I’ll leave in a month or two).
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