Ladies, let’s cut it out with the girl math jokes. I have not been a “girl” since I was seventeen, and once I found the right teachers, math became my favorite subject. I still use math principles in my nine-to-five, albeit with Excel shouldering most of the work. Need me to run you an amortization schedule? I make those for fun; just give me your loan terms, extra payment intel, and eight minutes.
Recently I got a credit alert triggered by a particular sizable extra mortgage payment. Who knew?!
It wasn’t always this way. I lived in a scarcity mindset with my short term needs being met: rent, food, utilities, and a minimal 401k contribution, one that hit the maximum company match but not much else.
It wasn’t until I got a substantial pay raise that I felt I no longer needed to live that way. I immediately upped my contribution and as soon as the work stabilized in 2021, I maxed out to the annual limit. Granted, I had outlier considerations:
- Our rent was being paid for through my husband’s job. We were living in Kazakhstan at the time.
- While in KZ, I was doing the double shift of childcare from eight am to five pm and paid career role from six pm to two….am. So I paid in terms of lost hours of sleep.
- Being in a foreign land during a pandemic kept us mostly at home and forgoing money on experiences.
There was not a reason not to save (and invest) that money (and my employer match) via a 401k account.
2025 max 401k contribution
If you aren’t already contributing through your employer’s 401k program, consider doing so after your own damn research.
I mean it, I am not a financial professional!
If you are not yet contributing to max, the turn of the new year is your moment. In 2025, you can contribute up to 23,500 pre-tax dollars. A 401k account will allow you to invest these pre-tax contributions. Yes, that is nearly one thousand dollars per paycheck assuming twenty-six paychecks a year, but how much of that is taken out for taxes?
Again, I am not a financial professional. Calculate what works best for you.
my plan
I have to meet six months of employment at my current job in order to participate in the program and baby, I am counting down the days! Granted it will feel slightly painful for the ten months I will be eligible to contribute as I will be having deductions taken out of ten months rather than twelve, to which I will just take care to sock away savings in the first two months.
With that, I will need to rollover not one but one and everything over five thousand from a second 401k account, as I have a really suspect one that will not allow me rollover the entire sum. I have to keep five thousand in the account until I retire.
Suspect, indeed.