Author Topic: $18K/26 = $692.30  (Read 5283 times)

headwinds

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$18K/26 = $692.30
« on: January 26, 2017, 12:08:59 PM »
And that is the amount I have set my automatic deduction for my 457 since 1/1/17. Would have done the same if it was a 401k instead as the plans have the same tax-deferred contribution limit. It's a little scary, but so far it has been ok. Honestly I wouldn't have done this without a cash cushion sitting in savings but I do have the cushion and so I have done,  it feels good that I am finally making some progress. Just keep pedaling.

dandarc

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Re: $18K/26 = $692.30
« Reply #1 on: January 26, 2017, 12:15:45 PM »
Nice - I bet you find things aren't as tight as you might imagine.

If you have the option, try adding the same thing to your 403B or 401K next year.

headwinds

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Re: $18K/26 = $692.30
« Reply #2 on: January 26, 2017, 12:25:18 PM »


If you have the option, try adding the same thing to your 403B or 401K next year.

I would but alas I do not have the option. The 457 is basically a subtype of 403b as i understand, it is in addition to a defined benefit pension. there is no 401k option at my job.

i have considered how to get a 401k by doing side work as self-employed but at my pay scale it makes more sense just to work more at my regular job and be taxed, nothing i could do as self-employed come even remotely close to my hourly wage.

headwinds

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Re: $18K/26 = $692.30
« Reply #3 on: January 26, 2017, 12:29:15 PM »
Can/will talk to HR. Would love to have this option. Not currently available as I understand. HR is resistant to doing anything which requires effort. But we have collective bargaining, may be able to force their hand.

ETA:

Quote
The 457 plan is often called a “Top Hat” plan because it offers double-deferral when coupled with a 403(b). For example, an employee can reach the contribution limit for a 403(b) and still contribute the entire contribution limit to a 457 – or vice versa. Further, as previously noted, many of these employees also have a Defined Benefit pension plan from which they will receive retirement income.

Ah. So it is possible.
« Last Edit: January 26, 2017, 12:32:15 PM by headwinds »

dandarc

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Re: $18K/26 = $692.30
« Reply #4 on: January 26, 2017, 12:31:05 PM »
Yeah - I used to do more side hustling myself until my hourly (independent contractor) got ridiculous at the main gig.  So, my wife works as a State Employee here, and has a similar setup 457 + the retirement system.  No option to defer extra to the retirement system, no 401K or 403B either.  University employees have the same 457 plan, same retirement system (although they may be a different class of employee within the plan), and a 403b at their disposal in addition to those 2.  So it varies a lot, even among similar but not exactly the same employers.

Anyway - good on you for maxing that out!

headwinds

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Re: $18K/26 = $692.30
« Reply #5 on: January 26, 2017, 12:33:03 PM »
Yeah - I used to do more side hustling myself until my hourly (independent contractor) got ridiculous at the main gig.  So, my wife works as a State Employee here, and has a similar setup 457 + the retirement system.  No option to defer extra to the retirement system, no 401K or 403B either.  University employees have the same 457 plan, same retirement system (although they may be a different class of employee within the plan), and a 403b at their disposal in addition to those 2.  So it varies a lot, even among similar but not exactly the same employers.

Anyway - good on you for maxing that out!

Thank you! I'm pretty psyched. Hopefully can leave the pedal to the metal there until FIRE :)

Longwaytogo

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Re: $18K/26 = $692.30
« Reply #6 on: January 26, 2017, 01:05:51 PM »
Nice job!!

We are still working through our debt mountains so no high contributions. But when we want to my wife (public school teacher) does have access to both 403B and 457 and pension.

Right now we are only putting 6% into the 403B plus paying back $400 a month to the 403B from a loan so ~$9,600 a year.  In the fall I plan to up that to 10% and then the following school year when the loan is complete go to 10% 403 and 10% 457 for ~$16,000 total.

2Birds1Stone

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Re: $18K/26 = $692.30
« Reply #7 on: January 26, 2017, 01:19:01 PM »
That's wonderful!

headwinds

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Re: $18K/26 = $692.30
« Reply #8 on: January 26, 2017, 01:38:09 PM »
Anyone have any ideas how to approach this? Is a 403(b) something that would cost my employer a lot to implement? It is kind of earth-shaking to me that they haven't offered it so far when school districts etc.. are offering both. My hospital district is solidly in the black so maybe they would be willing to play ball. Plus it would personally benefit EVERYONE that works full time for the district so you would think even the administrators might be supportive.

dandarc

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Re: $18K/26 = $692.30
« Reply #9 on: January 26, 2017, 01:52:39 PM »
Have you been to whitecoatinvestor.com?  Might have some articles and advice on how to approach this.  Doctors often make a lot of money so finding legal ways to avoid or defer the taxes should resonate well with more than a few folks, I'd think.

headwinds

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Re: $18K/26 = $692.30
« Reply #10 on: January 26, 2017, 02:26:27 PM »
Yes but the doctors are contracted, they are not employees of the district.

Lindy

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Re: $18K/26 = $692.30
« Reply #11 on: January 29, 2017, 07:00:38 PM »
That's the same amount I have deposited in my 401k every paycheck!  Great minds think alike.  :)

My take home pay is pretty small, but thanks to being a mustachian, I have plenty to live on. 

headwinds

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Re: $18K/26 = $692.30
« Reply #12 on: January 29, 2017, 08:50:18 PM »
That's the same amount I have deposited in my 401k every paycheck!  Great minds think alike.  :)

My take home pay is pretty small, but thanks to being a mustachian, I have plenty to live on.

And since it's pretax it makes less of a dent than you think it will.

Metric Mouse

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Re: $18K/26 = $692.30
« Reply #13 on: January 29, 2017, 11:53:41 PM »
And that is the amount I have set my automatic deduction for my 457 since 1/1/17. Would have done the same if it was a 401k instead as the plans have the same tax-deferred contribution limit. It's a little scary, but so far it has been ok. Honestly I wouldn't have done this without a cash cushion sitting in savings but I do have the cushion and so I have done,  it feels good that I am finally making some progress. Just keep pedaling.

Having a savings cushion opens up all sorts of possibilities! Good work.

Ebrat

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Re: $18K/26 = $692.30
« Reply #14 on: January 30, 2017, 07:12:24 PM »
Awesome. I want to do the same, but am missing the cash cushion component. Once we build that up, the 457 is next on my list.

aceyou

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Re: $18K/26 = $692.30
« Reply #15 on: February 01, 2017, 06:12:09 AM »
Congrats headwinds, this is awesome.  So nice to have the savings on autopilot. 

Same here, the only way I can put what I do into my retirement accounts is that we have savings.  Each month our savings dips.  My wife and I either have 20 years to be making 20k more per year, or we will have to reduce our contributions in 24 months by that amount..no pressure:) 

headwinds

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Re: $18K/26 = $692.30
« Reply #16 on: February 01, 2017, 08:41:30 AM »
Congrats headwinds, this is awesome.  So nice to have the savings on autopilot. 

Same here, the only way I can put what I do into my retirement accounts is that we have savings.  Each month our savings dips.  My wife and I either have 20 years to be making 20k more per year, or we will have to reduce our contributions in 24 months by that amount..no pressure:)

Yeah I am watching it closely, hopefully it's ok otherwise will have to reduce. But...  I think it will be ok.

10dollarsatatime

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Re: $18K/26 = $692.30
« Reply #17 on: February 03, 2017, 09:03:19 AM »
And that is the amount I have set my automatic deduction for my 457 since 1/1/17. Would have done the same if it was a 401k instead as the plans have the same tax-deferred contribution limit. It's a little scary, but so far it has been ok. Honestly I wouldn't have done this without a cash cushion sitting in savings but I do have the cushion and so I have done,  it feels good that I am finally making some progress. Just keep pedaling.

I'm doing the exact same thing.  Kind of... my first two contributions were much higher than they were supposed to be (more than double!), so recalc puts my amount around $639.  Between the 457, 2% in the 401k for the match, and my HSA, just about half of my paycheck is invested before I see it.  So I live on about $725/period.  With $400 of that set aside for mortgage and home maintenance.  It is scary, even with the cash cushion.  And I can't even rely on freelance $$ because I stick all of that into an IRA.

What I'm saying is... I'm right there with you.  And I think we can both handle it. :)

Classical_Liberal

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Re: $18K/26 = $692.30
« Reply #18 on: February 05, 2017, 11:07:00 AM »
Congrat's!  Do your best to keep it up!

I look at it this way; if I didn't max out 18K each year, I would have to pay about 1/3 of that to federal and state income taxes.  I'd only see 12K.  Plus, my employer matches about 6K per year.  By giving up the 12K of income, I end the year with 24K in savings & that's without capital gains or dividends earned. You simply cannot beat this virtually guaranteed, unleveraged investment! ... Unless you somehow manage to massively fuck up err, mismanage your withdrawls in early retirement, but that is a different topic/issue.

Zikzin

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Re: $18K/26 = $692.30
« Reply #19 on: February 05, 2017, 12:57:55 PM »
Did the same thing! although I split it within 401K and ROTH  , hopefully to max out 401K eventually. 10% to 401K and $458.33 on the ROTH.

Set it and forget it :)

headwinds

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Re: $18K/26 = $692.30
« Reply #20 on: February 05, 2017, 06:05:53 PM »
And that is the amount I have set my automatic deduction for my 457 since 1/1/17. Would have done the same if it was a 401k instead as the plans have the same tax-deferred contribution limit. It's a little scary, but so far it has been ok. Honestly I wouldn't have done this without a cash cushion sitting in savings but I do have the cushion and so I have done,  it feels good that I am finally making some progress. Just keep pedaling.

I'm doing the exact same thing.  Kind of... my first two contributions were much higher than they were supposed to be (more than double!), so recalc puts my amount around $639.  Between the 457, 2% in the 401k for the match, and my HSA, just about half of my paycheck is invested before I see it.  So I live on about $725/period.  With $400 of that set aside for mortgage and home maintenance.  It is scary, even with the cash cushion.  And I can't even rely on freelance $$ because I stick all of that into an IRA.

What I'm saying is... I'm right there with you.  And I think we can both handle it. :)

Yeah! Thanks for this! :)