Anyone stop their retirement contributions

[HenDuck]

at this time of year?

I usually don't, but since we're travelling to Disney AND trying to finish our Christmas shopping, I just reduced my deferred comp (similar to 401K) contribution about 80%. I was going to stop it altogether but just couldn't bring myself to contribute nothing!

(My friends think I'm crazy to put the amount of $$ into retirement that I do, although it's about what the "experts" say to contribute. I do it so that I can cut back when I need to, like now. )

We were also lucky enough to be getting a "rebate" on our medical insurance premiums for one month, so I'm adding that $$ to the pot.

Anyone else make these types of adjustments around the holidays or for vacation spending?

Just wondering...TIA!!!

 

[disneysteve]

If you are putting so much into your retirement plan and nothing into non-retirement savings, it may be time to rethink that plan. It is great to save for retirement. I certainly promote that here all the time. But you need to save for other things too, particularly short-term things, like vacations and gifts.

So no, I don't stop my retirement contributions to be able to afford vacation and gift giving. I simultaneously save for all of those things.

 

[cbrfan]

Well...............I sort of do the opposite. I don't contribute at all at the beginning of the year (employer doesn't make any matching contributions). I sort of rough out how much needs to go in to his 401K to bring us down into a lower tax bracket and put that in near the end of the year or when the market is down. I do max out our Roth IRA contributions. The leftovers I put into regular investments. I figure our tax bracket won't be much different when DH retires (he's 56 and could retire on full pension now) so I'd just as soon get the taxes out of the way and have use of the money when we want or need it.

 

[deltachi8]

I dont alter my contributions at all, in fact i dont even think of it as income, just a fee if you will thats taken from my check.

That being said, I dont contribute a bunch as I plan on working till Im dead. I just like to work I suppose - plus if I feel i have no social life now, what will it be llike when DS grows up and leaves? I wil be at owrk 7 days a week I bet...

 

[HenDuck]

All good points.

I agree with disneysteve that I need to readjust my allocations. That will be a new year's resolution!

If it weren't for this trip, which was a last minute trip, I wouldn't have adjusted anything.

I used to be worse. I used to do a yearly budget but not even take into account Christmas gifts. Then I'd be stressed out at Christmas time because I didn't have the cash to pay for gifts! I'd take money out of my savings that was allocated for something else and screw up the whole plan.

So, I'm a little slow, but I do learn, eventually.

Thanks for all the helpful responses!

 

[got2lovedisney]

The way our 401K is set-up, they match 1/2% up to 6% for my YTD wages. For the year I only put in 1%. For 1 payperiod, I increase to 6%. This causes a true-up in my favor...don't ask me why, I didn't write the formula. Otherwise, I don't adjust cuz I need my cash in hand.

 

[crisi]

Several years ago I did when I thought my DH was about to get laid off. In preperation for a few months of living off my income and unemployment, we cut expenses down and maximized income. We'd been good retirement savers, and I knew I'd sign back up when he got a new job, but I didn't want to drain all of our savings accounts for what I hoped to be a short term situation.

As it turned out, he was reorganized about two days prior to his "last day" and was never out of work. Within days, I'd reinstated my 401k contributions.

But in your case, I agree with Steve, while getting laid off is difficult to plan for (although we learned a lesson, made a lot of progress to being able to live off one income, and wouldn't need to cut retirement contributions now), Christmas is something you should probably save for all year.

 

[Danemom]

We contribute 12% to DH's 401K. We lowered it this year so DH's bonus check would not get that percentage taken out and bumped it right back up after that check was issued.

 

[staceyfe]

I put away money every month of the year in a savings account and make note of it in the savings register. That way, I earn a little interest, and have the money for Christmas when I need it. I keep track of what I spend on Christmas every year, so I have an idea how much to put away. When November comes, I simply withdraw the money. So no, I do not change my retirement contribution. I want to be able to retire young (50s), so I will need every penny I can get.

 

[spoon full of sugar]

We don't do this usually, but were just talking about it last night. My dh's work matches 5%, we have been putting in about 12%. We're thinking of cutting it down to the 5% that is matched to use the extra to pay on unexpected medical bills and Disney. I know everyone will scream about this, but when your health is uncertain (and you have good life insurance) I think enjoying life and making memories with your family is much more important than obsessivly squarreling away money that you may never get to spend anyway. Live a little people!

 

[cbrfan]

We don't do this usually, but were just talking about it last night. My dh's work matches 5%, we have been putting in about 12%. We're thinking of cutting it down to the 5% that is matched to use the extra to pay on unexpected medical bills and Disney. I know everyone will scream about this, but when your health is uncertain (and you have good life insurance) I think enjoying life and making memories with your family is much more important than obsessivly squarreling away money that you may never get to spend anyway. Live a little people!

Well said!! We're in the same boat!

 

[HaleyB]

Nope, never. We don't think of that is income at all. We set it at 10% (and we get 6% match) and never touch it. We have done this from day one so we never miss it.

We also put 5% into a short term 'savings' by putting it into the ESPP. We make an automatic 15% on every dollar because of the way the plan works and often much more.

I consider that money untouchable. I always look up the compounding tables when I am tempted. When you think about the money not in terms of todays value but what it would be worth in 35 years (or however long, depending on your age) it makes it easy to leave it be.

I, however, am a saver by nature.

 

[Chicago526]

Nope. 401k money does not exist until I retire. End of story.

I pay for Christmas out of my Christmas bonus. We are told in July if we will get one (we only do if we are in the black for the previous fiscal year, which ends in June) so if so, I use that. If we don't (we always have though since I've worked here) then I still have 5 months to save up on my own.

 

[HenDuck]

I've made one new year's resolution...The first working day of 2006, I will be setting up an automatic deposit into a Christmas Club with my credit union. I already have a Christmas expense budget which I am pretty faithful to, so I know how much I need to save.

Next year at this time, I will not be worrying about how to pay off the Christmas credit card bill!

I'm also going to put my savings on an automatic deposit too. I have never done that because I'm always afraid I'll have some big expense that I need to cover. But hey, the credit union is only across the street!

(And I'll reinstate my deferred comp. payments back to the 10% I was contributing.)

Thanks all for your helpful responses!

 

[brettb]

We don't do this usually, but were just talking about it last night. My dh's work matches 5%, we have been putting in about 12%. We're thinking of cutting it down to the 5% that is matched to use the extra to pay on unexpected medical bills and Disney. I know everyone will scream about this, but when your health is uncertain (and you have good life insurance) I think enjoying life and making memories with your family is much more important than obsessivly squarreling away money that you may never get to spend anyway. Live a little people!

Back when my company was owned by a mega-corporation, it matched 401k contributions 1-to-1 up to 3%. After it bought itself out, it started making a 3% "Safe Harbor" contribution instead; the company contributes 3% of my biweekly gross to the account whether I contribute or not. (Luckily it's been doing well enough on it's own that it's been making extra contributions at the end of the year, too!)

Because I also have health issues, we opted to open Roth IRA accounts for both my wife and I and put the max into those each year. Because you can always withdraw your contributions (but not any earnings) without any penalties or tax consequences (other than not being able to put the money back in), our contributions to the Roths are sort of a secondary really-bad-emergency fund for us. Though there is (almost?) always a slight tax advantage to the 401k (or a traditional IRA) over a Roth IRA, our increased risk of needing emergency funds outweighs that.

Additionally, my company only offers a handful of funds for its 401k. I'm a big Vanguard fan so being able to use them for the Roths is another advantage as far as I'm concerned. (I also use Vanguard for my Rollover IRA and our post-tax investing.)

Everybody's situation is different but I agree that it's important to balance the present and the future. I was diagnosed lupus before I was married or had a child so getting affordable life insurance once I needed it has been challenging. So it's important to me that if the next flare does me in, my wife and daughter will get by. But after a 39 day stay in the hospital (Friday the 13th, 2002 through January 20th, 2003), spending time with my family is pretty darn important to me, too!

Brett

 

[MrsPete]

I think enjoying life and making memories with your family is much more important than obsessivly squarreling away money that you may never get to spend anyway. Live a little people!

I don't think living a little necessarily has to do with money. Family memories can be made on a Caribbean cruise OR in the kitchen baking cookies together. Ideally, kids will grow up with some of each type.

When we started our first professional jobs, DH and I started "maxing out" our 401 Ks. Even with a chunk of money going towards retirement, we still had loads more than we had in college, so we never felt like we were going without. Since then, we've never really considered that portion of our income as income. Our retirement savings have added up nicely since then, and I've never felt as if I'm living on the cheap because of it.

If I follow in the footsteps of the other women in my family, I will probably live to be close to 100 and will probably have good health for most of that. I don't want to ruin that blessing by worrying where my next meal will come from. If that doesn't happen, my children can enjoy a nice chunk of inheritance.

 

[PrincessKitty1]

Here we go again!

 

[crisi]

We don't do this usually, but were just talking about it last night. My dh's work matches 5%, we have been putting in about 12%. We're thinking of cutting it down to the 5% that is matched to use the extra to pay on unexpected medical bills and Disney. I know everyone will scream about this, but when your health is uncertain (and you have good life insurance) I think enjoying life and making memories with your family is much more important than obsessivly squarreling away money that you may never get to spend anyway. Live a little people!

I don't think anyone is going to scream about your circumstances. You'll still save 10% of your income towards retirement after the cut - which is where most people think you need to be. Its possible the 12% +5% match (17%!) was actually overkill, depeding on your ages, how much you think you'll spend in retirement, how long you expect to live for, and how much you already have saved. And given that you are implying uncertain health, I'd do the same.

 

[Kramer]

I've cut back... sort of.

My job has a defined benefit pension which will pay me 65% of my final year's salary when I retire after 25 years of service (which will be in about 12.5 years). My contribution to my pension is 8.5% of my salary. I can't cut back on that contribution.

In addition to that I am also able to contribute to a 457 deferred compensation plan. I was contributing another 12.5% of my salary into that account. I just cut it back since we moved and our new mortgage is a little bigger than the old one. But I will gradually be building it back up the same way I did in the past... just increasing my contribution a little each year with my yearly raise. That way I never really miss the money.

I'm fortunate in that I will only be 47 when I am able to retire with a full pension. So I plan to relax for a year or two and then go back to work... maybe .

 

[fac]

I dont alter my contributions at all, in fact i dont even think of it as income, just a fee if you will thats taken from my check.

That being said, I dont contribute a bunch as I plan on working till Im dead. I just like to work I suppose - plus if I feel i have no social life now, what will it be llike when DS grows up and leaves? I wil be at owrk 7 days a week I bet...

Ditto. I never considered those as income and always believe I will work till I die. Just a word of caution on working till you're dead, depends on the field you are in and how "secure" your job is, your experience may vary, sometimes it may be difficult to compete for the same job when you are older. (BTW, I didn't mean that you have to depend on working after retirement age, rather a general comment on whether we can really work on the job we like at an older age.)

Back to the OP's question.
a. When I was younger I always contribute to the company's matching.
b. I never consider them as income, always leave with the company with I change job and even forgot about them. The last part turns out to be a big mistake, I realized some of the contributions were negative for the last 5 years.