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I didn’t want to, but my pending furlough pushed me into increasing my retirement contributions. I had been steadily contributing 10% of my pretax income while my employer contributed 5%. At a total of 15%, felt like a good place. Many financial experts suggest saving 15% of income be funneled into the blackhole that is retirement.
I felt comfortable there. The future had money, current me has money, and everyone is happy, right?
Then, I started thinking about my furlough. My position, as lovely as it is, is subject to furlough. This means I get an extended work break for up to 6 months.
As I was bracing myself for half a year of furlough, I had to accept that my retirement contributions would be zero dollars.
I still want a cush retirement which means I had to make a hard choice. Mostly, the part where I see less upfront money and more future money.
Before this furlough inducing job, I had a position where 12% of my pretax income was funneled into mandatory contributions for retirement. It did not seem like a bad deal since my employer was contributing 13%.
That seemed fair.
Now, I have to decide what to contribute.
It felt great to have a choice. But now, it feels more like a struggle, since my decision could also dictate my failure.
This is one area I prefer not to fail.
It doesn’t help that I didn’t get off to a good start. Instead of starting strong with an automatic 15%, I waffled and picked 10%. Even though this position paid significantly more than my last.
But between the looming furlough and knowing that future me deserves nice things, I decided to up my retirement ante by increasing retirement contributions.
This past week was the first paycheck since I changed my contribution amount, and it didn’t feel too bad. It felt like a heating pad that was on the extra hot setting, uncomfortable but survivable. It’s not like I went down a tax bracket, but I noticed.
As a bonus, this is all happening in the beautiful land of pre-taxes where my money goes further than the gloomy land of post-taxes.
I love logging onto TSP (federal 401k) and seeing my account increase. Much of that is because of my contributions but there is a dusting of magic in the form of compounding interest too.
As long as it is not a mole, growth is a beautiful thing!
Even though this position seems to have a lot of instability, I am still on track for an early retirement.
There is an outpouring of gratitude that even though I may only work half a year, it’s still counted as a full year. This means I can, and will, retire early at the age of 51.