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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%, it felt like a good place. After all, many financial experts suggest saving 15% of your income for retirement.
I felt comfortable right there. “Future me” has money, “current me” has money, and everyone is happy.
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 six months. In prior years, this furlough did not happen.
But it’s 2020. In my experience, this year defies all the odds.
As I was bracing myself for a six-month furlough, I had to accept that my retirement contributions could be all of zero dollars.
But, 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.
Initially, it felt great to have a choice. But now, it feels more like a struggle, since my decision could 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 way the extra hot setting, uncomfortable but survivable. It’s not like I went down a tax bracket but I did notice a difference.
Plus 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.
Plus, I love logging onto TSP 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.
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 after 16 years of federal employment and 4 enlisted years with the Navy.
This is a future worthy of increased retirement contributions.