Ramping up 401k contributions to 15k

[maddythebeagle]

Have people increased their contribution rate for 2006?

http://www.irs.gov/newsroom/article/...149631,00.html

[justin]

Yes!

[SteveR]

Yes, bumping up DW to 24% pre-tax.

[Robert the Red]

Yes for both of us, plus $5K 'catchup' (ketchup?) for us geezers-in-training.

[Texas Proud]

Yep...

But not in geezer territory yet to catch up...

[SteveR]

Quote:

Originally Posted by Robert the Red Yes for both of us, plus $5K 'catchup' (ketchup?) for us geezers-in-training.

We are working on DW's account since mine is already pretty far along. *Being nearly newly weds (15 months) she is in "training" for FI and ER. *Her 401k went up $30k last year so she is seeing the light. *Not sure what I will do with mine yet. *At this point I am going to leave my contributions above company match but no higher since I am working on debt reduction right now. *We will see how it goes during the year; I can always "ketsup" at any time. *

[Nords]

Quote:

Originally Posted by maddythebeagle Have people increased their contribution rate for 2006?

Yup. If I do this right my spouse won't see a W-2 this year.

For those of you using the TSP, here's their website disclaimer: "Effective January 1, 2006 you are authorized to increase your TSP basic pay contribution percentage to 100% of your remaining basic pay after mandatory deductions. Unfortunately, we have identified that our systems are at risk of calculating the contribution without ensuring mandatory deductions (if applicable) are withheld upfront for our Army, Navy and Air Force customerbase. The software problem could adversely affect you.

"To ensure we do not erroneously calculate TSP contributions we are implementing the following. You will have the ability to elect 100% or less for your Basic Pay contribution to TSP. All elections of 85% and below will automatically process. Elections of 86% and above will be automatically calculated at 85%. The account will be flagged for manual review to ensure that mandatory deductions of FICA/Medicare and SGLI (if applicable), and additional deductions, debts and/or allotments are properly identified and properly deducted before deriving the maximum percentage available for your TSP Basic Pay election. If we determine that a 100% election will adversely affect you your servicing finance office will contact you."

Has anyone figured out the financial answer? I jacked spouse's TSP contribution up to 100% and I'm eagerly awaiting contact from our servicing finance office (I know, oxymoronic). Spouse has no debts or allotments. The only deductions from her Reserve pay are FICA/Medicare, federal income tax witholding, and state income tax witholding. If all of her Reserve pay goes to the TSP before it becomes "taxable income", then is there still a deduction for FICA/Medicare? And if there is a deduction for that, is there any way that we mere mortals can calculate the percentage we should select?

[Outtahere]

Yes, upped it to 16%, that will put me right about at the max with the catchup contribution for a total of $20k

[cute fuzzy bunny]

Thanks for reminding me. Just reinstated the wifes 403b to the max.

[Andre1969]

I bumped contribution rate up back around Sept/Oct, so that I'd end up contributing the maximum for 2005. I ended up coming in just a bit short, at $13,577.70, because I forgot that the final two weeks of last year were actually counted in 2006.

Anyway, I'm on track to put in $15,000 for 2006, and my company will put in around $1500.

[brewer12345]

I had to re-jigger things when bonuses were announced (paid 1/15) so I'm already set up for the max this year.

[73ss454]

Sending in my 20K for this year next week. Ah the joys of being over 50~

[Outtahere]

It's great being able to legally hide $20k from the taxman..at least for a while.

[usc_et]

I did. Mildly surprising to see the first paycheck. Slightly smaller than two weeks ago. But can't wait to see the impact on the 401k as the year goes along.

[obryanjf]

Yes, Same percentage at 16%, but with the Beg of year raises I will contribute just around the 15,000 mark. Roths (mine and DW) will be going in next week as a move from taxable acct to Roth accts.

job

[Sheryl]

Last year I put in $700 per bi-monthly pay check, and was done by the end of October. This year our company is switching to every-two-weeks paychecks, so I think I'll put in $625. That'll get me there in 48 weeks.

It's really nice to have your take-home pay suddenly increase at the end of the year - helps pay for holiday shopping and travel.

SO officially becomes a geezer (50) in March - does the geezer catsup contribution start in the year in which you turn 50 or do you have to be there at the start of the year?

[Martha]

Year you turn 50.

[HFWR]

Have put in near the max the past few years, but am considering diverting some to taxable or Roth. Need to do some number crunching regarding what the tax bite in retirement will be...

[LOL!]

My spouse will turn 50 in November, so she has upped her contribution rate to reach $20K by year end.*

Hmmm, I can see how to make her paycheck ending up to be $0.* *:* I will try to get her to up the taxes withheld from her paycheck to cover some of the taxes on my paycheck.* That would be one less deposit to mess with every couple of weeks.

[Martha]

Quote:

Originally Posted by LOL! Hmmm, I can see how to make her paycheck ending up to be $0. : I will try to get her to up the taxes withheld from her paycheck to cover some of the taxes on my paycheck. That would be one less deposit to mess with every couple of weeks.

Been there, done that. The problem is that it is a bit demoralizing getting $0 paychecks. Did manage to max out the employee 401(k) at $18,000 (I'm 50) and get another $12,000 or so in profit sharing.