Tonight, Lloyd and I enjoyed a low-key date of pizza and beer (with a coupon, of course – who do you think I am?). Pizza and beer is one of my favorite dates – I’m a low-maintenance kinda gal and there’s something so refreshing about an ice cold brew and a steaming slice of pie on a Saturday night. It really gets you to thinking about…retirement?
Over slices of pepperoni, Lloyd and I got on the subject of our retirement accounts and saving for the future. Truth be told, we’ve been talking about this subject quite a lot lately. I’ve been toying with the idea of…not maxing out my retirement account next year. *shocked gasps from readers*
Yes, that’s right, I might stray from the biggest personal finance rule of them all: Thou shall max out thy retirement accounts each and every year.
The fact of the matter is that we have a lot to save for right now. We want to pay off a good chunk of our future house before we have kids, we want to build our home gym, we want to buy a dog when we have a house, we want to get married. On top of that, while my car is close to brand-new, Lloyd’s car is almost 10 years old and we’d be naive to think it won’t need maintenance or even need to be traded in in the near future.
What’s more important: not getting into debt again or maxing out my retirement account?
The obvious answer is avoiding going back in debt. I made a one-time stop in Debtsville and I don’t intend to ever go back. I don’t mind working for even 5 more years if it means that I never have to be in debt ever again.
I’m happy I maxed out my 401k this year. If I was going to do it any year, this was the year to do it. I now have a huge amount of shares under my belt that I bought for a really cheap price. Who knows when the market will provide that opportunity again?
So, next year, I won’t be maxing out my retirement accounts. Instead of saving almost 24% for retirement, I’ll be backing my contributions down to the Dave Ramsey recommended percentage of 15%. Next year, I will contribute $5,000 to a Roth IRA and $5-6,000 to my 401k (plus about $3,000 in matching from my employer).
Our ultimate goal is to reach max-out again and stay there, but for now, we’re content with contributing just 15%.
I’m happy with my decision. My taxable income will go up and I’ll pay a couple thousand dollars more in federal taxes, but I think it’s worth it in the end.
We had some great personal finance discussion flowing over our dinner tonight. It makes me think: is it possible that the best financial decisions are made over pizza and beer?