My take is that honesty is always the best policy, even where it might hurt you. Thus, when I opened my pay stub today, I noticed right away that the amount of money that my company contributes to my retirement was wrong in my favor by more than $60. I could think of no immediate explanation, sighed heavily and went to pick up the phone to call payroll and explain that they had given me too much money–and before I finished dialing, the reason suddenly occurred to me.
You see, my company contributes a small percent of my income to a retirement plan. (I also contribute my own money to the plan, but the amount they contribute is something above and beyond my income and is part of the retirement program, in lieu of stock options and the like.) Anyway at various stages, the percentage which they contribute can increase. For instance, if you make above a certain amount of money, it can go up. I do not make above that amount of money. However at two different times, it also goes up: when you turn 35 and when you turn 50. (Ultimately the company is contributing amounts equal to 10% of your income, which is nice, but I still have about 15 years to go before I get there.)
Anyway, I just turned 35 at the end of March. I must not have noticed this in my last paycheck, but once I did the math, the excess $60 account exactly for the fact that the percentage which my company contributes to my retirement has increased. $60 doesn’t sound like much, but I get that extra $60 26 times a year, so it is essentially an extra $1,560/year contributed to my retirement. And all I had to do was turn 35!
Of course, if it had been a mistake, I would have contacted payroll and insisted that they fix it. But happily, it was no mistake!
One thing I did over the weekend was to re-reun my financial modeling software (this is software I developed over a period of 10 years that projects every single financial transaction I will make into the future based on a given starting point, and that I use in place of things like Quicken) which is something I haven’t done in quite some time. There were some adjustments that needed to be made.
1. I wanted to add more to my retirement accounts.
2. I wanted to increase the amount of money I donate to charity.
I’ve been pretty bad at the latter this year. As it stands, I donate about 2.5% of my income to charity. I’m trying to get that up to 5%. As far as retirement goes, I’d cut back on how much I was putting into retirement in order to pay some big bills. Now that the big bills have been paid, I’m upping my contribution to $400/paycheck ($200/week). This is still a few thousand dollars short of the maximum allowed for tax deductions, but I’m getting there.
I put together a budget for charitable donations for the rest of this calendar year. Next year I’m looking to increase the amounts and within 2 or 3 years, I hope to be at my 5% mark. Some of the bigger ticket charitable donations this year:
- Isaac Asimov Memorial Lecture: $500
- UC Riverside Annual Fund: $350
- AOPA Air Safety Foundation: $200
- WETA President’s Circle Membership (my local PBS): $150
There are a number of smaller ticket items and it looks as though I have a little left over so if anyone has suggestions for good causes, let me know and I will look into them.
Finally, I need to do a little cost cutting. I started today by cancelling my NetFlix subscription. NetFlix is a great service, but I find that I hardly use it anymore. (The movies I have out now I’ve had for a couple of months.) The $240/year that I will save on NetFlix, for instance, completely covers the AOPA Air Safety Foundation donation.
There is more cost-cutting to be done, but I’ve got to take a closer look at my model to see where I can do it.