I recently received an e-mail from work, reminding me that for 2019, the maximum pre-tax contribution to the 403(b) has gone up. For those under 50, it has increased from $18,500 to $19,000; for those 50 or older (including those who turn 50 in 2019), the maximum has gone from $24,500 to $25,000.
I was reminded–yet again–that turning 50 is a special time. As a PCP, I usually have other issues on the brain when thinking about this landmark year.
You have to start screening for colon cancer, preferably with a colonoscopy. (There is a newer recommendation to start at age 45, but it doesn’t seem to have caught on quite yet.) (1)
After several years of “discussing risks and benefits” of breast cancer screening, the rubber hits the road on recommending screening mammograms. Everyone (every organization I can find) agrees that mammograms should be happening for healthy women in their 50s, even if they disagree about when screening should start and stop. (2)
The new shingles vaccine is recommended. (3)
Amidst all that medical stuff–which, frankly, doesn’t sound like all that much fun–you also get to put away more money towards your retirement. They call it “catching up.” You can put away extra $6000 per year in your 403(b) or 401(k), and an extra $1000 per year in your IRA (Roth or traditional).
This is a perk I had been looking forward to. Investing extra money (with tax benefits!) to support my future self means I will likely have a lot more to spend later. After all, I’ll need to live on more than coffee .
All of this sounds lovely, except that I just took a 10% pay cut. Suddenly coming up with an extra $8000 ($6500 more for my 403(b), and another $1500 for my IRA) seems a little daunting.
My original plan was to wait until I had paid off the mortgage to reduce my hours (and salary). Life doesn’t always go according to plan, though, and I decided I needed to reduce my hours about a year earlier than I had expected.
I now have to manage several competing priorities: pay off the mortgage, pay the regular bills, keep up savings for those irregular bills that appear periodically (family events! family illnesses! house repairs!), and boost retirement savings.
For those who think all doctors are rich, or wonder why we need personal finance training, this is a good example of how we can have many nice things (afford a 10% pay cut) but not all of them (find an extra $8000 after a 10% pay cut).
For now, my retirement contribution increases are on hold. I will see what my January paycheck looks like; those are always a surprise anyway, given the uncertain effects of all the changes I make as I choose my insurance (with new and ever-rising insurance premiums), change FSA contributions, and arrange for charitable donations to be drawn directly from my paycheck. This year, I also had some problems adjusting my contributions to my credit union account (where I hide money from myself), and I’m not sure when the amount coming out of my paycheck will change.
Basically, I have no idea what my take home pay will look like this month. Is this a bad thing to admit on a public blog where I talk about money?
In any case, I think I’m going to have to look pretty hard at my expenses to find that extra money.
(1-3) I really hope I don’t actually need to say this, but you should not rely on this site for medical advice (4). You should speak to your own doctor–who knows you much better than a stranger on the internet–about your own health care decisions.
(4) Also, please don’t construe anything I write as personal financial advice. This site is for entertainment and education only.