I’ve got a tough decision to make, and I’ve got two days to make it. I have to decide exactly how much per month I want to send to my 403b retirement account. One the one hand, I want to be super-aggressive and send the maximum allowable amount, which in my case would be $15,500 for 2007, or almost $1,3000 per month. On the other hand, I want to “hedge my bets” a bit and contribute something like $6000 per year, or $500 per month. The aggressive track would be way more than 15% of our pre-tax income (my wife’s contributes 5% of her income to a pension plan already). There are pros and cons to both approaches. I could even go somewhere in the middle, say $12,000 per year, or $1000 per month. I’m really, really stumped. We have a van that will need replacing in the next two years, and my car will need replacing in the next 3. If I want to pay cash for things, I need cash on hand, and not in a retirement account.
But, “out of site, out of mind”. If I tuck more cash away in my retirement account, then I will not be tempted to overspend or be undisciplined. I’ll let you know what I decide to do.
(To be honest, I’m leaning really heavily towards the super-aggressive plan. I could always go in mid-year and change the amount I’m contributing. We shall see.)
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