Comments on: Contribute Regularly to That Retirement Account (59/365)

By: Stacy

Stacy — Sat, 03 Mar 2012 19:02:04 +0000

I’ve been putting $212 in retirement since I started my job, so I never missed it.

All I’d spend that $212 on is crap (booze, clothes, eating out) anyway. Don’t miss it.

By: Tom

Tom — Thu, 01 Mar 2012 16:17:39 +0000

David, you certainly should not get out more. That was hilarious.
My math shows that regardless of state income tax, the reduction in pay is more like $141 per check, not 125

By: Karen

Karen — Thu, 01 Mar 2012 16:04:27 +0000

I work for a large financial company and I get paid every 2 weeks.

By: Joan

Joan — Thu, 01 Mar 2012 13:50:11 +0000

The Simple Dollar failed to show up in my e-mail for three days. I really missed all the comments by the English Literature scholars.

By: deRuiter

deRuiter — Thu, 01 Mar 2012 11:47:33 +0000

Totally ignores another easy way to contribute to a retirement account, which is to get a part time job and put all that money, up to what is allowed by law, into a ROTH. Then you 1. wouldn’t “miss” anything from regular income because regular income would be unchanged and 2. there would be less free time to shop, to hang out in bars hemoraghing money, or board games stores buying unnecessary board games.
The profusion of ads and ad placement in this column are because two groups are now taking money from this blog, the author with his “passion” for writing who devotes his real “passion” to novels and the people who invested money to buy this column to flog ads for clients. The lack of interest in quality writing / content by both groups is on display, especially with a page a day from an old book and some days combining that rehash with ten things written by others or links to blogs by other writers. Pretty cushy “work.”

By: Jules

Jules — Thu, 01 Mar 2012 06:19:48 +0000

“Only $100″

When you’re living paycheck-to-paycheck, that’s a week’s worth of groceries and a haircut. Not trivial, if you ask me.

By: Mister E

Mister E — Thu, 01 Mar 2012 00:54:19 +0000

It might be my industry, or a regional thing, but pretty much everyone I know professionally is paid twice a month – 15th and last day.

By: Steve

Steve — Wed, 29 Feb 2012 22:24:43 +0000

The point really is that Trent erred in calculating this person’s marginal rate – 25% whereas it should only be 15%. (FICA & medicare deductions remain the same regardless of 401K contribution or not).

The $166.67 contribution is reduced to $141.67 per paycheck for this fictitious person presumably residing in a non State Income Tax state earning $40K per year being paid twice per month :)

By: Kathleen

Kathleen — Wed, 29 Feb 2012 22:02:57 +0000

Every salaried job I’ve had involved payment twice per month, NOT every two weeks.

By: David

David — Wed, 29 Feb 2012 21:55:01 +0000

Fascinating stuff, words. In point of fact Trent’s numbers do jive with reality, for “jive” originally meant “talk or conversation; especially talk that is misleading, untrue, empty, or pretentious; hence, anything false, worthless, or unpleasant”. What they don’t do is jibe with reality, for that verb means “to chime in (with); to be in harmony or accord; to agree”.

I should perhaps get out more. But then I might be run over by a yellow Neon.

By: Eric

Eric — Wed, 29 Feb 2012 21:51:20 +0000

Many public sector workers (Fire, EMS, Police) in this area are paid twice a month, on the 15th and the last day of the month

By: josh

josh — Wed, 29 Feb 2012 21:16:54 +0000

@Johanna – Not every state has income tax, but I get your point.

By: josh

josh — Wed, 29 Feb 2012 21:14:02 +0000

Also, if you have an unexpected windfall, please burn it to a CD-R right away.

By: Nick

Nick — Wed, 29 Feb 2012 21:13:36 +0000

The ads in the middle of the articles are pretty annoying.

By: Johanna

Johanna — Wed, 29 Feb 2012 20:34:50 +0000

“So, beforehand, you pay $6,030 in income taxes over the course of the year”

Where did this number come from? It looks like Trent might have looked up the tax on $40K in the IRS tax tables (it’s actually $6131 for a single person) – but that’s on $40K of taxable income, after deductions and exemptions have been subtracted out. Someone whose total income is $40K will pay much less than $6131 in federal income taxes.

But there are also state income taxes, and as lurker carl points out, FICA and Medicare taxes.

By: lurker carl

lurker carl — Wed, 29 Feb 2012 20:30:33 +0000

“two every weeks” should read “every two weeks”

By: lurker carl

lurker carl — Wed, 29 Feb 2012 20:27:04 +0000

Trent’s numbers don’t jive with reality, the real take home pay is considerably less than this example portrays. A lot of people are paid two every weeks but almost nobody is paid twice per month and you forgot about the mandatory FICA and Medicare taxes. These sum of these two mistakes are more than the amount going into retirement savings.