How Do You Keep Up With Inflation?

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floridacatlover
Posts: 4615
Joined: Fri Aug 28, 2015 7:21 am

Re: How Do You Keep Up With Inflation?

Post by floridacatlover »

HappyDaze wrote:
Sat Jan 23, 2021 6:18 am
UGHHHHH...after doing a lot of research and crunching my numbers, I reduced my retirement contribution by a couple of percentage points. "They" say - it's better if you have debt to aggressively pay off the debt and THEN increase your retirement contributions - so I'm sticking with that.

I'm comfortable with what I'm contributing and my employer is generously contributing - so it's okay. When/if we finally get our pay increase in the spring, I will likely increase it again - which is what I usually do when I get a pay increase.
I think you are smart to focus on debt. The number you cited in an earlier post about your employer’s contribution, 7%, is fantastic and as long as you keep your own contribution high enough to get that match I think you are good. Keep in my that all of the money you put in your retirement account will be taxable when you withdraw it. My guess is that taxes are going to increase over the next decade.

Maybe when you feel comfortable contributing more to retirement, look into a Roth IRA. You pay taxes on that money now but it is tax free when you withdraw it. I’m happy that I have savings/investments outside my 401k retirement account so that I can adjust my taxable withdrawals. Just an idea for you. You are doing great already.

HappyDaze
Posts: 1405
Joined: Tue Oct 15, 2019 11:11 am

Re: How Do You Keep Up With Inflation?

Post by HappyDaze »

floridacatlover wrote:
Sat Jan 23, 2021 9:59 am
I think you are smart to focus on debt. The number you cited in an earlier post about your employer’s contribution, 7%, is fantastic and as long as you keep your own contribution high enough to get that match I think you are good. Keep in my that all of the money you put in your retirement account will be taxable when you withdraw it. My guess is that taxes are going to increase over the next decade.

Maybe when you feel comfortable contributing more to retirement, look into a Roth IRA. You pay taxes on that money now but it is tax free when you withdraw it. I’m happy that I have savings/investments outside my 401k retirement account so that I can adjust my taxable withdrawals. Just an idea for you. You are doing great already.
Thank you Floridacat for the encouragement and the tip! I do have another iron in the fire via a whole life insurance policy that I purchased in my early 20's. Through some sort of class action lawsuit about 20 years ago, I no longer have to pay anything on the policy (I never did, my ex-husband did, it just keeps increasing in cash value. Ideally, that money will be there for my kiddos if something happens to me - but it's also there if I need some of it one day.

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