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Worried Enough to make some adjustments

April 21, 2009

Despite trying to remain confident and calm, I’m worried enough about possible job shuffling that I’m taking precautions.

I mentioned awhile ago that I dropped my 401k from 12% back to 8% (minimum to get the full match).  This was not due to job worries, but other plans in the next 12 months or so that led me to believe we might need the extra cash now rather than in 40 years.  And if not, I could always jack up my 401k to 20% or something later in the year.

Paranoid Asteroid asked for opinions on whether she should drop her 401k from 20% to stockpile more cash, and I suggested cutting (temporarily) Roth IRA contributions first because those could be “made up” more easily.

When I started to get anxious about my job situation, I thought, “hmmm, maybe I should take my own suggestion.”  So, instead of having $160 out of each paycheck automatically deposited into my Roth IRA, I’m only having $25.

The net result of all my recent changes is this:  Previously about $1000 was going into my 401k (including match) and $360 was going into a Roth IRA each month.  Now just under $800 is going into my 401k and $50 is going into my Roth IRA.  This is a significant drop, and I’m reluctant to do so in this (supposedly) “on sale” stock market.  Emotional or not, I want the extra cash in my bank account.

If everything goes as smoothly as I anticipate it to (I remain gainfully employed all year and things settle down), I’ll make up my Roth IRA 2009 contributions before April 15th, 2010.  If not, I’ll be glad to have the extra cash.

6 Comments leave one →
  1. April 21, 2009 11:03 am

    It’s funny, I did that too!

    Plus I figured I could always drop them later if we needed more money after we (hypothetically) move. There’s no point reacting to something if I don’t even know it’s going to happen!

  2. April 21, 2009 11:56 am

    It sounds like a solid plan to me. I’m in Canada – but assuming that your Roth and 401K are your retirement plans thought i don’t know the differences between them.

    Are you going to stash the cash in your emerg fund for now – or just leave it in the bank?

  3. April 21, 2009 12:00 pm

    @PA – I think I often to react to things I’m not sure will happen! Probably not the best approach!

    @Jessie – yes, they are retirement. 401ks are pre-tax and roth IRAs are post tax. Other than that, there isn’t a major difference (though 401ks are associated with your employer).

    The Efund and “bank” are pretty much the same thing I guess. I only keep ~$500 in checking and the rest is all in “high yield” savings accounts. My efund is currently split between 3 accounts (for no good reason). But I will add it to one of the Efund accounts for now.

  4. April 21, 2009 1:07 pm

    So what has caused your recent anxieties at work? Have they announced it? I can’t remember if you had said something about this before.

  5. April 21, 2009 2:08 pm

    It is somewhat complicated without providing details. Nothing has been announced yet, I think things are still being figured out, but I can expect to be either reassigned to a new task or find a new job by mid summer.

    I expect some amount of layoffs for sure, but they either don’t know the impact, or they are being intentionally vague about the impact.

  6. April 26, 2009 1:36 am

    Talk about a double-whammy. Just when the time is right to buy stocks in your retirement funds, you have to cut back because of the possibility of job loss. That blows. I hope everything works out for you.

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