The annual limit for your standard 401k/403b/457 goes from $19,000 to $19,500 from 2019 to 2020. That means you have an additional $500 (or $1000 if you’re working for a state institution that has both 403b and 457) that you can put away for retirement in a tax-advantaged fashion.
I went on the awful university internal site and figured out how to futz with my 403b withholding (it took about 20 min and a ton of googling to figure out– this is still better than the paper way we had to do it before which always took at least an hour, including finding the forms and the addresses the forms needed to be sent to), from 2111.11 to 2166.66 given my 9 month salary. Then I went to the easy and painless 457 site and futzed with that withholding (5 min, most of that digging out my password). Then we determined that DH had to email their admin person in order to futz with his 401k, so he did that (20 min, mostly determining he couldn’t do it himself online).
So now we have an additional $1,500 going towards tax-advantaged accounts for 2020!
When was the last time you changed your retirement contributions?
December 30, 2019 at 6:59 am
I just upped my HSA contributions for 2020 – the family limit increased by $100, so it’s a small change but good to keep maxing it out. I don’t max out my 403b because (at right about the national median income) my family is in a low tax bracket, so we prioritize maxing out Roth IRAs for my husband and me instead. The last time I changed my 403b contribution was in August – I became eligible to participate in my employer’s 403b plan after I’d been working there for a year and since then I’ve been increasing my contribution by 1% of my salary each academic year.
An aside to sing the praises of the benefits coordinator at my institution: she is so competent and proactive! She an email bcc’ing everyone enrolled in the HSA telling us what the new limits were and how much we should contribute per paycheck if we want to max it out, with the form attached. It took me 2 minutes to fill out the form and send it back to her. She also reached out to me in advance of my child’s birth a year and a half ago to set up a meeting to explain our health insurance options and give me all the forms I needed to update my 403b, life insurance, etc beneficiaries. On her recommendation, I ended up enrolling my kid in our state’s Medicaid expansion instead of my work insurance, which saved my family and the institution a ton of money and made us eligible for WIC.
December 30, 2019 at 7:01 am
December 30, 2019 at 7:17 am
December 30, 2019 at 10:44 am
I update mine pretty frequently. It is all automatic/online and I like to front load contributions, especially 457bs, just in case. The 457b takes ~1.5 months to go into effect for some reason though.
December 30, 2019 at 3:28 pm
I think ours takes effect in the next paycheck. It’s weird that yours would take so long in this day and age of electronic paperwork.
I sometimes wonder if I should frontload ours, but it’s so easy to just let it auto deduct. There’s no real way to say “contribute the most you can until you hit the max and then stop” on mine, though I bet it would actually stop automatically if I told it to max out (DH’s company thinks it stops automatically, but DH has accidentally overcontributed by about 1K for no reason we can understand since it’s not the obvious thing of an extra paycheck, but instead 4 seemingly random paychecks with over-contributions; we have to fix that by April to avoid a 6% penalty, though I think we can handle the $60 if the person doesn’t figure it out). And of course then I’d have more months of no paychecks at the end of an unpaid summer followed by enormous paychecks… which might be more efficient, but …
December 31, 2019 at 8:23 am
Any changes in regards to contributions for my 457 plan do not go into effect until the first of the next month(!).
December 31, 2019 at 8:49 am
Technically that’s true for me too– but I get paid monthly. (And technically I got paid today, not tomorrow, but it’s recorded as tomorrow. Direct deposit goes out the business day before the first of the month.)
January 3, 2020 at 12:38 pm
They go into effect of the paycheck of the 2nd month after I change them. Plus, I do it before the payroll deadline around the 15th or 20th of the month, otherwise it would be the 3rd paycheck after I make the change. Hence, a 1.5+ month delay. There must be something on the backend that is manual or requires going back and forth with payroll? The 403b (same servicer as 457!) takes just a few days, and go into effect with the next paycheck
December 30, 2019 at 2:34 pm
Last weekend, I just increased my husband’s contributions to max as well as mine from 0 (I started a new job late in the year after maxing my previous employer’s 401k). Also, new employer allows additional post-tax contributions for mega backdoor roth (be still my yuppie heart!).
December 30, 2019 at 3:20 pm
December 30, 2019 at 10:45 pm
I’m self-employed so the amount l contribute to my SEP-IRA changes every year depending on my income. But I don’t know how much I’m contributing until my taxes are calculated.
December 31, 2019 at 8:58 am
Looks like SEP-IRA limits went up too! Though I guess if you’re bound by the 25% of gross salary rather than the 57K then that’s less relevant.
December 31, 2019 at 11:35 am
I think it’s actually a bit more complicated for self-employment income than just a straight 25%. My accountant does the calculation for me. I think the maximum ends up closer to 20%.
December 31, 2019 at 12:41 pm
My husband has to set his as a % and the % he picked for last year is also correct for this year with the extra $500, so no changes necessary!
December 31, 2019 at 12:50 pm
January 1, 2020 at 9:38 am
Thanks, I needed this reminder. Done!
January 1, 2020 at 1:01 pm