A break down of the last paycheck of 2016

My wife and I started contributing to our 401K/457K from the time we started our careers at 22. We’ve been maxing them out from about 25, when I was making less than $40,000, and she probably made about $70,000. Max contribution that year was probably $7500. So, I was saving 18% of my income, while she was saving 10% (slouch).

We’ve always made it a point to pay ourselves first-to max out our retirement, savings, emergency, and other accounts-before doing anything else with our money (with the exception of my first year, when I was a very stupid and very excited 22 year old who bought his first new car).

She’s been retired for about 8 months now. We’ve become a single income family. But, that’s ok, because we’ve essentially been living on 1 income, while saving the other, for 20 years. (OK, let’s be real, after 20 years and a couple promotions, I’ve got my salary up to 6-figure. It’s not a small salary, even in NYC. So, we’re not exactly making sacrifices here).

I continue to max out my retirement accounts because it lowers our taxable income while providing a larger cushion for my eventual retirement as well.

Here’s a break-down of where my last paycheck went before it reached my CFO (Chief Financial/Family Officer), my wife:

Gross pay: 5019 (includes some overtime and little contractual obligations)
401K: -1622 (1 more payment before hitting $18,000)
Taxes: -865
Pension dues: -383 (yes, we contribute to our pension)
Extra Pension contributions: -192 (I’m allowed to contribute 50% extra into my pension fund)
Other deductions: -77 (union dues, charity, health rider)
Total deductions: -3139
Take home: 1880

Yes, that’s my typical take-home after all deductions. My contract allows me to contribute to both our traditional 457K and the somewhat new to our union 401K. So, you know I’ve been taking advantage of both. That’s why it’s so late in the year and I still have a significant 401K contribution of $1622. I usually max out my 457k by the middle of the year, and then start contributing to the 401K.

That’s why my CFO still laughs at my paychecks. I don’t bring home much more than I did as a rookie cop.

With our expenses running at around $4000 a month, and my take home pay being about the same amount, I will have to make some adjustments for the next year. We’ve really had to stick to our budget the last few months since she stopped bringing home a paycheck.

As much as I loathe it, I will simply have to cut out the 401K contributions and just stick to the traditional 457K (it hurts so bad).

Max contribution to each fund is at $18,000 this year. So, I should be able to bring home an additional $1000 a month, increasing my take-home to about $2500 per check. That should be enough cushion to alleviate my wife’s anxiety.

So, I’ll still be able to contribute to my 457K. Whether I max out is questionable. But, not contributing a meaningful number is out of the question. Perhaps I’ll start out with 10% and see how my wife responds. And, then I’ll slowly increase the pressure during the year