Changing Retirement Contributions

As a public school teacher, my raises are prescribed by a pay scale that is based on years of service. I never get merit raises or bonuses. The Husband on the other hand, gets yearly raises based upon merit and effort. In the coming weeks, we will find out how much of a raise he will get.

Currently, The Husband contributes 17% (plus a 3% match) towards his retirement. As we were late to the game, we are playing catch up with our retirement so we are working to max out our 401ks (or in my case, 403b). The first one percent of any raise he gets will go towards his 401k in order to max out his contributions. Originally, we had planned to then adjust my contributions so that his entire raise was going towards our retirement, but between debt and our new normal, we need a little more cushion in our monthly budget.

I’m also so tempted to change my current contributions. As a teacher, my district automatically takes out 10% of my check for my pension. Currently that works out to about $750 a month. In addition, I contribute another $1000 per month, pre-tax to my retirement. If I stopped my additional retirement contributions, I could take home an extra $750. That would actually cover our entire credit card payment, and then some, that is required to get below $10000 by the end of the year.

Knowing myself, though, I’m so afraid I would spend that money and have nothing to show for it. In other words, I’m afraid I wouldn’t use it for its intended target. At least keeping it going towards retirement, it’s money that will benefit me someday.

So far I have resisted the temptation to change my contributions, but the “bonus” of our tax refund makes me rethink my plan. I need to try to remember that we will get out of debt, but this is long term planning! We dug ourselves a hole with our debt and now we need to fill it back in one shovel full at a time, however, we can’t sacrifice our future security for our past debts.