I’m obsessive. Once I tried it, I just had to have more of it. The feeling was just so good, and I wanted it again. But each additional dose gave me less and less of that dopamine that I saw with my first attempt.
No, I’m not talking about any kind of illicit drugs! I’m a 457 Junkie!
As a reminder, I work in local government, so my retirement account is a 457(b) plan. If it helps you understand this more easily, swap in 401(k) or 403(b), whichever applies to your situation.
For the 3 years leading up to me starting my current job, I worked towards maxing out my 457 plan – $19,000 limit in 2019. New employer in 2018 meant a new 457 plan, new provider, new investment options. New (higher) fees.
I set my goal to max out my 2018 allotment of $18,500 with equal contributions over the remaining 14 pay periods of the year (after I started the position and got my 457 paperwork competed). With each biweekly paycheck, I contributed $773.81. (For those who check the math, I took a 2-week break between jobs and had a delay in getting my 457 set up, so I had to make larger than 1/26th deposits to make it to the max in 2018. I was able to decrease these deposits to max out $19k in 2019 over the course of the full year with this employer.)
|Contribution #||Amount (stays the same)||Percent of contributions to date|
Early on, my contributions represented a large percentage of the total account balance. I could actually see that my savings rate was the main driver of the account balance. But the larger the balance grew, the smaller effect each individual contribution made on the total balance. Sure, in dollar terms it went up a steady amount (excluding the impacts of the market), but over time, it slowed to a steady crawl instead of going up 500% in 2.5 months like it did by the time of contribution #5.
The dopamine hit I got every-other Friday didn’t give me that buzz anymore. Due to fluctuations in the market, my account balance sometimes swung more intra-week than it went up on that biweekly deposit date.
Impact of being a retirement account Junkie
I’ve had 25 bi-weekly contributions since joining the 457 plan, and my balance is currently $19,300, despite my contributions to date of around $18,870. This isn’t a huge percentage gain, but it’s growth nonetheless. It also represents a tax savings to me to the tune of ~$2,264. Deferring this chunk of my compensation allows me to have almost $2,700 more net worth than I otherwise would have.
Now that I’ve maxed out my workplace retirement account contributions and my IRA contribution in 2019, I keep trying to figure out how to get my next “fix”. I don’t have access to an HSA. I contributed $498 to my FSA this year, since a maximum of $500 will roll over to 2020. I opened up a taxable brokerage to supplement my fully-stocked emergency fund, but I always feel like there should be more I could do.
Does anyone else feel obsessive about their retirement contributions? How do you get over the feeling that you aren’t doing enough or saving enough to reach your retirement goals? Let me know in the comments!