Next year, 2010, when available I plan to maximize my 401k contributions. The only problem is I do have a minimal cost to survive and I have no idea how the payroll change will effect me. In order to successfully pursue wealth I need to know everything about my money whether it be my income or expenses. If I knew how this payroll deduction change would change my take-home pay I could budget and plan to change my spending habits to match my reduced available cash accordingly. I have found an amazing free online tool at CalcXML Payroll Adjustments Calculator that calculates payroll deduction changes and even allows me to export the before and after to PDF. Thanks to this tool I am able to fully educate myself about my income changes. Without the use of this tool I probably never would make large changes to my payroll deductions willingly. Knowledge is my number one tool I plan to use to gain wealth.
I should have maximized my 401k contributions from my first day of employment. It is a shame that it took me years before I decided to make the future reduction in take home pay, but better late than never. The more I put aside for retirement the better which will add to the weight of my 401k in addition to my other investments. An added benefit of maximizing pretax deductions is the tax benefit. Increasing my pretax contribution reduces my income, reducing my tax liability, which can keep more money in my pocket come tax season.
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