Violet Sky

Okay, I’ll admit, it’s a bit of a clickbait title, but I made a change to my retirement withholdings at the beginning of August, and while the change was carefully planned and thought about, it’s still occupying a lot of space in my mind. So I might as well write about it.

Next year, I’m finally eligible for my sabbatical at work – we get a sabbatical every 6 years, and my 6th year will fall in January. The sabbatical consists of 3 weeks paid, and 3 weeks unpaid, so going into it, I knew that I would need to save up enough money to cover 3 weeks of post-tax spending. Additionally, several years ago, we decided to take the kids Japan, and the sabbatical seems like the perfect time to do that. Of course, we don’t only want to go to Japan, as we’ve loved traveling to Europe the last three years in a row, so we also plan on going to France for two weeks.

All of which is going to cost a lot of money! So this month, for the first time since I started saving for retirement in 2017, I reduced my retirement contributions.

I maxed my Mega Backdoor Roth (MBDR) to the artificial maximum imposed by my company last year, which got me close to the actual maximum, but not quite there. I was extremely pleased to be able to fully max it this year – this was the pinnacle of my yearly push to increase the amount of retirement savings I put away each year. And this was the year! The year that I achieved full, blissful maximum.

Well, it’s August, and I already pulled back my contributions. I’m still maxing my traditional 401k, and still receiving the full match from my company, but I reduced my MBDR contributions from almost $1700 down to $150. 😢

I’m not gonna lie, it sucked. It also feels dramatic that it sucked, but it did suck. I was supposed to fully turn off my MBDR, and I probably sat there staring at the Schwab interface for a good five minutes, trying to get myself to do it. I couldn’t do it. I settled on $150 because that would give me a fairly round number to put away in cash savings instead, and still let me feel like I was contributing, even if it was just a small amount.

It took me days to stop fretting about it. It caused me a fair amount of actual distress, which was a bit shocking to me – after all, I’m doing all of this saving because, one day, I intend to stop saving altogether! I’m supposed to be living off of this money in the future! It raised some other questions, too, as I’ve always intended to someday reduce our retirement savings to the minimal match, in order to build up cash for our first few years of retirement – if I feel this way about “only” maxing my regular 401k, how am I going to feel about going down to 4%?

I’m writing all this in the past tense, but if I’m being honest, we’re 3/4 of the way through the month and it still sucks. I love seeing the jumps my 401k makes each paycheck cycle, and they’re pretty small now. I find myself periodically trying to rationalize or predict when I can turn it back on. Then I remind myself that I have a plan, so I don’t need to rationalize anything: when I’ve accumulated $20,000 in savings for next year, whether that’s from my MBDR money or stocks vesting, then I’m done. I can turn it back on.

But man. I really wanna turn it back on now!