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My husband’s 401(k) balance changed the way I save


Jacquelyn Smith
I made changes to my 401(k) contribution as soon as I realized how much more my husband had saved.
Marianne Lucille

Exactly three years ago, my husband and I bought our first home in the suburbs of New York City.

When we began the process of applying for our mortgage, we were asked to submit a boatload of documents and paperwork. We each handed over two months worth of pay stubs, three years worth of W-2s, about a dozen quarterly bank statements, letters confirming our employment, retirement account balances … and the list goes on.

We spent a few days getting everything together and then dedicated one entire Sunday afternoon in early April to scanning and emailing everything over to our soon-to-be lender.

Before I sent the email, I carefully looked through each and every document once more to confirm we had everything they were asking for.

Yup … okay … perfect … wonderful … great … WAIT, WHAT?!?!

When I looked closely at my husband Tyler’s 401(k) statement, I was shocked to see the number at the very bottom.

We had both started working and contributing to our retirement accounts around the same time (late 2010) and we earned about the same amount of money — so how on earth was his balance so much higher than mine?

Tyler and I had always been very open with each other about our finances — so I knew he was contributing a larger percentage of his pre-tax income than I was. But I had never realized just how much more money he was actually saving until I saw the balance printed in bold, blank ink at the bottom of that statement.

While I had been contributing anywhere from 2% to 4% of my pre-tax income to my retirement account since I started working, he had been contributing between 8% and 12% — increasing his contribution by about 1% each year.

That led to a pretty big disparity between his balance and mine over the six-year span. He had saved about three times what I had, to be exact.

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Seeing those numbers side by side was a huge wake-up call for me. I thought about our future. I wondered, If that gap is this big now, what will it look like in 40 years?

I knew if I continued contributing and saving the way I was, he’d be in way better shape come time to retire.

Sure, that’s still years away — but I know from reading about saving for retirement that what you do and how you save when you’re young has an immense impact on things later.

I felt silly for once feeling so proud of myself for contributing anything. I had thought, Oh, how responsible of me! But I now realized it simply wasn’t enough.

I knew right then and there I had to re-evaluate.

I sat down, did the math, figured out what I could afford to contribute without feeling strapped for cash each month, and increased my contribution to 8%. I also checked off that little box next to the question on the website about whether I’d like to automatically increase my contribution by 1% each year. Now I don’t even have to think about it!

As Business Insider’s Libby Kane pointed out, in order to finance 20-30 years post-work — operating on about 70% of my former annual income (at least) — I should be contributing 15% of my pre-tax income starting at age 30.

According to T. Rowe Price, increasing my contribution to 15% would help me save about $600,000 more by age 65 than I would if I contributed just 10% of my income.

(When I first heard and read all that three years ago, I was 28 years old. I’m 31 now, and while I still haven’t hit that 15% goal, I’m close! I’m aiming to get there by the end of 2020.)

Sure, my pocketbook noticed when I upped my contribution a few years back. It has decreased my take-home pay a bit … and has meant I’ve needed to skip the occasional dinner out, or hold myself back from buying those sandals I’ve been eyeing — but I’m sure I’ll enjoy that extra $600,000 more than I will those shoes I’ll probably wear twice.

Watch out, Tyler: I’m quickly catching up to you, and I’ll get there before you know it!



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