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Fewer pay cycles? Don’t shortchange your IRA or 403(b)

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Michelle Blog PhotoMany districts are reducing the number of pay cycles from 24 to 20 per year. If you have a set dollar amount deducted per paycheck for 403(b) or IRA contributions, you need to adjust that amount so you can continue to meet your retirement savings goal. 

Pay cycle graph

For example, if you want to save $2,000 per year and have been receiving 24 checks per year, your contribution per paycheck would be $83 (for a total of $1992). However, if you are now receiving 20 checks per year, that $83 contribution will accumulate to just $1660 by the end of the year. To stay on pace to reach your yearly goal, increase your contribution to $100.

If this affects you, contact your business office today and fill out a Salary Reduction Agreement to modify your contribution withholdings.

Michelle Slawny, CFP®