(That’s one for my late 70’s / early 80’s babies. If ya know, ya know.) But seriously — if you don’t know what your money’s doing right now, it might accidentally stay out way after the street lights come on.
So halfway through the year, you want to check two things:
- Your taxes
- Your 401(k) & HSA contributions
If you’re reading this, you’re probably in the Max It Out Club on the paycheck savings front. Meaning you want to contribute the full $23,500 to your 401(k) and $8,550 to your HSA ($4,300 for singles).
And if you’re really Ms. Janet — aka Nasty — you’re also maxing out your Mega Backdoor Roth contributions (~$46,500, depending on your plan).
On the tax front: your taxes may be withheld every two weeks, but they’re actually due every quarter. If you don’t withhold or pay enough, Uncle Sam hits you with an underpayment penalty — currently 8%. That’s meaningful, and we want to avoid it.
For our Financial Zen members, we collect paystubs three times a year to run tax projections and track 401(k)/HSA contributions. That way our members don’t get hit with underpayment penalties and don’t have to go paycheck-less in December while cramming all their savings into their last two pay periods.
Not a member? You can still do a gut check on your own. AI tools can actually help here — I’ve tested them, and they’re accurate-ish. They won’t nail it to the penny, but they’ll tell you if you’re WAY off course. For our members, we use purpose-built tax planning software that’s still primarily directional, but gets you a lot closer to the runway.
Don’t let your taxes or your 401(k) wake up in a gutter in December. Check where they are today.