So, during my last net worth update, I mentioned that I had increased my 401k contribution from 5% per paycheck to 8% per paycheck. Many friends of mine either don’t contribute to their companies 401k plan or if they do – they never increase their contribution amount. Typically, most set their contribution amount to the minimum amount to qualify for a company match. That’s fine – but many have told me that they won’t increase their percentage because they don’t want the amount taken from their paycheck.

Well I just took a look at my most recent paycheck, which includes my new 8% contribution. The bottom line is that it didn’t hurt at all. In fact, barely felt the few additional dollars. In total, my retirement contribution went up by about $80 while only about $60 was taken out of my check. So, the tax advantage of the 401k contribution is basically like $20 free bucks. Not too bad, eh?

In fact, kind of makes me want to do a little math right now and determine if I should raise it to 10%. We’ll see.