So, I'm officially switched to the Roth 401(k), though I'll miss Thursday's paycheck (drat!). I made this choice largely because of what commenters reminded me when I last posted about this option: that I probably won't have this option forever (because I probably won't be working here forever, and laws change, and whatnot) so it's smart to take advantage of it while I've got it, and while I'm young and in a low tax bracket (at a historically low tax level, too). Because the contribution percentage is set aside and then has the appropriate taxes deducted from it, I bumped up the contribution to 9%--I can't remember whether it was 7% or 8% before--so as to put myself on track to get the full $2,000 match. I can always tinker with that when I get a paycheck if it's too much or not enough.
I also got information on our corporate discount at NYSC--turns out, you can set up the membership fees to function as a payroll deduction. I'm not sure whether that means the membership is paid pretax or not, and I'm not sure how it works with the "extra" paychecks that fall outside the two-paychecks-a-month pattern, so I'll have to ask. I was hoping that there might be some room for negotiation--like, say, "Hey, if I pay cash for a year up-front, will you give me 20% off?" But the membership plan that my company offers is a good one--the enrollment fee is waived, and it's a substantially discounted price for a membership that allows me to use any NYSC location at any time. Not too shabby for $77/month. Essentially, then, this will work out much as I thought it would: the gym membership plus the switch to the Roth 401(k) will eat up my raise. That's fine with me. Both are worth my money.
Tuesday, January 08, 2008
After a Visit to HR
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6 comments:
i would be careful about the nysc deduction straight from your paycheck. nysc has the 2nd most Better Business Bureau complaints out of all the gyms in NY. when i went to cancel my membership there and I had a plan where I could cancel at any time, they made it very difficult.
also, have you visited the gyms you would be using yet? i would ask for a free week trial and see how you like it. i ended up canceling b/c time warner cable has an exercise on demand channel for free that gives me a huge variety of workouts that i can do right in my living room. for me, it was much better than going out to the gym (b/c i didn't always make it)
I'm jealous that you have the option for a Roth 401k. I guess I'll stick with my Roth IRA and traditional 401k....
If your membership is deducted pre-tax that woule be awesome! I wish mine was...or that I had a deal through my company...
Not only are they worth your extra money, but since you did so well last year, I'm sure it won't throw you off track :).
I hated how gyms in NY are so expensive, but at least you're spending the money on your health! Good for you on switching the the Roth IRA. There was an announcement that my company was going to start offering it as well. I need to look into it.
Gym deductions aren't pretax (and if your company subsidizes your membership at all, that subsidy is reported as taxable income). The good/bad thing about a corporate membership is that usually your membership ends when you leave the firm--so on the one hand you're not stuck with the infinitely renewable contracts of perpetual evil, but, on the other hand, when you leave your job, you might be out on your ear!
Sarah:
If you are eligible to contribute to a Flexible Spending Account, you can take the FSA funds and pay for the gym membership. The FSA is taken out Pre-tax so that is a way to pay for your gym membership with pre-tax dollars.
Also, one of the most important factors for saving for retirement is the number of years that you are investing. The benefit you will receive from starting young will far outweigh the smaller salary that you are getting paid now. Plus, your strategy of investing your entire salary increase into a retirement account and gym membership are EXCELLENT!!! I try and urge our employees to do the same thing, but it is a hard sell. You have never seen that money before so you are not going to miss it.
Sounds like you have your head on straight and are headed for a bright future.
I was Googling Payroll Deduction for gym memberships and I came across this blog and thought I just needed to add my $.02. I am the HR Manager for my company and we are just starting to offer the gym membership benefit. I am glad to see that you have the right ideas with regards to best utilizing your benefit program.
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