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Posts tagged with: paycheck deductions

Open Enrollment Completed

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Thank you so much for all the tips and comments on my Open Enrollment post! I really found the comments to be insightful and incredibly helpful as I decided on my plans.

In the end, I opted to keep my current insurance (a PPO) and a flex spending account for both health and dependent care purchases. I may still switch to an HSA in the future, but didn’t feel comfortable doing so without any EF whatsoever right now. So it will be a consideration in future years, but not at this time.

I increased the amount of deductions for my health HSA but reduced the deductions for my dependent care HSA. And the cost of my medical insurance went up a little as well.

In the end, here are the benefits-related deductions I’ll see per paycheck:

In my open enrollment post, I’d posted all of my paycheck deductions (including required investment, taxes, parking permit, etc.) But to do an apples-to-apples comparison of just the benefits-related deductions (including health insurance, dental insurance, and the two FSA contributions), here’s how things stack up:

2016 per paycheck deduction = $382.90

2017 per paycheck deduction = $340.33

So I’ll be saving a little bit per check, but its really a pretty negligible amount. I also hope to reduce the amount of taxes taken out (pending the CPA’s review), so I may be able to “add back” a little bit more money to my take-home pay after our 2016 taxes have been finalized.

All in all, it’s still a pretty large deduction per paycheck, but I have excellent insurance and am happy with our coverage thus far. I pay for my dad’s health insurance (albeit out of his own funds, but I am the money-manager), and he pays $1,000/month for private insurance for a single individual with crappy coverage! Ugh! So I know I am really very lucky to have such good coverage at such a great rate! And as an aside, my Dad’s birthday is in March and at that time he’ll be eligible for Medicare. So hopefully that means a big reduction in his  health insurance costs.

I just wanted to follow-up to let everyone know what we’d decided regarding open enrollment. Thanks, again, for all your helpful suggestions!

~Ashley

 


Paycheck Blunder

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I was oh-so-excited for my very first 2-week paycheck that was direct deposited into my account on Friday. I was giddy as a child on Christmas morning opening up my bank account information online only to discover…

I got paid nearly the same for my TWO weeks of work as I did on my last check for ONE week of work (in full honesty, this check was about $80 more than last time’s check…but for a full extra WEEK of work!!!)

My jaw dropped when I saw the deposit.

IMMEDIATELY I logged into my school account to view my paycheck and find out what happened.

And, as it turns out, it’s a combination of things.

First, I hadn’t elected my benefits yet in time to have them withdrawn from my last check. The only withholding it contained was the mandatory 401(a) contribution and my taxes. In contrast, this check had OVER A THOUSAND DOLLARS of deductions (not even including taxes)!!! Ouch! I elected for a LOT of things to be withheld, including: my mandatory 7% 401(a) contribution plus an additional contribution to bring me up to 10% withheld; all our medical, dental, and vision insurances, taxes, and the BIG one is the FSA for dependent child care to the tune of $500/paycheck. That one will serve me in the long-run because it allows me to pay for childcare with pre-tax money. But it still hurts to have that all added up to be over half my paycheck!!! (also, side note: the max I can contribute to the FSA is $5,000/year. So this level of withholding allows me to use $5,000 pre-tax toward childcare in 2015, then I’ll start over again in 2016. Once I hit the $5,000 max limit these withholdings will disappear and I’ll have to pay remaining childcare costs with after-tax money)

Only…those deductions shouldn’t equate to half my paycheck!

After a more careful inspection of my paycheck I realized I’m getting paid the wrong amount!!!

I’d been hired at ($X) over a 9-month contract. That way I can either take summers off or, if there’s additional work, I can get paid extra to work over the summer (essentially securing a 25% “raise” by working over the summer). When I was hired the business manager said that most faculty members prefer to have their pay spread over a full 12 months so they don’t go without pay over the summer. She could show me how to do that. I said thanks, but never pursued it. In my own mind, I’d rather get my money up front within the 9 months. Hubs still gets paid over summer, we could set up some type of “savings” to set aside some money for summer, or I could just hustle and try to teach over the summer for additional income. But, no, I was not a huge fan of just letting them keep my money and divvy it up over 12 months. I want as much as I can get now, thank you very much.

So when I calculated what was going on it was easy to see. Apparently I’d somehow been opted into the 12-month pay cycle instead of getting paid over 9 months as I’d intended. That essentially makes my income drop 25% (since it’s being spread over an additional 3 months).

Soooo, what would you do?

My knee-jerk reaction is to go to the business office and ask them to correct it. I want to get paid over 9 months, not 12. But are there any great reasons to keep my pay over 12 months? Anything I’m overlooking?

One additional piece of information is that if I opt for 9 months of pay, then I get double-dinged for insurance payments in the Spring semester (in order to cover the unpaid summer months). If I stick with the 12-month cycle then the payments stay the same year-round.

Thoughts?