Prior to starting internship and residency, I knew that I had a shortened time frame of 6 months in which to contribute to my 403(b)/401(k), since I would only start earning a salary around July 1 of that year. I also knew that residency would likely be the only time in my career that I would be able to contribute to a Roth IRA (other than the backdoor Roth IRA that I later learned about) and so I definitely wanted to max that out as well. The only problem with such lofty goals is where the money would come from.
In 2011, when I started residency, the annual contribution limit to my 403(b) was $16,500, and the Roth IRA contribution limit was $5,000. You have until the end of the calendar year to contribute to the 403(b), whereas you have until April 15 of the following year to contribute to the Roth IRA (e.g. you have until 4/15/18 to contribute to 2017's Roth IRA). I wanted to contribute as much to my 403(b) as possible in this short time, with a limited salary. My gross salary for the year was approximately $25k, and I wanted to put $16.5k into my 403(b). That left a gross income of $7.5k, or approximately $6k after tax to live off of for six months. How can one live off of $6k for 6 months with a rent of close $925 a month? Turns out, it is really freaking hard.
What follows is an extreme example. I would not recommend this, unless you have a great backup plan, which I had. I had the luxury of having supportive parents from a financial standpoint. They were willing to loan me money if necessary in order to allow me to achieve my goal of maxing my retirement account. After saving up 3 biweekly paychecks without any 403(b) deferrals, I started deferring the MAXIMUM amount allowed into my retirement account. My plan allowed 75% of salary deferral, after which my take-home salary was only $263.30 biweekly. I thought surviving on $131.65 per week would be REALLY hard, but it turns out being a busy intern makes you less likely to spend money. There were a lot of large crock pot meals eaten for many days, hot pockets, and take-home food from the hospital that kept me within my budget. What drained my savings was the rent. Before the end of December, I finally gave up and stopped contributing to my 403(b), not wanting to have to borrow money from my parents.
All said, I deferred a total of $11,751.75 out of $16,500 allowed to my 403(b) account. I am very proud to have done this. If I were to do it all over again, I would attempt to do more. Given my parents generosity, I should have borrowed money from them to max out the account. This account has had an annualized return of 9%, so it has definitely paid off!
What unusual tactics have you employed to contribute more to retirement? I'd love to hear about it in the comments below!