Money in, money out · Module 3 of 10
The size of a life after work
How much of your income to keep for later in life, and why your working years are the easiest time to build it.
Key terms in The size of a life after work
- Defined contribution plan
A defined contribution plan is a retirement plan in which each participant has an individual account. The eventual benefit depends on how much goes in and how the investments perform, so the investment risk rests on the participant. In the United States, 401(k) plans and profit-sharing plans are the best-known examples.
Source: Internal Revenue Service, Types of retirement plan benefits
- Elective deferral
An elective deferral is a portion of pay that an employee chooses to direct into a workplace retirement plan instead of receiving it as wages. In the United States such amounts are generally left out of taxable income, except designated Roth contributions. The tax code caps the total that can be deferred in a year.
Source: Internal Revenue Service, Retirement plans definitions
- 403(b) plan
A 403(b) plan, also called a tax-sheltered annuity plan, is a United States retirement plan for employees of public schools and certain tax-exempt organizations. It is funded by salary reductions, employer contributions, or both. It plays a role comparable to the 401(k) plan found in private-sector employment.
Source: Internal Revenue Service, Retirement plans definitions
Every term on Lever is in the money glossary.
About this module
The size of a life after work is part of Money in, money out, one of 15 subjects in Lever. It’s a short run of 5 lessons, about 13 minutes in all, so you can finish it in one sitting.
Every lesson takes one idea at a time. You read it with the math worked out step by step, answer a question that puts it to use, then see why the right answer is right and why the others aren’t.
It’s for anyone who was never taught this, and you don’t need to know anything first. Every lesson is free. Lever works out what you already know, so you can start here or let your path bring you to it.
More in Money in, money out
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1
What lands in your account
Read your payslip line by line and see where the gap between your salary and your paycheck goes.
5 lessons -
2
Your floor and your slack
Work out the least you need each month, the wiggle room above it, and what to do in a tight month.
13 lessons -
4
The pension that's already being built for you
What the pension deductions on your payslip are buying you, and what changes if you claim early or keep working.
5 lessons -
5
The costs retirement doesn't warn you about
The retirement costs people forget: relying on one income, what a partner is left with, and health costs that rise later.
5 lessons -
6
When there is no wage
Managing money without a regular paycheck: cash income, gig work, months with nothing coming in, and making savings last.
7 lessons -
7
When the plan stops matching the month
What to do when your budget stops matching real life, including when it’s the budget that needs to change.
6 lessons -
8
Tracking without obsessing
A simple tracking habit you’ll keep, a quick monthly review, and how to stop a raise from quietly disappearing.
6 lessons -
9
Everything you own, minus everything you owe
Your net worth: everything you own minus everything you owe, and why watching it over the years tells you so much.
6 lessons -
10
When the money itself shrinks
How to protect your money when prices rise fast: what to buy ahead, and what inflation does to your debts and your pay.
5 lessons
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It’s part of Money in, money out. Lever will bring it to you when you’re ready, or you can go straight there.