Workplace Retirement Plans and Canada Geese
In this edition of the Flying Point Update, we’re going to talk about the never-ending fall to-do list, expand on the last issue with a discussion about retirement accounts through your job, and learn about Canada geese. And yes, it’s Canada geese, not Canadian geese. Ask a birder. I was surprised to learn that.
Top of Mind
Tax season is over for real this time. The October 15th deadline has come and gone, the extension pile is empty, and I’m starting to remember what my inbox looks like when it isn’t on fire.
Fall, meanwhile, showed up the way it does in Maine, which is all at once. The leaves along our road are at or near peak, the mornings have a bite to them, and it’s dark before anyone has really decided what to do about dinner. It’s beautiful. I’d like to enjoy it. But there’s a low hum in the background, and it’s the list…
The list lives in my head, in a notes app, and on at least two sticky notes that don’t agree with each other. At home, the firewood needs stacking, the yard needs a final cleanup, the hoses need to come in, the storm windows need to go up, and the small broken window needs to finally get fixed. On the business side, there’s a stack of things I’ve been meaning to get ahead of before the year-end rush: software renewals, a few meetings to schedule, the website updates that have been “almost done” since spring.
None of it is hard. Most items take an hour. What gets me is the volume, and the fact that they all share the same deadline: the first hard freeze or real snowstorm, which nobody announces in advance. So they sit in the background, taking up room while I’m doing other things. Earlier this week I caught myself halfway through a bedtime story, wondering exactly where in the barn I want to put the stack of green firewood sitting in my driveway. I’ve got a complicated first-in, first-out system to age green wood while working nicely seasoned older wood through our wood stoves.
I used to think the trick was to finish the list. I’ve since noticed that every time I cross something off, something new goes on. Net progress is hard to measure. For now, the leaves are great, and I’m going to enjoy the fall.
Worth Knowing
Last issue, in Retirement Accounts and Woodchucks, we sorted retirement accounts into three buckets based on who set up the account. This week we start with bucket one: accounts through your job. That’s the 401(k), 403(b), 457(b), and TSP, along with the SIMPLE IRA or SEP-IRA if you work for a small employer that offers one. I’ll say “401(k)” for short, but most of what follows applies across the group. (SIMPLE IRAs have lower limits, so check yours.) I realize that some readers are business owners and also employees. For the purposes of this post, we’re covering retirement accounts from the perspective of a W-2 employee.
Let’s start with the simple concept that these retirement accounts are set up through your employer and are entirely separate from any IRA or Roth IRA accounts that you may also have. Each has its own contribution limit, so money going into your 401(k) doesn’t use up any of your IRA room. That said, being covered by a retirement plan at work can affect whether a traditional IRA contribution is deductible.
Here’s how it works. You choose a dollar amount or percentage, your employer takes it out of each paycheck, and it goes to the plan’s provider. You then pick how it’s invested from the menu of funds the plan offers. Withdrawing before age 59½ generally triggers taxes and a 10% penalty. Note that 457(b) plans have different rules. If your plan offers both, you also choose traditional or Roth. We’ll run the traditional versus Roth math in a future edition. For now, just know that traditional means a tax break today (your W-2 wages go down, though Social Security and Medicare tax still apply) and taxable withdrawals later, while Roth means no tax break today but qualified withdrawals that are tax-free later.
For 2026, you can put up to $24,500 of your own pay into one of these plans. Your employer’s match is on top of that and doesn’t count against it. Plenty of people never get close to the limit, and that’s fine. The first number to know is the one your employer is offering you. At a minimum, try to contribute enough to get the full match, since it’s part of your compensation package.
Match formulas vary, and your plan’s summary or your HR contact will have yours. As an example, say your employer matches 50 cents on the dollar, up to 6% of pay, and you earn $90,000. If you contribute 6%, that’s $5,400, and your employer adds $2,700. If you contribute 3%, that’s $2,700, and your employer adds $1,350. The extra $2,700 you put in earns another $1,350, which is a 50% return on day one, before any investment growth. That’s hard to find anywhere else, and it’s worth running the numbers on your own plan. While you’re at it, ask whether the match is vested. Your own contributions are always yours, but some employers require a few years of service before the match is fully yours if you leave.
Because the money comes out of your paycheck, the practical deadline is your last paycheck of the year, not December 31st itself. To see where you stand, look at the year-to-date retirement line on your latest pay stub. Say you want to reach the $24,500 limit, you’ve contributed $18,000 so far, and you have six paychecks left. That’s $6,500 divided by six, or about $1,083 per paycheck. Payroll changes can take a pay cycle or two to kick in, so it’s better to make them in the next couple of weeks than on December 20th.
One catch before you front-load anything: some plans calculate the match paycheck by paycheck. If you hit the limit early and your contributions stop, you may miss match dollars in the remaining paychecks, unless your plan has a “true-up” that makes up the difference. Check yours first.
If you’re 50 or older, your plan allows extra “catch-up” contributions on top of the regular limit, and the amount is higher still for ages 60 through 63. Those numbers are easy to look up. What’s harder to find is a new 2026 rule: if you earned more than $150,000 in Social Security wages from your employer in 2025, your catch-up contributions have to be made as Roth. (If your plan doesn’t offer a Roth option, catch-up contributions aren’t available to you at all.)
I’ll spare you a lengthy soapbox session, but our retirement system is administratively complicated, to put it mildly. Your plan’s summary plan description is the final word on how yours works, so it’s worth keeping handy.
Mark Your Calendar
Thursday, December 31st: Last day for 401(k) and other workplace plan contributions through payroll. In practice, that means your last 2026 paycheck, so make any changes sooner rather than later. Also the deadline for Roth conversions, and for required minimum distributions if you’re already taking them.
Friday, January 15th, 2027: Q4 2026 estimated tax payments are due.
Another quiet stretch on the calendar.
Maine Wildlife Facts
Chasing Canada geese is a team favorite here at Flying Point Advisors, and fall has been good for it. The geese hold their ground until the last possible second, then leave in a huff, honking their objections the whole way. Our naturalists consider this a fair trade.
The V formation is the part everyone knows. It’s thought to cut wind resistance and help the flock keep track of one another, and the lead spot, which is the hardest, rotates among the experienced birds. Young geese learn the route by following their parents.
Not every goose we see is on its way somewhere. Maine’s geese are a mix of Arctic migrants and local breeders, and the resident population has been growing since the state began restoring it. Some of the geese overhead this time of year are migrants from farther north, and those that nest in northern Canada usually reach their wintering grounds by late October. In places where food is easy and the water doesn’t freeze, some geese skip migration altogether, which may explain why the ones in the field never seem to be in a hurry.
One note for fellow chasers: nesting geese can be aggressive about defending their nests and goslings, so we save the chasing for fall. No chasing goslings.
Our guess is that the geese flying over the house right now are on their way somewhere, and the ones in the field have already arrived. We’ll keep chasing the second group.
These Maine wildlife facts have been brought to you by Will (8), Frank (4), and Catherine (2), Flying Point Advisors’ on-staff naturalists.
Questions about any of this? Just reach out - I read every email and love hearing from you.
Thanks for reading. You’ll hear from me again in about two or three weeks. Have a nice weekend.
-Mike
Disclaimer
The Flying Point Update is provided for general educational and informational purposes only. The content in this newsletter reflects my thoughts and observations on tax, accounting, and financial planning topics, but should not be considered personalized tax, accounting, or investment advice for your specific situation.
Tax laws are complex and change frequently. The information presented here is based on current tax law as of the publication date and represents general concepts that may not apply to your circumstances. Every individual and business has unique factors that affect their optimal tax and financial planning strategies.
Before making any financial decisions or implementing any tax strategies discussed in this newsletter, please consult with a qualified tax professional, CPA, or financial advisor who can evaluate your specific situation. If you’d like to discuss how any of these topics might apply to your circumstances, I’m always happy to chat.