I haven't cut my contributions even though in the past week I've lost $400 in that account. I think you always want to stay in and buy low but I am not knowledgeable about the stock market to be honest just my own train of thought.
What's wrong with the economy? You should always put in monthly payments to your 401k no matter how the economy is.
Why do you care what the current market conditions are? You're not retiring for another 35-40 years. You should at least contribute up to the amount your company matches as it's free money.
Does your company match? Not investing is like throwing away part of your compensation if they match.
Do it at least up to the company contribution. My company matches up to 6% so I just have it come out of my paycheck pre-tax and have 12% of my income stashed away every paycheck. Free money baby!
If anything, you want to put more in during a bad economy. Unless of course you have a serious concern about your job safety and need to put some cash in savings. Always contribute the amount needed to max out your employer's match.
Just basically repeating what others have said: 1) if your company matches, put in at least that much, but be careful they don't only match up to a certain dollar amount (ex. 5%, up to $3,000). 2) even if things are going down I (my own personal opinion) think it's a good time to buy, because like Donny said, it's a long term investment and in the long run, it will almost certainly rise. 3) It's also helping save you money on your taxes Just to give an example, a few years back, right after the economy had taken a bad nosedive, I converted a former 401k into an IRA, and it ended up working. The way I see it, I bought low, and it's only going to go up in the long term (especially since I will be waiting 30+ years to take out the money). The only time I think you should not be contributing to a retirement plan is when you have other, higher interest (you're paying more interest than you're gaining on your retirement) bills you could be using the money for. However, if your company matches ALWAYS take advantage of that first. Pugs
Yes, I forgot that the matching is basically free money. I currently contribute 3% and my employer contributes 10%. 3% is the minimum to get the 10% contribution and I am already fully vested. I've been thinking of upping it to 5% lately just to keep adding more to the pot.
Think about it this way, do you wait until things are going up in price before you buy them? Or would you rather buy them when their on sale? Think of stocks as being on sale right now, sure they may go down in value in the short run, but that just means you can buy more of them and when they go back up (and they will), they'll be worth more to you. A 401K is a Long-term investment.
If you can, go the full 10%. Americans are the absolute worst at saving money because we spend more than any other country on things we Don't need. You should be putting away 10-15% of your income away for retirement. If you follow the Dave Ramsey way of thinking, you'd put 10% in your 401K (because thats what your company matches) and then another 5% in a mutual fund. this is assuming you already have 6months worth of expenses in a money-market fund as an emergency savings account..if not, take a few months to put that money in before you increase your 401K contributions. this way, if some emergency comes up, you can cover it with cash instead of using credit cards or taking money out of your 401K. I say money-market instead of regular savings account because money-market funds will usually pay back a higer interest rate than a regular savings account and you can usually access the money several times a month without a fee if you need to. But of course if this is your emergency fund, hopefully you'll only use it a couple of times a year at the most - for AC going out at home, or major car repair, CT Scans, any big-ticket emergencies. Good luck.
One way to think about this to expect your contribution to double every decade (this requires a 7% annual return which is very reasonable). The $15,000 invested this year will be $30,000 in 10 years, $60,000 in 20 years, $120,000 in 30 years, $240,000 in 40 years, etc.
this is the absolute truth. we wonder why this country is so bad at managing finances when all you have to do is look at yourself. people get into debt because they want to impress someone else. "need" a tv so you can watch "necessary" cable? buy 55 inch TV. need a car? get a loan for a new BMW. need a house? get a mortgage for a 5 bedroom home when there's only 3 in the family. i have friends who make twice as much as me who are constantly broke because they finance everything and can't figure out why. it took me awhile to realize it myself. it's a psychological change you have to make. spend less than you make. it's not that hard.
I'm not broke and I am considering upping my investment but not to the full 10%. I already have a combined 10% of my income going into a regular savings account and a checking account that gets 5.01% interest. I know how to save.
relax...i wasn't specifically speaking about you. it was directed more to the general public. i really didn't even pay attention to who DW was quoting.
