Saturday, June 5, 2010

Temporarily Stopping 401(k)?

I have been reading online the many ways people try to save money. I am trying to get some stuff paid down really quickly and looking at alternative ways to get that accomplished.

I have seen mentioned several times online is temporarily stopping 401(k) contributions and using that money to speed up paying off items.

I am seriously thinking about it. Have any of you out there done this?

1 comment:

Kelly@TearingUpHouses said...

I think it depends on what kind of debt you owe, how much you normally contribute to your 401k and what other kinds of retirement plans you have.

I never planned on using 401k's or IRA's as my primary means of retirement income, mostly because I'm skeptical of how the tax laws could easily change as I age.

Therefore, I've invested measily into my IRA's over the last few years, but invested heavily in real estate. My husband, however, has been maxing out his (company matched) 401k for some time now. So we figure it evens us out a bit. Plus, we also throw as much as we can into an online investment account. We stopped his contribution for a few months last year after being unexpectedly relocated right after our wedding so that we could buy another house.

I guess my point is, that you should be wary of stopping it all together if you are participating in no other investment vehicles. Perhaps you could lower your contribution and open up an Etrade account or something that is comparably liquid? That way you can take the money that you make from the investment and split it between your debt and your 401k contribution.

Kelly