Is It Ever Ok to Pause Retirement Contributions? - 11

Action Item: Open up your 401(k) account and confirm you're getting the full employer match. If you're not, adjust your contribution this week to capture that free money.SummaryIn this episode, I tackle the question most financial experts won't touch: Is it ever okay to pause your retirement contributions? I share how my wife and I partially paused our contributions to save for our adoption, and why we made sure it was strategic rather than permanent. I walk through research showing what happens when you pause versus stay consistent through market downturns, including case studies from 2000, 2008, 2020, and 2022 that prove the investor who keeps contributing ends up nearly $200,000 ahead. Then I share four mini case studies: Sarah who paused strategically to pay off $8,000 in credit card debt, Marcus who never paused and retired at 50, Jason who paused for the AI bubble and never restarted, and Alicia who's being squeezed by both lifestyle inflation and real inflation. Pausing might be okay in specific emergencies, but stopping permanently will cost you decades of compound growth and employer match money you'll never get back.Resources & Links MentionedI'm a Financial Expert: Here's Why I Paused My 401(k) Contributions To Prepare for a Recession: https://www.nasdaq.com/articles/im-a-financial-expert:-heres-why-i-paused-my-401k-contributions-to-prepare-for-a-recession4 Signs You May Need to Pause Your 401(k) Contributions (The Motley Fool): https://www.fool.com/investing/2020/04/12/4-signs-you-may-need-to-pause-your-401k-contributi.aspxHow to Maximize Your 401(k) Employer Match (Ameritas): https://www.ameritas.com/insights/how-to-maximize-your-401k-employer-match/Why You Shouldn't Hit Pause on Your 401(k) (Morningstar): https://www.morningstar.com/markets/should-you-hit-pause-401k-thats-losing-moneyPay Down Debt vs. Invest: How to Choose (Fidelity): https://www.fool.com/investing/2020/04/12/4-signs-you-may-need-to-pause-your-401k-contributi.aspxTimestamps[01:30] My story: How we partially paused retirement contributions to save for adoption[10:11] The $200,000 question: Case studies from four major market downturns[17:44] Case studies comparing 2000, 2008, 2020, and 2022 market crashes[21:47] The 6% rule: When to pay off debt before investing[24:00] Sarah's story: The strategic pauser who paid off $8,000 in 8 months[26:41] Marcus's story: Never paused, retired at 50[30:40] Jason's story: Paused for the AI bubble and never restarted[33:13] Alicia's dilemma: Squeezed by lifestyle inflation and real inflationEmail me at [email protected] may earn affiliate commissions