A Reddit user has chosen to halt her 401(k) contributions temporarily in order to boost her emergency fund from $65,000 to $80,000, citing that the current amount only covers 10 months of bare-bones expenses. Her husband continues to contribute to his 401(k) due to an 8% employer match, which she doesn't receive. Experts caution that while emergency savings are important, delaying retirement contributions can have significant long-term costs. Consulting a financial advisor might provide valuable insights into balancing both priorities.
The Reddit poster's decision to pause 401(k) contributions reflects the common dilemma between prioritizing immediate financial security and long-term retirement savings.
The advice suggests that while it's crucial to have an emergency fund, delaying retirement savings could incur long-term financial costs.
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