Financial advisors will give you differing advice when it comes to your retirement contributions. Is it ever wise to put them on pause? Some say it is, some say you’d be doing your future self a huge disservice.
But let’s face it, life isn’t always perfect. There may come a time when paying for something else makes more financial sense than saving up for retirement. One thing’s for sure, you have to set up a plan!
How long will you pause contributions? Will you step up your game later? These are questions you have to answer before you make a decision.
Today we’ll talk about when and why it might be best to temporarily stop saving for retirement. Click through to find out more!
During a Health Crisis
There may be times when your insurance won’t be able to pay for a sudden medical crisis. When that happens, instead of dipping into your savings such as 401(k)s, stop your contributions.
You could put that sudden extra money in a savings account until you need it. Keep in mind that if you’ve managed to save more than necessary by using this method you can still reinvest the leftover funds into your retirement. For example, you can put the money in a traditional IRA. Then, once the crisis is gone, restart your 401(k) contributions.
The bottom line is that your health comes first and you shouldn’t avoid paying for medical bills in favor of saving for your retirement. Otherwise, if you ignore the issue due to financial problems, you might not even reach the golden years you’ve been dreaming of.