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401k question - should I reduce my contribution amount?
Posted on 5/6/22 at 11:24 am
Posted on 5/6/22 at 11:24 am
I'm 42 and the stock market sucks. Should I drastically reduce my 401k contributions now or anytime soon?
25
Posted on 5/6/22 at 11:26 am to Cole Beer
I mean that is a really complicated question that should not be simply answered with a yes/no without taking a full picture view.
That being said this is MT, and guessing you are quite a few years from retirement. So the knee-jerk answer is absolutely not.
You cant time the market
That being said this is MT, and guessing you are quite a few years from retirement. So the knee-jerk answer is absolutely not.
You cant time the market
Posted on 5/6/22 at 11:26 am to Cole Beer
Sure, wait for it to go back up, get more expensive and then start buying more (or less depending on how you look at it. )
This post was edited on 5/6/22 at 11:27 am
Posted on 5/6/22 at 11:27 am to Cole Beer
Keep it going. You're buying more shares now and the market will return.
Posted on 5/6/22 at 11:37 am to Cole Beer
This is when you increase your contributions
Posted on 5/6/22 at 11:38 am to Cole Beer
quote:
I'm 42 and the stock market sucks.
While true, you aren't going to be using this money for another 20ish years so the current downturn really isn't affecting you.
quote:
Should I drastically reduce my 401k contributions now or anytime soon?
I wouldn't but ultimately, it's up to you. I would expect the market to be higher in 20ish years so why wouldn't you want to get more in now, while its lower and have more capital appreciation?
Posted on 5/6/22 at 11:43 am to Cole Beer
Never reduce your long term investment baw. If anything kick it up a notch during these times
Posted on 5/6/22 at 11:48 am to Cole Beer
When are you planning to retire?
I just increased my contribution percentage
I just increased my contribution percentage
Posted on 5/6/22 at 11:52 am to Cole Beer
Go back and look at charts from almost every single sell off/recession/even the depression. Within two to three years the market fully recovered. If anything, buy more right now. You’re 42… you’ve got a lot of time.
Posted on 5/6/22 at 12:13 pm to Cole Beer
Annual contributions are use it or lose it proposition… I wouldn’t reduce. There’s nothing saying you can’t change your allocation a little bit if you’re nervous about the market. We are 14% off of all time highs after the biggest bull market in the history of the world.
Posted on 5/6/22 at 12:16 pm to Cole Beer
If you are contributing money now, you are buying things low with the "hope" it goes up. 
Posted on 5/6/22 at 12:36 pm to kywildcatfanone
quote:
If you are contributing money now, you are buying things low with the "hope" it goes up.
why wouldn't it
Source link
This post was edited on 5/6/22 at 12:51 pm
Posted on 5/6/22 at 12:45 pm to UltimaParadox
quote:
You cant time the market
Argument to be made for increasing contribution
Getting those cheap shares
Posted on 5/6/22 at 12:49 pm to iAmBatman
quote:
why wouldn't it
It's never guaranteed as world events are inherently unpredictable, but if we get into that situation we're all dead anyway
This post was edited on 5/6/22 at 12:50 pm
Posted on 5/6/22 at 1:08 pm to Cole Beer
If your 401 is way down, now may be the best time to move to a money market account and wait for it to come back up then jump back in.
I kid, I kid!
If anything, increase contributions now if you can afford it.
I kid, I kid!
If anything, increase contributions now if you can afford it.
Posted on 5/6/22 at 1:14 pm to Cole Beer
Are you spending money to enjoy your life now?
Guess what: You might not be able to enjoy shite in your 60’s after retirement if your health goes. And let’s say you are healthy in your 60’s: Will you still be able to do the same things as now from a physical standpoint? (Probably not)
Time and enjoying your healthy years are much more important than money.
My opinion only.
Guess what: You might not be able to enjoy shite in your 60’s after retirement if your health goes. And let’s say you are healthy in your 60’s: Will you still be able to do the same things as now from a physical standpoint? (Probably not)
Time and enjoying your healthy years are much more important than money.
My opinion only.
This post was edited on 5/6/22 at 1:15 pm
Posted on 5/6/22 at 1:14 pm to Cole Beer
quote:
I'm 42 and the stock market sucks. Should I drastically reduce my 401k contributions now or anytime soon?
Not unless you absolutely need the cash flow for an immediate requirement.
This is arguably the best time to fund your retirement.
Posted on 5/6/22 at 1:34 pm to Cole Beer
Does your company match? I wouldn’t reduce given your age and the years you have until retirement. If your company matches, you would throw away free money.
Posted on 5/6/22 at 3:28 pm to Cole Beer
quote:Unless you need the money, or want to put it towards a similar investment vehicle that has different benefits (like an HSA), then I wouldn’t recommend it, especially since you probably have 20+ years until retirement.
I'm 42 and the stock market sucks. Should I drastically reduce my 401k contributions now or anytime soon?
In addition, while the market could still go lower in the near term, valuations are quite reasonable at this time. So while the market has consistently performed well over the long-term, and there is nothing to indicate otherwise so the outlook is good even if valuations are high, it’s especially good when they are reasonable.
Finally, although I don’t think it’s technically Dollar Cost Averaging (DCA) to invest every pay period (which I suspect you do with your 401k), or at least throughout the year. That said, it’s functionally the same as DCA and provides the same benefits, specifically it offsets the impact of volatility. In other words, you get more shares when it’s cheaper and fewer when it’s more expensive.
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