Keep contributing the max. Not close in your situation.
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I agree but if he wants to shift his 401k contributions to make his emergency fund bigger then that’s OK too. This is like shifting your asset allocation to bonds in a downswing – an indication that you were too heavy in stocks in the first place. If Tilted’s emergency fund is too small for his comfort zone then he should make it bigger. But he should keep it that big in good times too, just like the person who shifted to bonds in troubled times should keep that asset allocation when things become better.
In any case it’s pretty insignificant either way and he should do whatever gives him the most peace of mind.
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I dropped my 401k contributions to company match and will bring it back up if it looks like shit is stabilizing… in 3 months.
If you’re feeling an urge to reduce 401k contributions right now your emergency fund wasn’t big enough, your asset allocation was inappropriate, or both.
Being able to buy when stocks are on sale is a huge opportunity, it’s a terrible time to stop buying.
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Federal rent and mortgage holiday seems like the answer…
I generally agree with this. Another thing to be wary of if not all plans allow you to change your contribution rate frequently. Some allow monthly or quarterly, and possibly only annually. So you might be stuck at your lower savings rate for quite some time.
Yes. But, if his emergency fund turns out to not be big enough, should he increase the size of the emergency fund during the downturn once he realizes that? I think he should.
I agree with Riverman.
If you have 6 month emergency fund this is sufficient. I expect you are not also factoring in potential unemployment you would get into that 6 month timeline.
Now is a great time to be putting into your 401k. You are able to buy stocks for 30% less than you could 6 months ago.
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Lol @ all the childless people talking about how companies are going to mellow on WFH because all the work is still getting done. Companies are going to be forever burned on the entire concept because 50% of their workforce is trying to work full time while running a daycare center.
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I can change it daily.
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Going to defer to you guys on the retirement advice as in no way am I advising people what to do there. That being said if you don’t think the stock market is going lower from here i think you are crazy.
Barring stimulus much larger than we have seen so far(which probably will happen) basically all of hotels, airlines, non-grocery retail, oil and gas, restaurants/bars, cruise lines and on and on and on are all worth zero. The secondary effects of this on their suppliers and beyond are going to have a huge rippling effect through the economy. There will be a massive amount of bankruptcy, unemployment and economic chaos.
I expect an enormous decrease in the velocity of money and massive deleveraging as a result. That will result in everyone from the top down getting poorer. And we are just starting this process. It is very very unlikely we aren’t still in some stage of this crisis at this point next year.
The counter to that is if you are saving for retirement now is a good time to buy because it will ultimately recover and be much higher from here. I just dont know if that will be 5 years, 10 years or longer.
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There’s no downside to stopping contributions for a while unless there’s an employer match that might be suspended. Open a separate savings account on Ally or somewhere, park the money there, and then you can make up the contributions later in the year. The only way you wont be able to make up the contributions is if you get laid off, in which case you’ll prefer to have the cash.
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Verify this before making large financial decisions, but I believe the new stimulus bill allows 401k withdrawls without the 10% penalty. There may be fine print involved but if you’re opting to take cash instead of 401k contributions for increased liquidity that may not be necessary.
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To that end, BofA sees between 16 and 20 million job losses, which could send the unemployment rate, which stands at 3.5% as of February’s report, surging within a few months to 15.6%, which would by far outstrip the unemployment rate during the 2007-09 recession.
Feels like the 07-09 recession was longer ago than it really was. … So we went from recession to a booming stock market and now pandemic pandamonium and probably a worse recession, in about a decade. The thing is, I don’t know if this is even “unconventional” anymore.
You can also usually take out a loan against a 401k as long as still employed.
If not employed - you can convert it to an IRA - then take a short term loan out for up to 60 days with no penalty.
Most kids would be at daycare or school and that wouldn’t be a problem in normal times. Only an issue during the summer and even then young children would be at daycare and older ones can find shit to do on their own
I was born in 1969. My life was almost one continual recession until the mid-90s - punctuated only by a brief boom in the mid-80s, followed by a crash in 1987. I thought recession was the normal state of the economy.
But … we’re talking about the future when schools and offices are open again.
I’m still plowing cash into index funds and some other broad market shit and maxing my 401k. either everything turns around in 5, 10, 15 years and I make a killing or life as we know it will be so different/fucked that that who cares about money at that point 
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Keep maxing it. Keep in mind that if you lost your job in the next two months, you’d get UI+2400/mo and that applies to your mother and sister as well. I also think that’s likely to get extended.
Riverman is spot on in his replies as well.
Even if the penalty for early withdrawal was not waived, consider 90% of the money to put in to be what’s available to you in an emergency.
Last but not least, you’re probably in a stronger emergency position than like 70-90% of Americans. If we get to the point where you’ve burned through everything AND there isn’t additional legislation to help people, we’re so fucked it won’t matter.
Keep maxing it out, imo it’s clearly the right move.
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