Should You Stop Contributing To Your Retirement Fund?
It’s a situation that many baby boomers have found themselves in over the past few years – their budgets have been shrinking, while their retirement savings haven’t blossomed as much. Perhaps your employer decided to stop contributing to your 401(k) retirement fund, or the sluggish market hasn’t done much to boost your savings and investments. Whatever the case may be, your shrinking budget might be tempting you to stop contributions to your retirement savings for a couple of years. After all, what harm can be done by putting your retirement plans on hold for a small amount of time?
Actually, it’s one of the worst financial moves that you can make. Despite the credit crunch’s effect on Wall Street – and the losses that many future retirees have experienced – financial experts are encouraging baby boomers to regard their contributions to their retirement savings as essential as those mortgage payments. While contributions may seem like a quick fix for your budgeting woes, you’re actually doing your future retirement a major disservice.
So why is that?
The answer is simple: the money that you contribute now can blossom into a major nest egg by the time you reach your retirement age – and if you stop contributing, even for just two years, you could lose out on the potential of thousands of dollars. Additionally, if your employer still contributes to your 401(k) retirement fund, it’s like getting free money; why ever would you want to stop getting that?
If you’re tempted to stop making contributions in order to tackle those mounting credit card bills or any other toxic debt, remember that this will take a considerable amount of time; in fact, it can take several years in order to pay off major debt. Sure, you’ll be debt-free by the time you reach your retirement age – but you’ll miss out on so much money if you stop contributions to your retirement savings that you won’t have the financial means to enjoy your debt-free life!
It can be hard to prioritize for the future, but when it comes to your retirement, don’t even consider cutting back contributions. Your retirement fund is just as important as those mortgage payments – so treat it that way!
For more information on smart retirement planning, visit www.kenhimmler.com, the IRA and 401(k) experts!
Authored by Kenneth Himmler, Sr.