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Valendorf t1_iuii46w wrote

Are your other debts’ interest rates greater than your tax rate + expected roi? The thing I’d bring up is while the markets are down it’s the ideal time to pump as much money as you can into them. Think of it as the stocks being on sale.

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tanon14 t1_iuiinei wrote

I believe the rates are higher since most of the debt is Credit cards. I was wandering about the "sale" as well, but it is managed by the 401k company so I would think they would pump into it the same, regardless of what I contribute. (I am by far not advanced with investing lol)

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Ihaveamodel3 t1_iuii4xs wrote

FYI, you can change your 401k contributions anytime, not just at open enrollment.

What are your debts? What is your age? What is your total retirement savings as a percentage of your current income?

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tanon14 t1_iuiiw1c wrote

Was not aware I could change the contributions throughout the year. I am a married 38 year old and my spouse has over 200k in her account already. This actually makes me feel more comfortable doing this to just pay off things then revert everything back. Thanks!

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Mashtatoes t1_iuii518 wrote

What interest rate are your debts? If they’re credit cards or other high interest debt above 20%, and there’s no other realistic way for you to pay it off, this is fine. If it’s debt under 10% interest, definitely not.

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tanon14 t1_iuiievb wrote

Debts are mainly credit cards at rates above 10%. Been with my company 10 years as of Sept of next year. Thinking I have enough built up right now to do this.

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virtualchoirboy t1_iuiifgy wrote

"Hey, there's a great sale going on and there is a TON of stuff available that I'd normally buy and they're at dirt cheap prices too. Yeah, they might go down a bit lower so I might not get the best deal, but they're a pretty good deal right now. Instead, I'm going to spend my money on other stuff and wait until everything isn't on sale anymore."

At least, that's what I was thinking as I read your post...

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ScrewWorkn t1_iuiigre wrote

So you want to NOT buy stocks when they are low? Your plan is to wait until stocks go up and then start buying into the market?

Stopping contributing may make sense to pay down debt, but don't try to time the market.

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orlandocfi t1_iuiiiyc wrote

If you have a company match, at least contribute the amount necessary to get the match. I think it’s a good idea to tackle higher interest debt as a priority over investing at this time.

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trilliumsummer t1_iuij7r1 wrote

If there's a company match you should always contribute enough to get the full match unless you're in dire straights.

How confident are you that you will follow through with starting contributions when you pay off the debts and not have life style creep?

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Triscuitmeniscus t1_iuij9du wrote

With the market down it makes more sense to invest more, not less: buy low sell high and all that. Having said that, it really depends on the nature of your debt. If you have $20k in credit card debt at 19% then by all means pause your contributions and pay it off faster. But don't stop saving for retirement for something like a 4% auto loan, unless you're having trouble making payments.

And regardless, keep contributing enough to get any match you may qualify for.

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hereforsnackz t1_iuijas7 wrote

I do this often.pay off, save up etc. Then put it back.

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