Comments on: Should You Forgo A Match From a 401(k) In Order to Start an Emergency Fund? http://www.moneyrelationship.com/retirement/should-you-forego-a-match-from-a-401k-in-order-to-start-an-emergency-fund/ Eliminate Debt, Enjoy Life Wed, 08 Feb 2012 06:34:04 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Weekly Roundup – Super Bowl Edition | Stupid Centshttp://www.moneyrelationship.com/retirement/should-you-forego-a-match-from-a-401k-in-order-to-start-an-emergency-fund/#comment-4654 Weekly Roundup – Super Bowl Edition | Stupid Cents Tue, 22 Mar 2011 14:24:21 +0000 http://www.moneyrelationship.com/?p=629#comment-4654 [...] Adam at Your Money Relationship responds to a readers question regarding whether they should stop 401k contributions and focus on building an emergency fund.  I think it’s important to make sure you at least contribute enough for a company match.  If you do forgo contributing a 401k, opening a rIRA would allow the flexibility of contributions while building an emergency fund. [...] [...] Adam at Your Money Relationship responds to a readers question regarding whether they should stop 401k contributions and focus on building an emergency fund.  I think it’s important to make sure you at least contribute enough for a company match.  If you do forgo contributing a 401k, opening a rIRA would allow the flexibility of contributions while building an emergency fund. [...]

]]> By: StupidCents » Weekly Roundup - Super Bowl Editionhttp://www.moneyrelationship.com/retirement/should-you-forego-a-match-from-a-401k-in-order-to-start-an-emergency-fund/#comment-649 StupidCents » Weekly Roundup - Super Bowl Edition Sat, 31 Jan 2009 18:02:15 +0000 http://www.moneyrelationship.com/?p=629#comment-649 [...] Adam at Your Money Relationship responds to a readers question regarding whether they should stop 401k contributions and focus on building an emergency fund.  I think it’s important to make sure you at least contribute enough for a company match.  If you do forgo contributing a 401k, opening a rIRA would allow the flexibility of contributions while building an emergency fund. [...] [...] Adam at Your Money Relationship responds to a readers question regarding whether they should stop 401k contributions and focus on building an emergency fund.  I think it’s important to make sure you at least contribute enough for a company match.  If you do forgo contributing a 401k, opening a rIRA would allow the flexibility of contributions while building an emergency fund. [...]

]]> By: Dustyhttp://www.moneyrelationship.com/retirement/should-you-forego-a-match-from-a-401k-in-order-to-start-an-emergency-fund/#comment-644 Dusty Sat, 31 Jan 2009 03:45:37 +0000 http://www.moneyrelationship.com/?p=629#comment-644 In my situation, having an emergency fund would be the best decision. Having a fully funded emergency fund makes my wife feel safe and secure. She is able to confidently raise our son, buy healthy foods and rest securely knowing that should anything happen, we would be able to ride out the storm. Passing up the free money may not make financial sense, but it could make emotional sense (which is not always a bad thing). In my situation, having an emergency fund would be the best decision. Having a fully funded emergency fund makes my wife feel safe and secure. She is able to confidently raise our son, buy healthy foods and rest securely knowing that should anything happen, we would be able to ride out the storm.

Passing up the free money may not make financial sense, but it could make emotional sense (which is not always a bad thing).

]]> By: Emergency Funds Make Your Life Better! (Or At Least More Stress Free) | Bible Money Mattershttp://www.moneyrelationship.com/retirement/should-you-forego-a-match-from-a-401k-in-order-to-start-an-emergency-fund/#comment-633 Emergency Funds Make Your Life Better! (Or At Least More Stress Free) | Bible Money Matters Thu, 29 Jan 2009 16:21:55 +0000 http://www.moneyrelationship.com/?p=629#comment-633 [...] Should You Forgo A Company 401k Match To Start An Emergency Fund? (my answer? depends.) [...] [...] Should You Forgo A Company 401k Match To Start An Emergency Fund? (my answer? depends.) [...]

]]> By: Matt @ StupidCentshttp://www.moneyrelationship.com/retirement/should-you-forego-a-match-from-a-401k-in-order-to-start-an-emergency-fund/#comment-632 Matt @ StupidCents Thu, 29 Jan 2009 15:26:31 +0000 http://www.moneyrelationship.com/?p=629#comment-632 Michael is right on...if the match won't be vested prior to you leaving your employer (or feel a layoff was coming) then that is probably the only time I would not contribute to your 401k. Luckily, my wife and I have company sponsored 401k's that do not have a vesting period, so there is no hesitation to contribute to get the max company match. Instead, I would recommend investigation a self-directed rIRA which allows you the flexibility of contributing to retirement while building an emergency fund. Stupidly Yours, Matt Michael is right on…if the match won’t be vested prior to you leaving your employer (or feel a layoff was coming) then that is probably the only time I would not contribute to your 401k.

Luckily, my wife and I have company sponsored 401k’s that do not have a vesting period, so there is no hesitation to contribute to get the max company match.

Instead, I would recommend investigation a self-directed rIRA which allows you the flexibility of contributing to retirement while building an emergency fund.

Stupidly Yours,

Matt

]]> By: nivhttp://www.moneyrelationship.com/retirement/should-you-forego-a-match-from-a-401k-in-order-to-start-an-emergency-fund/#comment-631 niv Thu, 29 Jan 2009 10:46:56 +0000 http://www.moneyrelationship.com/?p=629#comment-631 Even if you get 50 cents for every dollar, that is still a great savings account. Even if you get 50 cents for every dollar, that is still a great savings account.

]]> By: Adamhttp://www.moneyrelationship.com/retirement/should-you-forego-a-match-from-a-401k-in-order-to-start-an-emergency-fund/#comment-629 Adam Thu, 29 Jan 2009 04:22:49 +0000 http://www.moneyrelationship.com/?p=629#comment-629 @Ken - Dave Ramsey? Is that you? How did you find my site? @Ken – Dave Ramsey? Is that you? How did you find my site?

]]> By: Kenhttp://www.moneyrelationship.com/retirement/should-you-forego-a-match-from-a-401k-in-order-to-start-an-emergency-fund/#comment-627 Ken Thu, 29 Jan 2009 03:31:20 +0000 http://www.moneyrelationship.com/?p=629#comment-627 I would suspend matching 401K investments until you get a $1000 emergency fund. It makes no sense to contribute to retirement when a washer repair would cause you to go to your VISA for a bailout. Even though your leaving free money behind, murphy will visit you with an unexpected expense. Once you get the 1000 in a savings account contact your emplyer and begin matching again. I would suspend matching 401K investments until you get a $1000 emergency fund. It makes no sense to contribute to retirement when a washer repair would cause you to go to your VISA for a bailout. Even though your leaving free money behind, murphy will visit you with an unexpected expense. Once you get the 1000 in a savings account contact your emplyer and begin matching again.

]]> By: Petehttp://www.moneyrelationship.com/retirement/should-you-forego-a-match-from-a-401k-in-order-to-start-an-emergency-fund/#comment-626 Pete Wed, 28 Jan 2009 20:11:00 +0000 http://www.moneyrelationship.com/?p=629#comment-626 What Adam said. I'd keep getting the free money with 100% return unless I thought a layoff was imminent. Of course if you're not vested, that is another consideration - i may start building up that emergency fund then as well. In my current situation I'm building up my 6 months as fast as I can and only after that is done I'll start adding to my 401k again. (i've got no match.) What Adam said. I’d keep getting the free money with 100% return unless I thought a layoff was imminent. Of course if you’re not vested, that is another consideration – i may start building up that emergency fund then as well.

In my current situation I’m building up my 6 months as fast as I can and only after that is done I’ll start adding to my 401k again. (i’ve got no match.)

]]> By: Adamhttp://www.moneyrelationship.com/retirement/should-you-forego-a-match-from-a-401k-in-order-to-start-an-emergency-fund/#comment-624 Adam Wed, 28 Jan 2009 14:51:20 +0000 http://www.moneyrelationship.com/?p=629#comment-624 @Mrs A - If you are laid off or quit your job, you can roll your old 401(k) into the new company's 401(k) or a traditional IRA. I would recommend rolling it into a traditional IRA as you will have more options for investments and less fees. @Michael - Great point on the vesting. There is no point in getting the company match if you are not going to see it for five years. Most companies are not that stringent but some may still be. If you think the company may not be around until you can get those funds then sure, save for the emergency fund. I think you are also getting at taking a 401(k) loan in your comment. I would rather see someone have an emergency fund set up outside of their 401(k). If you take out a loan, you will then be paying it back with after-tax money. You will also be taxed again when you take it out during retirement. A double wammy! Also, I would like to start a new saying, "Free Money is King"! @Miranda - Great comment! You hit the nail on the head there. Why not just cut back on some things to get that emergency fund started? Do you really need to eat out or have the premium TV package? Just cut back on some things to start the fund. It will still allow you to get the match! @Mrs A – If you are laid off or quit your job, you can roll your old 401(k) into the new company’s 401(k) or a traditional IRA. I would recommend rolling it into a traditional IRA as you will have more options for investments and less fees.

@Michael – Great point on the vesting. There is no point in getting the company match if you are not going to see it for five years. Most companies are not that stringent but some may still be. If you think the company may not be around until you can get those funds then sure, save for the emergency fund.

I think you are also getting at taking a 401(k) loan in your comment. I would rather see someone have an emergency fund set up outside of their 401(k). If you take out a loan, you will then be paying it back with after-tax money. You will also be taxed again when you take it out during retirement. A double wammy! Also, I would like to start a new saying, “Free Money is King”!

@Miranda – Great comment! You hit the nail on the head there. Why not just cut back on some things to get that emergency fund started? Do you really need to eat out or have the premium TV package? Just cut back on some things to start the fund. It will still allow you to get the match!

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