The Consequences of Slashing Retirement Plan Contributions for Short-Term Gains
Why Reducing 401(k) Contributions Can Be Detrimental
Making life easier in the near term could make it harder in the long term. To contribute funds to a retirement plan, you generally have to give something up. That something could be a nicer car, a higher-end vacation, or more outings with friends.
Cutting Your Retirement Plan Contributions: A Risky Move
If you're truly struggling financially, then it makes sense to pump less money into your retirement account and focus on basic needs. However, slashing contributions for discretionary expenses may lead to financial insecurity later on.
Consider a Side Hustle as an Alternative Solution
Before reducing retirement savings, explore options for earning extra income through a side hustle to maintain your retirement fund growth while enjoying your current lifestyle.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.