Is now the best time to be contributing to your company’s retirement plan?
The best return on your investment is when the company matches your contribution.
Many companies are not offering a match right now. They have decided to pause matches so they have more money to pay overhead.
The general rule of thumb is to only invest an amount equal to the maximum match. This gives you an immediate return on your investment.
Remember, once you put money into any retirement vehicle the government takes over and tells you when you can withdraw the funds, how much you can (or have to) withdraw and they will penalize you if you do not follow their rules.
Now, that is NOT to say that you STOP saving for retirement.
Just like anyone who does not have access to a retirement fund with an employer match, keep saving your 10% and investing it in what YOU want to invest in.
(as a reminder, if you are truly unable to put 10% of your after-tax income toward “future you”, make sure you are putting something into each of your 5 buckets- savings, investing, play, education, giving- even if it is only $1 per pay period)
You can invest in stocks, bonds, index funds, mutual, funds, rental real estate, land, a start up, annuities, bitcoin, or anything else you could reasonably expect to appreciate (go up in value) in the upcoming years.
And, just like your 401(K), these investments will have varying degrees of risk and reward.
But, the big difference is that you are in charge.
Yes, you pay taxes on your revenue now.
But, you will have a lower tax rate when you sell the asset in your golden years.
And if you need it sooner, you will not be penalized for doing what you want with YOUR money.