Pending Recession-Filter: Should I reduce my 401k contribution?

Post date: 2022-06-21 01:40:46
Views: 9
YANM accounting/financial advisor, etc. The stock market taking a dive and talk of a pending recession has me wondering if I need to reconsider how much money I'm sending to my 401k. Like everyone else, I've seen massive losses in my 401k this year, to the tune of about 4 times what I've put in. I am *not* considering pulling money out, but I am wondering if it makes sense to lower what I'm putting in to a) keep from setting money on fire and b) have a little more emergency cash on hand. Is this a dumb idea?

Other relevant details - Currently contributing 12% with a 4% employer match, which puts me under the max contribution amount but not by a whole lot. I'm 43 and single with a solid job (knock on wood) and good salary. My 401k isn't where it should be for my age but given my earning potential I should be ok in the long run. I'm in decent shape financially otherwise - have a few months' expenses in savings and one consolidation loan that I should have paid off next year.

If I dropped my contribution rate to say 10%, that would give me an extra few hundred bucks or so a month that I would a) not lose and b) could pay down the loan faster or build up a bigger oh-crap fund with. My thought would be to return the rate to 12% or even 14% once things improve. I don't have a financial advisor or accountant, so I turn to you, MeFi. Thanks!
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