With the market so volatile, does it still make sense to contribute to a 401K?
Answers | 5
The other added benefit (hopefully) is employer contributions you may receive. This is "free" money that you should never turn down.
Here's to continued success in your financial plans.
If your time horizon is within the next few years, then I would argue against what everyone else has said. If you are 62 and lose 30%, 40%, 50% or God forbid, more of your 401(k) balance (as my mother did in 2008-2009), you simply won't be able to retire, and you won't have enough TIME to recuperate your losses without taking on much higher risk. The date you choose as your retirement date could have a devastating impact on your "Golden Years."
History proves that the market corrects itself about every 7 to 8 years...how long has it been since the last crash? Something to think about...
Research has shown that it is imperative to the longevity of your retirement plan not to incur losses just prior to or during the initial phase of your retirement, also known as the "Critical Phase." Consult with a Retirement Income Specialist for strategies to avoid these and other retirement pitfalls.
I'd be happy to answer any questions you might have...just reach out.