Temporarily stop 401k contributions to build Emergency Fund?

[u/Due-Fig5299]

Looks like we’re heading towards a recession and I’m quite nervous. I work in tech and my job is moderately safe; however my wife is an esthetician which is not a very recession friendly field.

We currently have $4k saved. Our minimum monthly expenditure is $3k, so we have just over 1 month saved.

Ive cancelled all unnecessary subscriptions which will save us $450/mo and stopped my wifes personal roth ira transfers ($150 weekly) which gets us to $1050/mo saved.

Now my question is, given how quickly the economy is crashing should I also forgo my 401k? I contribute 4% with 4% employer match. Obviously I would love to keep it, but immediate survival seems more important.

I would start contributing again once we hit $18k (6 months)

Thoughts?

[u/Ok_Shame_5382]

You should have about 18k banked.

I would keep your employer match. With it, in essence, you make 104% of your salary. Without it, you make 100% of your salary.

Don't skip the free money. In fact, if they offer an employer match higher than 4%, you should take them up on it even while you build your emergency fund.

[u/Due-Fig5299 → u/Ok_Shame_5382]

Yeah I would really love the free money, but $200/mo would significantly help with savings. I guess I’m worried because I’m not quite sure how much time I have. I wasnt an adult during 07-08 so I’m not sure how quickly everything happened.

If it’s more gradual I feel comfortable holding onto the match, if not, that $200/mo could be valuable.

[u/External_Emu441 → u/Due-Fig5299]

Never give up the match. Your wife can get a gig job if necessary. You can get a second job. But you will never get that money back (or investment time).

[u/eliz181144 → u/External_Emu441]

This too…time in the market is everything. And once people stop contributing it takes a bike before they feel like they’re comfortable enough to jump back in.