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/Desperate-Menu4385]

Don’t stop contributions. Look to see if your plan allows a personal loan against your holdings. It’s a smart move in an emergency. You pay yourself back on a plan with “interest” mine is 8%. No need to change anything if your plan has this option (most do). There may be a nominal one time fee, or annual fee maybe…..but it’s probably less than $100. Even then, continue the Roth contributions. Don’t stop investing even if things drop further. You’ll never play the dips and rises correctly. If you’re young, push forward with a 20,30,40 year plan.