Does it make sense to start contributing to 401K this year if I think the market is about to correct

[Anonymous]

We have nothing saved for retirement and are 35. We have a high HHI but have been using it to pay down enormous student loans. We've made some good progress and are now thinking we should start putting some money towards retirement. Not sure if that makes sense though given how high the market is right now. We both think that there may be a significant drop this year. Should we just wait another year to start? Any advice appreciated. Thanks

[Anonymous]

Yes, because for small investors it's practically impossible to time the market. During the decades life of your 401k there will be dozens of corrections, but over time the value will always correct back to normal.

[Anonymous]

Well did you think there would be a significant drop last year? I hope your crystal ball is working.

[Anonymous]

If you have high HHI you need to be looking for as many tax advantages as you can. 401ks give you an immediate c 35% return due to tax bens. Plus the effect of any employer match. I'd start contributing as soon as you can. Select conservative investment options if you think the market is going to correct.

[Anonymous]

Contribute. And if you are 35 don't pick options that are too conservative. Does your 401K have a target retirement date fund? If you don't know much about investing those are good choices.

The market will go up and down. None of us have a crystal ball to predict what it is going to do next year. You will do better if you are in it. As long as you contribute every month you will contribute some money at higher prices and some at lower prices and over time you will make money.

[Anonymous]

Yes, don't try to time the market. It doesn't matter what happens in the next year, only what happens between when you buy and when you sell (in 30+years).

[Anonymous]

You can't time the market without inside information.

[Anonymous]

The amount you invest this year will not be a significant proportion of your retirement savings when you retire. if you invest 20K this year and the market falls 15 percent, so what? You will have another 20 or 30 years to save. The time you need to worry about the market crashing is in the few years before you retire, not in the years you start saving!

[Anonymous]

You WANT the market to go down while you're contributing, because your shares will cost less. If you don't need the money for 20 years, don't worry about the short term.

[Anonymous]

Contribute and I bet you are wrong about the market.

But, even if you were right, the correct answer is contribute. Look up dollar cost averaging.

[Anonymous]

Contribute and start ASAP. If you get an employer match, that's extra money right away. Also, the power of compounding works better the earlier you start. Pick a target retirement fund to begin if you want to keep it simple.

[Anonymous]

Anonymous wrote:We have nothing saved for retirement and are 35. We have a high HHI but have been using it to pay down enormous student loans. We've made some good progress and are now thinking we should start putting some money towards retirement. Not sure if that makes sense though given how high the market is right now. We both think that there may be a significant drop this year. Should we just wait another year to start? Any advice appreciated. Thanks

contribute to the extent you get a employer match. Pay off student loans very aggressively. Once loans are paid off, max out your 401K..

Contribute evenly over the 26 pay periods. This way if the market corrects you are benefiting from the lower prices that will follow. As everyone else suggests, you have a long time to invest and market ups and downs shouldn't matter as long as you are investing regularly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have nothing saved for retirement and are 35. We have a high HHI but have been using it to pay down enormous student loans. We've made some good progress and are now thinking we should start putting some money towards retirement. Not sure if that makes sense though given how high the market is right now. We both think that there may be a significant drop this year. Should we just wait another year to start? Any advice appreciated. Thanks

contribute to the extent you get a employer match. Pay off student loans very aggressively. Once loans are paid off, max out your 401K..

Contribute evenly over the 26 pay periods. This way if the market corrects you are benefiting from the lower prices that will follow. As everyone else suggests, you have a long time to invest and market ups and downs shouldn't matter as long as you are investing regularly.

Neither one of us has an employer match. We still owe 190K in student loans (started with about 430,000). Our highest interest rate is 3.5%, which is why we wondered if we should start contributing to our 401Ks. Should we just focus on paying the loans down until we have a lower balance?

[Anonymous]

How long will it take you to pay off the loans? I would probably start contributing 5% each if it's going to take more than two yeas to pay off the student loans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have nothing saved for retirement and are 35. We have a high HHI but have been using it to pay down enormous student loans. We've made some good progress and are now thinking we should start putting some money towards retirement. Not sure if that makes sense though given how high the market is right now. We both think that there may be a significant drop this year. Should we just wait another year to start? Any advice appreciated. Thanks

contribute to the extent you get a employer match. Pay off student loans very aggressively. Once loans are paid off, max out your 401K..

Contribute evenly over the 26 pay periods. This way if the market corrects you are benefiting from the lower prices that will follow. As everyone else suggests, you have a long time to invest and market ups and downs shouldn't matter as long as you are investing regularly.

Neither one of us has an employer match. We still owe 190K in student loans (started with about 430,000). Our highest interest rate is 3.5%, which is why we wondered if we should start contributing to our 401Ks. Should we just focus on paying the loans down until we have a lower balance?

Wow. With those student loans, what the hell do you do for a living?