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

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[quote=Anonymous]Contribute. You are in a high tax bracket. Even if you don't get the employer max, because the contributions to a 401K are pre-tax, you have immediately earned whatever you would have paid in taxes on that money. All compounding will be on top of what amount, so you'll have compounding on the money you would have paid in taxes. At what I am guessing your income is, you should both be contributing the maximum you can each year to lower your taxes. You're already late to start saving for retirement but if you contribute the maximum each year you should be fine.

And, don't play it too "safe" on investments. There is nothing safe about having money in a money market account or something else that has almost no chance to earn much. I'm assuming you have 20 to 30 years before you need that retirement money. Put it in something that will grow. I got a late start on retirement also and I did 75 percent stocks, 25 percent bonds. I weathered 2007/2008 well. My net worth went down. I kept contributing, The market recovered and it went back up plus I had all the stocks I had bought at bargain basement prices while the market was low. Don't forget that stock funds generally pay dividends on top of any increase in value and that generates additional compounding and investment.[/quote]

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