Need Some Advice

It has been drilled into me early on that you should not mess with your retirement savings. I have a 401k that I put 6% of my salary into. Well, as some of you know, my wife has been out of work since Feb and my salary alone barely makes ends meet. At the end of July I had $25 in mu account. And just at the end of this month I had $100 in my account. So every dollar counts these days.

So I was thinking about cutting my 401k contribution to the bare minimum of 1%. This would pump an extra $200 or so in to my monthly income.

On the other side of that, it means my tax return next year would be a lot smaller.

So I am a bit torn as to whether to take the extra money now since I am in need of money now or to hold out and hope that the wife gets a job soon and no unexpected expenses come our way.

The secret to building wealth is to use the time value of money. You will be much better off if you can keep a steady contribution. However, if you are in need of funds now, then cut back the contribution but bump it back up again as soon as you can afford it. If you get a raise each year, increase the percentage one or two percent. The more you save in early years, the better off you will be in your retirement.