3 Reasons to Not Contribute To Your Retirement Plan Just Yet

Most experts recommend that putting most if not all of your funds in a 401(k) plan can ensure a comfortable life after retirement.

Unfortunately, a 401(k) plan isn’t for everyone since everyone has different needs, goals and plans.

So, here are 3 reasons why you shouldn’t consider opening a company 401(k) plan yet:

#1: No emergency fund

Before you spend, save or do anything else, an emergency fund is most necessary. Whether it’s a job loss, a medical situation that you are grappling with or any other personal crisis, it will be necessary to have funds that will protect you and your family.

Get this type of fund in place first because you don’t want to withdraw money from your 401(k) plan as it will be a costly affair.

#2: Your employer does not match contributions

Most employers will match contributions made to your retirement account, and which according to a number of experts, is really free money. However, if this isn’t so in your situation, you might want to consider a traditional or Roth IRA instead.

#3: You’re neck deep in debt

While it might be a good idea to get your money to grow in an IRA account, this will be of no use if you’re neck deep in debt. So pay off your debts before you think of putting money away for retirement. Of course, if your company has an excellent 401(k) match, then a financial advisor might help you negotiate your way through it.