PSA: I think the 'always max your 401k' advice is wrong for some people

For a long time, I put every spare dollar into my 401k because that's what all the finance blogs said to do. About a year ago, I realized my emergency fund was only $2,000 and I had zero cash for a house down payment. I changed my plan and now I only put in enough to get my company match, which is 5%. The rest goes into a high-yield savings account for a real emergency fund and a separate brokerage account I can actually access before I'm 60. Having that cash on hand feels way less stressful than seeing a big number in a retirement account I can't touch. Has anyone else decided to pull back on retirement savings to build more liquid cash?

3 comments

3 Comments

lee_reed7d ago

Oh man, my buddy did that and then his car engine blew. He had to take a 401k loan and it was a huge mess.

phoenixb347d ago

Check your car's oil every other time you get gas, seriously. My cousin skipped that and his engine seized on the highway. Had to get a payday loan just to cover the tow. Now I keep a quart in my trunk and check it every two weeks, it takes two minutes. That small habit can save you from a total disaster.

lee_reed7d ago

Ugh, that's rough. I had a coworker who ignored a weird noise for months and his transmission just gave out. Some people really do push their luck with cars.