Why I Temporarily Suspended My Retirement Fund Contribution

By Chelsea Baldwin, Contributor, on March 6, 2017

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I have one big goal when it comes to retirement: retiring early. I’m 100 percent serious. Working eight hours per day, five days per week, 40 hours per month from the time you’re 22 until you’re 62 is absolutely bogus. Life is much more than that, and I fully intend to make my life something grander, too. On that note, it only makes sense I’d shovel money like a crazy woman into my retirement fund contribution, right?

Right. Except I just suspended contributions to my retirement fund, and there are two important reasons why:

1. I Need to Pay Back My Financial Cushion

Some people call this an emergency fund, but I don’t like that label. I don’t like the feeling of constantly saving up for a life emergency that’s just bound to happen — at least, that’s what it feels like to me when I call this my emergency fund. But whatever you call it, the peace of mind it provides is literally priceless. I went through a lot at the end of last year, so I needed to drain a big chunk of money from my fund. Now, I’m paying it back.

It’s important for me to feel like I have a safety net, just in case things go south or I decide to take my life in a different direction. Without it, I don’t have the power to make the decisions I need to make my life as good as I want it to be. As much as I care about retirement, I’m living right now, too. I want to make sure I’m happy and fulfilled in the moment, as well.

2. I’m Saving up for a Down Payment on a House

Houses aren’t cheap. Plus, I’ve read a number of financial experts who actually suggest to only start saving for your retirement fund contribution when you have enough money for a down payment.

For me, a big part of retiring early means not worrying about what’s currently my biggest monthly expense by far: rent. When I don’t need to worry about hustling to come up with that money, I’ll have “made it” into early retirement, whether I decide to keep working or not.

Temporary Solution for a Long-Term Goal

This solution is only temporary. In fact, by the time this publishes, I’ll have paid back my emergency fund in full. Plus, I’ll be buying a house at the end of the year, so instead of putting 15 percent recommended toward retirement, I’ll put in a 5 percent minimum and shovel everything else toward the house.

But, of course, the more I make, the higher of a percentage I can afford to put toward both. It’s important to be flexible with your priorities and accept that they may change throughout your career. If you adjust accordingly, you’ll cover all your bases.

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