Invest in 401k or save as cash?

[Sienna Parker]

Hello everyone! Amidst these uncertain times I’m assessing my savings and investment plan and strategy.

I joined the workforce almost two years ago at a company that does 401k matching 50¢ to every $1 up to the federal limit. Putting 20% of my paycheck, I’m able to max my 401k and get an additional ~$9,500 from my company with their match.

However, I also want to save enough for a down payment to buy my first property as soon as possible. I could save a lot more if I wasn’t contributing as much to my 401k. Yet my company’s match is basically free investment money (equivalent to ~10% of my salary) that’s hard to give up.

What would you suggest I do? Keep my contributions or allocate more to liquid cash for real estate investment?

[Joe Splitrock]

@Sienna Parker with the market down right now, it is arguably a good time to invest. In your case, you are getting an instant 50% return on your investment. To put that in perspective, the market would need to drop 34% from investing value before you lose money. I don't see that happening based on how far it has already dropped. The match is guaranteed instant return.

I know everyone gets scared of the stock market when it is down, but that the opposite of when they should be scared. Be scared when it reaches new highs. Invest when it reaches new lows.