I currently contribute $350 a month to my employers 457 (deferred compensation) plan. Nothing is matched and it's taken directly out of my paycheck pre taxed. However, my employer has a separate retirement plan also. It's a mandatory contribution (currently $150 each month also not matched). I currently have only a few hundred dollars in savings earning minimal interest under 2%.
I know I need to have a savings account with a significant amount to use in case of emergencies, seeing as I have two children, however I feel that contributing to my retirement is just as important also. If I open a MMA, I will have to lower my amount I currently contribute to my 457. It's hard to fathom taking after tax dollars and investing them in something that at the most I can get a 5% return.
Thanks in advance for your advice.
2007-03-23 13:06:40 · 3 answers · asked by sara bellum 4 in Business & Finance ➔ Investing
I was in your same situation a couple of months ago. I decided to open the MMA because of the ease of reaching it in an emergency. I looked into the amount of paperwork to withdraw from the 457 in an emergency and thought I would be dead by the time the money got to me. I think you should trim your retirement contributions until you reach your emergency stash fund amount, don't stop though! Don't attach the MMA to any of your current bank accounts and make it a little hard to get to so that you will not be tempted to use when you don't really need it.
Good luck on your decision.
2007-03-23 14:23:12 · answer #1 · answered by R Worth 4 · 1⤊ 0⤋
Rule of thumb is at least 3 months worth of your paycheck as an emergency fund. Sounds like you are already contributing into your qualified plans. I'd say put some into MMA.
2007-03-23 15:16:09 · answer #2 · answered by It is what it is 3 · 0⤊ 0⤋
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2016-12-19 12:40:02 · answer #3 · answered by ? 4 · 0⤊ 0⤋