Personal Finance

I'm approaching $100k in my 401(k) — should I decrease my contributions going forward?

Aaron Webber

Published: December 20, 2024 8:30 am

There is so much financial advice on the internet that no matter what you do, there will always be someone who thinks you’re doing it wrong. Combine this with the modern “maxing” culture and the pursuit of money over all else, and you have a recipe for rich people feeling disappointed with how much money they have. If you feel like there are always too many balls to juggle when it comes to your personal finances, you’re not alone.

One person, in particular, was doing their best to follow all the financial advice but still felt like they were being left behind, so they came to the community in r/personalfinance to seek help. Here is what they said. Please remember, however, that the advice in all the comments and in this article is not legal financial advice, and you should always speak to an expert before making any major financial decision.

The Question

The author of the post in question begins their question by lamenting the fact they couldn’t buy a home before the interest rates went up. They are still contributing to a down payment fund and increased their 401(k) contribution to 18%.

They are in their early 30s, have over $100k in their retirement account, have around $30k in the down payment fund, and make around $95,000 per year. They want to be able to buy a home in the $230k–$275k price range, and want to increase their down payment fund faster in order to do so.

The author asked the community if it is reasonable to decrease their 401(k) contribution to 15% and instead put that money in the down payment fund every month.

The Community Response

The most common and popular responses were those that advised the author to keep their retirement contributions the same, and instead focus on cutting costs in other areas and saving money in other ways.

The reason why is that the money invested in the 401(k) has more potential to grow and increase than money invested in the down payment fund. It is also a couple hundred dollars every month, which wouldn’t actually make much of a difference to a down payment, especially since the author wants to buy a house so quickly. The author already has enough money for a down payment anyway, so it is unclear how much the author wants to save.

Some asked why the author wanted to buy a house so badly, and they said it was a personal decision. They certainly didn’t have a financial need to do so. With that in mind, it definitely makes more sense to continue contributing 18% to retirement and making better financial decisions elsewhere to save money.

Some other commenters pointed out that the post author is doing better than probably around 95% of the country when it comes to saving and retirement. They have much more savings and are maximizing their retirement contribution while being able to shop for a home, which means most of their concerns are just made up and they are either just bragging to the community or confused.