got a paycut - should I stop contributions to 401, SEP, etc?

[Templeusque]

I am 51 years old and I have 2 jobs; grossing $80K.

Contributions to SEP, 401K, & employee stock plan are $20K a year. I also invest $2K in money markets.

My full-time job is reducing hours. My part-time will increase hours. Even though I can increase to FT at my PT job, it pays less. This means a loss of income around $25K.

Should I still contribute the max to SEP, IRA, 401K, Employee Stock Plan and use up savings?

Should I stop all of the investments?

Should I keep some investments and stop some, if so which?

I'm so confused. Any thoughts would be greatly appreciated.

[sweeps]

No, you should not stop contributing to your retirement accounts.

If you need to reduce your contribution temporarily, that is understandable. But look at it this way... if you don't save for your retirement, who will?

[tripods68]

If you have to reduce retirement contributions, reduce it enough to get employer matching.

[zetta]

You've been doing great saving $22k on an $80k salary -- that's a 27.5% savings rate!

How much do you have saved so far, and at what age do you hope to retire? How much do you need to live on? Where can you cut back? The answers should help your decision on how much to continue to contribute.

[MonkeyMama]

Originally Posted by zetta

You've been doing great saving $22k on an $80k salary -- that's a 27.5% savings rate!

How much do you have saved so far, and at what age do you hope to retire? How much do you need to live on? Where can you cut back? The answers should help your decision on how much to continue to contribute.

Agreed - need more info.

Then I'd consider match benefits and tax savings, etc.

[TBH]

How much do you have saved for emergencies, outside your retirement accounts? If you have a good emergency fund worth 6-12 months' worth of expenses, then I'd say keep up the retirement savings.

If it were me, I'd try to continue to save the same percentage to my various retirement accounts, but not the same dollar amounts. Somebody said you were saving 27.5 percent of your $80K salary. I'd keep saving 27.5 percent of your new lower salary.

[blankcheck]

Originally Posted by TBH

How much do you have saved for emergencies, outside your retirement accounts? If you have a good emergency fund worth 6-12 months' worth of expenses, then I'd say keep up the retirement savings.

If it were me, I'd try to continue to save the same percentage to my various retirement accounts, but not the same dollar amounts. Somebody said you were saving 27.5 percent of your $80K salary. I'd keep saving 27.5 percent of your new lower salary.

This sounds like the best way to do things. That way, you remain comfortable with living off of a certain percentage of your income, as opposed to a flat dollar amount (which is obviously reduced after a pay cut).

[kork13]

Originally Posted by TBH

If it were me, I'd try to continue to save the same percentage to my various retirement accounts, but not the same dollar amounts. Somebody said you were saving 27.5 percent of your $80K salary. I'd keep saving 27.5 percent of your new lower salary.

This was my initial thought as well. Reduce your savings and also your spending proportionally to your decrease in income. That's just the simple answer, however--there really are other considerations to include (as mentioned, such as any fund-matching).