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Off Topic :
1) When Does a software engineer start financial planning for retirement since the our Career span is only 15-20 years on average.
2) How much and which schemes to invest to mitigate the risk?
3) How much do we need for retirement?
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I actually increased my contribution. Not saying you should. Just know that there is optimism out there among all the bad news. The market has always bounced back.
It will go back up. Every dollar you put in your 401k now is discounted. Check out charts showing market gains since 1950, every crash recovers.
Hang in there and you’ll gain from all the big up days. They will come. If you pull out you miss out. Also you will the psychological hurdle of fear to go back in.
You can’t look!
Very true!
Keep contributing and don’t look
Still contribute. Remember, it’s tax free. If you put it in savings you lose ~30% automatically on taxes. If you invest, over time, you’ll earn.
https://www.schwab.com/resource-center/insights/content/when-markets-dip-dont-drop-out
401k contributions are NOT tax free, for the record. You pay tax when you retire and take the money out (or if you have Roth you pay the tax now).
And nows the time to buy, if you’re not retiring for a long time. The market is so down, it’s all so much cheaper than usual!
Stop looking at it. For one year.
Dollar cost averaging is the way to invest for anyone under 35. Buy a set dollar amount per month of an indexed fund like S&P 500. Not shares. Pay yourself first. A set dollar amount. In times like these, the shares you own will go down but will rebound. The shares you buy over the next few months with that set dollar amount will be cheaper than anything you bought prior and will go up in value as well. Over 25 years, reinvesting your dividends, you should have enough in this pile to not even worry about the taxes at the end. Any bank can set this up for you.
Keep your contributions maxed and otherwise don’t touch it.
A savings account is always a good idea regardless. I’ve been quite happy using Ally Bank’s online high yield savings. Even though the rate sucks now, it’s still loads more than you’ll get with a savings account from chase or any other regular bank. I think now interest rate is 1.5%.
(I meant a savings account *in addition to* your 401k. Keep contributing to that.)
I made the mistake of looking too 😥
That’s not a good idea.