Strategies To Halt 401(K) Investment Growth: A Comprehensive Guide

If you don't want to invest in your 401(k), you can opt out or stop your contributions at any time by logging into your account. However, it's usually not a good idea to stop 401(k) contributions just because the market is down. Volatility can occur at any time and financial experts cannot accurately predict the market. If you have credit card debt, especially on cards with high-interest rates, pausing your 401(k) contributions to pay it off more quickly could actually help you increase your retirement savings in the long run.

Opt out of paycheck contributions to 401(k)

If you want to stop contributing to your 401(k), you can opt out at any time by logging into your account. You can access the Contributions page of your dashboard by clicking the “Manage” button within the “Payroll contribution” section on the main page of your dashboard.

Retirement accounts are designed for long-term investing — at least 10, 20 or 30 years if not more. It’s usually not a good idea to stop 401(k) contributions just because the market is down. Volatility can occur at any time. Even financial experts cannot accurately predict the market. When huge stock market drops happen, it’s not unusual for investors to get nervous and move their 401(k) contributions out of stocks and into perceivably safer funds such as a money market. This causes them to sell stock at a low price. When the stock market rises, these same investors may feel confident enough to move their money back into stock funds, thus buying at a higher price than they sold at and decreasing their potential for a better return on their investment.

If you have credit card debt, especially on cards with high-interest rates, pausing your 401(k) contributions to pay it off more quickly could actually help you increase your retirement savings in the long run. After all, the interest you’re funneling toward the credit card companies could be going into your own investment accounts to help your money grow. If you’re close to retirement and have already amassed a substantial nest egg, or are about to start taking distributions, you may not need to continue to contribute to your 401(k). After all, with such a short timeline, your rate of return is likely to be on the lower end.

If you’re very close to retirement and have already amassed a substantial nest egg, or are about to start taking distributions, you may not need to continue to contribute to your 401(k). After all, with such a short timeline, your rate of return is likely to be on the lower end. If your employer has suspended matching contributions, it’s less expensive to halt your savings in favor of paying down debt with that money instead.

Even just a few years or a few thousand dollars can make a big, big difference later down the line. Here’s an example. Say you invest $1,000 into your 401(k) account at age 20 and then contribute $250 per month every month until you’re 60 years old. At that time, assuming a very reasonable interest rate of 6%, you’d have some $474,571.61 in your account—and this is a pretty low-ball figure since you’d likely contribute more than that as your salary increased over time or if you started to work at a company that offered an employer match. Now pretend you invest that same $1,000, and the same $250 per month, at age 30. That ten-year delay slashes your nest egg in half: with the same interest rate, you’d only have $242,918.05 by your 60th birthday.

Pause contributions temporarily

If you want to pause your 401(k) contributions temporarily, you can opt out at any time by logging into your account. However, it is usually not a good idea to stop 401(k) contributions just because the market is down. Volatility can occur at any time and even financial experts cannot accurately predict the market.

If you have credit card debt, especially on cards with high-interest rates, pausing your 401(k) contributions to pay it off more quickly could actually help you increase your retirement savings in the long run. After all, the interest you’re funneling toward the credit card companies could be going into your own investment accounts to help your money grow.

If you’re close to retirement and have already amassed a substantial nest egg, or are about to start taking distributions, you may not need to continue to contribute to your 401(k). After all, with such a short timeline, your rate of return is likely to be on the lower end.

If you have no emergency fund and are at risk of losing your job outright, you may also want to pause your 401(k) contributions.

If you’re very close to retirement and planning to retire in the very near future, you may not want to add another year or two of work. Check to make sure you’re not overexposed to riskier equity investments. Instead of cutting your contributions, you may consider shifting over to less-risky investment choices like stocks and bonds.

Shift to less-risky investments

If you are close to retirement, you may not need to continue contributing to your 401(k). After retirement, your rate of return is likely to be on the lower end. If you have credit card debt, especially on cards with high-interest rates, pausing your 401(k) contributions to pay it off more quickly could actually help you increase your retirement savings in the long run.

If you have no emergency fund and are at risk of losing your job outright, you may want to halt your savings in favor of paying down debt with that money instead.

If you are not interested in making paycheck contributions (known as deferrals) into your 401(k) or you'd like to pause them temporarily, you can opt out at any time by logging into your account.

Retirement accounts are designed for long-term investing — at least 10, 20 or 30 years if not more. It’s usually not a good idea to stop 401(k) contributions just because the market is down. Volatility can occur at any time. Even financial experts cannot accurately predict the market. When huge stock market drops happen, it’s not unusual for investors to get nervous and move their 401(k) contributions out of stocks and into perceivably safer funds such as a money market. This causes them to sell stock at a low price. When the stock market rises, these same investors may feel confident enough to move their money back into stock funds, thus buying at a higher price than they sold at and decreasing their potential for a better return on their investment.

If you are planning to retire in the very near future, you may want to check to make sure you’re not overexposed to riskier equity investments. Instead of cutting your contributions, you may consider shifting over to less-risky investment choices like stocks and bonds.

Pay off credit card debt

If you have credit card debt, especially on cards with high-interest rates, pausing your 401(k) contributions to pay it off more quickly could actually help you increase your retirement savings in the long run. After all, the interest you’re funneling toward the credit card companies could be going into your own investment accounts to help your money grow.

Retirement accounts are designed for long-term investing — at least 10, 20 or 30 years if not more. It’s usually not a good idea to stop 401(k) contributions just because the market is down. Volatility can occur at any time. Even financial experts cannot accurately predict the market. When huge stock market drops happen, it’s not unusual for investors to get nervous and move their 401(k) contributions out of stocks and into perceivably safer funds such as a money market. This causes them to sell stock at a low price. When the stock market rises, these same investors may feel confident enough to move their money back into stock funds, thus buying at a higher price than they sold at and decreasing their potential for a better return on their investment.

If you’re close to retirement and have already amassed a substantial nest egg, or are about to start taking distributions, you may not need to continue to contribute to your 401(k). After all, with such a short timeline, your rate of return is likely to be on the lower end.

If you have credit card debt, especially on cards with high-interest rates, pausing your 401(k) contributions to pay it off more quickly could actually help you increase your retirement savings in the long run. After all, the interest you’re funneling toward the credit card companies could be going into your own investment accounts to help your money grow.

If you’re very close to retirement, you may not want to add another year or two of work. Check to make sure you’re not overexposed to riskier equity investments. Instead of cutting your contributions, you may consider shifting over to less-risky investment choices like stocks and bonds. Your employer suspended matching contributions. Employer matching makes 401(k) savings particularly lucrative. If your employer has suspended matching contributions, it’s less expensive to halt your savings in favor of paying down debt with that money instead. You have no emergency fund and are at risk of losing your job outright.

If you don't want to invest in your 401(k), here's how to opt out or stop your contributions. If you're not interested in making paycheck contributions (known as deferrals) into your Guideline 401(k) or you'd like to pause them temporarily, you can opt out at any time by logging into your account. Please note, if you’re trying to opt out from the enrollment email you received from Guideline, you will need to set up your account first, even if you do not wish to participate.

Consider retirement timeline

If you're close to retirement, you may not need to continue contributing to your 401(k). If you have credit card debt, especially on cards with high-interest rates, pausing your 401(k) contributions to pay it off more quickly could actually help you increase your retirement savings in the long run. If you're planning to retire in the very near future, you may want to check to make sure you’re not overexposed to riskier equity investments.

If you're not interested in making paycheck contributions (known as deferrals) into your 401(k) or you'd like to pause them temporarily, you can opt out at any time by logging into your account. Please note, if you’re trying to opt out from the enrollment email you received, you will need to set up your account first, even if you do not wish to participate.

Retirement accounts are designed for long-term investing — at least 10, 20 or 30 years if not more. It’s usually not a good idea to stop 401(k) contributions just because the market is down. Volatility can occur at any time. Even financial experts cannot accurately predict the market. When huge stock market drops happen, it’s not unusual for investors to get nervous and move their 401(k) contributions out of stocks and into perceivably safer funds such as a money market. This causes them to sell stock at a low price. When the stock market rises, these same investors may feel confident enough to move their money back into stock funds, thus buying at a higher price than they sold at and decreasing their potential for a better return on their investment.

If you have no emergency fund and are at risk of losing your job outright, you may want to halt your savings in favor of paying down debt with that money instead. If your employer has suspended matching contributions, it’s less expensive to halt your savings in favor of paying down debt with that money instead.

Even just a few years or a few thousand dollars can make a big, big difference later down the line. For example, if you invest $1,000 into your 401(k) account at age 20 and then contribute $250 per month every month until you’re 60 years old, you’d have some $474,571.61 in your account at that time, assuming a very reasonable interest rate of 6%. This is a pretty low-ball figure since you’d likely contribute more than that as your salary increased over time or if you started to work at a company that offered an employer match. If you invest that same $1,000, and the same $250 per month, at age 30, that ten-year delay slashes your nest egg in half: with the same interest rate, you’d only have $242,918.05 by your 60th birthday.

Frequently asked questions