On: GenX Are a Retirement Time Bomb for the American E...

[CompelTechnic]

Employer-matched contributions to a 401k should be prioritized before an emergency fund. Otherwise you are leaving free money on the table. This applies to many Americans.

[rekwah → CompelTechnic]

Disagree. What happens if you have an emergency? Then you end up withdrawing from the 401k + penalty.

[dragonwriter → rekwah]

> What happens if you have an emergency?

You borrow from the 401K. If for some reason that's not an option, you take money out with a penalty, but with sufficient match you are still often ahead.

[silisili → rekwah]

Even with the penalty and tax, it will be less than 50 percent, making it financially beneficial since the employer is matching 100 percent.

[dragonwriter → silisili]

Sure, if it's 100% employer match. Even employers that do matching often do it below 100%.

[marssaxman → rekwah]

How often do you have emergencies? Seems to me that if your life is going sideways, paying the penalty to get money out of your 401k would be worthwhile; but I expect that my life generally won't go sideways, so the extra percentage of income is more likely to be a benefit than the potential penalty is to be a detriment.