Throughout the ups and downs of the stock market the strategy that will give you the best chance for a comfortable retirement is a regular contribution to your 401(k) , 403(b) or TSP savings program.
You don’t have any control over the short term direction of the market, but you have a great deal of control over how much you put away for retirement. If you only put away $2000 a year at age 25 earning an average 6% per year, at age 65 earning you will have over $300,000. Over the last 10 years, despite significant market volatility, the S&P 500 has averaged 7% per year.
Keep in mind that the savings in 401(k) plans grows tax deferred which means that the money will grow faster. In addition, contributions to 401(k) plans reduce your taxable income, saving you taxes even as you save for retirement.
If your employer matches you contribution at some level, if you don’t contribute you are passing up “free money.”
The primary advantage of making regular contributions is that you are dollar cost averaging, buying more when stocks are low and less when stocks are high. The best time to buy is usually when we are most fearful; regular, automated contributions force us to do the right thing.
If you are unsure of the investments in your 401(k), consult an RIA (Registered Investment Advisor).