401k halted during BS3 as well?

[zjc0329]

We are Gazelle intense and completed BS2 a couple of months ago and halted our 401k to do it...I am understanding that DR said not to start our 401k again until BS4...am I correct?

[Greebo]

Correct - you need a fully funded emergency fund in place in case of a major crisis tomorrow. A 401k won't do you nearly as much good in an emergency as cash will.

[kmonokwe]

I realize I'm a little late to jump in on this conversation, but I wanted to add that on his radio show, DR often amends his advice to say that if your company matches your 401k contributions up to 3% of your income (or whatever), you could pay that much until you get to BS4. Theres no sense in wasting a match during the time you're working on BS 1-3, as long as its not a huge amount.

[Greebo]

I'm sorry, but no, that isn't what he says. 18 months of listening to every single episode and I've never, ever, ever heard him say that its ok to put in up to the match in 1-3. OTHERS may say it, he doesn't.

He WANTS people to be uncomfortable in BS1-3. He tells you yes you're giving up the match, for a little while, so you can live like no one else later.

When you get to BS4 what he says is 15% starting with the 401k UP to the match only, then Roth to the max, then back to the 401k if anything is left.

[Momof4cats]

http://www.daveramsey.com/article/da...ney_investing/

Baby Steps: Don’t start investing prior to completing Baby Step 3.

1.$1,000 to start an emergency fund.
2.Pay off all debt using the debt snowball.
3.3-6 months of expenses in savings.
4.Invest 15% of household income into Roth IRAs and pre-tax retirement.
5.College funding for children.
6.Pay off home early.
7.Build wealth and give! Continue to invest in mutual funds and real estate.


Investing For Those Just Getting Started:

1.Be sure you have completed the first 3 Baby Steps.
2.Begin by doing pre-tax savings in (401k, 403b, TSP, Traditional IRA) and tax-free savings (Roth IRA, Roth 401k)
NOTE: If you receive a match in your (401k, 403b, TSP), invest here first up to the match. Then, fully fund a Roth IRA for you (and your spouse, if married). Then, come back to the (401k, 403b, TSP).
If you are still on Baby Steps 1-3, be patient; put off investing for now. Avoiding a crisis with a fully funded emergency fund and paying off high-interest debts is a fantastic investment!

[kmonokwe]

I stand corrected I thought I had heard him say it doesn't hurt. At the same time, I know I've heard him say what you mentioned: BS 1-2 are supposed to be an uncomfortable time, to keep the motivation up. Thanks for keeping me on my toes.