Financial Planner Warns Worker Against Pausing 401(k) To Fight Layoff Fears

A 28-year-old worker earning a $130,000 base salary plus a 10% annual bonus asked the r/PersonalFinance subreddit whether he should lower his 401(k) contributions to make extra payments on his $342,000 mortgage, citing fear that offshoring and AI could eliminate his job, according to Money.com.

Certified financial planner Hillary Stalker of CapWealth said the move would not actually help in a layoff scenario, since extra mortgage payments reduce the loan's principal and length rather than lowering the required monthly payment. "With such a long runway until retirement, I think that there are other areas to focus on to give him peace of mind," Stalker said, adding that cutting retirement savings to pay down the mortgage would be an opportunity cost. She suggested he instead watch mortgage rates and consider refinancing.