Personal finance

3 people who shouldn’t invest in a retirement account | Personal finance

(Kailey Hagen)

Saving for retirement is a big job, which is why most people work there as soon as they can. Even in the best-case scenario, it may take three to four decades to invest some of your paychecks to get the cash you need.

Setting a monthly savings goal and putting your funds into a retirement account is a smart move for most people, but there are exceptions to every rule. Here are three types of people who would be much better off skipping the retirement account right now.

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1. Those who do not have emergency funds

An emergency fund should be everyone’s primary financial goal, even above retirement savings. It’s the money you rely on to help cover unforeseen costs like an emergency room visit, appliance breakdown, or your daily expenses following a job loss.

Without emergency funds to lean on, you could end up in debt, preventing you from saving for retirement and leading to more immediate problems as well.

You should save at least three to six months of living expenses in your emergency fund before tackling other financial goals. Some people prefer to save even more than that, especially if they think they would have a hard time finding a new job if they lost their job.