Should I lower my 401K contributions and opt for a savings/money market account?

People always assume a “cash” instrument such as a money market account is safer than stocks because they are unaware of the various types of risk associated with investing. People are only familiar with “market risk” meaning the risk that the stock market will go down and you will lose your money. Well every investment (including the so called “safe” money market accounts)incur risk. In the instance of a money market, you are incurring what is known as inflation risk meaning if a money market account is paying you .50% and inflation is going up 4% per year, the value of your savings is being eroded by inflation – so not only are you not gaining any money, you are also losing money! If you still feel strongly about lowering your stock exposure and increasing your cash exposure, look for the fixed investment in your 401(k) plan and put some (not all) of your contributions there. At least this way you’re getting tax-deferred savings and tax-deferred compounded interest. Albert Einstein calls compounded interest the 8th wonder of the world! Look it up – good luck! And keep saving for retirement – don’t make the mistake of relying on Social
(In)Security!! And remember, a money market account doesn’t offer FREE company match!