Buying a new home is a major financial decision with a hefty price tag. But is it worth slowing down your retirement savings for? That’s the question one high-income earner recently posed.

Weldon, 30, lives in a high-cost part of the country and is thinking about pausing his 401(k) contributions temporarily to afford a home.

“I know it sounds dumb, but my work actually puts 15% of my pay into my 401(k) instead of a matching program,” he said. “I normally max out my contributions, but if I stopped paying in, there would still be $50,000 to $55,000 contributed to my 401(k) next year [1].”

It’s not just the down payment that’s giving him pause. He anticipates his mortgage payments to be between $3,000 and $4,000 a month [2]. If he stops making $2,000 in monthly 401(k) contributions, he could manage the mortgage, and hopes to increase retirement contributions in the future.

Considering a home is also an investment with high-growth potential, should Weldon go ahead with his plan?

There are really two questions to unpack here:

Should you pause retirement contributions to buy a home? (Generally, no, but it depends.)

Is it still a bad idea if you’re getting $50,000+ contributed by your employer? (Maybe not.)

Weldon earns about $330,000 a year, and currently maxes out his contributions at $23,000, reaching the IRS total annual 401(k) limit of $70,000 [3].

By pausing his $2,000 monthly contributions, he’d free up $23,000 a year for mortgage payments and other housing costs. In a high-cost market where mortgage payments could hit $3,500 a month, that extra cash could mean the difference between a tight budget and a more manageable one.

And while putting retirement savings on indefinite hold to buy a home is generally a bad idea, he’d still be saving a significant amount due to his employer’s contributions.

But what’s the trade-off?

If he doesn’t contribute the maximum $23,000 over 10 years at an 8% growth, he will miss out on $361,000 in his 401(k) [4]. Stretch that over 20 to 30 years — depending on how far you are from retirement — and the missed growth gets even bigger.

Story Continues

Even a single $23,000 investment compounded at 6 percent over 30 years equals $132,100 with no additional contributions. The $361,000 he could have invested would multiply to $2,073,400 in 30 years, enough for a comfortable retirement without counting on selling his home.

So, while it’s not a questionable idea, it’s still potentially costly.

The reality is that most people won’t find themselves in Weldon’s situation. For many Americans, pausing retirement savings could mean missing out on their only nest egg. That’s why advice on pausing contributions, even temporarily, has to come with a big asterisk: unless you’re still saving significantly through other means, it’s usually not worth it.

Read more: There’s still a 35% chance of a recession hitting the American economy this year — protect your retirement savings with these 10 essential money moves ASAP

If you’re facing a similar decision, remember that it is generally not worth the loss in retirement savings to stop or pause retirement contributions — unless you’re a high earner or already have sufficient funds in your retirement account.

But, if you’re still considering it, ask yourself these questions:

A short pause, say six to 18 months, to save for a down payment might be manageable, especially if you resume contributions quickly. But the longer you delay, the harder it is to catch up. Run the numbers to see how much you’ll lose out on — and whether you’ll still be able to have the retirement you want if you pause contributions.

If your employer stops contributing, or you move to a new job without a similar benefit, you’ll be behind on your savings. Moreover, you also risk losing your home if you lose your job and can’t find another with the same high salary.

If you already have an emergency fund and some investments outside of retirement, that may justify a temporary pause. If your 401(k) is healthy, too, then a brief pause might not matter as much. Try running the numbers on how much your 401(k) will grow by your retirement date if you never contribute again.

If affording the mortgage requires skipping retirement contributions for years, it likely means you simply can’t afford the home. It might be better to wait or buy a less expensive home.

If your employer is contributing a hefty amount to your 401(k), you’re in a better position than most to pause personal contributions without sacrificing a stable retirement. But that doesn’t make it a risk-free move.

If the only way you can afford a home is not to save for retirement, then you either can’t afford the home, or you can’t afford to retire. Which would you rather sacrifice?

Buying a home should improve your quality of life, not derail your retirement. Ensure your financial plan balances homeownership and retirement in a way that puts your long-term goals first.

Join 200,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.

At Moneywise, we consider it our responsibility to produce accurate and trustworthy content that people can rely on to inform their financial decisions. We rely on vetted sources such as government data, financial records and expert interviews and highlight credible third-party reporting when appropriate.

We are committed to transparency and accountability, correcting errors openly and adhering to the best practices of the journalism industry. For more details, see our editorial ethics and guidelines.

[1]. Bankrate. “401(k) contribution limits for 2025”

[2]. Zillow. “Chicago, IL Housing Market”

[3]. IRS. “401(k) limit increases to $23,500 for 2025, IRA limit remains $7,000”

[4]. Nerd Wallet. “Investment Return Calculator”

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.