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

Keep your emergency fund in a high yield savings account rather than investing it. Investing is risky because the stock market is volatile in the short term. When you have an emergency, you often need to withdraw your funds at any time, which can mean selling your stocks when they are down. By keeping your money in a high yield savings account, you eliminate this risk of loss while earning a reasonable rate of interest.

Once you have your emergency fund, you can start saving for your retirement. But whenever you run out of emergency savings, it’s a good idea to make replenishing them your top priority. You should also remember to update your emergency fund as your life changes. If your living expenses increase, you should also increase your emergency fund.

2. Those with high interest rate debt

Credit cards and payday loans generally charge you more interest than you will earn on the stock market each year. If you’re only making the minimum payment on your debts and putting the rest of your money into retirement savings, you’re probably setting yourself up for retirement.

Instead, focus on getting rid of your high-interest debt first. There are several ways to approach this. You could remove a Personal loan or use a credit card balance transfer. Or you can just spend all your extra money on your debt each month.