Saving decisions depend on many factors. Factors such as job stability and a family's level of emergency savings and outstanding debt all need to be considered. In deep recessions, such as 2008-2009, some investment experts recommend holding emergency savings equal to eight months of household expenses. That's because it generally takes workers longer to find a job when many people are out of work.
If someone faces uncertainty about job stability and has only a small reserve fund, it might make sense to temporarily suspend or reduce retirement plan contributions and redirect the money to increase emergency savings instead. On the other hand, workers with no/low debt and good emergency reserves might want to consider saving more in a retirement savings plan because their increased contribution will buy more securities when share prices are low. Saving/investing more now can be an especially good strategy for workers who anticipate retiring in a few years.
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