Market volatility got you thinking about hitting the pause button on your 401(k) contributions? It’s a tempting thought, especially amidst this year’s uncertainty. But before you make that decision, consider this: a ‘wait-and-see’ approach might actually cost you more in the long run.

To illustrate, let’s examine four significant 21st-century market downturns. We’ll compare two hypothetical investors: one who consistently contributed $500 monthly, regardless of market fluctuations, and another who paused contributions during bear markets, resuming only after market improvement. For simplicity, we’ll assume all contributions were invested in stocks.

(Note: In this analysis, we assume contributions were paused only during the specific bear market and then resumed for all subsequent periods.)

The surprising results revealed a clear pattern: consistent investing, even during periods of decline, significantly outperformed the ‘wait-and-see’ strategy in each scenario. While the short-term impact might seem less dramatic for the investor pausing contributions, the long-term growth potential is severely diminished by missing out on crucial periods of market recovery and compounding gains. This underscores the importance of maintaining a disciplined approach to retirement savings, regardless of short-term market fluctuations.

The key takeaway? While market timing seems appealing, it’s generally a losing game. Sticking to your investment strategy, even during turbulent times, is far more likely to yield the best results for your retirement.