Something's gotta give

A disturbing trend among 401(k) investors (Sue Asci, InvestmentNews):

While workers continue to put money into their 401(k) plans during the current downturn in the economy, they are investing at a lower rate, a survey released yesterday by Putnam Investments found.

The 152 advisers that responded to the online survey, conducted in May, reported that 89% of plan participants are continuing to save and 85% of plan sponsors are continuing to provide matching contributions.

But 21% of participants are now contributing at a lower rate and 4% have stopped altogether.

Obviously, energy and food prices are rapidly rising, and everyone needs to pay for these necessities somehow. But to steal from your retirement income tomorrow just to burn a few gallons of gas today is counterproductive. Your future is literally going up in smoke — as car exhaust.

Pay for a present necessity with a future necessity, and you will never be able to make up for the lost time that will erode the compounded value of whatever you save later. Beyond the money not contributed today, the money that money would earn is lost forever. Better to cut some other unnecessary expense out of your life today rather than to take food off your own table tomorrow.