Don’t Hit Pause on Your Retirement: Why Stopping Contributions Can Cost More Than You Think

If you’ve ever listened to a Dave Ramsey episode or scrolled through personal finance advice on social media, you’ve probably heard the line: “Stop your retirement contributions and focus on paying off debt.”

It sounds tidy and disciplined - like cleaning the slate before you start saving again. But for many first responders and public-sector professionals, that advice can do more harm than good.

Because every time you “pause” your contributions, you’re not just taking a break - you’re giving up time, momentum, and potential growth that you can’t easily get back.

Why This Advice Sounds So Tempting

There’s a reason Ramsey’s advice resonates: debt feels heavy. It steals your focus, adds stress, and often feels like it’s standing between you and your future. He’s helped millions of Americans face that reality head-on, and that’s commendable.

But as Investopedia points out in their article “Why Dave Ramsey Is Wrong About Pausing 401(k) Contributions,” halting your retirement savings can cost you tens of thousands in lost growth and missed employer matches. It also breaks a habit that’s hard to rebuild once you stop.

And for my first responders - firefighters, police officers, EMTs, dispatchers - your retirement system plays by a different set of rules than most. You may not get a 401(k) match. You might have a 457(b) plan through your city or county. But the lesson still stands: momentum matters.

Just because there’s no “match” doesn’t mean there’s no reward.

What You Really Lose When You Pause

1. Lost Time and Compounding Growth

As Warren Buffett famously said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.” Every contribution is a seed. And when you stop planting—even for a year or two - you lose a season of growth you can’t ever reclaim.

Stop or Don't Stop?

The math proves it. Investopedia estimates that skipping just two years of contributions in your 30s can cost you tens of thousands by retirement age. That’s because compounding isn’t linear - it’s exponential. The earlier dollars you invest have decades to earn returns on top of returns.

It’s the quiet kind of progress that feels small in the moment but adds up to something powerful over time - what I like to call compounding change.

2. Potentially Missing Out on “Free” Money

If you work in the public sector but outside of safety forces, you may have a 403(b) or 401(k) plan with an employer match. That match is real compensation - usually around 4 - 5% of your salary, according to Vanguard’s How America Saves 2025 report. Turning off your contributions means leaving that on the table.

For my 457(b) participants - most of you in police, fire, or EMS - there’s rarely a match, but don’t dismiss this point. If you also have a spouse with a matched plan, or a side job with a 401(k), contributing enough to capture that match there is one of the best returns you’ll ever get.

3. Losing the Habit (and the Psychology) of Saving

Automatic contributions are powerful because they make saving effortless. You never see the money hit your checking account, and that helps keep lifestyle creep in check.

When you pause, even with the best intentions, it’s hard to restart. There’s always another bill, another trip, another “I’ll start again next year.” Behavioral finance research backs this up: habits are easier to maintain than to rebuild. Consistency beats intensity. In other words, it’s better to contribute something than nothing at all.

Finding the Balance: Paying Debt and Saving at the Same Time

One of the biggest myths in personal finance is that it’s an either/or choice: pay off debt or save for retirement.

The truth? You can do both.

As financial planner David Tenerelli told Investopedia, “High-interest debt payoff and saving for the future don’t have to be mutually exclusive.”

The trick is balancing urgency with opportunity, knowing which debts deserve immediate focus, and which can take a back seat while you build long-term wealth.

How First Responders Can Apply This

You face challenges most civilians don’t: unpredictable overtime, physically demanding jobs, and career timelines that may end earlier than traditional retirement ages. That makes your time horizon even more valuable. Here’s how to prioritize both debt and savings - without losing your financial footing:

1. Start with clarity.

Know your plan type (457(b), 403(b), 401(k)) and whether you have a match. For most first responders, the 457(b) is your core savings vehicle. No match? No problem - your advantage is flexibility. You can withdraw from a 457(b) after separating from service without the 10% early withdrawal penalty.

2. Tackle high-interest debt first.

Focus extra payments on anything above 7-8% interest - credit cards, personal loans, etc. That’s your financial fire to put out first.

3. Build an emergency fund.

Start with $1,000–$2,000 and aim for three to six months of expenses over time. This keeps you from dipping into retirement accounts when the unexpected happens.

4. Contribute at least a baseline amount.

Even 3–5% of your paycheck keeps the habit alive. As debt decreases, increase your deferrals - many plans let you auto-escalate contributions each year.

5. Revisit often.

Just like you’d inspect your gear before every shift, check in on your plan periodically. Debt and income change; your savings strategy should adjust too.

Why Momentum Matters More Than Perfection

If you’ve ever been on a call where things don’t go exactly as planned, you know how important momentum is. Stopping mid-response only makes things harder to restart. The same principle applies here.

Financial progress isn’t about being perfect - it’s about being consistent. A steady trickle of effort, compounded over years, becomes the river that carries you into retirement with flexibility and confidence.

Or as John Bogle, founder of Vanguard, put it: “Time is your friend; impulse is your enemy.”

Putting It All Together

If your plan doesn’t offer a match, focus on the things you can control:

- Keep your contributions automatic.

- Prioritize high-interest debt.

- Build your emergency savings.

- Review your progress once or twice a year.

Each small, intentional move compounds - financially and emotionally.

When you combine steady debt reduction with consistent investing, you’re not just chasing numbers; you’re building flexibility. Flexibility for your next chapter after the firehouse or patrol car. Flexibility for your family. Flexibility for the version of you that’s earned a slower pace someday.

That’s compounding change in action - one decision at a time.

Final Thoughts

Hitting “pause” can feel like control, but often it’s just postponement.

Whether you’re contributing to a 457(b), 403(b), or 401(k), the goal isn’t perfection - it’s progress. Paying down debt and saving for retirement are both acts of discipline and hope. They work best when they work together.

If you’re unsure where your balance lies - or how to decide between debt payments and contributions - let’s talk it through.

Because your financial plan, like your work, deserves a strategy that holds up under pressure.

“Do not save what is left after spending, but spend what is left after saving.”  -  Warren Buffett

And if that feels easier said than done, remember: every habit starts small. Every dollar saved, every debt paid, is one more example of compounding change at work.

If you’re wondering what this looks like for you - your plan, your debt, your next step - let’s talk it through. Together, we can make sure your choices today set you up for the flexibility you deserve tomorrow.

- Shannon

Disclaimer: This content is for educational purposes only and should not be considered investment, tax, or legal advice. Always consult your financial and tax professionals before making changes to your retirement or debt-repayment strategy.