Reader Question: Should I Stop Saving for Retirement To Save For My Wedding?

by RJ

in Investing

3636579686_5b499eda8aThis question was forwarded to me by my lovely wife, from one of her great friends and a very loyal reader of Gen Y Wealth.

To be more specific, our friend was wondering whether it’s OK not to contribute the maximum amount to her Roth IRA and instead contribute to a savings account set aside for her wedding.

Before I answer, I just want to let everyone know that I’m making a few assumptions about my friend’s situation:

  • She is debt free
  • She has at least 3 months worth of cash for emergencies
  • She is maintaining her 401K contributions up to the company match

My Answer For Her:

Never go into debt to pay for your wedding. If you have to decrease the amount you’re saving for retirement to pay for your wedding, that’s fine.

If you’re currently dollar cost averaging into your Roth IRA each month, decrease your monthly contribution to a minimum, say $100. It’s important not to stop contributing entirely because you want to maintain the habit of investing.

Until your wedding, make sure to allocate a large portion from your paycheck to a savings account every month. (Here’s an example of how I set up sub-savings accounts in ING Direct) If you need to save $5,000 in 24 months, you need to be saving about $200 a month. If you need to save $5,000 in 18 months, that’s about $275 a month.

Finally, with the money you receive as gifts from friends and family attending your wedding, go on an amazing honeymoon and max out you and your husband’s Roth IRA when you get back.

Considering your just 25, you will be off to a great start financially.

My Rationale

In most cases, I believe that you should pay off  all non-mortgage debt before investing for retirement. If she choose to go into debt to pay for her wedding, while continuing to max out her Roth IRA, she would violate this principle.

Also, while she is missing some important years to take full advantage of compound interest, she is already off to a great start financially. If her and husband continue the habit of saving that she has already developed, they will have plenty of money when they reach retirement.

Other Random Financial Advice Regarding Weddings

Knowing that I was just married in April, I have a few words of wisdom regarding money and weddings.

  • Negotiate everything!
  • Pay everything by credit card. Here’s my story of how this saved us about $2,000. Plus, use the rewards to pay for your honeymoon.
  • Spend money on what’s most important to you. Spend little on everything else.

In the comments please list any suggestions you might have for someone in this situation. Do you agree that it’s OK to stop saving for retirement?

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CrystalNo Gravatar January 26, 2010 at 11:14 am

I wouldn’t cut back on retirement savings for a wedding, but our biggest goal is early retirement. We had a fantastic wedding for $3000, so I am also a big fan of inexpensive weddings. Also, if she is having trouble saving $5000 because of the wedding, maybe the wedding is getting too expensive anyway?

It’s all about priorities…she will have no regrets if she knows the wedding is more important than the Roth IRA. She will have regrets if she isn’t sure. I would sit down with my future hubby and see what our financial priorities are going to be once we’re married…

I liked the idea of using the cash they’ll receive as gifts towards the Roth IRA…if she does cut back, that’s a really smart way to catch back up. I’m also a big fan of credit card rewards if she knows she can avoid carrying a balance.

Congrats on the upcoming wedding and good luck!

RJNo Gravatar January 26, 2010 at 3:55 pm


You brought up a great point. It’s all about priorities. If early retirement is more important then a wedding, then by all means save.

My point was that it’s not the end of the world if you can’t contribute the maximum to your Roth IRA. It’s more important not to go into debt to pay for your wedding.

CrystalNo Gravatar January 26, 2010 at 5:32 pm

I’ll second that…I wasn’t thinking debt was even an option. I’d definitely lower my Roth IRA contributions before I’d go into debt for anything other than our house. I begrudge that debt too…

MelanieNo Gravatar January 27, 2010 at 5:03 pm

Having just gotten out of credit card debt the previous year, I was adamant about not going into debt for our wedding. Luckily, we had a lot of help and we did a lot ourselves.

We did haul money out of my RRSP to put a down payment on our house, but I’m not too worried about that as I have an excellent pension plan besides the RRSP and I’m quickly building it back up.

Swinton@weddingsNo Gravatar August 19, 2010 at 1:50 am

Most people consider weddings as their most awaited moment of their life with someone they love specially those country that has no divorced allowed so we cannot blame others to spend much money for that special occasion. However I agree with the writer’s answer.

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