No. of Recommendations: 1
Saving for retirement is a very important goal. But so too is saving up for a home purchase; I feel owning a home free and clear of mortgages is a big part of retirement security. I don't think I'd neglect either one. If you could ramp up to 25% of your income into savings and investments of various sorts, I'd probably put 6% of pay into the 401(k) (since you said your employer matches 6%) plus a Roth IRA contribution. Everything above 6% of pay plus some for the Roth, I'd put in savings for a home purchase.

You didn't say what your income level is, so I don't know what percentage of income $4,000 would be for you (the Roth contribution limits). That might influence whether or not I thought you should put all $4,000 into the Roth. If you still have enough to set aside for the home after 6% (pre-tax) plus $4,000 (after tax) to put in a down payment fund, that's definitely what I'd do.

But for sure, if a home purchase is down the road and an important goal for you, I'd divert the non-matched 401(K) contributions into a savings account toward the down payment.

Oh, and by the way, you're off to a great start. You have a lot more saved up than I did at 25, and I did better than most...

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