I stopped maxing my Roth IRA after 10 years to pay for a new baby and home projects. Am I making a mistake?

On a recent episode of the How to Money podcast, host Jesse Cramer admitted something most personal finance voices would never say out loud. “2025 was the first year for us in probably over a decade where my wife and I, we didn’t max out our Roth IRA contributions,” he explained. The reason was a new baby born in March, two home improvement projects, and the recognition that “we had a lot of other important reasons to be spending money in our life.”

If you have spent ten years maxing a Roth, the question stings. Are you blowing up your retirement to pay for a nursery and a new roof, or finally letting your money serve your actual life?

The verdict: this can be the right move, if one number checks out

Pausing Roth contributions is defensible, but only if you have already reached Coast FI. Coast FI means your existing retirement balance, left alone with no further contributions, will grow into a sufficient nest egg by your target retirement age. Once you cross that line, every additional dollar you put into the Roth is optimization on top of a goal you have already secured. Skip a year or two while a baby and a kitchen renovation are eating your budget, and the long-term math barely flinches.

Here is the mechanic. Imagine you are 38, you have $250,000 invested, and you want $1.5 million by age 65. At a 7% real return, that $250,000 compounds to roughly $1.55 million over 27 years without another dollar added. You have already done the heavy lifting. The $7,500 Roth contribution you skip in 2026 would have grown to around $46,000 by 65. Meaningful, but not the difference between retiring and not retiring.

Now compare that to what you get by spending the money now: covering daycare without raiding the emergency fund, finishing a basement before a second kid arrives, or staying out of a 24% credit card APR while the HVAC is replaced. Cramer’s guest framed it well, calling out “one of the tough questions for great savers and investors is that when an action doesn’t serve them well anymore, what do they do.” The trade-off, in his words, is between optimization and living optimally.

The data shows what happens when people skip this analysis and white-knuckle contributions. Hardship withdrawals from 401(k)s in 2025 ran 365% above the five-year average, and 21% of workers took a 401(k) loan or hardship withdrawal. Refusing to flex contributions during expensive seasons of life often forces the worst outcome: pulling money out under duress, with taxes and penalties on top.

The variable that decides it: your Coast FI number

The whole argument rests on one calculation. If you have not hit Coast FI, pausing contributions quietly creates a retirement shortfall.

Run it both ways. A 35-year-old with $80,000 saved, aiming for $1.5 million at 65, is short. At 7% real returns, that balance grows to roughly $610,000 untouched. Skipping the $7,500 annual Roth here creates a real retirement gap. Same person with $300,000 already invested? The base case compounds to about $2.28 million by 65. A one or two year pause changes almost nothing.

Use a compound growth calculator to see your own picture before you decide.

If your projected balance lands comfortably above your retirement target with zero further contributions, you have earned the permission Cramer is describing. If it falls short, you have not.

What to actually do this week

1. Capture the employer match first. Free money outranks every other consideration. Reduce 401(k) contributions only down to the match, never below it.
2. Run your Coast FI number. Take your current invested balance, assume a 6% to 7% real return, and project it to your target retirement age. Compare to the nest egg you actually need. Northwestern Mutual’s 2025 figure for the “magic number” was $1.26 million, which is a starting reference, not a personal answer.
3. Set a calendar boundary. Write down the month you will resume maxing the Roth, ideally tied to a specific event like the end of daycare bills or project completion.
4. Protect the emergency fund. The reason to redirect Roth money is so you do not drain it. If you are still gutting your reserves to fund the baby and the projects, the pause is not solving the problem.
5. Recheck the 2026 IRA limit of $7,500 next January. Resume when life loosens, and let the next decade of compounding do the work.

Maxing every account every year is a strategy, not a virtue. If your retirement math already works, choosing your baby’s first year over a marginal Roth contribution is the entire point of having saved in the first place.