Dear Dr. Don,
I am 36. Given the current financial gloom settling in on the market, do you think that I should keep on investing in my 403(b) or stop it temporarily and increase my other savings?
— Neel Neutral

Dear Neel,
I understand where you’re coming from. It’s hard to watch your contributions to a tax-deferred retirement plan decline in value as soon as the money is put to work in the account.

But I think you should continue contributing to the plan.

The ideal when investing in financial securities is to “buy low” and “sell high.” I’ll be the first to tell you that I don’t know where the market is headed next. But when you make regular purchases of mutual funds in a 403(b), you buy more shares when shares are cheap and buy fewer shares when shares are dear.

It’s a form of “dollar-cost averaging” your investments through good times and bad.

To stop buying when stocks and stock mutual funds are less expensive, with a plan to return to the market later when shares are higher, isn’t a winning strategy.

Trying to time the market can cause as many problems as it cures. Investors would have loved skipping the roller-coaster ride in share prices over the past year. But what was the signal to get out, and what will be the signal to get back in?

Investors sitting on the sidelines in cash can feel smug about not losing principal, but what growth opportunities will they miss while trying to determine when to get back in the market?

Taking what you would have contributed tax-deferred and stash it away in a taxable savings account has you investing after-tax dollars and subjecting the returns to income taxes.

If you currently contribute $10,000 a year of pre-tax income to the 403(b) plan and you’re in the 25 percent marginal federal income tax bracket, you’d only save $7,500 a year and would pay income taxes on the interest earnings to boot.

If your employer matches all or part of your contributions to the 403(b) plan, you should continue contributing, at least up to the limit of the matching contributions. Turning your back on free money doesn’t make sense.

It’s not as common for employers offering 403(b) plans to match contributions as it is with 401(k) plans. But if yours does, take advantage of it.

By all means, evaluate your 403(b) portfolio along with your other investments and rebalance as necessary to get to a risk level where you’re comfortable investing. But stopping contributions to build a cash reserve in a taxable account only makes sense if you have no cash reserve or emergency fund to provide a measure of financial flexibility in these uncertain times.