Retirement might be decades away for you, but you know it's an important goal. You were all ready to make 2022 the year you finally began saving, and then came record inflation and growing chatter about an impending recession. Now you're wondering if it's a good idea to put your savings in the stock market right now.

The answer depends on a few factors, including your overall financial health. Below, we'll talk about everything to consider so you can decide on your best move.

Person staring uncertainly at laptop.

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Retirement shouldn't be your highest financial priority

Retirement is really important to a lot of people, but your day-to-day financial security has to come first. You need to make sure you have enough money set aside to cover your essential bills. This includes predictable monthly expenses, as well as bills that come up once or twice a year. 

Then you need to build an emergency fund if you don't already have one. At a minimum, you should set aside at least three months of living expenses, and six or 12 months is even better. It's up to you to decide what you feel comfortable with. 

If you already have an emergency fund, review it now. With inflation driving up expenses, your current emergency fund may no longer be adequate. Consider beefing it up a little to account for rising costs.

Make sure you do these things before you set aside any money for retirement. Failure to do so could put you in serious trouble if an unexpected bill arises. You may have to divert money from your retirement savings, and you could wind up with long-term debt problems if you don't have another means of covering these unexpected costs.

When you're ready, don't let the market scare you

After you've got your bills and emergency fund taken care of, you can turn your attention to retirement savings. You might be wary of investing right now with fears of an impending recession, but don't let that stop you. There's always a risk to investing, even when times are good. And over the long term, most people see their portfolios do quite well.

Plus, putting off retirement can actually make your job harder when you do start. Say you're 25 and you want to save $1 million by 65. You could do this by saving $403 per month if you earned a 7% average annual rate of return. But delaying retirement savings by just one year means you'd now have to set aside an extra $30 per month. That may not seem like much, but over your career, you'll have to save over $14,000 more than you would have if you started saving at 25.

If you're worried about losing money in the near term, the best thing to do is to use a strategy called dollar-cost averaging. This is where you put aside a certain dollar amount on a schedule, like a percentage of your paycheck each pay period. Sometimes you'll buy when share prices are high; other times, you'll buy when prices are low. In the end, you'll pay an average amount.

Dollar-cost averaging can also help you avoid emotional decision making, which is helpful all the time but especially during a recession. You can often automate your contributions, and once that's done, there's usually no need to check your portfolio every day. The daily ups and downs shouldn't matter to you much anyway if you have decades to go until retirement.

Focus on making regular contributions over time. Consistency is key to building up a nest egg that will carry you through the rest of your life.