Money Talks News: Pay off debt or save for retirement? - News, Weather, Sports, Toledo, OH

Money Talks News: Pay off debt or save for retirement?

(Source: Money Talks News) (Source: Money Talks News)
Money Talks News -

If you want your golden years to be golden, you've got to stash some cash. However, it's just as important to pay off that high-interest debt. How do you choose? There are some things to consider.

How much interest are you paying on that debt? Paying 15 percent on a credit card and paying it off is like earning 15 percent tax-free and risk-free. That's hard to beat.

However, with some 401k or other retirement plans, you can do even better. If your employer gives you 50 cents for every dollar you put in your plan, that's free money. It's like earning 50 percent with no taxes and no risk.

So if the question is, "Should I save for retirement or pay off debt," the answer is: You should do both.

Contribute enough to your retirement plan so that you at least get the full company match, then pay off that high-interest debt.

However, once you've paid off all your debt you should take those old debt payments and put those in your retirement account too.

Paying interest is horrible, but so is being poor when you're old.

These are important goals. Make it a priority to accomplish them both. For more tips visit the Money Talks News website

© 2018 Money Talks News. All Rights Reserved.


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