Should I continue to contribute towards my retirement or pay off my debt in a bull market?

Debt, Retirement
Answers
Sort By:
Most Helpful
November 2017
80% of people found this answer helpful

I followed you until your last sentence.  Your debt carries a rate of 17%?  Good heavens -- your investments need to earn more than 17% for you to be better off NOT paying down your debt.  A certain return of 17% does not exist.  Sure, you save on taxes by contributing to a 401(k) but you are still paying a ton of money to the bank.  Get busy and pay off that debt, now.  Live like a pauper until it's gone.  Cut back on discretionary purchases and get used to having less.  When the debt is paid off you can celebrate (and invite me).

Once you are out of the hole you have dug yourself, never again should you let a month go by without paying off your credit cards in full.  IN FULL.  Always.

But, retirement contributions are very important.  Don't stop contributing; get the money for debt paydown from somewhere else.  If you can't swing it (because heaven knows life costs money) then cut your contribution if you must, but see if you can do both.  I hope you come out of this with a life-lesson and become a saver in earnest.  Upon retirement, you will need invested savings of 20 times your annual living needs in order to retire comfortably.  So few people get there, and I hope you will be one of them.

November 2017
November 2017
November 2017
November 2017