Comments on: The Big Debate #4: Pay Off Debt or Save for Retirement? http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/ Simple, applicable personal finance advice for the modern world Fri, 10 Feb 2012 08:34:37 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Paul http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-359527 Paul Thu, 21 Aug 2008 20:33:26 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-359527 These days, I'm finding calling the credit card companies no use at all. With the economy, everyone's calling, and the companies are even less flexible. The calls are automatic, or you have to ask online, and they respond with "You are not eligible for rate change, etc" These days, I’m finding calling the credit card companies no use at all. With the economy, everyone’s calling, and the companies are even less flexible. The calls are automatic, or you have to ask online, and they respond with “You are not eligible for rate change, etc”

]]> By: Soo http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-355569 Soo Sat, 16 Aug 2008 14:14:39 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-355569 I'm in my mid-forties and have only recently woken up to the sad reality of my financial situation. No savings for retirement and a fair amount of credit card debt. My short-term solution is to consider my retirement savings as another debt at this stage (considering I am behind and have to catch up). I am therefore paying a small "minimum" amount into a savings each month whilst I pay off and snowball my other debts, intending to eventually snowball my entire current debt repayments into my saving "debt". Thanks, Trent, for the daily motivation and advice. I’m in my mid-forties and have only recently woken up to the sad reality of my financial situation. No savings for retirement and a fair amount of credit card debt. My short-term solution is to consider my retirement savings as another debt at this stage (considering I am behind and have to catch up). I am therefore paying a small “minimum” amount into a savings each month whilst I pay off and snowball my other debts, intending to eventually snowball my entire current debt repayments into my saving “debt”. Thanks, Trent, for the daily motivation and advice.

]]> By: Georgia http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-355321 Georgia Sat, 16 Aug 2008 02:07:28 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-355321 20 years ago my husband and I were $34K in cc debt. Had no other debt but our mortgage which was only about $6K. I worked 3-4 jobs and lived 90 miles from home to earn the money to help pay this debt off. It was done by 2002. I started using a cc and paying it off @ month. It felt so freeing. As soon as I retired I paid off our car and we were completely free of debt. When I was 50, lost my job, and so deep in debt, I started putting a small amount in 403B(?) at work because I knew it would be very necessary. I could always stop it if I really needed the money. The state only matched $25. But I started at more than that. About the 2nd or 3rd yr., I realized that if I put my raise in each year, I would still be all right. After about 5 years I was told I couldn't put all my raise in. They said I was already putting 25% of my gross mo income in. Sure surprised the dickens out of me. I didn't think I could ever do that. However, that still only left $75K in savings at retirement. But it is plenty for me. I take only the minimum out once annually and I have SS & 2 very small retirements. The smartest move my husband and I made was to make our retirements a little less and have it set up as 100% for surviving spouse. So I am pretty set, along with good insurance that the state pays about 45-50% on based on my years of service. I own an old dbl. wide trailer and lot. My spending has gone down dramatically, based on fewer needs. I can go back to work for 6 mos. a year whenever I need to (per my old boss), but I hope to get some grants, etc. and finish my college degree started 51 years ago. Wish me luck. Life is good. 20 years ago my husband and I were $34K in cc debt. Had no other debt but our mortgage which was only about $6K. I worked 3-4 jobs and lived 90 miles from home to earn the money to help pay this debt off. It was done by 2002. I started using a cc and paying it off @ month. It felt so freeing. As soon as I retired I paid off our car and we were completely free of debt.

When I was 50, lost my job, and so deep in debt, I started putting a small amount in 403B(?) at work because I knew it would be very necessary. I could always stop it if I really needed the money. The state only matched $25. But I started at more than that. About the 2nd or 3rd yr., I realized that if I put my raise in each year, I would still be all right. After about 5 years I was told I couldn’t put all my raise in. They said I was already putting 25% of my gross mo income in. Sure surprised the dickens out of me. I didn’t think I could ever do that.

However, that still only left $75K in savings at retirement. But it is plenty for me. I take only the minimum out once annually and I have SS & 2 very small retirements. The smartest move my husband and I made was to make our retirements a little less and have it set up as 100% for surviving spouse. So I am pretty set, along with good insurance that the state pays about 45-50% on based on my years of service. I own an old dbl. wide trailer and lot. My spending has gone down dramatically, based on fewer needs. I can go back to work for 6 mos. a year whenever I need to (per my old boss), but I hope to get some grants, etc. and finish my college degree started 51 years ago. Wish me luck. Life is good.

]]> By: Roger http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-355317 Roger Sat, 16 Aug 2008 01:55:35 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-355317 Another interesting conversation about an important topic. I think Trent has the right idea: cut spending, keep making minimum debt payments, start investing for retirement (in a 401(k) with a company match first and foremost), and use the rest for aggressive debt repayment. Tailor a bit to your exact financial circumstances, and you've got a pretty solid plan for success. Another interesting conversation about an important topic. I think Trent has the right idea: cut spending, keep making minimum debt payments, start investing for retirement (in a 401(k) with a company match first and foremost), and use the rest for aggressive debt repayment. Tailor a bit to your exact financial circumstances, and you’ve got a pretty solid plan for success.

]]> By: Bill http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-355089 Bill Fri, 15 Aug 2008 20:27:09 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-355089 For U.S. residents, not only does traditional retirement savings (IRA, 401k, Roth, etc.) provide a tax deduction, qualified retirement accounts are also immune from creditors. Disability (short or long-term) is unfortunately much more common than sudden death. Were I to become disabled, I'd rather have $100,000 of unsecured debt and a retirement plan I had fully funded over the years than be debt free with little to no retirement savings (disability income benefits are also unavailable to creditors) For U.S. residents, not only does traditional retirement savings (IRA, 401k, Roth, etc.) provide a tax deduction, qualified retirement accounts are also immune from creditors.

Disability (short or long-term) is unfortunately much more common than sudden death.

Were I to become disabled, I’d rather have $100,000 of unsecured debt and a retirement plan I had fully funded over the years than be debt free with little to no retirement savings (disability income benefits are also unavailable to creditors)

]]> By: My.cold.dead.hands http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-355049 My.cold.dead.hands Fri, 15 Aug 2008 19:22:44 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-355049 Doing both is essential. You want to drive out the debt, but you also need to capitalize on the power of compound interest in your retirement. You don't get that time back. Doing both is essential.

You want to drive out the debt, but you also need to capitalize on the power of compound interest in your retirement. You don’t get that time back.

]]> By: Margaret http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354971 Margaret Fri, 15 Aug 2008 16:53:57 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354971 Shevy -- I mean you can roll it over into your RRSP. Shevy — I mean you can roll it over into your RRSP.

]]> By: Margaret http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354966 Margaret Fri, 15 Aug 2008 16:39:53 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354966 Shevy -- I'm not maxing out our RESPs either. However, when they did the changes a couple years ago, they eliminated the maximum contribution per year, so if you have the funds in the future, you can top it up. That's what I am hoping to do -- get rid of our non-mortgage debts, then spend a couple years catching up on the RESPs. Also, if your child does not use the RESP AND you have RRSP room left, you can roll it over into your RESP to a maximum of $40,000. Don't remember if that includes the match, but it does include the earnings so you won't get taxed on it. Shevy — I’m not maxing out our RESPs either. However, when they did the changes a couple years ago, they eliminated the maximum contribution per year, so if you have the funds in the future, you can top it up. That’s what I am hoping to do — get rid of our non-mortgage debts, then spend a couple years catching up on the RESPs. Also, if your child does not use the RESP AND you have RRSP room left, you can roll it over into your RESP to a maximum of $40,000. Don’t remember if that includes the match, but it does include the earnings so you won’t get taxed on it.

]]> By: Steve http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354924 Steve Fri, 15 Aug 2008 15:48:51 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354924 I agree with Trent - you have to do both. And you need to do both to a good amount. Meaning, you have to cut those expenses and reckless spending - the very ones that got you into debt in the first place. (This doesn't apply to everybody but it applies to most debtors.) I agree with Trent – you have to do both. And you need to do both to a good amount. Meaning, you have to cut those expenses and reckless spending – the very ones that got you into debt in the first place. (This doesn’t apply to everybody but it applies to most debtors.)

]]> By: Martin http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354876 Martin Fri, 15 Aug 2008 14:21:06 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354876 This all sounds great in theory. But life happens, even when you try to plan for things. I was focusing on debt, after three years I was four months from being debt free other than a house payment. Then bam, water heater goes up and chews up the emergency fund, followed the next few weeks by the heating system. Back in debt for another 18 months (choice, go cheap or go for an efficient system that will at least get you some payback). Then bam again, mother took a fall and busted her hip and needed help. Let's extend the debt another six months for out of state visits and support. Oh, during this time my one kid needs braces, the other requires a bunch of dental work not covered by insurance. That's a new monthly payment extending the debt plus a new debt. Now I need about seven grand in home improvements I've been putting off because I assumed I'd be debt free and have accumulated the savings to be able to pay them up front at this point (by "need" I don't mean putting in new countertops in the kitchen because I don't like them, I mean do it now or face double or triple the cost of repair in a few years). I'm going to have to bite the bullet and this will extend the debt at least another year. Sigh, what's the saying, if it weren't for bad luck I'd have no luck at all :-). The point isn't to whine (well, maybe a little) but to point out that if I had waited until I was completely out of debt to save for the kids college and my retirement, neither would have ever happened. At first because I wasn't particularly savy about money management but kind of knew it would be a good idea not to pass on free money in the 401K or neglect being able to help at least a bit for my kids college. Then later because even as I struggled to get out of debt things happened to keep me there. Best decisions I ever made was automatic payments to college funds and retirement. I'm essentially forced to live on less. So, can I fund $40K per year for college per kid? Not a chance in hell. Can I help with $5K per year, yeah. Am I on track to funding 100% of my current preretirement salary when I retire? Only if I go on welfare right now, I think I can match that. However will $20K per year in today's dollars help me when I retire. I like to think so, should be better than nothing. And if I get out of debt in time, those numbers will definately go up. This all sounds great in theory. But life happens, even when you try to plan for things. I was focusing on debt, after three years I was four months from being debt free other than a house payment. Then bam, water heater goes up and chews up the emergency fund, followed the next few weeks by the heating system. Back in debt for another 18 months (choice, go cheap or go for an efficient system that will at least get you some payback). Then bam again, mother took a fall and busted her hip and needed help. Let’s extend the debt another six months for out of state visits and support. Oh, during this time my one kid needs braces, the other requires a bunch of dental work not covered by insurance. That’s a new monthly payment extending the debt plus a new debt. Now I need about seven grand in home improvements I’ve been putting off because I assumed I’d be debt free and have accumulated the savings to be able to pay them up front at this point (by “need” I don’t mean putting in new countertops in the kitchen because I don’t like them, I mean do it now or face double or triple the cost of repair in a few years). I’m going to have to bite the bullet and this will extend the debt at least another year.

Sigh, what’s the saying, if it weren’t for bad luck I’d have no luck at all :-).

The point isn’t to whine (well, maybe a little) but to point out that if I had waited until I was completely out of debt to save for the kids college and my retirement, neither would have ever happened. At first because I wasn’t particularly savy about money management but kind of knew it would be a good idea not to pass on free money in the 401K or neglect being able to help at least a bit for my kids college. Then later because even as I struggled to get out of debt things happened to keep me there. Best decisions I ever made was automatic payments to college funds and retirement. I’m essentially forced to live on less.

So, can I fund $40K per year for college per kid? Not a chance in hell. Can I help with $5K per year, yeah.

Am I on track to funding 100% of my current preretirement salary when I retire? Only if I go on welfare right now, I think I can match that. However will $20K per year in today’s dollars help me when I retire. I like to think so, should be better than nothing.

And if I get out of debt in time, those numbers will definately go up.

]]> By: Johanna http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354858 Johanna Fri, 15 Aug 2008 13:54:56 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354858 I think it depends on how confident you are that once you pay down the debt, it will remain paid down. If the debt is things like student loans or credit cards that you are no longer using (say, because you've had a big increase in income or decrease in expenses since the days when you ran up the balance), then I agree with the others that you should look at the interest rates you're paying versus the return you can expect on your investments, and do whatever is the best deal. But if, honestly, you haven't quite got a handle on your spending, so that you're adding to the debt at the same time as you're trying to pay it down, then you should put some toward retirement and some toward the debt, so that even if you never manage to pay off the debt, at the end of the day you will at least have something fore retirement. I think it depends on how confident you are that once you pay down the debt, it will remain paid down. If the debt is things like student loans or credit cards that you are no longer using (say, because you’ve had a big increase in income or decrease in expenses since the days when you ran up the balance), then I agree with the others that you should look at the interest rates you’re paying versus the return you can expect on your investments, and do whatever is the best deal.

But if, honestly, you haven’t quite got a handle on your spending, so that you’re adding to the debt at the same time as you’re trying to pay it down, then you should put some toward retirement and some toward the debt, so that even if you never manage to pay off the debt, at the end of the day you will at least have something fore retirement.

]]> By: Lurker Carl http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354849 Lurker Carl Fri, 15 Aug 2008 13:47:39 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354849 The amount of money allocated to funding retirement versus debt reduction depends on your income, debt load, and age. The level of each requires a unique approach, one size does not fit all. The amount of money allocated to funding retirement versus debt reduction depends on your income, debt load, and age. The level of each requires a unique approach, one size does not fit all.

]]> By: Lurker Carl http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354845 Lurker Carl Fri, 15 Aug 2008 13:45:38 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354845 This is something that depends on your income, debt load, and age. The level of each requires a unique approach, one size does not fit all. This is something that depends on your income, debt load, and age. The level of each requires a unique approach, one size does not fit all.

]]> By: cynthia http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354837 cynthia Fri, 15 Aug 2008 13:25:52 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354837 Retirement is a long term investment. The earlier you put money in the longer your time horizon for growth. For most people it is the last 7 to 10 years before retirement that really adds to the principal because of the "magic" of compounding. So, if you save $200,000 by the time you are 55 or so, by 65 or so--with no new investments--that money would typically have doubled at a fairly conservative rate of return. So, if you focus on paying down debt only and not contributing to retirement you are losing out on a big bang for your bucks in the long haul. this is my two cents, anyway. Retirement is a long term investment. The earlier you put money in the longer your time horizon for growth. For most people it is the last 7 to 10 years before retirement that really adds to the principal because of the “magic” of compounding. So, if you save $200,000 by the time you are 55 or so, by 65 or so–with no new investments–that money would typically have doubled at a fairly conservative rate of return. So, if you focus on paying down debt only and not contributing to retirement you are losing out on a big bang for your bucks in the long haul. this is my two cents, anyway.

]]> By: Paul http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354812 Paul Fri, 15 Aug 2008 12:58:42 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354812 Doing the math to compare a maximum debt reduction vs a maximum retirement contribution strategy is fine, but don't forget the tax implications. If you zero out your 401K or IRA contributions to go full force against the debt, you lose a substantial tax benefit. Makes you wonder if the government is encouraging us to stay in debt...) You can make a rational decision based on your situation (marginal tax bracket, employer 401K matching, expected rates of return, debt interest rate, etc). Just be careful that you include all the factors. Doing the math to compare a maximum debt reduction vs a maximum retirement contribution strategy is fine, but don’t forget the tax implications. If you zero out your 401K or IRA contributions to go full force against the debt, you lose a substantial tax benefit. Makes you wonder if the government is encouraging us to stay in debt…)

You can make a rational decision based on your situation (marginal tax bracket, employer 401K matching, expected rates of return, debt interest rate, etc). Just be careful that you include all the factors.

]]> By: Shevy http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354707 Shevy Fri, 15 Aug 2008 09:02:06 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354707 I agree that doing both is the best idea. We're paying down debt and putting a small amount (about $100/mo between us) into our RRSPs and another $50/mo into an RESP, which is a way to save for post secondary expenses. Neither of us currently has an employer pension plan with matching. If we did I would try my best to make sure we contributed the maximum amount for the match. However, we are leaving money on the table with the RESP because the government will add a percentage of what you contribute annually, up to a maximum amount and we're not contributing at that level. Perhaps that's shortsighted of us, but we don't feel we can afford to put that much more into our daughter's educational savings, especially when you consider that we wouldn't get the govt percentage if she chooses not to continue her education. Once we have no debt I would want to put most of the money that's currently going for that towards our RRSPs but also modestly increase the RESP contribution. I agree that doing both is the best idea. We’re paying down debt and putting a small amount (about $100/mo between us) into our RRSPs and another $50/mo into an RESP, which is a way to save for post secondary expenses.

Neither of us currently has an employer pension plan with matching. If we did I would try my best to make sure we contributed the maximum amount for the match. However, we are leaving money on the table with the RESP because the government will add a percentage of what you contribute annually, up to a maximum amount and we’re not contributing at that level.

Perhaps that’s shortsighted of us, but we don’t feel we can afford to put that much more into our daughter’s educational savings, especially when you consider that we wouldn’t get the govt percentage if she chooses not to continue her education.

Once we have no debt I would want to put most of the money that’s currently going for that towards our RRSPs but also modestly increase the RESP contribution.

]]> By: Margaret http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354650 Margaret Fri, 15 Aug 2008 07:31:03 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354650 Strictly mathematically, I should be paying off debt and not contributing to retirement, but psychologically, it freaks me out not to have anything in my RESP even though I have debt. Of course, DH says that as soon as we get out of debt, he is going to buy a boat, so we will be in debt again, so apparently we will NEVER dig ourselves out, so if I wait to be debt free, I will be waiting forever. Strictly mathematically, I should be paying off debt and not contributing to retirement, but psychologically, it freaks me out not to have anything in my RESP even though I have debt. Of course, DH says that as soon as we get out of debt, he is going to buy a boat, so we will be in debt again, so apparently we will NEVER dig ourselves out, so if I wait to be debt free, I will be waiting forever.

]]> By: Brad http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354589 Brad Fri, 15 Aug 2008 05:57:09 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354589 What good is saving for retirement if you have a massive debt load? I think for someone in this situation, they would need to face the ugly truth. Two or three jobs with great intensity because time is running out kind of deal. It's not pretty but neither is the mess they created over the years. Quite simply, eliminate the debt AS FAST AS YOU CAN, and then you can use your income to save save save! What good is saving for retirement if you have a massive debt load? I think for someone in this situation, they would need to face the ugly truth. Two or three jobs with great intensity because time is running out kind of deal. It’s not pretty but neither is the mess they created over the years. Quite simply, eliminate the debt AS FAST AS YOU CAN, and then you can use your income to save save save!

]]> By: Frugal Dad http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354436 Frugal Dad Fri, 15 Aug 2008 02:05:42 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354436 I've been pouring so much of my income into debt repayment for the last couple years that I have neglected saving for retirement. This post, and my own soul searching, have me rethinking that strategy. Perhaps I should be ramping up retirement contributions and using what's left to knock out debt. I'll have to crunch some numbers over the weekend, but thanks for providing the food for thought! I’ve been pouring so much of my income into debt repayment for the last couple years that I have neglected saving for retirement. This post, and my own soul searching, have me rethinking that strategy. Perhaps I should be ramping up retirement contributions and using what’s left to knock out debt. I’ll have to crunch some numbers over the weekend, but thanks for providing the food for thought!

]]> By: Ed http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/comment-page-1/#comment-354427 Ed Fri, 15 Aug 2008 01:48:21 +0000 http://www.thesimpledollar.com/2008/08/14/the-big-debate-4-pay-off-debt-or-save-for-retirement/#comment-354427 This is a great article, Trent. When paying down debt, retirement is often left out of the usual equation. I am currently doing my best to get out of debt (and documenting it at http://ednessindebt.blogspot.com). Yet, having received a tiny raise a couple months ago, I promptly increased my contributions to the ol' 401k. At least that way I could be sure to pay less in taxes and pay myself first. This is a great article, Trent. When paying down debt, retirement is often left out of the usual equation. I am currently doing my best to get out of debt (and documenting it at http://ednessindebt.blogspot.com). Yet, having received a tiny raise a couple months ago, I promptly increased my contributions to the ol’ 401k. At least that way I could be sure to pay less in taxes and pay myself first.

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