As a good steward of your money, you understand the importance of paying off credit card debt, but you also know you need to save aggressively for retirement. However, determining which should be your first priority can be perplexing.
The answer in most cases is that you can—and should—focus on both. Paying off debt is critical to your financial independence. But along with paying your creditors, it’s important to pay yourself in the form of retirement savings.
This approach makes sense for two reasons.
- First, if you wait until your debts are paid off completely, you may never begin saving. And the later you begin saving, the less time your money can benefit from the power of compounded earnings over time.
- Second, seeing your savings accumulate provides the emotional and psychological boost many people need to keep moving forward.
Remember that there is help available. Don’t hesitate to get in touch with Anne Simpson (Anne.Simpson@odysseypfa.com) to talk about ways to manage debt while saving for retirement.