Should I Pay Off Debt or Should I Save For Retirement?
The short answer to the question of should I save for retirement of pay off debt is to do both at the same time.
Using your retirement fund to pay off your debt in a lump sum may not be the best option. You may owe large fees or tax on the amount you withdraw, and it may not end up saving you any money in the long run compared to just paying the interest.
Saving towards retirement should be the number 1 goal in your budget. Especially if your employer offers a match contribution, meaning they will pay up to a certain percentage if you also pay that amount. Take advantage of this offer and your savings could double!
Paying off high interest debt and saving into an emergency fund are the next steps. Once you have a little bit more breathing room in your budget, it’s recommended you consolidate your debt into one monthly payment, with one low-interest rate. This will end up saving you some money in the long run.
GHS is here to help with any questions concerning your accounts and managing your money goals! Stop into one of our open branches or give us a call at (800) 732-4447.
1APR = Annual Percentage Rate. Rates are shown "as low as". Rates and terms are subject to change. The rate and term may vary depending on each individual's credit history and underwriting factors. Credit Union Membership required with a $25 minimum deposit and $1.00 membership fee.
2APY = Annual Percentage Yield. Rates are subject to change at any time. Early withdrawal penalties may be imposed on Term Share Accounts. Credit Union Membership required with a $25 minimum deposit and $1.00 membership fee.