hi all. i've been going over and over this one in my head for weeks now, and still can't figure it out, so i would appreciate any and all thoughts/opinions...
some pertinent facts:
- finished grad school & started my job 6 mos. ago.
- i currently earn $82k, which will become $85k w/in the next 2 mos.
- i lived on cc during my last (unfunded) semester in grad school, and am currently carrying almost exactly $15k (i've paid down ~$8k so far).
- due to a few missed payments last fall the interest rate on all 3 of my cc is 29-30%
(yes, it's true). i've tried getting the rates reduced, and have been told by each company that i must pay on time for a full year before they'll consider it. so i'm stuck with the rates.
- my company has an outstanding 401(k) match: 100% on the first 7% of my salary.
- i have a $70k student loan (consolidated a couple of years back at ~4%).
- i have a mortgage that is currently at $102k (6.25% 30-yr fixed), and my renters essentially cover that.
- i don't have a car loan or other debt, but my rent *is* sky high (~$1700...can't be helped, unfortunately
)
...now...
i'm not at all concerned about the latter two debts (but in the interest of full disclosure i listed them); payments are low, rates are decent, and they're good debt anyway.
what i can't figure out is whether or not i should elect to enroll in my
401(k) this go-round - which will be in a couple of weeks, and after that i'll be eligible every 6 mos. thereafter. my current rate for full company match is ~$6k for 6 mos., meaning my options are these:
1) contribute $6k over the next 6 mos., which my company will match 100%.
2) wait to enroll for the next election period (which will be Aug '08) and instead use the entire $6k i'm NOT putting into 401(k) to pay off that ^%&*#! credit card debt. essentially, give or take a month or two, that would allow me to completely erase that $15k by this fall (whereas i'm looking at something more like next spring with 401(k) contributions).
i am certainly no financial guru, but i am intelligent enough to know that i should probably know which scenerio to choose based upon simple gain vs. loss...
...i guess my confusion/indecision derives from the fact that i can't really figure out how much that extra $12k ($6k of which is of course *free* money) in 401(k) now will benefit me in the long run.
i.e., if it ultimately means the difference between retiring in 21 vs. 20 yrs. i'd consider that a good trade-off for not having to pay this horrific interest any longer than necessary. if, OTOH, it could be worth much more than that 20-some yrs. from now i'd rather enroll now.
oh yeah, FYI, i guess the majority of my investments, at least in the near future, will be relatively high risk stocks. i know there's no simple formula for determining these figures - which is why i need some more experienced & knowledgeable folks to offer their thoughts.
any input would be most appreciated!