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Originally Posted by creditcardfree
It's great that you are saving. My question is what percentage of your gross income are you saving for retirement. You would want to save at least 10%, but maybe up to 15%.
I do think paying off your debt is important, too. It might feel like you are making progress if you pay off the student loans first, but really you are probably paying more in interest to the home equity loan.
Advisors say to contribute up to match, so that you aren't throwing away "free" money. It is fine to contribute more!! Nothing wrong with that especially since you are already maxing out your 401K.
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401K + retirement = about 10% to retirement. That might be okay if I wasn't so far behind. Thanks for the explanation. It always seemed to me that people were suggesting that putting more than the match in a 401K was a waste.
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Originally Posted by bjl584
I'd start paying off your debts with your extra money. Rule of thumb is to start with the debt that has the highest interest rate. I'm not sure what your tax situation is so far as being able to deduct interst on your loans, but that is something that you will need to consider if it applies to your situation.
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I desperately want to pay off those debts but I keep going back and forth because I have so little in retirement. You've given me food for thought.
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Originally Posted by feh
+1
Contributing up to the match is the minimum you should be contributing. 10-15% is preferred.
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Originally Posted by disneysteve
That's 15% to retirement total. It doesn't need to be 15% to 401k and maxing a Roth (though that would be even better).
Personally, I always considered accelerated debt repayment to be the fixed income portion of my asset allocation. Instead of investing in bonds, for example, you are "investing" in the guaranteed 6.375% return from prepaying your HEL.
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I feel the same way about the guaranteed return, but I just wasn't sure if I was in a position to do that with so little in retirement.