8.5% interest rate?
I suppose I would prefer paying off the debt if so, but maybe you can do both? Pay 50% more than minimum on debt and take that out of what you would have contributed to your IRA.
I would also pay attention to your tax bracket. If you are in a high tax bracket (higher than 15%), I would definitely do the IRA to get that automatic "return" and shelter some more income from taxation.
Still, 8.5% is pretty high, and expecting (even a long term) rate of return on that in investments might be too optimistic.
Then again, tax sheltered gains do rule!
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Thanks,
ea1776
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