Opinions relating to debt payoff

[mojo89]

I wanted to get everyone's opinion on my method for paying off some debts. I have been investing in the past and beginning this year, decided to funnel that money towards paying off debts. Throwing larger chuncks at it seems like a better idea than paying 100 here 100 there. The money being used to pay these debts was previously allocated to two ROTH IRAs. I calcultated that I could have these debts paid off by end of July.

Is it a good idea to hault Roth IRA contributions for a few month in order to pay off debts?

Thanks for the input.

[bjl584]

In the grand scheme of things, halting retirement savings for a few months isn't going to matter 20 or 30 years from now. If you can have everything paid off by July and then restart your contributions to your Roth, I'd say go for it.

[mojo89]

I was thinking the same, I have another 30+ years to work and contribute. We maxed both Roth's out last year and will pick up once these debts are eliminated.

[Joe Moore]

Depends on the debt interest rate as well. If you have a long term mortgage at 1% above base rate you would let it run its course. However, I would say pay any credit card, personal loan and car loan debts.

There is tax benefits of contributing to retirement plans in most countries as well. Paying debt may be extra beneficial when contributing to retirement plan is least advantages in terms of tax.

[Retired To Win]

Just make sure you have a way to keep the debts from building back up.

Good luck.

[creditcardfree]

I would definitely halt contributions if it would only take a few months to get the debts paid off. Great plan!

[mojo89]

Appreciate the feedback, I'll post again when the debts have been paid.!!

[MonkeyMama]

Just make sure you have a way to keep the debts from building back up.

Good luck.

Exactly. Halting retirement contributions for a few months is, "meh". But, doing so every time you have a debt to pay off isn't a great habit to get into. I'd just pay off the debt, but would keep that in mind.

[dczech09]

I typically recommend that people pay-down debt while saving for retirement at the same time. However there are two exceptions.

One is if you have such a large debt and need to focus all of your resources on the debt at least for a period of time in order to make it more manageable.

The other is if you have so little debt that you can just wipe the floor with it in a short period of time. This sounds like you!

If you can have it paid off by the end of July, then I would go for it! As long as you get on top of your retirement investing right after you pay of the debt! Good luck and congrats!