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Old 03-16-2011, 02:43 PM   #21
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Sort of an update. Have paid off two cc's ~$3k. I have pared down the 401(k) to matching only.

The thing I am looking at now: I am wondering if I should try and fund our 2010 IRA contributions before 4/18/11 or pay off another card or two. I am nervous because you can't go back in time to fund the IRA and can't put in more than the $5k/ea when all the bills are paid off....

We are not adding any $$ to the cc's just slowly paying them off.

Would it be better to contribute to IRA for 2010 or put towards a bill(s)
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Old 03-16-2011, 02:50 PM   #22
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I agonized over this, Ronnie, when we were getting things paid off. I kinda split the difference, putting half into the IRAs by the deadline and using the rest for paying off debt. That way I covered both rather than an all-or-nothing program.
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Old 03-16-2011, 03:12 PM   #23
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Credit card interest rates are so outrageously high that getting rid of credit card debt ASAP has got to beat any other move, I think. And the sooner you do, the more money you will free up for savings.
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Old 03-16-2011, 03:16 PM   #24
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I agonized over this, Ronnie, when we were getting things paid off. I kinda split the difference, putting half into the IRAs by the deadline and using the rest for paying off debt. That way I covered both rather than an all-or-nothing program.
Plus, if it's a Roth, you can always withdraw your contributions without taxes or penalty if you really need that cash -- but you can't "change your mind" and fund the IRA for 2011 in, say, 2013.
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Old 03-16-2011, 03:35 PM   #25
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I have to vote to pay off the credit cards first, Ronnie.

Great that you've been able to "retire"--two of your credit cards, that is!
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Old 03-16-2011, 03:45 PM   #26
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Plus, if it's a Roth, you can always withdraw your contributions without taxes or penalty if you really need that cash -- but you can't "change your mind" and fund the IRA for 2011 in, say, 2013.

That was my feeling, granted the CC are at 10% or less and this would only delay their pay off by less than a year, but can't go back and fund the IRA.

Nor can I put 'extra' in the IRA when bills are paid off
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Old 03-16-2011, 04:28 PM   #27
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You do what you have to do. Because you are still young, you may not feel as much of a sense of urgency as some do. Or maybe you do. Like Onward, I was pretty motivated and retired I guess about 8.5-9 years after figuring out how to do it. In order to do that, I had to max out my TSP(=401K) plus over-50 catchup while I was paying off my debt.

The TSP contribution was an automatic deduction, like withholding and so on, so I never saw it. I then had to set aside 1/3 of my remaining take-home pay for paying off my debts (and then saving once I was debt free). I had to keep those monthly bills at an absolute minimum, as you can imagine.

I made some big mistakes, too. I didn't get my Roth IRA started until about 5 years before I retired. At the very beginning of my efforts my junk car was in the process of self-destructing, so I bought a new one. Buying a Toyota in cash was a good idea, but getting the money for it from the 401K from my previous job was not a good move.

But you know, if you keep on working hard at it you can overcome a few mistakes. We live in a truly great country with so much opportunity.
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