 Dear
Dr. Don,
I am in $15,000 of credit card debt and
I'm 39 years old. I do not have retirement savings
and I am now eligible at my new position to start
investing in a matching 401(k). Do
I pay off the debt before investing in the 401(k)
or should I do both? The interest rates on my
credit cards average around 12 percent.
-- Nikki Nibble
 Dear
Nikki,
As long as it's financially feasible, I recommend
contributing to the company 401(k)
plan, at least up to the limit of the company
match. For example, if your company contributes
50 cents for every $1 that you contribute of your
salary up to 6 percent of income, you just earned
a 50 percent return on your money.
Too often, people say they'll start saving for retirement when they get the rest of their financial house in order. For many, that day never comes. You need to make retirement savings a priority. Starting to invest in your company's 401(k) plan will force you to make it a priority. The money is taken from your check before you even think of spending it.
I'm not saying it's OK to carry
the balance on your credit cards. At 12 percent
interest, you're paying $1,800 in interest annually
on a $15,000 balance. I just don't want you to
use past spending as an excuse to delay saving
for retirement. Work on paying down the balance,
too.
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