Should I Stop Retirement Saving to Dump Debt?

This is a question I’ve received in several settings recently. It’s a good question and deserves a good answer.

Let’s take this apart.

Before we start, I need to make it clear that I am not a financial adviser and everyone’s situation is specific. To fully answer this question, please consult a certified financial planner.

Even with advice from a professional, you should still have enough information to ultimately make the best decision for your family.

While I wouldn’t pretend to believe I can tell everyone what’s best (remember, a one-sized solution does not exist in personal finances), I can tell you what WE did.

Retirement Saving 401K

It’s pretty simple. We did not stop contributing to our retirement account to dump debt.

This was actually one of our early disagreements in the process. I’d read someone else’s suggestions and believed we should follow in lock step. My husband wasn’t so convinced. At the time, we only had $40,000 in debt. I figured we could pay that off in a few years – even faster if he stopped contributing to the 401(k).

As you might know, that $40,000 in debt ballooned to over $100,000 and took us seven years to finally pay off.

Since retirement saving was happening in the background, we never noticed the accumulation. Seven years later, I’m so glad my husband stood firm.

Even with the best intentions, sometimes life throws you a curve ball or two.

Be honest about your history with follow through. An alternative to pausing retirement savings might be to increase your income with either a part time job or legal side hustle.

Pausing our retirement savings might have been more reasonable for a VERY short period of time. However, I would probably be more likely to concentrate on reducing other expenses or finding ways to supplement our income.

That’s how we handled the approach and I’m happy with the decision.

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