THE BLOG

Don't Put off Retirement Savings to Be Debt Free

05/28/2015 08:00 am ET | Updated May 28, 2016

I've always thought of being debt-free as the Holy Grail in personal finance. It's a prize that can be nearly impossible to obtain.

Yes there are some people that are debt free. I say congratulations, because it is quite an accomplishment. If you do have some debt, do not make the mistake of putting off saving for retirement before you are debt free. That day may not come.

Here's why you don't want to wait to save before you are debt free:

1. There's always a big purchase looming. It's hard for most of us to make large purchases like homes and cars without borrowing. Let's face it, there's always a large purchase out there just waiting for us.If you have been in debt most of your adult life, then don't procrastinate on saving for retirement. Stop being in denial, you may never be debt free. You'll have to set aside money for big purchases as well as save for retirement. Retirement is coming whether you like it or not.

2. No one is twisting your arm. Yes, no one will hold you accountable for saving for retirement. It's something you have to do on your own. Getting out of debt may take years, but saving for retirement will take decades. That's why you want to start as early as possible and give your retirement savings time to grow.

3. Time has a way of sneaking up on you. Before you know it you'll be 30, then 40, and then 50 or 60. You don't want to be chasing the debt free Holy Grail and end up still in debt and no retirement savings. Time will go by fast. Make a commitment today to sign up for your 401(k) at work, or start drafting that IRA contribution out of your checking.

Don't put off saving for retirement because you're busy chasing the personal finance Holy Grail. The challenge is figuring out how to do both. It will require a few lifestyle changes to save and get out of debt. It will be worth it though.

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