How to Pay Off Debt While Saving for Retirement

You've got major financial hurdles to deal with--you're in debt and you have to start saving for retirement or you'll be working long into your retirement years. But now you're wondering which to do first and if it's possible to save for retirement and pay off debt at the same time. Here is a guide to help you pay off your debt while saving for retirement at the same time.

Instructions

1

Plan to put most of your efforts toward paying off the debt, especially if it's a high interest debt such as a credit card. Once you pay off the debt, you can start putting your debt payments toward your retirement.

2

Find out if the government can help you save. You may be able to join the KiwiSaver government retirement savings (see Resources below).

3

Talk to your human resources department. Many businesses offer retirement accounts and 401K's. If you put aside a certain amount of money, your business may match it. Most experts feel you should put enough money into your 401K to get your company match no matter how much debt you're in.

4

Have the money directly taken from your paychecks. If you don't see the money, you may not notice it's missing. Have that money put into a retirement account and/or into a savings account that you can apply toward your debt. You could also put a certain percentage of the money your bank pulls out toward debt and the rest toward retirement. Perhaps 70 percent of the money you take from your paychecks goes for debt, while the other 30 percent goes for retirement.

5

Put extra money toward debt reduction to get it paid down fast. Take rebate checks, bonuses, money from garage sales and so on and apply it directly to your debt.

6

Make sure you have an emergency fund so small emergencies like car or appliance repair don't undo all the work you've done toward paying off your debt.