If you have extra money at the end of the month you should use it to pay down your debt instead of retirement savings. No, now I will agree paying off your debt is super important but so is planning for your future and saving enough throughout your career so you are financially stable in retirement. If you postpone saving for retirement you are not only losing the years of saving but also the compounding interest from those years. Check this out, if you started saving $200 a month at age 30 and retired at age 60 you would have a savings balance of two hundred thousand nine hundred three dollars. Now let's say you waited to start contributing two hundred dollars a month until age forty when you retire at sixty your balance would be ninety two thousand four hundred eight dollars. In this example, because you waited to start saving, your balance would be over $100,000 less at retirement. The takeaway from this experiment? You need to start saving or increase your contributions today, not tomorrow, not a month or a few years, today. By doing so you can take full advantage of the power of compounding interest and be one step closer to meeting your future financial goals.
