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A reader is torn between paying off her credit cards, saving for retirement, or doing a little of both.

2 minute read

Question: After years of working part-time (I was laid off in 2014), I got a good full-time job with benefits. During the bad years, I ran up $11,000 on a half-dozen credit cards. I’m looking forward to paying those down, but I also want to start saving for retirement.

My wife says we should probably split whatever extra money my new job will bring in, but since we’re both in our early 50s, I’m wondering if stashing more in an IRA is a better option. Any advice?

— Andrew in Rhode Island

Howard Dvorkin CPA answers…

Howard Dvorkin on how to get out of debt fast

Many times, my answers to reader questions is, “It depends.” Then I explain the nuances of that particular financial dilemma. Not so in your case, Andrew. The answer is simple. Pay off those credit cards.

Let me explain it like this: Saving for retirement without paying off your current debts is like trying to cure your cancer with chemotherapy while bleeding to death from a flesh wound. You need to solve the most pressing problem first, or you won’t survive long enough to get to the second.

As a CPA and financial counselor for more than two decades, I get asked all the time: “How do I save more for retirement?” When I ask if they have any credit card debt, they sometimes answer, “Sure, but I’m making the minimum payments.”

Here’s the thing: The interest on your credit cards far outstrips what you’ll earn in a retirement account. The average interest on those cards as of today is around 15 percent. Does your retirement accounts pay you 16 percent? If the answer is no, then pay off those credit cards first.

Of course, there’s a caveat: If you have a 401(k) at this new job, take advantage of it, especially if it offer a generous matching contribution. Until you pay down those credit cards, contribute only as much as the match.

If you really want to know where you stand, Andrew, call 1-800-810-0989 for a free debt analysis from one of our trained counselors. Then you can start your new job knowing exactly what you need to do.


Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a  CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

Dvorkin is the author of Credit Hell and Power Up and Chairman of

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