3389: Should You Save More For Retirement Or Pay Off Debt First? by Mark Dennis with Financial Finesse

What It Covers

Mark Dennis examines whether to prioritize retirement savings or debt payoff, comparing mathematical versus psychological approaches to determine the most effective strategy for financial success.

Key Questions Answered

• •Employer match priority: Always contribute to your workplace retirement plan up to the maximum employer match percentage first, capturing an instant guaranteed return before addressing any debt repayment.
• •Debt payoff psychology: Paying off smallest debt balances first, regardless of interest rates, provides greater motivation and satisfaction than the mathematically optimal approach of targeting highest interest rates, improving long-term adherence.
• •Retirement savings target: Calculate a monthly savings amount that replaces approximately 80 percent of pre-retirement income to determine if current contributions are adequate, making the abstract goal more tangible and actionable.