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Subject:  IRA Contribution vs Debt Paydown Date:  4/13/2003  11:43 PM
Author:  drcpa Number:  36129 of 87981


I have the option to contribute the full $3k for 2002 to my Roth IRA, however I will have to carry a balance of about $2k on my credit card in order to do so (APR of approx 10%). I estimate that I would be able to pay down the balance on the card within 3 months. Does it make sense to make the full 2002 contribution, to make a partial contribution to allow for faster debt paydown, or fully pay off my card now and contribute whatever's leftover? Also, I participate in a 401(k) plan through my employer which I contribute to at 6% of my income (the maximum percentage at which my employer will match 25%). I could increase the 401(k) percentage to make up for whatever missed contribution to the IRA (although I would not reap the benefits of the tax free income on the Roth). What do you think? Looking forward to some suggestions.


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