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Subject:  Re: What percentage of gross? Date:  2/28/2004  10:27 AM
Author:  LuceLu Number:  2040 of 5245

I'm currently putting 15% of my gross towards my 401K. My dh does not have a 401K, he has a pension annuity fund through his union (I don't know the formula yet). We are fairly early in our quest for financial independence. We are paying off about $24,000 in credit card debts (so far this year have brought it down to just above $20,000). We also have a car payment and a student loan to pay off. Suffice it to say, we need to pay down our debts thus cannot afford to put anymore in retirement accounts at this time. We also refinanced our mortgage to a 15 year at 5% (was a 30yr FHA at 7.25%).

My father (a CFP) told me I should put only 3% in my 401K and use the rest to pay off the debts. I realized that with watching our spending, I don't have to sacrifice my 401K (somedays the increasing balance is what keeps me going). DH and I decided that in order to pay off our debts, vacations had to be forgone for 2 years and work we wanted to do on the house had to be put off for 1. Anyway, he has no pension or any big well of retirement funds and basically lives on Social Security along with a tax job. If he were to have an long illness during tax season (a possiblity, he smokes, drinks and has a heart problem) he would end up having to borrow against his home (a condo with ever-rising common fees and taxes -- NYS). So I think we are taking the best course for us.

I am 38 and my dh is 35.

My goals are to pay off all debt--credit cards (this year), student loans, and vehicle (next year). After that we can handle the mortgage payment while maxing out our retirement accounts and my son's 529 and hopefully have a little extra to build some wealth in investments.

At least that is where we are now.

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