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Hi everyone. I have $4000 saved up and am trying to decide whether to pay off the $4000 we have in credit card debt at 9.90% interest or fund two IRAs for 2001 ($2000 for my IRA and $2000 for my wife's), or something inbetween. At first blush, the easy answer is pay the debt. But please hear me out.

I have two main reasons for not paying the debt: First, if I don't fund the IRA for 2001 by April 15, 2002, I lose that opportunity forever. Second, even if I don't pay off the debt now, I will definitely be able to do so within a few months after contributing to the IRAs. (We make good money (~$160,000/yr), and live well below our means, so we typically have about $1500-$2000 left over at the end of each month.)

You're probably wondering why we haven't paid off the debt sooner. Well that is because we made mistakes earlier in life, giving us a lot of debt. At the beginning of last year, we owed about $22,000 in CC debt--now it's down to $4000. I would like to finish it off and never carry a balance again, but I hate to miss this one-time opportunity (literally!) to fund the IRA for 2001.

FWIW, (1) retirement planning is an extremely important goal for us; (2)I already max my 401k, and my wife works part-time so she doesn't have a retirement plan; and (3) I am 27 and my wife is 26.

I would appreciate everyone's viewpoints. I would like to do the Foolish thing (capital F), rather than the foolish thing (lower case f).

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