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"This Fool's official recommendation is that free money is always good. If your employer matches any amount of a 401K, you are a fool not to take advantage of it to the fullest." -- uwalum

I'd like to examine that a bit.

If I'm paying an average of 20% interest on debt,, and I only have $50 extra right now to either put into debt reduction or my 401K, would it really make sense to divert this paltry sum of cash into my 401K?

Shouldn't debt reduction come first and foremost? Should I really be messing around with my 401K when I've got $50,000 in credit card debt just sitting there?

The possible return on the 401K can't possibly overcome the 20% interest rate, can it? Or am I being a fool (the bad kind, not the good kind) and missing something?

Help!

Sean
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