Try it one more time, assuming the original poster diverted the credit card payment into the IRA for those 15 years. Earning the same nominal 8% gains.Or even if he diverts just half of the credit card payment into the IRA... 15 years is a pretty good period of time for compound interest, and you're allowing it to work against him...Yup that is the missing piece in AJ analysisLet's assume he contributes $325 month into a Roth IRA at 8%/year instead of paying down his credit card debt. (Since I don't want to figure the tax advantages of Traditional IRA) At the end of 82 months his Roth balance would be $30,590. Aj writesNow if the OP were to have just kept making $325 payments each month, instead of making the diminishing minimum payments, he would have paid off the CC debt in 82 months (6 years, 10 months) and would have only paid $13,414.66 in interest, while gaining $14,487.04 in interest in the IRA during that 82 months, still coming out ahead by leaving the money in the IRA.This leaves him with a traditional IRA balance of $34,487.I think we can agree that age 57 it is better to have a Roth IRA worth $30,590 vs a traditional IRA of $34,487.
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