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Hello everyone.

I am currently 31 and need to get my retirement strategy in order. Currently I am not involved in an IRA or 401K. I work for local city government and they offer a 403B and I am automatically enrolled into a state retirement program where they contribute 5% for me.

I am thinking about starting up the 403B and do an Index fund (s&P 500). Should I also consider an IRA?

I currently have a lot of credit card debt that I am trying to get rid of. I am entered a debt management program which has help a lot with the interest and fees.

I was thinking that I should get the 403B started and get my credit cards out of the way then start an IRA. Right now on the credit program I will have the cards paid off in 2008. If I double the payments I figure I would be paid off by 2003.

Anyone out there have any ideas or advice if they have been where I am now?


Keith A.
- Virginia
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Welcome, Keith.

You seem to be on the right track. In the long run, you will need savings beyond what your 403b can probably provide--especially if you plan to retire early. So you will want to max your 403b, max your Roth IRA (better than IRA if you qualify), and then have savings in addition.

However, first you should indeed work down that credit card debt. How quickly depends in part on the interest rates you pay. If over 10%, pay it down first. If under 10%, you could be better off investing in Roth IRA and 403B first.

A point to remember, is that every year your IRA and 403B have $$ maximums that you can contribute. If you fail to use all your allowance this year, you lose it and can never get it back. So accellerate paying off that credit card debt if you can and fund your Roth for '02. You can still contribute to your Roth for '01 until April 15 next year.

Best of luck to you.
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