I’ve mentioned before that I’m loosely following the Dave Ramsey Total Money Makeover. From all the debt repayment books that I’ve come across his is by far the most straightforward. But I’ve chosen to follow it loosely because I’m not entirely comfortable with the idea of postponing my retirement contributions or ignoring my savings account while I pay off debt.

I realize that I can potentially speed up my debt repayment if I suspend my retirement contributions and put the money towards debt. But I’m willing to delay my financial freedom a few extra months if it means that when I’m 65, I’ll be able to retire.

In a 2016 GOBankingRates survey, one-third of American’s surveyed reported having nothing saved for retirement. Nothing. Millennials (ages 18-34) were 40% less likely to have anything saved for retirement while Gen Xers (ages 35-54) were 29% less likely. Among the Boomers (aged 55+), 28% reported no retirement savings at all.

While having nothing saved for retirement is much worse than temporarily suspending contributions, it’s still not a great financial decision, in my opinion.

In an article by Liz Weston in Money, she noted that prioritizing rapid debt repayment over retirement savings could cause debtors to wind up poorer in the long run.

I think the single greatest tool in preparing for retirement is time. The greater your investment time horizon (i.e., the greater the amount of time you have until you retire) the more likely you will be able to benefit from the power of compounding, and if need be, also rebound from market downturns.

Suspending contributions may also mean you’ll be passing up free money from your employer if they match contributions. How can you pass up free money? Free money!

I don’t think I’m any less “gazelle intense” for continuing to contribute to my retirement account while paying off debt (although Dave Ramsey might disagree). My retirement account is my saving grace. It’s the one financial decision that I’ve made in the last decade that I wouldn’t change. But while I won’t suspend contributions, I don’t plan on increasing them either. Life’s about compromise.

Are you working on debt? Are you planning to suspend your retirement contributions?

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