Ask a financial planner: Should I pay debt or invest in my 401(k)? - Business Insider

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Note: If you can't make at least the minimum payment on your credit-card debt without reducing your 401(k) contributions completely, then stop investing and prioritize your debt

I hosted with two other personal-finance experts, talking about prioritizing well-being and budgeting during these uncertain times. We didn't get a chance to answer the question live, so here's my response.

Firstly, I recommend calling your credit-card company and asking if they would consider giving you a lower interest rate, even if it's just temporary. Because of the pandemic, What you should avoid is pulling money out of your 401 that's already invested in order to pay down the debt. Even thoughallows savers to withdraw up to $100,000 from retirement accounts through the end of 2020, penalty-free, you'll still pay income taxes on the amount and miss out on any future potential gains.

 

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