Ask The Expert: Should I Save For Retirement or Pay Off Debt First? -
Posted by: Howard Dvorkin, CPA
Date of post: October 12, 2015

Here’s how to counter the doom and gloom about retirement savings.

Another week, another round of depressing news about retirement savings – more specifically, the lack of them. Here’s the latest retirement news…

Millennials have it rough

It’s not just the crushing student loan debt that will hurt millennials retirement. In a new study, investment firm J.P. Morgan says the generation faces other hurdles, ranging from “below-trend wage growth” to “ rising pressure on the federal government to curtail the entitlements they currently and will eventually receive.” Millennials also:

  • “Hold more cash than prior generations,” which means they don’t benefit from investments.
  • “Are less likely to marry or own a home,” which means they don’t take advantage of marriage savings and historically rising home values.
  • “Will increasingly finance their own retirements due to declining availability of defined benefit pension plans,” which will require even more savings discipline.

Even one of their advantages works against them: Because of medical advances and better health practices, they’ll live longer – and possible outlive their money.

45-year-old women have it rougher

We’ve all heard the scary predictions that many Americans are heading into retirement without enough savings. A company called Financial Finesse crunched numbers to drive home the point. Its novel gender gap study compared 45-year-old men and women to see how they’re doing on the retirement savings front.

Researchers “looked at median incomes, deferral rates, retirement savings, life expectancies, and projected healthcare costs to determine how much each would need to save in order to replace 70 percent of their income in retirement.” The result?


The median 45-year-old man is projected to have a savings shortfall of $267,233 to meet average retirement.

That’s terrible. This is worse: The 45-year-old women is facing a shortfall of $522,262.

Americans have it better than others

A German marketing institute called GfK polled employees around the globe and asked how many agreed with this statement: “I am confident that I will have enough money to live the life I want when I retire.”

Not surprisingly, that number was low in countries with terrible economies – in Russia, it was a mere 17 percent. However, even in more stable and prosperous nations, the numbers were actually lower – 16 percent in Sweden, 15 percent in South Korea, and 13 percent in Canada.

The United States topped the list, but only at 22 percent. That’s one tick above China’s 21 percent.

 Turning bad news into better news

Previous studies have shown the biggest obstacle to retirement savings is current debt – from credit cards to student loans.

That means the most productive action you can take toward saving for retirement is to retire your debts now. was created for that purpose. Call one of our certified credit counselors today for your free debt analysis. Waiting another day to dial 1-800-810-0989 is another day of doom and gloom.

Howard Dvorkin is a CPA and chairman of, an educational resource for those who want to conquer all forms of debt in their lives.