Savvy Strategies to Pay Off Debt and Build Retirement Wealth

By Brett Gottlieb

Balancing debt repayment with retirement savings may seem unattainable, but it’s possible—and many Americans are wondering how to juggle the two. With an average debt load of $104,215 per person and 61% of people over 50 concerned about retirement funding, it’s a common challenge.

But there’s hope: with the right plan, you don’t have to choose one over the other. By taking small, intentional steps each day, you can steadily reduce your debt while building your retirement savings. A financial professional at Comprehensive Advisor can help you develop a strategy that balances both priorities, providing guidance so you can work toward a stable and debt-free retirement.

Debt Management vs. Retirement Planning: You Can Do Both

At first glance, paying off debt and retirement planning seem at odds. How can you squirrel away money for retirement when you’re paying off a mortgage, student loans, auto loans, credit card debt, or a personal loan—or all of the above?

However, debt management and retirement planning are complementary; they work together. The sooner you pay off the money you owe to someone else, the earlier you can begin paying more to yourself, giving the power of compounding interest a chance to work as you build your retirement savings.

Many financial professionals recommend saving 10% to 15% of your salary every year for retirement. That can be tough to do with debt payments chewing up a good portion of your income. But if you start small, you can work your way up—and someday you could have multiples of your yearly salary saved up. Right now the goal is to begin saving while still paying off your debt.

7 Steps to Paying Off Debt and Saving for Retirement

The daily weight of debt can be crushing, but you can dig your way out by taking a strategic approach to your finances. Consider these seven steps to pay down your debts and boost your retirement savings:

1. Analyze Your Debt, Spending, and Budget

Start by listing how much you owe and the interest rate of each debt. Examine your spending and cut out nonessential expenses, and then track your spending in a budget spreadsheet or app.

2. Set Clear Financial Goals

Having goals to work toward can help you stay motivated and stick to your strategy. Keep your goals reasonable and attainable, and adjust them as your income changes.

3. Debts vs. Investments

Compare the interest paid on your debts to the interest earned on any investments. If the interest on a debt is higher, make it a priority.

4. Prioritize High-Interest Debts

Pay off debts with the highest interest rates first to save the most money over time. When you eliminate one debt, use that monthly payment to boost your savings or accelerate another debt payoff. You also can consider consolidating multiple debts, giving you one payment with a potentially lower interest rate.

5. Incremental Savings Increases

As you pay off your debts, boost your salary, or receive gifts of money, put the additional money toward your savings.

6. Emergency Fund

An emergency fund covers unexpected expenses. Once you start saving, prioritize building an emergency fund to avoid future debt when something unforeseen happens.

7. Employer Match

An employer match is almost like a salary increase. If your employer matches contributions to your retirement plan, your contribution should be at least high enough to get the full match.

Take Action Today

Balancing debt repayment with retirement savings can seem challenging, but the less debt you carry, the more resources you’ll have available to invest for your future. At Comprehensive Advisor, our advisors can work with you on personalized strategies for both debt management and retirement planning, helping you stay on track toward your financial goals.

Contact us at info@ComprehensiveAdvisor.com or call (760) 813-2125 to schedule an introductory consultation.

About Our Advisors

Brett Gottlieb is the founder of Comprehensive Advisor and a financial advisor with nearly two decades of industry experience. He graduated from California State University-Chico with two bachelor’s degrees, in business administration and economics, and is Life Insurance licensed in several states. He is passionate about guiding his clients on retirement income planning, helping each client pursue their specific retirement goals, and defending the assets his clients have worked so hard to achieve. Brett is a California native and currently resides in San Elijo Hills with his beautiful wife and three children.

Our team of qualified professionals have experience in the financial service industry, and our advisors hail from some of the largest independent broker/dealers and banking institutions in the country. They have dedicated their professional careers to creating personalized financial strategies for individuals and families who seek successful retirement planning and currently offer investment advisory services through AE Wealth Management, LLC. Our advisors take a common-sense approach to the planning process and work with clients to create a comprehensive retirement roadmap to help ensure their assets are preserved and they receive the income needed to enjoy their future. Based in Carlsbad, California, they work with clients throughout San Diego County and beyond. Learn more by connecting with Brett on LinkedIn or email them at info@ComprehensiveAdvisor.com.

Investment advisory products and services made available through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor. Insurance products are offered through the insurance business C.A. Financial & Insurance Services.Comprehensive Advisor, LLC is an Investment Advisory practice that offers products and services through AE Wealth Management LLC (AEWM), a Registered Investment Advisor. AEWM does not offer insurance products. The insurance products offered by C.A. Financial & Insurance Services are not subject to investment Advisor requirements. CA Ins. Lic. #6000262. 2734812 – 12/24