stuck between a rock and a hard place

OK here is my situation. I am 28 years of age single have debt. 16K on cc and the rest is on a heloc but that is tax decuctible so I am worrying about that last since I get the tax break.

I want to be able to invest for retirement and I have been the past few years but very minimal due to my debt. I have a plan to be debt free of the credit cards by next year.

Some financial advisors are saying don't pass up this opprtuinty to invest since I will be buying everything low, and others say do not invest until debt is paid off. I do not know what to do and want to get some sound advice.

My company matches 40 cents on every dollar up to 6% and they have some good funds. I am not vested yet so I wont even have that money if I leave. I am currently on contributing 2% since I can't afford to do anymore due to my debt.

I also have a roth IRA from american funds that is on auto withdraw from my checking on 50 per month.

I really want to get rid of my debt but also do not want to miss the chance to have a comfortable retirement. Can someone please help me out on what to do. Should I suspend all my retirement investments unitl my debts are paid off? I will never get into these debts again but I need to take care of them first.

Thanks

What are the chances that you'll stay long enough at your job to get vested? How much interest are you paying on your credit card debt?

With me just guessing at those answers (read my disclaimer) here's my advice:

You can't beat the instant 40% return of the employer match. Stop contributing to the roth (temporarily) and put all the money you can afford into your 401k until you're able to get to 6% contribution level.

Nobody knows what the future holds for the stock market, but I'm guessing that when it does start to recover, it will jump quickly, so you can't watch the market and decide when to start investing again.

Paying off your debt can have a great psychological satisfaction, but if you want to get quantitative about it, you need to compare interest rates. Since the future stock market return is unknown, you have to guess at that. Then compare that to your credit card debt rate. The one with the higher rate wins. When you get to the HELOC, you also have to take into account the tax advantage.

Here's some steps I would consider:

1. Definitely stop the $50 Roth contribution and use the funds to get more of the employer matching funds. This assumes you will stay at your job until vested. If you seriously think you'll leave before vesting, maxing the employer match isn't as critical. You may want to ask your HR department whether they have gradual vesting (e.g. 20% year) or "cliff" vesting (e.g. all at once after 2 years). If the former, you may have some % vesting already.

2. Consider a "balance transfer" of your credit card debt to a lower rate ("for life") card. If you do this, be sure not to use the card for any new purchases as they will fall behind the transferred balance special offer. Actually, call your current credit card company and just ask for a lower rate. Tell them you're looking at doing a balance transfer and see if they can do anything for you. It's worth the call. If you can lower the interest component of your credit card payment, you can use the money to either pay down the balance faster or, ramp up your 401k contribution.

3. The market likely is a good buy now, but no one really knows. More important, I think, is the fact that you're 28. Getting money socked away and compounding in a retirement account now will payoff nicely when your 65.

4. Scrutinize your spending to find outlays that can be cut to free up resources for the 401k. Cable TV? Dining out? Work hard at freeing up cash to get more of the employer contribution.