Tough choices?

  Tough choices? You have $10,000 that you have saved from your salary. You have two options: (i) Pay off your $10,000 student loans, which carry an effective interest rate of 10%. (ii) Invest in your retirement account through your employer. Your employer provides half-matching on fund you contribute up to a contribution of $10,000 on your part. That is, if you contribute $5,000, your employer will contribute $2,500 (you keep this; the only downside is that you cannot withdraw either the money you contribute or your company matching until you’re 59.5 years old). Which option is better? Yes, the answer is actually that clear. You generally should do full matching unless you need the money for a large expense.