Why maxing out your 401(k) is a major financial mistake if you have credit-card and other punishing debt

An employer matching contribution to a 401(k) provides immediate returns on invested money. Financial advisors commonly recommend paying off high-interest credit card debt before maximizing retirement contributions beyond the employer match threshold. Emergency savings of three to six months of expenses is also prioritized by many financial professionals before additional retirement investing. The specific order depends on individual circumstances including interest rates, income stability, and debt amounts.

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