Paying off credit card debt can be a better option than taking the employee match. Provided you dedicate the income stream freed up by paying that CC debt to future matched contributions, and the CC’s interest rate is high enough check out: http://ponderingmoney.com/2009.....t-cc-debt/

The matching % actually drops out of the equation so it doesn’t matter if the match is 0% or 100% as long as both present and future contributions have the same match.

-Rick Francis

http://aceofwealth.com/2010/01.....-matching/

This is free money and you should take advantage of it if it’s available to you. As bad as consumer debt can be, it doesn’t match the 50-100% matching the many employers offer.

I think the other factors that you brought up were really great. You describe most (if not all) of the factors that should determine whether you invest. I think maybe people only consider the financial factors when deciding to make important financial decisions, but you rightly brought up many personal reasons why someone should or should not invest.

However, I actually have a different way of thinking than most people. While investing in the market is riskey, I do not have a problem with investing part of the emergency fund in a blue chip stock. Something like Exxon or Walmart usually is a pretty safe investment and can actually go up quite nicely during certain times.

Again, there is risk, but also a bigger reward factor as well.

(do as Matt recommends and have an emergency fund before investing / paying off debt).

Only once your debt is eliminated should you concern yourself about ‘investing’ in the traditional sense — but do get that 401k match regardless (free money).

Paternal employers try to get near 80% (combined total of Employer sponsored plans, personal savings and public plan – social security).

Joe Taxpayer mentioned finance is a personal matter – I agree. 80% is a good replacement ratio for some, other may only need 60 or 40 even.

Just to the reader, whenever possible save all you can, and own your stuff before you retire. As the world is full of fixed income retirees, just “barely getting by”, making Golden years, not so fun.

That said, I’d suggest that one start saving the day they get their first job. A company match, especially a dollar for dollar match should (in my opinion) take priority over even paying off credit cards. Most employers, if they match at all, limit to the first 5% of income. So, someone starting out of college at say, $30,000, will only put $1500 into the account.
If this delays the card repayment a bit, fine. If it means never getting those cards paid, there’s a bigger issue that this 5% won’t fix. Adjust spending. If one can live at their means, one can learn to live 5% beneath that.
Better that they get the match and learn to budget on 5% less of their income.

Once you have eliminated the credit card debt you should take stock of where you are financially and decide if investing makes sense for you. I have been able to eliminate my car loans and soon my student loan while investing for my retirement.