Paying off $45,000 in debt unlocks income that can fuel a Roth IRA—delaying investing for one year costs little but frees $3,750 monthly
RK
Rowan Kingsley
HSA eligibility IRS ruling · Apr 12, 2026
Eliminating $45,000 in non-mortgage debt unlocks $3,750 in monthly cash flow that can then be directed into a Roth IRA and other investments. A 32-year-old earning between $100,000 and $150,000 recently asked Dave Ramsey whether she should open a Roth IRA while still carrying that debt. Ramsey’s advice was clear: pay off the debt first. The $45,000 consists of high-interest student loans, a car loan, and personal borrowing—none of which should take priority over building wealth through investing.
She could earn $150,000 annually and live on $100,000, allowing her to direct $50,000 toward debt in a single year. At that pace, the $45,000 disappears in 12 months. Once it’s gone, the money previously spent servicing those loans—about $3,750 per month—becomes available for wealth-building. That sum can fund the maximum annual Roth IRA contribution of $7,500, with the remainder flowing into taxable brokerage accounts.
Delaying Roth contributions for one year means missing a year of compounding, but with roughly 30 years until retirement, the long-term impact is minimal. The trade-off is asymmetric: one year of lost contributions versus permanent liberation of income. The average American carries over $105,000 in debt, making her situation far better than most. At her income level and with the discipline to live on half her earnings, she operates in a different financial reality. The Roth IRA will still be available at age 33. The compounding she gains by starting at 33 instead of 32 is nearly as powerful as beginning earlier—especially when fueled by debt-free cash flow.