I'm not exactly in the camp of paying off all debt pretty much no matter the interest rate like some/most of everyone here seems to be. I paid off the high interest 9.25% student loan but I'm hesitant to pay off ALL of it. I've read where a lot on here would even pay off 1-3% loans. Compared to that, my debt will seem like high interest debt to you. Some details:
Emergency funds = I have about $15k in cash in savings and checking combined which equals about 10 months worth of expenses currently.
Debt: School loans only -
$37,300 @ 6.00% fixed for 30 years (28 years left and a $238/month payment)
$3,400 @ 6.25% variable ($17/month payment)
$14,670 @ 5.25% variable ($64/month payment)
The last 2 loans are private variable loans with Sallie Mae. They are 10 year loans with about 8.5 years left on them. Currently, both loans are interest only loans for the first 4 years. So both loans are interest only for the next 2.5 years with a payment of $82 total per month. After the initial 4 year period in 2.5 years, the payment for these 2 loans will jump to $297 per month total for the remainder of the term (6 years).
So total debt is about $55,370. No other debt.
Tax Filing Status: Single
Tax Rate: 28% Federal 7.75% MD State of Residence
Also, here's a link to my networthiq entry to give a snapshot of all balances and net worth: https://www.networthiq.com/people/blah_blah
I currently max 401k (I've already contributed about $16500 this year, I'll contribute the rest sometime later this year), max Roth IRA, and I used to max HSA (current employer that I just started with a couple weeks ago doesn't offer an HSA). Current employer does an automatic 10% contribution of salary to 401k. My salary is about $115,000. Student loan interest is no longer deductible.
I plan on going for a Master's degree in about a year or so but the employer will completely pay for it if I space the classes out far enough, which I plan to do, so I will not be adding any debt for school. I don't plan on getting a car or a house for at least a few years and I do not plan on getting engaged or married anytime soon (soonest would probably be 30). So I hopefully won't have any major expenses coming up for a while.
I've been thinking about investing in taxable soon as I've already maxed all tax advantaged and I still have money left over. I understand the argument of how it's better to pay off debt first before investing in taxable, I'm just having a hard time feeling that I should actually do that. I don't have a problem with paying off the small $3400 loan at 6.25% but the rest of it I feel like I shouldn't pay off right away. I feel it's best to build up some savings just in case (even investing in taxable in S&P 500 and Total International), then MAYBE pay it all off at once if I feel like it when I have the total amount saved up.
I also understand the argument that savings and CD rates are low and no where near the amount of the interest rates on my loans but the $37,000 loan is a 30 year loan and I'm sure the interest rates will rise where I could get an equivalent rate for savings and CDs eventually. I have gotten to a point where sometimes I feel like I should just pay off all my loans (or at least the 2 variable loans for now) but them sometimes I feel like I should save more money first to ensure I have some liquidity in case something happens.
Do Bogleheads really suggest I should pay off all of these loans completely ASAP before investing in taxable instead of using the money to invest long term in tax efficient index funds?