Search found 20938 matches

by grabiner
Tue Jan 16, 2018 8:33 pm
Forum: Investing - Help with Personal Investments
Topic: Tax implications of rebalancing
Replies: 7
Views: 365

Re: Tax implications of rebalancing

In my taxable account I have $3000 in a short term bond fund, $160,000 in Wellesley, the $238,753 in the Total Stock market and an additional $112,609 in another Total Stock Market account. For some reason I wanted to keep the money I inherited separate. I may need $200,000 of my taxable money to b...
by grabiner
Tue Jan 16, 2018 8:30 pm
Forum: Investing - Help with Personal Investments
Topic: Bond Allocation with TSP G/F Funds
Replies: 7
Views: 282

Re: Bond Allocation with TSP G/F Funds

Welcome to the frum! Access to the F and G Funds is throwing me off.  I could cover all of my bond allocation in my TSP, but don't know if I should (would a bond index fund offer something they don't?).  I see a lot of praise for both of those TSP funds, and believe that the G fund offers some infla...
by grabiner
Tue Jan 16, 2018 8:23 pm
Forum: Investing - Theory, News & General
Topic: Case study Broker trade executions
Replies: 166
Views: 18454

Re: Case study Broker trade executions

Does it matter that jhfenton's test with VSS was for only one share? I don't want to go back and reread the thread, but I seem to remember some info that odd lot orders might receive different (and more favorable) treatment than 100+ share orders. On the flip side, I was thinking of a MOO buy order...
by grabiner
Tue Jan 16, 2018 8:17 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 175
Views: 15192

Re: Why Buy Bonds If You Have A Mortgage?

But you can't "hold the bonds for their duration", can you? Think about it. You on day one are going to purchase shares in a bond fund. Then at the end of the month, the first mortgage payment comes due. You haven't had time to hold it for the duration ... the bond fund has one duration and you hav...
by grabiner
Mon Jan 15, 2018 10:08 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 175
Views: 15192

Re: Why Buy Bonds If You Have A Mortgage?

Well, one thing is that you a) Assume that bonds are completely safe in your analysis: Here is the last 50 years of real long term bond rates taken from the DFA data matrix http://i65.tinypic.com/15p5nxe.jpg Does that look like a completely risk free asset? The bond-like return from paying down you...
by grabiner
Mon Jan 15, 2018 7:31 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 175
Views: 15192

Re: Why Buy Bonds If You Have A Mortgage?

Well, one thing is that you a) Assume that bonds are completely safe in your analysis: Here is the last 50 years of real long term bond rates taken from the DFA data matrix http://i65.tinypic.com/15p5nxe.jpg Does that look like a completely risk free asset? The bond-like return from paying down you...
by grabiner
Mon Jan 15, 2018 7:23 pm
Forum: Investing - Theory, News & General
Topic: International stocks underperformed for the last 20 years.
Replies: 148
Views: 15420

Re: International stocks underperformed for the last 20 years.

can someone kindly explain why VWO (Vanguard Emerging Markets Stock Index Fd) is not tax efficient but VXUS(Vanguard Total International Stock ETF) is more efficient than VWO? how much is the difference? Generally the larger the group you are looking at (Total World ex-US is pretty all encompassing...
by grabiner
Sun Jan 14, 2018 7:15 pm
Forum: Investing - Help with Personal Investments
Topic: Move to Tax-Exempt Bond in 32% Tax Bracket? What Proportion?
Replies: 22
Views: 1407

Re: Move to Tax-Exempt Bond in 32% Tax Bracket? What Proportion?

My rule of thumb is that 25% is the break-even for taxable versus tax-exempt bonds; that is, bonds of comparable risk will have comparable returns at a 25% tax rate. Sorry Grabiner to keep on asking you bond questions ... I never did really understand them. Why is 25% the break-even point? Do we no...
by grabiner
Sun Jan 14, 2018 7:10 pm
Forum: Investing - Help with Personal Investments
Topic: Does Global Wellesley Get the Foreign Tax Credit?
Replies: 5
Views: 582

Re: Does Global Wellesley Get the Foreign Tax Credit?

Whether the fund is eligible for the foreign tax credit or not, it should be held in a tax-sheltered account. I'm not sure how the global variant will come out, but the US version of Wellesley scores 9, 3, and 16 on Percent Rank in Category, tax analysis, at morningstar relative to all funds that h...
by grabiner
Sun Jan 14, 2018 7:04 pm
Forum: Investing - Help with Personal Investments
Topic: Move funds from investment account to Roth solo 401k?
Replies: 4
Views: 270

Re: Move funds from investment account to Roth solo 401k?

So, should we move VTIAX (Int stocks) or VTSAX (US stocks) into the Roth accounts? I'm thinking VTIAX because that fund has a smaller proportion of dividends that are qualified. The fund tax costs are close to a wash. Total International has more non-qualified dividends, but it is also eligible for...
by grabiner
Sun Jan 14, 2018 7:01 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 175
Views: 15192

Re: Why Buy Bonds If You Have A Mortgage?

1) If you pay off the whole mortgage, you no longer need to pay your mortgage. You improve your monthly cash flow. 2) If you pre-pay a portion of your mortgage, you still need to pay the same amount of mortgage every month. Hence, you do not improve your monthly cash flow. Furthermore, you tied up ...
by grabiner
Sun Jan 14, 2018 6:57 pm
Forum: Investing - Help with Personal Investments
Topic: Roll SGENX to Thrift Savings
Replies: 15
Views: 588

Re: Roll SGENX to Thrift Savings

Timing-wise, I'd be a little scared to swap it into the TSP C-Fund (or a C- and I-Fund combination) right this minute since your present holding may weather a short-term correction better. Eventually, the corrosive effect of the 1.2% ER will make SGENX a laggard no matter what. To deal with the ris...
by grabiner
Sun Jan 14, 2018 4:28 pm
Forum: Investing - Help with Personal Investments
Topic: Move to Tax-Exempt Bond in 32% Tax Bracket? What Proportion?
Replies: 22
Views: 1407

Re: Move to Tax-Exempt Bond in 32% Tax Bracket? What Proportion?

Vanguard doesn't have anything for Arizona. Shucks. So I guess my best alternative is the VWIUX, int term tax exempt fund? Does it matter much if I have 50% Total Bond VBTLX Admiral and 50% VWIUX Int Term Tax Exempt Admiral or 100% VWIUX tax exempt int term admiral? I would prefer 100% munis in you...
by grabiner
Sun Jan 14, 2018 3:41 pm
Forum: Investing - Theory, News & General
Topic: change in balanced fund, taxable event?
Replies: 4
Views: 305

Re: change in balanced fund, taxable event?

I can see this for Target Date funds or where individual companies included in the fund drop out but I was curious about more dramatic changes. Say VG decides to drop the internation bond fund from its target date. Are they allowed to do this without causing a taxable event? I guess taking this to ...
by grabiner
Sun Jan 14, 2018 3:07 pm
Forum: Investing - Theory, News & General
Topic: change in balanced fund, taxable event?
Replies: 4
Views: 305

Re: change in balanced fund, taxable event?

This happens all the time in the target-date funds, which change their allocation to be more conservative over time. You don't usually see capital gains until after the target date, because the funds add new money, and can direct that new money to the bond funds. (More often, the funds distribute ca...
by grabiner
Sun Jan 14, 2018 3:01 pm
Forum: Investing - Help with Personal Investments
Topic: Does Global Wellesley Get the Foreign Tax Credit?
Replies: 5
Views: 582

Re: Does Global Wellesley Get the Foreign Tax Credit?

Whether the fund is eligible for the foreign tax credit or not, it should be held in a tax-sheltered account. The foreign tax credit will be relatively small, while there are other tax costs from the high dividends on the bonds, and on the capital gains because the stock portfolio is actively manage...
by grabiner
Sun Jan 14, 2018 2:58 pm
Forum: Investing - Help with Personal Investments
Topic: Expense ratio, turnover ratio, taxes vs fund performance
Replies: 5
Views: 377

Re: Expense ratio, turnover ratio, taxes vs fund performance

In a tax-deferred account, turnover is not relevant to tax cost, as you don't pay any taxes until you withdraw, and then pay tax on the full balance (traditional) or not at all (Roth). Turnover does have a slight negative effect on fund performance, because of transaction costs. If a fund holds a mi...
by grabiner
Sun Jan 14, 2018 2:54 pm
Forum: Investing - Help with Personal Investments
Topic: Move to Tax-Exempt Bond in 32% Tax Bracket? What Proportion?
Replies: 22
Views: 1407

Re: Move to Tax-Exempt Bond in 32% Tax Bracket? What Proportion?

My rule of thumb is that 25% is the break-even for taxable versus tax-exempt bonds; that is, bonds of comparable risk will have comparable returns at a 25% tax rate. At a 32% tax rate, you can get higher returns for the same level of risk, or lower risk for the same return, so you should use all mun...
by grabiner
Sun Jan 14, 2018 2:51 pm
Forum: Investing - Help with Personal Investments
Topic: Roll SGENX to Thrift Savings
Replies: 15
Views: 588

Re: Roll SGENX to Thrift Savings

My TSP is 70% C, 15% S, 15% L2040. It doesn't make sense to use this type of allocation. The L funds are designed to manage your whole portfolio by themselves, so they are appropriate if you don't want to manage the portfolio. If you are going to retire in or about 2040, then it's fine to put your ...
by grabiner
Sun Jan 14, 2018 2:35 pm
Forum: Personal Finance (Not Investing)
Topic: Quick question on paying Estimate Tax
Replies: 5
Views: 435

Re: Quick question on paying Estimate Tax

You don't file form 1040-ES at all; you fill it out yourself in order to estimate how much tax you owe. The IRS doesn't care what you wrote on the 1040-ES, only that you paid enough each quarter to avoid a penalty, and the 1040-ES helps you compute that number. For example, if you are planning to pa...
by grabiner
Sun Jan 14, 2018 2:24 pm
Forum: Personal Finance (Not Investing)
Topic: Withdraw First from t-IRA or Variable Annuity?
Replies: 6
Views: 360

Re: Withdraw First from t-IRA or Variable Annuity?

Withdrawing from either one will get the same tax bill, unless you annuitize the variable annuity or use up all the gains. Therefore, it's likely better to withdraw from the variable annuity, because the money in that annuity will grow more slowly. Once you have used up all the gains, you can choose...
by grabiner
Sun Jan 14, 2018 2:20 pm
Forum: Personal Finance (Not Investing)
Topic: How long do you save tax returns?
Replies: 39
Views: 3009

Re: How long do you save tax returns?

Save the returns themselves forever; you might need them for some other record. (I needed my 1997 W-2 for my 2012 NJ state taxes.) You can discard supporting documents once the statute of limitations expires for the last relevant return, as long as you don't need the documents for other records. For...
by grabiner
Sun Jan 14, 2018 12:51 pm
Forum: Investing - Theory, News & General
Topic: Tax Exempt Bond Funds - Considerations after Tax Reform
Replies: 12
Views: 1795

Re: Tax Exempt Bond Funds - Considerations after Tax Reform

One also has to be alert to the hidden marginal rates (27%) that occur below the 24% bracket for people with significant dividend and capital gain income. Can you kindly elaborate on how the 27% marginal rate comes about? I expect minimal dividends and no cap gains for 2018, but I hope to convert t...
by grabiner
Sun Jan 14, 2018 12:47 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 175
Views: 15192

Re: Why Buy Bonds If You Have A Mortgage?

25% of net worth in home equity is too much? I find this to be a little silly, especially if you have ample liquidity. What happens when you lose your job and still have to find $20k per year to pay your mortgage? If "pull it from your portfolio" is the answer, what happens if your job loss was due...
by grabiner
Sun Jan 14, 2018 12:28 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 175
Views: 15192

Re: Why Buy Bonds If You Have A Mortgage?

1) If you pay off the whole mortgage, you no longer need to pay your mortgage. You improve your monthly cash flow. 2) If you pre-pay a portion of your mortgage, you still need to pay the same amount of mortgage every month. Hence, you do not improve your monthly cash flow. Furthermore, you tied up ...
by grabiner
Sun Jan 14, 2018 12:23 am
Forum: Personal Finance (Not Investing)
Topic: 2018 Withholding Tables
Replies: 86
Views: 10226

Re: IRS announces new withholding tables for 2018

Per the below, a single person (in a simple one-job/nothing special situation) would need to update their current W4 withholdings (from 1) to 2 per the below? " ...filers with no dependents, only one wage income, standard deduction, and no other income, credits, etc., filing "Single with 2 Allowanc...
by grabiner
Sat Jan 13, 2018 5:24 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 175
Views: 15192

Re: Why Buy Bonds If You Have A Mortgage?

As usual, Grabiner, I don't think I'm smart enough to understand the nuances of your response. But as I see it, for this discussion you have two options with an extra $1000 per month: You can pay down a mortgage, earning the fixed mortgage rate pf return; or You can invest the money in an investmen...
by grabiner
Sat Jan 13, 2018 11:42 am
Forum: Personal Finance (Not Investing)
Topic: 2018 Withholding Tables
Replies: 86
Views: 10226

Re: IRS announces new withholding tables for 2018

I believe the IRS has warned that the tables may not be accurate and it will be up to employees to double-check the math. The way to double-check the math, does not yet exist, but perhaps it will in the near future. https://www.washingtonpost.com/business/economy/new-tax-guidelines-rely-on-workers-...
by grabiner
Sat Jan 13, 2018 11:20 am
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 175
Views: 15192

Re: Why Buy Bonds If You Have A Mortgage?

Compare the following four options: A: $100K mortgage, $280K stocks, $220K bonds B: No mortgage, $280K stocks, $120K bonds C: $100K mortgage, $350K stocks, $150K bonds D: No mortgage, $350K stocks, $50K bonds Do you prefer C or D? They have the same risk; you will lose $175K either way if the stock...
by grabiner
Sat Jan 13, 2018 10:58 am
Forum: Investing - Help with Personal Investments
Topic: Opinions for 2018 investment plans - tIRA to ROTH, pay off mortgage 10/1 ARM or student loans
Replies: 13
Views: 718

Re: Opinions for 2018 investment plans - tIRA to ROTH, pay off mortgage 10/1 ARM or student loans

Just saw an email from the loan servicer about 1098E being mailed: $2,205 interest for 2017. I'm pretty confident this will phase out for 2018 based on rough calculations using 2017 salary and income/OT for the partial year. The plan was to pay off the mortgage before the 10/1 ARM resets in June 20...
by grabiner
Fri Jan 12, 2018 11:01 pm
Forum: Personal Consumer Issues
Topic: Paid mortgage: Now what do I do?
Replies: 21
Views: 2558

Re: Paid mortgage: Now what do I do?

When I paid off my mortgage, I increased my contributions to my retirement plan (403b) by the same amount I was paying for the mortgage. If you can do this, you will have one great retirement. Similarly, you can decrease your emergency fund. If you keep six months' living expenses for emergencies, ...
by grabiner
Fri Jan 12, 2018 10:47 pm
Forum: Investing - Theory, News & General
Topic: When the Fed stops what do you do?
Replies: 17
Views: 2287

Re: When the Fed stops what do you do?

When the Fed funds rate reaches 3% and allowing for a slight flattening of the yield curve from today, 30-year Treasuries will be somewhere north of 4%. Knowing that a 4% SWR will be more than sufficient to live on (so leaving extra room for taxes and inflation), does it not make sense to move all ...
by grabiner
Fri Jan 12, 2018 10:40 pm
Forum: Investing - Theory, News & General
Topic: Tax Exempt Bond Funds - Considerations after Tax Reform
Replies: 12
Views: 1795

Re: Tax Exempt Bond Funds - Considerations after Tax Reform

Logically, yields should rise slightly when tax rates fall. If an investor in a 25% tax bracket is willing to buy a muni yielding 2.25% rather than a taxable bond yielding 3%, he must believe that the muni is no riskier, since the two bonds have the same after-tax return. When he drops to the 22% ta...
by grabiner
Fri Jan 12, 2018 10:32 pm
Forum: Investing - Help with Personal Investments
Topic: Looking for Best Alternatives for VTMFX
Replies: 7
Views: 482

Re: Looking for Best Alternatives for VTMFX

If you want to hold both US stocks and munis, I wouldn't sell the existing holding in Tax-Managed Balanced for a capital gain. You can just add the individual stock and muni funds as appropriate, so that you can control your allocation. If you want to hold all your bonds in your IRA, then it may be ...
by grabiner
Fri Jan 12, 2018 10:28 pm
Forum: Investing - Help with Personal Investments
Topic: Rebalancing out of target funds?
Replies: 8
Views: 731

Re: Rebalancing out of target funds?

Since you have a taxable brokerage account, the target funds don't make much sense for you anyway. The purpose of target funds is to automatically manage your allocation, but if you have substantial assets outside the target funds, this won't happen and you will have to rebalance on your own. So, yo...
by grabiner
Fri Jan 12, 2018 10:20 pm
Forum: Investing - Help with Personal Investments
Topic: In this case is fliexibilty better that efficiency? A question about fund placement.
Replies: 1
Views: 155

Re: In this case is fliexibilty better that efficiency? A question about fund placement.

There is almost no efficiency loss in holding bonds in a traditional or a Roth IRA, and no flexibility loss If you have $4000 in a traditional IRA, and $3000 in a Roth IRA, and you withdraw money in a 25% tax bracket, you will get the same return from both funds if they are invested the same way. Th...
by grabiner
Fri Jan 12, 2018 10:16 pm
Forum: Investing - Help with Personal Investments
Topic: Opinions for 2018 investment plans - tIRA to ROTH, pay off mortgage 10/1 ARM or student loans
Replies: 13
Views: 718

Re: Opinions for 2018 investment plans - tIRA to ROTH, pay off mortgage 10/1 ARM or student loans

1. We feel like our emergency fund is a too large. If we had to cut out non-essentials, we could cut that to $40,000 - $53,000 (9-12 months of essential expenses is our comfort level). We are considering paying down more debt for a guaranteed return rather than hold extra cash. Should we pay down t...
by grabiner
Fri Jan 12, 2018 10:02 pm
Forum: Investing - Help with Personal Investments
Topic: Investing in HSA Help
Replies: 1
Views: 208

Re: Investing in HSA Help

If you are using your HSA for medical expenses, keep one year's deductible in cash, as part of your emergency fund. If you are maxing out your retirement accounts and thus paying current medical expenses out of pocket, you can invest the whole HSA. Either way, you should contribute the maximum to yo...
by grabiner
Fri Jan 12, 2018 9:51 pm
Forum: Investing - Help with Personal Investments
Topic: ultimate all-value portfolio using Vanguard
Replies: 5
Views: 570

Re: ultimate all-value portfolio using Vanguard

Welcome to the forum! Is this a taxable or a tax-deferred account? In a taxable account, you don't want to use Vanguard International Value, and even in a tax-deferred account, it isn't strongly biased towards value; you might use a non-Vanguard value ETF. For international small-cap and emerging ma...
by grabiner
Fri Jan 12, 2018 9:47 pm
Forum: Investing - Help with Personal Investments
Topic: Trade date/Settlement date and SEC restrictions
Replies: 3
Views: 133

Re: Trade date/Settlement date and SEC restrictions

Freeriding, and related violations, occur when you buy and sell stock without having the funds to pay for the purchase. Effectively, you are getting credit from your broker, which is not allowed in a cash account. (You can have a margin account in which your broker does give you credit.) The 2-day s...
by grabiner
Fri Jan 12, 2018 7:09 pm
Forum: Investing - Theory, News & General
Topic: If I have a million with Edward Jones, in 10 years, how much money has my FA made off me?
Replies: 48
Views: 6202

Re: If I have a million with Edward Jones, in 10 years, how much money has my FA made off me?

How much they are making of your parents and how much it is costing them are two different things. What it is costing your parents is actually much higher than what they are making from them. Because they are not only losing amounts equal to the fees--they are also losing any future returns they co...
by grabiner
Fri Jan 12, 2018 7:05 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 Withholding Tables
Replies: 86
Views: 10226

Re: IRS announces new withholding tables for 2018

Honestly, I'm planning to use the same method I've done the past couple years. I change nothing on my W4 until I do my taxes. Then I take last year's tax owed, subtract whatever has already been withheld from my paychecks, and divide by the remaining number of paychecks for the year. I then mark 10...
by grabiner
Fri Jan 12, 2018 6:54 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 175
Views: 15192

Re: Why Buy Bonds If You Have A Mortgage?

I don't follow your logic. Just because I am willing to put SOME money at risk does not mean (and it does not follow logically) that I am willing to put ALL money at risk. That's the point of an investment plan and an asset allocation strategy. The issue is that you are comparing options with diffe...
by grabiner
Thu Jan 11, 2018 11:53 pm
Forum: Investing - Theory, News & General
Topic: "6 Reasons The Rich Should Pay-Off Their Mortgage"
Replies: 126
Views: 20607

Re: "6 Reasons The Rich Should Pay-Off Their Mortgage"

No longer having a mortgage would mean our credit scores would go down. We paid off the mortgage on our first house in 1991. We had a mortgage on our second house for about one year, while we waited for the first house to sell. We then paid off the mortgage on the second house. That was 10 years ag...
by grabiner
Thu Jan 11, 2018 11:50 pm
Forum: Investing - Help with Personal Investments
Topic: Help with Mandatory IRA distributions. The IRS will take my money away!!
Replies: 29
Views: 1906

Re: Help with Mandatory IRA distributions. The IRS will take my money away!!

Katietsu wrote:
Thu Jan 11, 2018 10:02 pm
Speak to the tax advisor about moving bond allocation to tax deferred and purchasing more equities in the taxable accounts.

There is a wiki called Tax Efficient Fund Placement that addresses this. Sorry, not sure how to put the link in here.
Wiki link: Tax-efficient fund placement
by grabiner
Thu Jan 11, 2018 11:48 pm
Forum: Personal Finance (Not Investing)
Topic: Credit score dropped 30 points because I paid off my auto loan?
Replies: 39
Views: 5539

Re: Credit score dropped 30 points because I paid off my auto loan?

One supporting piece of evidence, as illustrated by this thread, is that many actions that actually reduce one’s default risk results in a lower credit score (such as paying off an auto loan or closing inactive credit cards). I think grabiner's point (if I may jump in) is that you're viewing this f...
by grabiner
Thu Jan 11, 2018 11:24 pm
Forum: Personal Finance (Not Investing)
Topic: Underwater 4-5k in vehicle.
Replies: 29
Views: 1661

Re: Underwater 4-5k in vehicle.

Whether you are above or under water doesn't make much difference in the decision whether to trade in, as long as you can afford the trade-in. If you have a $15K car with a $20K loan, and want to buy a new $30K car with a $25K loan, you'll need to write a check for $10K, and your car equity will inc...
by grabiner
Thu Jan 11, 2018 11:19 pm
Forum: Personal Finance (Not Investing)
Topic: Sell bonds, pre-pay mortgage instead?
Replies: 10
Views: 759

Re: Sell bonds, pre-pay mortgage instead?

See Paying down loans versus investing on the wiki.

A 10-year, risk-free, tax-free bond earning 3% is a good deal, but not a super deal; that's close to the yield on 10-year munis. If you don't need the money for liquidity, it's worth paying down.
by grabiner
Thu Jan 11, 2018 11:09 pm
Forum: Personal Finance (Not Investing)
Topic: Equifax issues
Replies: 14
Views: 1134

Re: Equifax issues

I just received a letter from Equifax today, that isn't relevant to your issue but might give you an idea of their competency. I placed a security freeze with them last year. Today I received a letter from them that states that a new address XXX was posted to my file in the last 30 days. They write...
by grabiner
Thu Jan 11, 2018 11:04 pm
Forum: Personal Finance (Not Investing)
Topic: Investing vs paying off student loan debt
Replies: 2
Views: 243

Re: Investing vs paying off student loan debt

Welcome to the forum! This is discussed on our wiki: Paying down loans versus investing Assuming that you won't get the loans forgiven (say, under Public Service Loan Forgiveness), paying down a 6.5% student loan is an investment with a risk-free 6.5% return. Even if that is a taxable return (becaus...