Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

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BogleCPA
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Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by BogleCPA » Mon Jun 19, 2017 11:00 am

Hi everyone,

New to the forum, just wanted to reach out to get some quick advice.

My question centers around my student loans, and my attempt to weigh paying off my student loans quickly against ramping up my retirement. My wife and I are recently married and just bought our first home, so I feel like I'm at a point where I finally have that first big wave of big expenses behind me (engagement ring, wedding/honeymoon, down payment on first house) and now I want to make sure I am allocating my money appropriately between student loans, retirement, and building back up our cash/emergency fund after the aforementioned recent expenses:

I'll provide some background and details below, but the basic idea is that combined we are currently saving about $800/month to our emergency fund, paying $1,000/month to student loans, and saving $875/month for retirement, and we are unsure if we should reallocate these funds based on our situation:

-His age 27, her age 26
-His salary: $70K (plus approx 10% annual bonus)
-Her salary: $47K
-Emergency fund: balance is currently $15K (as mentioned above, this is lower than usual b/c we recently paid several big expenses related to the wedding and our first home). To build this back up we are adding about $800/month to it currently, so at our current pace we would get it up to around $35K or so in 2 years and then stop these savings and allocate the money elsewhere (student loans or retirement)
-His retirement - balance is $15K - currently contributing $500/month to 401(k)
-Her retirement - balance is $12K - currently contributing $375/month combined to employer's pension and Roth IRA
-Her student loans - she is a state teacher so we are under the plan where she pays an income-based amount ($200 currently) for 10 years and then receives forgiveness for the remainder of her outstanding loan balance.
-His student loans - balance is $42K. Currently paying about $800/month towards it to pay it down as quick as possible. This is where my biggest question(s) pops up. FYI out of the $42K total for my loans, $38K of it is at 6.8%, $2K is at 4.5% and $2K is at 3.4% (so almost all at 6.8%). Couple questions I would love advice on:

1) My loans are currently federal loans which give me the flexibility to be on an income-based repayment plan, so because of this my "required" payments are only $274/month. This eases my mind a bit because I know if emergencies ever pop up, I always have the ability to pay way less than I'm capable of in a given month. However, in a typical month I pay this $274 minimum across all my loans and then throw every remaining dollar I can afford that month towards the loan(s) with the highest interest rate (6.8%). This strategy allowed me to already pay off a loan I used to have that was at 7.9% (!) and now I've made my way down to targeting the 6.8% ones.

However, my thought is that I could probably save a lot of money by refinancing to private loans at much lower interest rates since my income is fairly stable and I work in a field where my salary is growing rather steadily ($52K my first year, up to currently $70K in my 4th year, and will be around $100K by my 8th year if I remain in this role). What are the pros/cons of refinancing and do you agree it would make sense for me, since my interest rates are so high (basically the whole balance is at 6.8%)? How much does it typically cost to refinance student loans and what type of rates could I be looking at after the refinance?

2) In general, how much should I be focused on paying off these student loans compared to saving for retirement? With the loans currently at 6.8% I feel like targeting the loans is a good idea because even the expected rate of return from investments in stocks is barely above that, and the payments towards student loans are a "guaranteed return" of 6.8% on the debt I'm eliminating. But, kind of related to question #1, if I am able to refinance and get the rate down to 3% or something, at that point I would lean more towards wanting to throw more money at my retirement and less towards the loan.

I'd be very grateful for any tips/advice you all are willing to give.

hightower
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by hightower » Mon Jun 19, 2017 11:11 am

Why do you need a 35k emergency fund? How much are your monthly expenses? Unless you're living way above your means, 15k is plenty for an emergency fund at this stage.
If I were you, I would start dumping as much money as possible into your 6.8% student loans and get rid of them asap. While you're doing this make sure you are contributing just enough to your 401k to get your employer match. As soon as the 6.8% loans are gone, you can ease up on the loan repayment a little and start contributing more to your retirement accounts.

Another acceptable option would be to refinance to a much lower rate (less than 4% preferably). The refinance shouldn't cost you anything. It's just a matter of finding a lender and qualifying. Check out www.whitecoatinvestor.com for a list of student loan refinancing companies. If you are able to get them refinanced then you can start focusing more heavily on saving more and just make minimum payments on the loans. Fortunately your loan balance isn't that big for your income.

Good luck and good job on saving so far.

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Meg77
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by Meg77 » Mon Jun 19, 2017 11:22 am

I think you guys are doing a great job, so kudos to being off to a wonderful start financially!

It's hard to feel like you're making much progress when you are splitting your attention and dollars among multiple goals. Personally, I would advocate for the following strategy:

1. Lower/Raise your 401k contributions until you are contributing just enough to get the employer matches.

2. Stop contributing to your emergency fund for now. $15K is a very respectable amount to have in there that will cover all manner of home and car emergencies, and if one of you were to get laid off there would be unemployment insurance, possible severance, the ability to cut all saving and some expenses, the ability to tap Roth IRA tax and penalty free, and also the ability to borrow on credit cards (absolute worst case) at a lower interest rate than you're paying on your student loan. People really overestimate the amount they need sitting around in checking doing nothing, especially if your income is stable.

3. Deplete your emergency fund enough to max out 2 Roth IRAs for 2017 (you have until April 2018 to do this so put it on the backburner for now if you want - but do it). Roth contributions can be taken out tax and penalty free so it can operate as an emergency fund. You can even keep the funds in a money market instead of invest them if it makes you feel better until you get your actual EF back up. But get the money IN while you can - you can only do $5500 per person per year.

4. Chunk all available excess cash flow at the most expensive student loan. Make sure the servicer is allocating extra payments toward principal reduction, NOT TOWARD PREPAYING FUTURE PAYMENTS. Typically they'll tell you you're paid up through some future month in time, but that is NOT what you want - that doesn't reduce your interest, it just allows you to prepay it (you'd be better off not even making extra payments if that's the case).

5. Consider reducing your EF to $2500 or $5000 and putting that extra $10K or so against the expensive loan to wipe it out even faster. This is temporary! Once it's gone you can rebuild cash.


Now, if you can refinance and get a lower rate, do it! Even if you have to take a variable rate, you can have this knocked out quickly enough to justify that. But a guaranteed 6.8% after tax return is pretty hard to beat, even after accounting for the tax benefits of retirement contributions. So I'm all for making wiping that out a top priority. And I don't know that you'll find much success with refinancing at a lower rate - unless you have a graduate degree, in which case drbank and sofi might be good options for you.
"An investment in knowledge pays the best interest." - Benjamin Franklin

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Pajamas
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by Pajamas » Mon Jun 19, 2017 11:37 am

Agree with both of the responses above. Refinance and pay off the student loans that are not forgivable as quickly as possible as you don't have a cash flow problem that would make the higher rates in exchange for lower payments worth it. Pay the loans with the highest rate first (as you have been doing) if you don't or can't refinance. Delaying unmatched contributions to tax-advantaged accounts would be worth it.

Also would add that you might shift your focus from saving specifically for retirement to the larger aim of achieving financial independence, basically the ability to retire (stop working) if you want to and to be open to opportunities when they arise. There may also be other specific goals that you save for such as college for future children or buying a house. Think of retirement accounts as tax-advantaged accounts for long-term investments instead of as "retirement" accounts.

Don't count your future salary chickens until they hatch. Plan for those salary increases you expect, but also plan for not receiving them or changing or losing a job.

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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by MoonOrb » Mon Jun 19, 2017 11:47 am

I'd defer the decision until you know whether you can refi the loans at a much better interest rate. My answer is a lot different if you're paying 4% on these loans instead of 6.8%.

I agree with no further e-fund growth unless there are circumstances you haven't set out in your post.

Tax advantaged space is precious and you can't get it back when gone, so if it's a close call between paying down the loans and funding your tax advantaged accounts, I'd fund those accounts first. But you won't know whether it's a close call until you see if you can refinance. I think there's a bit of a knee jerk reaction to seeing the high interest rate; but you can probably avoid paying that rate simply by refinancing.

BogleCPA
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by BogleCPA » Mon Jun 19, 2017 11:50 am

hightower wrote:Why do you need a 35k emergency fund? How much are your monthly expenses? Unless you're living way above your means, 15k is plenty for an emergency fund at this stage.
If I were you, I would start dumping as much money as possible into your 6.8% student loans and get rid of them asap. While you're doing this make sure you are contributing just enough to your 401k to get your employer match. As soon as the 6.8% loans are gone, you can ease up on the loan repayment a little and start contributing more to your retirement accounts.

Another acceptable option would be to refinance to a much lower rate (less than 4% preferably). The refinance shouldn't cost you anything. It's just a matter of finding a lender and qualifying. Check out http://www.whitecoatinvestor.com for a list of student loan refinancing companies. If you are able to get them refinanced then you can start focusing more heavily on saving more and just make minimum payments on the loans. Fortunately your loan balance isn't that big for your income.

Good luck and good job on saving so far.
Good point, now that I think about it I guess a $35K emergency fund isn't quite necessary. I've probably just gotten used to seeing more money in that savings account because it used to have the money we used for our downpayment in it. I guess as first time homeowners I'm just wanting to make sure we have plenty in there to cover any unexpected repairs. The emergency fund, to me, is in place mainly for unexpected expenses - I have almost zero worry about either of us losing our jobs for any period of time.

My employer's 401(k) match is pretty weak, but they match 25% of all contributions up to 6% of my salary. So if I give 6%, they'll bump it up to 7.5%. Currently I've been saving more like 11% in order to get my $500 per month. But yeah, definitely worth considering reducing my 401(k) contribution to be 6%, pocketing the rest, and putting it towards my student loans.

Thanks for the link about the student loan refinance. I'll give that a look.

BogleCPA
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by BogleCPA » Mon Jun 19, 2017 11:58 am

Meg77 wrote:
3. Deplete your emergency fund enough to max out 2 Roth IRAs for 2017 (you have until April 2018 to do this so put it on the backburner for now if you want - but do it). Roth contributions can be taken out tax and penalty free so it can operate as an emergency fund. You can even keep the funds in a money market instead of invest them if it makes you feel better until you get your actual EF back up. But get the money IN while you can - you can only do $5500 per person per year.

Now, if you can refinance and get a lower rate, do it! Even if you have to take a variable rate, you can have this knocked out quickly enough to justify that. But a guaranteed 6.8% after tax return is pretty hard to beat, even after accounting for the tax benefits of retirement contributions. So I'm all for making wiping that out a top priority. And I don't know that you'll find much success with refinancing at a lower rate - unless you have a graduate degree, in which case drbank and sofi might be good options for you.
Great suggestion on the ROTH IRA's. As I said in my OP, I am new to this forum and still learning about all the different tools/vehicles, and I was not aware that you can take out Roth contributions tax and penalty free (i.e. operate it as an emergency fund, as you said). Seems like a no brainer to use the Roth IRAs (rather than a savings account) as our emergency funds.

As for the student loan refinance, I do have a graduate degree so I will definitely look into drbank and sofi to see what type of rate I'm able to get! Thanks for your response.

mortfree
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by mortfree » Mon Jun 19, 2017 12:12 pm

I would pay off the two $2k student loans first - math aside, really no reason to have these low balances when you have 35k in savings.

kid(s) in future?

If so, I wouldn't go too crazy depleting that 35k in savings. Sometimes putting 5k blocks on debt helps to minimize the shock of a lower savings balance and also allows for you to be prepared in case life happens.

I might not even consider reducing the 401k - you have 800/month left over. contribute 150-300 of that to a Roth (or whatever you're comfortable with).

See how much you can stretch your dollars by spreading them around.

The one thing you don't get back with retirement contributions is time - that is if you don't contribute you have missed out on that chance for a given year. The max is 18k to 401k and 5500 to individual Roth for a reason; you will need to save close to that for a good retirement.

BogleCPA
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by BogleCPA » Mon Jun 19, 2017 12:33 pm

mortfree wrote:I would pay off the two $2k student loans first - math aside, really no reason to have these low balances when you have 35k in savings.

kid(s) in future?

If so, I wouldn't go too crazy depleting that 35k in savings. Sometimes putting 5k blocks on debt helps to minimize the shock of a lower savings balance and also allows for you to be prepared in case life happens.

I might not even consider reducing the 401k - you have 800/month left over. contribute 150-300 of that to a Roth (or whatever you're comfortable with).

See how much you can stretch your dollars by spreading them around.

The one thing you don't get back with retirement contributions is time - that is if you don't contribute you have missed out on that chance for a given year. The max is 18k to 401k and 5500 to individual Roth for a reason; you will need to save close to that for a good retirement.
I know that personal finance is a mixture of math and what makes you feel good emotionally, but for me personally those two small balance loans with the low interest rates aren't adding any additional stress to my life. It's only $4K in low interest rate student loans, compared to $38K in higher interest rate student loans, so if I had $4K to put towards the loans I'd make the math decision (i.e. put it towards the higher interest rates) rather than the emotional decision (taking the lower interest rate debt to zero).

I am definitely going to consider rethinking my strategy related to my emergency fund though. If I keep the emergency at $15K, that opens up an additional $800/month that I've currently been adding to this fund to go towards either retirement or student loans. My gut instinct is to put the additional dollars towards the student loans, but that's part of why I started this thread was to float that idea to others. There's no way I can max out my 401(k) quite yet though. That'd be $1,500/month, and I'm currently only doing $500/month and I already feel like I'm maybe a little too heavy in putting my money towards retirement, relative to student loans.

JGoneRiding
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by JGoneRiding » Mon Jun 19, 2017 12:52 pm

Having 3 loans for federal are you eligible for a federal consolidation? I might start there as you keep the flexibility you mentioned but also could lower rate. Otherwise I would look into private refi and like Meg said I would stop futter contributions to ef (though maybe not deplet it) until big loan is paid

hightower
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by hightower » Mon Jun 19, 2017 8:05 pm

BogleCPA wrote:
hightower wrote:Why do you need a 35k emergency fund? How much are your monthly expenses? Unless you're living way above your means, 15k is plenty for an emergency fund at this stage.
If I were you, I would start dumping as much money as possible into your 6.8% student loans and get rid of them asap. While you're doing this make sure you are contributing just enough to your 401k to get your employer match. As soon as the 6.8% loans are gone, you can ease up on the loan repayment a little and start contributing more to your retirement accounts.

Another acceptable option would be to refinance to a much lower rate (less than 4% preferably). The refinance shouldn't cost you anything. It's just a matter of finding a lender and qualifying. Check out http://www.whitecoatinvestor.com for a list of student loan refinancing companies. If you are able to get them refinanced then you can start focusing more heavily on saving more and just make minimum payments on the loans. Fortunately your loan balance isn't that big for your income.

Good luck and good job on saving so far.
Good point, now that I think about it I guess a $35K emergency fund isn't quite necessary. I've probably just gotten used to seeing more money in that savings account because it used to have the money we used for our downpayment in it. I guess as first time homeowners I'm just wanting to make sure we have plenty in there to cover any unexpected repairs. The emergency fund, to me, is in place mainly for unexpected expenses - I have almost zero worry about either of us losing our jobs for any period of time.

My employer's 401(k) match is pretty weak, but they match 25% of all contributions up to 6% of my salary. So if I give 6%, they'll bump it up to 7.5%. Currently I've been saving more like 11% in order to get my $500 per month. But yeah, definitely worth considering reducing my 401(k) contribution to be 6%, pocketing the rest, and putting it towards my student loans.

Thanks for the link about the student loan refinance. I'll give that a look.
From a "seasoned" home owner I can promise you that 15k will be plenty to cover anything your house may require.

BogleCPA
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by BogleCPA » Thu Jul 27, 2017 12:25 pm

Update: I inquired about refinancing my loans and my quotes are below:

SoFi:
5-year variable: 4.85%, $775 per month
5-year fixed: 5.00%, $778 per month

DRBank:
5-year variable: 4.36%, $766 per month
5-year fixed: 4.95%, $777 per month

My initial reaction is that it's not worth it to me at this time to go with this refinance. Compared to my current interest rate of 6.8%, I'd be forfeiting a lot of flexibility and would still have an interest rate above 4%. Currently my required monthly payment is $274/month and I just put about $800 a month towards it as long as I have no other large expenses in that given month, but it's nice knowing that in an emergency situation I could reduce my payments way down to $274 if necessary.

I know some posters above recommended that a refinance is only really worth it if I can get the rate below 4%. Based on this new information, would you all recommend paying down my student loans aggressively (by reducing my 401K contributions down to the point where I still get the full Company match, but no more)? Then maybe I can refinance my loans later in time once my $42K balance in student loans gets a little smaller, to where my required monthly payment after refinancing wouldn't be quite as high as almost $800 a month.

Just wanted to get everyone's thoughts now that I've gotten the refinance quote, since a lot of people's advice seemed to hinge on what the refinanced student loan rate would be.

Thanks!

sterlingcooper05
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by sterlingcooper05 » Thu Jul 27, 2017 1:00 pm

Why not go crazy and do everything you can to get rid of the student loans forever, including your wife's deferred loans. I wouldn't stay in debt for 10 years waiting on a forgiveness program that may not be there. I was in a similar spot at your age and paid off everything as fast as I could. It was the best financial decision I have ever made. I tried to contribute to retirement while paying off debt and I lost momentum. Once I focused on one debt at a time, debt disappeared rapidly. It took me about 2.5 years to pay off $93K in student loans. I maxed out retirement after and have made up significant ground. Maybe try it for a few months, it won't hurt anything.

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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by mw1739 » Thu Jul 27, 2017 1:28 pm

I would take $5k out of the bank and pay off the 2 small student loans just to simplify your life. Then redirect the $800/month going to savings, plus the $800 you're already paying to the remaining loan. Throw your $7k a year bonus at it too. Do that and you'll be done with these student loans in less than 2 years.

BogleCPA
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by BogleCPA » Thu Jul 27, 2017 1:36 pm

sterlingcooper05 wrote:Why not go crazy and do everything you can to get rid of the student loans forever, including your wife's deferred loans. I wouldn't stay in debt for 10 years waiting on a forgiveness program that may not be there. I was in a similar spot at your age and paid off everything as fast as I could. It was the best financial decision I have ever made. I tried to contribute to retirement while paying off debt and I lost momentum. Once I focused on one debt at a time, debt disappeared rapidly. It took me about 2.5 years to pay off $93K in student loans. I maxed out retirement after and have made up significant ground. Maybe try it for a few months, it won't hurt anything.
Her student loan balance is about $75K currently, and she's already 4 years (out of 10) towards having them forgiven as a teacher. I don't think it makes any sense at all for us to spend the time and effort paying above the minimum payment on those when it would probably take us over 6 years to pay them off anyways even if we tried, at which point the loans will be forgiven by then anyways even at just minimum payments.

I'm all for going "all in" on my student loan debt, but I don't think it's financially responsible to do so with her student loan debt (at the expense of cutting off our retirement contributions, especially)
Last edited by BogleCPA on Thu Jul 27, 2017 1:37 pm, edited 1 time in total.

BogleCPA
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by BogleCPA » Thu Jul 27, 2017 1:37 pm

mw1739 wrote:I would take $5k out of the bank and pay off the 2 small student loans just to simplify your life. Then redirect the $800/month going to savings, plus the $800 you're already paying to the remaining loan. Throw your $7k a year bonus at it too. Do that and you'll be done with these student loans in less than 2 years.
Why not use that $5K to pay down 6.8% loans, instead of loans that are about 3%?

The only benefit I see to paying off the loans that have small balances and low interest rates would be to free up monthly cash flow. But given that I'm already paying well in excess of my monthly required payment on my loans, I'm not sure how removing the smaller loans would simplify much.

If I was going to put a lump sum $5K on loans, I'd just reduce my 6.8% loan by $5K, before I paid my 3% loans down to zero.

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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by Nutmeg » Thu Jul 27, 2017 2:18 pm

OP--You are getting a variety of results because different people have different values. Some value simplicity, so they advise you to pay off the smaller loans, even though their interest rates are lower. Some value being totally debt-free, so they advise you to pay off your wife's loans even though they will be forgiven in 6 more years if she continues to work at the same job.

From my standpoint, I don't value added simplicity, so I would pay off your higher-interest loans before the smaller ones. I would even take some from the emergency fund to do so. (Note that a two-earner family is less likely than a one-earner family to have the entire family income stream decimated at one time). I wouldn't pay off your wife's loans early if they seem likely to be forgiven in six years. I agree with your analysis that paying off your 6.8 percent loans is better than putting the same amount of money into an investment that might or might not yield 6.8 percent.

Ultimately, the advice you are receiving will not provide the definitive answers to your question, but as you consider the merits of what you read, you will get a better view of what your values are and therefore what steps to take next.

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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by BigMoneyNoWhammies » Thu Jul 27, 2017 2:29 pm

hightower wrote:Why do you need a 35k emergency fund? How much are your monthly expenses? Unless you're living way above your means, 15k is plenty for an emergency fund at this stage.
If I were you, I would start dumping as much money as possible into your 6.8% student loans and get rid of them asap. While you're doing this make sure you are contributing just enough to your 401k to get your employer match. As soon as the 6.8% loans are gone, you can ease up on the loan repayment a little and start contributing more to your retirement accounts.

Another acceptable option would be to refinance to a much lower rate (less than 4% preferably). The refinance shouldn't cost you anything. It's just a matter of finding a lender and qualifying. Check out http://www.whitecoatinvestor.com for a list of student loan refinancing companies. If you are able to get them refinanced then you can start focusing more heavily on saving more and just make minimum payments on the loans. Fortunately your loan balance isn't that big for your income.

Good luck and good job on saving so far.
Agree with the above. Certainly focus any extra money allocated towards debt towards paying off the loan with the highest interest rate.And certainly put enough money towards your retirement plan to get the max employer match, as this is effectively a 100% return on your investment right out of the gate. You have a pretty healthy emergency fund for your income level and age; it sounds like you would be ok shifting funds allocated to that towards debt and/or retirement, especially since you already contribute well above the required minimum to the debt. One way I like to think about these scenarios is: will the extra money I put towards an investment garner me a higher return than the interest rate of the debt it would otherwise be paying off? With the 6.8% debt being close to the historical adjusted annualized return of the S&P, I think it's better to focus on paying that debt off. Once that is gone, it is likely you'll be earning a higher return on that extra money as investment when compared to increased debt from the 3ish% interest rate on the other loans.

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marti038
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by marti038 » Thu Jul 27, 2017 2:55 pm

What I would do...

1) Contribute to 401k('s) until you meet the maximum employer match
2) Max out Roth IRA's
3) Pay off the student loans, but I probably wouldn't refinance so I could keep the flexibility. Flexibility is very valuable...to me anyway.

I think a $15k emergency fund is probably enough. It appears you're an accountant, so if you got let go for some reason you could probably land on your feet pretty quickly.

ny_knicks
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Re: Mid/Late 20's - Student Loan Paydown vs Saving for Retirement

Post by ny_knicks » Thu Jul 27, 2017 3:34 pm

Just refinanced my loans. I would advise you shop around for better rates. Most of the lenders allow you to see a rate before a hard pull on credit so there is no harm. You might have seen something similar when they listed the rates to you at SoFi but for me the 7 and 10 year loans actually came with lower rates than the 5 year.

I went with CommonBond. I did their 10-year Hybrid loan w/ first 5 years being fixed at 4% and then the last 5 being variable. I plan on paying it off before 5 years but nice to have the flexibility for longer if something catastrophic happened.

I was receiving rates between 4.5% and 5% before CommonBond offered me one at 4%.

Also worth noting, if you go on WhiteCoatInvestors page there is a list of student loan lenders. The links he provides include cash bonuses if you refinance through them. CommonBond put $600 in my checking account just for completing the refinance. Tossed it right back at the loans.

Took me 20 minutes to complete the application, got $600 in cash and lowered my rates from 6.8% to 4%. I would have done it even if the rate was 5%.

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