Search this Thread
Thread Tools
Post Reply
Users like you have given feedback on this thread:
To give your opinion, vote using the thumbs above.
To give your opinion, vote using the thumbs above.
100% |
Share this thread on the web:
Share this thread by Email:
Click here
 del.icio.us
StumbleUpon
Google Bookmarks
Technorati
reddit |
Yahoo! My Web
Facebook
AOL IM
|
Share this thread by Email:
Click here
Pay Off Student Loans and/or Invest in Taxable?
Emergency funds = I have about $23k in cash in savings and checking combined which equals about 15 months worth of expenses currently.
Debt: School loans only -
$37,110 @ 6.00% fixed for 30 years (28 years left and a $238/month payment)
$14,670 @ 5.25% variable ($64/month payment)
The last loan is a private variable loan with Sallie Mae. It is a 10 year loan with about 8 years left. Currently, it's interest only for the first 4 years and I have about 2 years left of the interest only portion. After the initial 4 year period in 2 years, the payment for this loan will jump to $240 per month for the remainder of the term (6 years).
So total debt is $51,780. No other debt.
Tax Filing Status: Single
Tax Rate: 28% Federal 7.75% MD
Age: 26
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 maxed it for 2012), max Roth IRA, and I used to max HSA (current employer doesn't offer an HSA). Current employer contributes an automatic 10% contribution of salary to 401k. My salary is $125,000. 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 in Vanguard TSM/TISM soon as I've already maxed all tax advantaged and I still have money left over ($5k-6k/month). Some argue it's better to pay off debt first before investing in taxable and some argue to keep low interest debt (although 5.25% and 6% isn't really low) and invest and take a chance on getting a higher return than the interest rate. Should I just make the regular payments on the debt and start investing in taxable, pay off all debt ASAP before investing in taxable, or pay down a chunk of the debt (not all of it) then invest in taxable? Or perhaps I should be doing something else entirely? If I should pay off the student loans, what would your plan of action be for doing so?
Debt: School loans only -
$37,110 @ 6.00% fixed for 30 years (28 years left and a $238/month payment)
$14,670 @ 5.25% variable ($64/month payment)
The last loan is a private variable loan with Sallie Mae. It is a 10 year loan with about 8 years left. Currently, it's interest only for the first 4 years and I have about 2 years left of the interest only portion. After the initial 4 year period in 2 years, the payment for this loan will jump to $240 per month for the remainder of the term (6 years).
So total debt is $51,780. No other debt.
Tax Filing Status: Single
Tax Rate: 28% Federal 7.75% MD
Age: 26
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 maxed it for 2012), max Roth IRA, and I used to max HSA (current employer doesn't offer an HSA). Current employer contributes an automatic 10% contribution of salary to 401k. My salary is $125,000. 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 in Vanguard TSM/TISM soon as I've already maxed all tax advantaged and I still have money left over ($5k-6k/month). Some argue it's better to pay off debt first before investing in taxable and some argue to keep low interest debt (although 5.25% and 6% isn't really low) and invest and take a chance on getting a higher return than the interest rate. Should I just make the regular payments on the debt and start investing in taxable, pay off all debt ASAP before investing in taxable, or pay down a chunk of the debt (not all of it) then invest in taxable? Or perhaps I should be doing something else entirely? If I should pay off the student loans, what would your plan of action be for doing so?
