Should I pay off student loans or start a retirement account?
Saturday, July 24th, 2010 at
8:57 am
BeenThereDone That asked:
I just graduated from college and will start to have to pay student loans within the next 5 months (about $13k) . I am also very interested in starting out a retirement account soon. I have been told that I can open an IRA for as little as $50 a month. Should I start to pay off the debt or start a retirement account? What is the best place to invest? I am 23 years old.
I just graduated from college and will start to have to pay student loans within the next 5 months (about $13k) . I am also very interested in starting out a retirement account soon. I have been told that I can open an IRA for as little as $50 a month. Should I start to pay off the debt or start a retirement account? What is the best place to invest? I am 23 years old.
Tagged with: 23 Years • Invest • Ira
Filed under: Student Loans
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Pay off the loans. Pay as much as you can afford each month. Once paid, keep writing a check for the same amount and deposit into an emergency savings account first. This should equal 8 to 12 months of salary. This is in case of job loss you can afford to live till finding another. Once that is done. Start your retirement savings.
What interest are those student loans at? If it is really low, I would start a retirement account.
Do some of each, if you can afford to. Pay the loans (the sooner you pay those off the less interest you’ll have to pay!) while putting the minimum into an IRA.
Pay off your loans first. Its simple, you’ll get more interest from the loans than you will from the IRA. The more you put it off, the deeper the hole you’ll be in.
Pay off large amounts of your college debt until it is completely gone then start putting money away for savings.
Start your IRA. Student loan interest is soo low, and doesn’t really affect your credit.