patrick.net

$180 thousand? Jeeeeesus.

I would concentrate on paying your debt first. A 6.5% return on investment is a good year and I would not expect that sort of return every year. Also paying off your student loan builds good credit. See if you can consolidate your stident loans into a lower rate.

Alternately, look for a job in Europe and forget the student loan lol............

xlr8 says

$180 thousand in student loans

OMG. There's something terribly wrong that getting an education should require someone to enter a lifetime of debt servicing.

Can you refi student loans? 4.7% seems high for a student loan..I thought they were in high 2's to low 3's.

I would also say pay down the debt first. It will pave the way for a better financial future.

In general, paying off debts is preferable to seeking a return. If you pay off your debts, you get a guaranteed 4.7% return on saved interest. You did well to get a 6.5% overall return on your investments, but I doubt that's sustainable without taking some risk. Safe investments are returning less than 1% today.

I wouldn't advise chasing risk for a possible 1.8% increase in return. So, I'd go with paying off the debts, starting with the highest interest ones. That's what I did when I graduated from college.

Do both.
If you wait until you are free of debt to invest for your retirement, you may not ever get there.
Get a Roth IRA at Vanguard, T.Rowe Price, etc.

You should wait until America goes into hyperinflation, and pay the debt off with a trillion dollar bill! Lol! Just kidding, I doubt you would be able to do that. Congress would create a package that rework all the loans, and then your student loan would be worth 10 trillion dollars.

I didn't mention another reason to pay the loan back but not at the expense of investing for retirement.
The dollars you use in the future for paying off your debt will be lower value dollars.
The stocks you buy in your Roth should be worth more.

clambo says

Do both.
If you wait until you are free of debt to invest for your retirement, you may not ever get there.
Get a Roth IRA at Vanguard, T.Rowe Price, etc.

That's true. I forgot to mention, fund your retirement accounts to the max each year because it's use it or lose it. But once you fund all your retirement accounts, I'd pay off debts first.

uomo_senza_nome says

xlr8 says

$180 thousand in student loans

OMG. There's something terribly wrong that getting an education should require someone to enter a lifetime of debt servicing.

Apart from things like law where the school you graduate from determines your career there are much more affordable choices like starting at your in-state community college (can be $3k for 30 semester hours/year) and finishing at the 4 year college (under $10K a year) while living with your parents yielding a total cost under $30K.

$180K of debt for a 4-year undergraduate degree is a choice (and perhaps not one made by the original poster; for example a law or medical degree is involved). While in the banks' best interest it's not necessarily good for students.

Another reason to invest in retirement accounts is that their contents are immune from civil judgement.
Now, as far as flaking out on college loans they may have special laws and you may have agreed to special terms, which I don't know anything about.
But *in general* a bonus of retirement accounts, or "qualified accounts" is their immunity.
This is how a guy can have a $30 million judgement against him and still be able to draw his NFL pension. (OJ Simpson).
Therefore, I recommend to always fund the IRA and other accounts with the max available always.
Some people could be clever and put all financial assets into a variable annuity, and never "annuitize" but still have shielded this money from all claims of any kind.
How you got up to $180K in debt is amazing but regardless, that's water under the bridge. The presumed reason for the education in the first place was to be able to work and retire. So, make contributions for that end.

$180k??? Yikes! Pay that off ASAP. I don't think there's anywhere else to get a no-risk 4.7% rate of return. Pay down the loans with the highest interest rate first.

180K! Please tell us you are a lawyer or a full medical doctor...

I thought 100K was high enough.

Of course go after the debt. The government is dead serious about collecting it now that it is co-opting collection agencies and paying them an extra 30% or so in order to accomplish it.

xlr8,

Would you mind sharing with us, how it is you wound up with student loans of 180K?