401k investment question

[vital]

I just graduated and I owe 20k in student loans and my minimum monthly payment will be about $250. Should I even invest anything to my 401k or should I try to pay off all my debt before I start investing?

 

[bondboy]

Put enough to at least get the company match. That's like free money. Then start paying off the loan.

 

[kitkat22]

You need to invest starting now. The longer you wait the more you lose.

 

[bennylong]

invest now. The latter you start, the more sorry you'll b e

 

[vi edit]

Student loan interest rates are typically pretty low (consolidate & reduce it even more) plus the interest paid is tax deductible up to certain income levels.

At the bare minimum put the max amount your employer will match up to into your 401k. Even a few extra % you won't end up missing much out of your paycheck.

Student loans aren't that bad of debt. It's about the cheapest money you'll borrow.

 

[Schfifty Five]

Originally posted by: bondboy
Put enough to at least get the company match. That's like free money. Then start paying off the loan.

Bingo....and maybe a few more % on top. If they match up to 5%, do that and add a little more, maybe even up to 10%.

 

[OS]

if it's a federal loan, i think payment and interest are deferred while you're in school, even part time. So the solution is to take a little pissy class along to side to forever not pay.

 

[vital]

I guess it's a definite winning situation if I invest in 401k since it's gauranteed return on money with matching.
I forgot to mention I owe an additional 5k in credit card should I take that into consideration on how much to invest into 401k?

 

[bondboy]

Are you paying interest on the 5k CC debt? If so, then pay that off before the student loans. CC debt interest will suck you dry, so pay it off ASAP.
Put enough for company match, then pay off CC.

 

[shopbruin]

Originally posted by: OS
if it's a federal loan, i think payment and interest are deferred while you're in school, even part time. So the solution is to take a little pissy class along to side to forever not pay.

that's only if the loan is subsidized. some of us didn't qualify for subsidized loans and the interest was running since the day the loan was taken out.

payments are deferred while you are a student. you need to meet the minimum units qualifications though to keep it i believe.

 

[Atomicus]

Roth IRA FTW

 

[Vette73]

Since you have CC debit and Student loans the best way is to...

1. Put in just enough to get the full company match in 401k (its free money as other have said)

2. Pay off the CC as fast as you can. % is the highest and a little can turn into a lot over time. Only use your CC if oyu can pay it off in full every month. If not then you should not be buying something you can;t pay for.

3. Pay off the studnet loan with min. payment. % rate is very low most of the time. If you have any extra money put it in a roth IRA or other investment.