Looking for feedback on overall financial strategy.
Assets:
- $92,000 cash
- $145,000 in 401(k)
Income:
- Around $110,000/year gross (~$6,000/month take-home after taxes/deductions)
- Projected around $125,000/year next year
Monthly spend:
- Around 2k
Debt:
- Federal student loans:
- $62,000 total (3.5%–6.5%)
- Private student loans:
- $20,000 at 8.5%
- $20,000 at 10.2%
- $5,200 at 13.1%
Would you prioritize aggressively paying off private loans first (especially the 10%+ ones), or keep investing and pay them down more slowly given current cash position and income trajectory?
Some more background, I just got out of school which is why my loans are so large and my father recently passed away and left me a part of his 401k and some cash assets. I work at a non-profit, so there's a chance my federal loans might be forgiven if I make payments towards them for 10 years, but I'm not sure if that's even worth it.
Finances at 30 — should I prioritize debt payoff or investing?
byu/qxxi inpersonalfinance
Posted by qxxi
2 Comments
I personally would want to offload those high interest private student loans ASAP. That cash you have likely isn’t outperforming the interest on those bad boys. The federal one’s you can slow roll if you think you might get loan forgiveness.
Pay those private student loans asap.
If your monthly spend is only $2k and you’re not saving for anything in particular like a house etc then you have $70k of spare cash you could be using much better.
Immediately pay off those private student loans, letting 8+% ride is wild.
Pay off the federal loans that are over 5% interest rate.