Call Us 432-848-3055 ☰ ˟
Logo
Call Us 432-848-3055
  • Home
  • Get a Quote
    • AutoImage of right arrow
      • Automobile
    • HomeImage of right arrow
      • Homeowners
    • Business & CommercialImage of right arrow
      • Commercial Auto
      • Cyber Liability Insurance
      • General Liability
      • Workers Compensation
    • TruckingImage of right arrow
      • Trucking
    • Oil Field InsuranceImage of right arrow
      • Oil & Gas
    • Workers Compensation
    • Motorcycle
  • Blog
  • Resources
    • Secure Area
    • Refer a Friend
    • Helpful Links
    • Calculators
    • Insurance Glossary
  • About Us
    • About Us
    • Our Locations
    • Employee Directory
    • Testimonials
    • Privacy Policy
  • Contact Us
    • Contact Us
    • Join our Newsletter
Icon Auto Icon Home
Icon Business
Icon Oil Field Contractors
Icon Life Icon Recreational Vehicles
Home > Blog > Should I Pay Off Student Loans or Save for Retirement?
WEDNESDAY, OCTOBER 28, 2020

Should I Pay Off Student Loans or Save for Retirement?

 

You’ve likely heard that you should save for retirement when you’re young. But, if you have student loans, paying off your debt may also be a goal. What should you prioritize? Should you pay off student loans or save for retirement? Here are a few ideas to think about.

Get Your Employer Match

If your employer offers a matching contribution to your retirement account, take advantage of this benefit. Your employer might, for example, offer to pitch in an additional 50 cents or $1 for every dollar that you contribute to a company-sponsored retirement plan, up to a maximum amount. This is “free money,” so to speak. If you don’t maximize this benefit, you’re leaving money on the table.

You might be thinking, “I don’t want to put money in my 401(k) because I’m afraid of the stock market.” Let’s take a moment to define a few terms: your 401(k) is an account and stocks are one of many types of investments that you might or might not choose to hold inside of that account.

Think of the 401(k) as the coffee mug, and stocks as the coffee. If you decide you don’t like coffee, you could choose to fill the mug with tea, water or juice, instead. You can often choose investments that align with your own risk tolerance.

Look at Interest Rates

Look at the interest rates on your student loans. If you have multiple loans, find out if you’re eligible to consolidate or refinance your loans into a single, lower rate. If you can’t, then you may want to consider making additional payments toward the student loan with the highest interest rate first, while making the minimum required payments on the other, lower-interest loans. By paying down the loans with the highest interest rates first, you’ll reduce the amount you’ll pay in interest over the long term.

Then, look at your budget to see if you have room to boost your retirement contributions — above the minimum amount required to receive your employer’s match — while also targeting your highest-interest student loan debt.

Top of Form

Get a quick, personalized insurance quote today.

432-848-3055

Get a quote

Bottom of Form

Consider Motivating Factors

Financial management starts with self-awareness. Ask yourself, “Which option do I prefer?”

Does the idea of reducing your debt motivate you? Can you see yourself trimming your budget and directing the savings toward paying down loans?

Or, does the idea of directing money to a retirement account, and watching your investments grow, make you feel more enthusiastic?

By focusing on what motivates you more, you may be more likely to stick with your financial plan over the long term. The approach that gets you more excited is the option where you’re likely to contribute more, and therefore may make faster progress.

The Bottom Line

The good news? Paying down student loans and investing in your retirement are both good ways to help secure your financial future. By making both a priority, but placing the emphasis on the option that excites you more, you’ll begin to make progress toward your financial goals.

 

Posted 1:00 PM

Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2023
  • 2022
  • 2021
  • 2020

  • coverage(14)
  • insurance(13)
  • commercial(7)
  • liability(6)
  • general(6)
  • oil(3)
  • field(3)
  • policy(3)
  • contractors(3)
  • homeowners(3)
  • auto(3)
  • car(3)
  • accident(3)
  • safe driving(1)
  • belongings(1)
  • highway driving(1)
  • compensation(1)
  • renters(1)
  • defensive driving(1)
  • oil and gas contractor(1)
  • auto insurance(1)
  • business(1)
  • general liability insurance(1)
  • workers(1)

View Mobile Version
Insure your needs today!
Social Social Social Social Social Social
Quick Links
Home
Get A Quote
Customer Service
Payment Options
Report a Claim
About Us
Our Carriers
Partners
Blog
Contact Us
Location 3328 N Midkiff Rd
Suite 1
Midland, TX 79705

Call/Text Us: 432-848-3055
Fx: 432-848-3054
Powered by Insurance Website Builder