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Budgetary allocation: Retirement vs Debt
Posted on 9/9/13 at 5:15 pm
Posted on 9/9/13 at 5:15 pm
I am currently putting in 14% in my 401k attributing for my contribution and the match.
I have a few hundred dollars "leftover" in my budget and I'm going back and forth where to put it.
One option is my Roth at Vanguard, which is appealing due to the flexibility and control it offers versus the 401k and the fact that I can play tax games at the moment to edge me into the 15% bracket, increasing the tax free growth appeal.
The other is to throw it at my student loans (my current budget is already paying them at ~40% more than the minimum payment, allocating the remainder will turn that into paying 100% over the minimum payment).
My current compromise thought is Roth till I'm at 25% tax bracket, then focus on the loans.
What say ye?
I have a few hundred dollars "leftover" in my budget and I'm going back and forth where to put it.
One option is my Roth at Vanguard, which is appealing due to the flexibility and control it offers versus the 401k and the fact that I can play tax games at the moment to edge me into the 15% bracket, increasing the tax free growth appeal.
The other is to throw it at my student loans (my current budget is already paying them at ~40% more than the minimum payment, allocating the remainder will turn that into paying 100% over the minimum payment).
My current compromise thought is Roth till I'm at 25% tax bracket, then focus on the loans.
What say ye?
4
Posted on 9/9/13 at 5:28 pm to Volvagia
APR on your loans?
Posted on 9/9/13 at 7:44 pm to Volvagia
Pay down the debt
Your salary will increase as you age. That will help toward retirement
Your salary will increase as you age. That will help toward retirement
Posted on 9/9/13 at 8:38 pm to Volvagia
I disagree with previous posts. If you are already crushing the minimum payments on your loans, I say go for the Roth. I'm assuming the chances of you exceeding the income limit well before retirement are reasonable (so you only have so much time to take advantage), and tax-free compounding interest is huge.
Posted on 9/10/13 at 9:53 am to Volvagia
Pay down the debt. Get the student loans off your back as soon as possible.
I don't have a lot of confidence in the long term regarding our leaders. They are liable to change the rules anytime concerning pensions.
I don't have a lot of confidence in the long term regarding our leaders. They are liable to change the rules anytime concerning pensions.
This post was edited on 9/10/13 at 9:54 am
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