Related Posts
Has anyone moved from Accenture Federal to CGI Federal at Manager/Senior Manager level? Looking at Strategy/Organizational Change Management roles, and curious to know if you feel that compensation and benefits were worth it when measured against your actual experience once you started working with CGI. (I understand that some of it depends on the account you're on, the team you have, etc., just trying to decide if it's worth considering.) Thanks!
CGI
More Posts
Would you want to work till your 60's?
Cornell or McCombs for consulting?
Additional Posts in Compensation
Anyone know the salary for a vp at Marcus?
New to Fishbowl?
unlock all discussions on Fishbowl.
Why do you have $30k in a high yield savings account at your age? Depending on your overhead, I’d keep 3-4 months worth of income in there as an emergency fund, then invest the rest aggressively. You have a 30-40 year time horizon, take advantage
Roth 401k is provided via the company and allows you to choose from their limited investment options.
Roth IRA is something you decide whether you want or not (I would recommend it). You can max it out at 6k per year. And I would recommend maxing this then your 401k. It also allows you more freedom of investment options to choose from.
Brokerage account — only useful IMO after you max both your Roth IRA and Roth 401k because this has no tax benefits. I only suggested this since it seems like you want to invest additional capital.
Regardless of what you choose, always max out your tax beneficial investment vehicles (IRA, 401K, HSA/FSA, etc) first before you decide on a normal brokerage account
Maybe I'm more extreme, but I would almost drain my savings to get that loan paid off ASAP (except for what you need for an emergency fund, of course). If you've accumulated that much already, it won't take long to get back.
While it may be prudent to compare all the interest you pay vs. what you earn in investments and savings, I love knowing I don't owe anyone a dime and can use 100% of my paycheck how I want (outside of taxes, of course).
For reference, I'm also 25M, DC, 40k in IRA/401(k), 25k in 1.9% APY savings (saving for a down payment), and have no debt besides credit cards that I pay in full.
You asked what we would do, and I'd keep the 5k in my checking account as an emergency fund and drain my savings to pay off the debt. After that, I'd pay MYSELF that extra $500/month and save it, invest it, and enjoy it.
Why?
1 - I like the mental freedom that comes from not having any debt that will take years to pay off at the rate you're going. I don't like the idea of anyone having legal claim to any money in my bank account. Being debt free and not paying interest is a priority to me. You could also pay off say, 20k, and you'll still have 10k in cash right now. If you continue your $500/month payments, you'll pay it off sooner, pay less in interest overall, and that's without making any changes to your current cash flow.
2 - While you could invest your 30k currently in savings, a recession could hit tomorrow and you either lose a lot of your investment or have gains that are lower than the accumulating interest on your loans. While we have stock market history to look back on, there are no guarantees with recessions related to how long, how severe, or when they hit.
3 - Related to 2 above, if you pay off the debt now, you guarantee yourself a 0% interest expense. Other investments aren't guaranteed to provide a higher return than that. You have the rest of your career ahead of you and still have a long investment horizon to capitalize on, assuming you keep smart financial habits.
Regardless of your choice, I think you'll still keep your head above water. Just depends on your priorities and your level of comfort, which you obviously know better than anyone on here.
If you interest rate on student loans is higher than 1.9% you are losing money by keeping $30k in savings account. Just keep the bare minimum and pay off the loan
Pay off all at once?
25M live in DC
And I make 90k a year
In a similar boat. I’m going to start aggressively paying off loans (like $1500 or so a month)
Wealthfront has a better yield and Marcus. Same type of vehicle.
If your loan interest is higher than your high yield account then you’re net net better off paying it off totally.
Don’t need that much cash considering your style feels conservative.
Student loan interest rate?
C1 - false and actually illegal in some places for your services not to allocate additional principal payment to higher cost loans.
OP - I personally would pay anything with an rate higher than 4% off before investing.
Move the other 10k from savings to robinhood and invest
D3 elaborate?
Move the Marcus money into something with bigger risk/reward.
Get a fiduciary
Also you have a good buffer already. Pile the rest into your loans and pay them off ASAP.
At what interest rate are your student loans?
4.4