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I would evaluate what the emotional/personal cost of keeping 200k of debt is for you.
I personally got rid of my student loans as quickly as possible. While mathematically it probably didn’t make sense (I could have earned a higher return by investing) emotionally and personally it was the right decision for me. Earlier this year I was able to pivot into a legal role that better suited our family (better work/life balance) that came with a smaller salary. The monthly payments on 200k of student loans would have prevented me from doing so and I (and my family) would be miserable.
If this was a math problem, the answer would be brokerage account > loans > HYSA (assuming your interest rate on your HYSA is under 6%). Seems like you should only deviate from that if you have a real reason
I mean, if you can borrow money at 6% and make 17% on it, why wouldn’t you? I don’t think debt is inherently bad— it depends on the rate. And of course 17% is not a guaranteed return, but the chances of doing better than 6% long term are pretty good.
I also have super old grandparents and great grandparents on one side (but omg I hope I don’t live to be 107), and think it’s pretty rational to maximize your wealth, especially if you don’t have other reasons to pay off your debt first.
Since you’re regularly adding to brokerage, why not throw some at the loans? Or split this extra amount 50/50 loans and brokerage. The brokerage returns are good but that loan interest is compounding
I am paying down the loans but not more than the required payments to keep me on track to finish repayment by ~2032 (except when the mood strikes me lol) but good suggestion!
Since you’re already maxing your 401k, HSA, and sending extra to brokerage — and because you’re already sitting on a healthy emergency fund — I’d funnel any extra to student loans.
Yes I understand the straight math of average S&P returns in excess of loans means time in market is better spent. But none of those people who argue that above all else seem to factor in bear markets. There are (and will in the future) be lost decades and years when you have to achieve returns far in excess of the gains to just make it up for the loss (finance calls this a hurdle amount). However, Paying off your student loans is an instant 6% ROI. I paid off $100k in student loans around your age and had plenty of time to still invest to meet financial goals. You should prioritize both IMO and not one to the exclusion of the other.
My first goal was getting rid of my student loans. I wanted to buy a house and having all that debt significantly reduced the amount I was prequalified for. Not having debt like that was such a huge weight off my shoulders. Highly recommend paying off as fast as you can if you can.
I don’t get why people don’t prioritizing paying off student loans
The math on the interest from my investments means I make much more money in the long run by investing rather than quickly paying off student loans. All my grandparents have lived past 100 and my parents seem on track for long lives too, so while I’m still on track to pay off student loans by 2032, I’ve been throwing extra money at brokerage (rather than pay down student loans faster) to let the power of compounding interest do its magic on investments I may need when I’m old and not working
Also: no kids, 31, live with boyfriend
Hire investment advisor
If you see yourself buying a house in the next 3-5 years I would. Home ownership comes with lots of hidden expenses and you won’t want all that extra debt hanging around