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I have about $41k in federal student loans at a 6.55% fixed interest rate. I already make the minimum payment plus an extra $300 a month. I've been thinking about stoping contributions to my Roth IRA for the time being to help speed up getting rid of my student loans. This would be an extra $459 I could put towards them. I hate to do this but it would really help me get out of student loan debt faster. I don't have any other debt. I'm 33 and have more then 30 years before I plan to retire. I can't stop saving for retirement completely. Luckily I have a 401k where my employer matches up to 4% so technically I save 8% of my gross salary. My employer also has profit sharing and they put in extra money my 401k. The bottom line is that while saving for retirement is super important to me, I want to get rid of my student loans even more. This would be my first step to positioning myself to buy a home down the line. I'm really torn about this. Anyone have any advice? Thanks.
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I would suggest splitting it - put an even $500 extra towards the loans, and then the other $259 or whatnot into the Roth. I wouldn't stop the Roth complete. By doing that, you are putting $6k per year to the loans EXTRA, at $41k in loans, with the regular principal, you should be done in 6 years. Then, you'll hit 40 debt free, with the ability to pile on retirement funds. If you get a raise in that 6 years, or get a higher paying job, you can increase that $500 extra.
But you really don't want to be 80 and going "why self, why?"
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