this post was submitted on 27 Jul 2023
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Pay off student loan debt or invest? (lemmy.world)
submitted 1 year ago by [email protected] to c/[email protected]
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Is there a general rule of thumb on student loan interest rates and whether or not it's better to pay off ASAP vs invest in an index fund? Sold a lot of company stock from an ESPP and RSU program that happens to be the value of our household's student loan debt that is just entering repayment after graduation. Can't tell if a 5 or 6% is worth drawing out or paying off in one go. Not worried about rainy day or emergency fund and already maxing out my retirement. So really it's a question of debt payoff or non retirement investment.

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[–] [email protected] 17 points 1 year ago (1 children)

at 3% or lower, I'd invest.

at 4% either is fine.

at 5% or more, I'd pay off loans.

[–] [email protected] 4 points 1 year ago (1 children)

And by invest, we don't mean the latest fad planted on wallstreetbets.

https://www.treasurydirect.gov/savings-bonds/i-bonds/ is a good spot.

[–] [email protected] 6 points 1 year ago (2 children)

I bond yields are tanking. 4.3% isn’t worth it when you can get a shorter-term CD at 5%

[–] [email protected] 1 points 1 year ago

Locking some money with that 0.9% fixed plus inflation for 30 years has some merit. I wouldn't go all in but they aren't completely worthless.