I have $84K in student loans at 4.7% interest rate. I have a 6 month expenses emergency fund and am getting my 401K employer match. Annual Household income is $130K. I am getting a windfall of approximately $50K and would like to hear what you would do in my situation and in the current economy.
Before refinancing student loans (previously 5.5%), I had been paying down student loans aggressively at $3500/mo over the last 15 months. After refinancing, the loans are now in an interest grey area of whether to A) continue the $3500/mo payment, B) contribute more to retirement while paying the minimum on the student loans (~$1600/month), or C) a mix (e.g. $2500/mo to student loans and $1000/mo additional to retirement).
With this sudden 50K windfall, I'm thinking I'd like to spend 30K on student loans to get down to 50K and max our Roth IRA's for 2018+2019. Then I'd do option C for the student loans ($2500/mo to student loans + 1000/month to retirement, which will essentially max my 401K).
Additional factor: planning first pregnancy mid-late 2019. I'm thinking we'd just start the baby fund after the first trimester by possibly pulling back on some of these contributions. This is the only thing that makes me want to just get the student loans done with sooner rather than just paying the minimum and dumping the remainder into retirement accounts.
Thanks for your advice and perspective!
Submitted December 27, 2018 at 10:19AM by jillanco http://bit.ly/2QUR9Tq
