A General 401k/Loan Repayment Finances Question
04-13-2012 12:20 PM
So I have been reading that there is slightly more importance placed on paying off student loans (in good standing). Currently, here is where I am. I need to make a decision on this today so I ca make the change to my 401k if needed.
1. Currently contributing 8% of my paycheck to my 401k. My company matches 4%.
2. Remaining DoE loan is at about ~$10k @ 2.5% interest. Currently making $80 payments a month.
If I remove my contribution temporarily to my 401k, I can get close to $1k/month payments on the loan and have it gone in about a year. I looked into it an the annual return rate on my 401k is just under 5% (which seems low to me).
Is it smart financially to hold off on my 401k for about a year to pay down and remove this loan?
In case it matter, I am 31 years old. I realize at 50 it may be a worse idea.
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