The primary reason you went to college was to give yourself a better future. You had big dreams of working hard when you were young and retiring early and letting the rest of life to enjoy without taking care of stuff like financial stability.
So you took out student loans, and make sure that you would land the ideal job after graduation and able to pay your debt quite comfortably.
[Flickr]
Unfortunately, life isn’t always so easy, and now you find that you’re one of the million people whose lives are held back by federal or private student loan debt.
And retirement is getting closer day by day.
You have four distinct options when considering how to tackle the student loan vs. retirement debacle
1 Loans now, retirement later
For many people, this is the better choice. Sure, this will tie up funds for the here and now — something you need to consider if the near future contains a mortgage or a baby carriage. But if you can scrape by now, you may come out on top in the future.
By concentrating on paying back student loans as soon as possible, you will end up saving on how much you are spending in interest, which often turns to a significant chunk of change.
2 Retirement now with minimum payments on loans
By prioritizing saving, you have the comfort of a belief that you always have a safety backup there when you need it.
However, you can’t just neglect student loan payments. The longer you wait to tackle your student loans, the more you will have to pay in interest, this option can become costly in the long run.
3 A little bit of both
This is the middle way, and many people find this to be a right medium between two extremes.
You pay a little bit more than the minimum to your student loans each month and then put a little extra into savings for retirement.
At last, you’ll pay some of the interest. Also, you have a healthy little retirement saved up.
4 Loan forgiveness
Student loan forgiveness is the option that no one realizes they have.
Some programs offer to forgive the total loan amount, along with any unpaid interest. Others work by forgiving the outstanding loan balance at the end of the repayment term.
It’s important to pay off your debts and to save for the future. Now you know what your option are.
