Question for the Money Doctors
Question submitted on Apr 15, 2010.
QuestionI have $15,000 in student loan debt and my husband has $67,000 in student loan debt and we are 43 and 41 respectively. We have a $10,000 auto loan and I just paid off the credit card debt to zero. We have a mortgage of $300,000 and two small children, ages 3 and 5. I want to get out of the shadows of the student loans, as I think they are prohibiting are ability to save for retirement and college funds. Please help!
Answer (answered by Meet the Money Doctors)
This is a tough one trying to answer this without more information and facts. I suggest you pay off the auto loan first as I’m assuming you have a higher interest rate on the car loan vs student loans. Plus, you may be able to receive tax benefits on your student loan interest assuming your income is under certain thresholds. You may want to consult your local accountant or CPA to educate you on the potential benefits of paying off your student loans.
I am always under the belief that you should pay down your debt as much as possible prior to focusing on your education and retirement savings. However, there are great benefits by saving for your retirement plans which your accountant should be able to assist you further on why it makes sense…possibly to lower your taxable income to start receiving child tax credits, etc..
I’m sure this was not answered in a way to completely answer your questions but I just don’t have all the facts. I wish you the best and I hope this was helpful.
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