Wife has 90k student loan
 

Quick question,

I just got married and my wife has a $90,000 dollar student loan and the interest rate is about 6%. I have about $700,000 in stocks and cash, about $250,000 of which is in 401k/IRA's, the rest mostly in stocks with about $100k cash.

Should I just bite the bullet and pay off her student loans now in one swoop? Is there any tax benefit? I'm making about $150k/year now if it matters. My wife does not work.

Thanks.

I would pay it off today. I'm no pro, but I would imagine any small tax incentive due to paying student loan interest would be FAR outweighed by having a $90,000 lbs. weight bogging your financial situation down. I do take a rather simplistic approach to personal finance, however. I wouldn't want a 90k student loan debt anywhere near my family.

Congrats on the marriage!

Consult a tax advisory, pulling money out of that account may be hit with a penalty depending on how it is set up.

I'd hang loose for a little while, see how things work out.

I would make her get a job.

Call the Dave Ramsey radio show. Listen to him on occasion, he seems to specialise in debt reduction/money management.

I was in a similar situation about a decade ago, but reversed: I had $40k student loan debt, my new bride had the cash. At the time the loan charged 10.25% which sounds excessive, but her money was parked in a 12-month CD paying 6.5% (I really miss those days...).

Simple math said we were losing money by holding onto the cash, especially if you make anything close to six figures when the student loan deduction starts to decrease.

Can you make more money investing than you would save by paying off the debt? If you think not, settle it and never look back.

THIS^^^^^^^^^^^^^^^

She doesn't work? What'd she get a degree for?

If you're newly married I'd wait at least 5 years before you pay off her loans. Have her work to pay off the interest once the deferment runs out. After the 5 year point it can be either an anniversary gift or part of a divorce settlement where she takes half of your nest egg. Hopefully it's the former...

She got a bachelor's and master's in psychology. She worked for a tech company awhile but the best she could do was about 25k/year doing crappy contract work that still required long hours and lots of work at home after the 9-5 office day ended. They reneged on promises to hire her full time after being contract for a year (wanted her just to keep being a contractor with no benefits forever) so she quit, with my encouragement.

She knows she made a mistake with her education and says she got bad advice from advisers. Also she listened to everyone who said that education was the way out of poverty.

I'm doing okay in the markets lately like most people but long term I doubt I'd be able to out-earn the 6% interest rate on the loans.

Thanks for the advice so far.