Wife has 90k student loan
07-26-2016 | 06:29 AM
#1
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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 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.
07-26-2016 | 07:47 AM
#2
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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!
Congrats on the marriage!
07-26-2016 | 09:34 PM
#7
Squawking 2000
Joined: Jul 2015
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From: Skeptical
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.
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.
07-26-2016 | 11:53 PM
#9
Gets Weekends Off
Joined: Oct 2015
Posts: 3,195
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From: Gear slinger
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 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.
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...
07-27-2016 | 04:35 AM
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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...
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 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.
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