Pay Down Student Loan Debt or Save for Retirement

After successfully getting through from the college and start working on a job, there is a common question everyone gets to have. That is whether to start saving for the retirement right away or to pay off the big student loans they may have taken. People can look at this problem in several angles focusing on the financial security, practical value and the risk factor. Let us stand on an impartial ground and analyze this problem looking at the visible and technical factors all together.

The normal belief that has been around for centuries is that one has to get rid of their debts as soon as possible. The bliss of living without debts is a feeling everyone has to feel in order to call their life complete. Although a person manages to save a million in their account, if there are debts to be paid, he cannot feel the relief and relaxation that saved money could give completely. But, since this economy and the web of financial transactions rely on debts including mortgages, automobile loans, student loans and numerous bills, one can argue that if you wait to pay off the debts and save, you will never be able to do it. Scholarships can help you get rid of your debt quickly.


Taking a detailed glance on the debts, there are some with a high interest yet not productive such as credit card bills. Then there are productive debts such as investments, mortgages and educational loans. If we go back to the question of whether it is good to pay down student loan debt or save for retirement, the first thing we should do is reducing the debts we already have. It is easy to cut off non productive debts by getting used to a simple life style. Then it is better to see if you can deduct the interest rates of remaining debts. This service is offered by many finance centers in an easier process than you think.


After you lower your interest rates and deduct the unnecessary bills, you can save the extra money you found by this changing of the situations. Thebad debts should be paid off no matter what. The key thing you should keep in mind is that somehow you should pay off the debts before your retirement. Even though you have a seemingly stable and secure employment, unexpected situations may occur sometimes leading for unemployment. You should always keep that in mind so as never to make your savings account dry off in the name of debt paying. Naturally you may be able to save a small amount while you are paying off your debts but make sure you keep doing it.


Finally after you pay off your debts, do start saving generously. The more you save when you are energetic and young, the more comfort you will have when you get less energetic! Saying that, you should never forget to enjoy your life in the present moment you live in while paying off debts and saving for the future. That is when you can enjoy the ultimate happiness and the meaning of this life.

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