# Student loan or Roth contribution

**URL:** <https://community.clark.com/t/student-loan-or-roth-contribution/1146>\
**Category:** Investing\
**Created:** [August 18, 2022, 4:05pm UTC](https://community.clark.com/t/student-loan-or-roth-contribution/1146 "2022-08-18T16:05:35Z")\
**Posts on this page:** 4\
**Page:** 1

<div class="post-metadata">

**Author:** ![TG44](https://sea2.discourse-cdn.com/flex016/user_avatar/community.clark.com/tg44/32/561_2.png) [@TG44](https://community.clark.com/u/TG44)\
**Post date:** [August 18, 2022, 4:05pm UTC](https://community.clark.com/t/student-loan-or-roth-contribution/1146/1 "2022-08-18T16:05:35Z")

</div>

Hello, All. I’m looking for ideas about whether I should put some additional money into paying off my student loan or add to a Roth IRA.  
Student loan balance is 26500 at 2.65%. Current minimum payment t is $258 but I’ve been paying $350. I’ll have an extra $80 a paycheck and want to spend it wisely.  
I’m 42. Get the 401k 5% match at work and have a pension that costs me 1%. I have a Roth but havent added to it in quite some time. No car payments. No credit card debt. Mortgage at 2.85% and student loan at 2.65% are the only debts. Thank you.

---

<div class="post-metadata">

**Author:** ![ochotona](https://sea2.discourse-cdn.com/flex016/user_avatar/community.clark.com/ochotona/32/293_2.png) [@ochotona](https://community.clark.com/u/ochotona)\
**Post date:** [August 18, 2022, 11:28pm UTC](https://community.clark.com/t/student-loan-or-roth-contribution/1146/3 "2022-08-18T23:28:11Z")

</div>

Some 401k plans are not worth contributing to beyond the match if they are high fee. I would do Roth ahead of 401k so long as it’s with a good discount provider and properly allocated.

Between now and retirement you will probably beat your 2.65% loan rate in your retirement accounts.

---

<div class="post-metadata">

**Author:** ![Smartpolitics](https://avatars.discourse-cdn.com/v4/letter/s/65b543/32.png) [@Smartpolitics](https://community.clark.com/u/Smartpolitics)\
**Post date:** [August 19, 2022, 8:18pm UTC](https://community.clark.com/t/student-loan-or-roth-contribution/1146/5 "2022-08-19T20:18:29Z")

</div>

> [@TG44](#):
>
> Mortgage at 2.85% and student loan at 2.65% are the only debts. Thank you.

Definitely the RothIRA. So since you’re doing 5% and they’re matching 5%, the next step if you can afford is to fully fund that Roth or set aside funds for dating. If you belong to the TSP, you could alternatively put as much as you can in the Roth TSP

---

<div class="post-metadata">

**Author:** ![sengsational](https://avatars.discourse-cdn.com/v4/letter/s/3ab097/32.png) [@sengsational](https://community.clark.com/u/sengsational)\
**Post date:** [August 25, 2022, 4:34pm UTC](https://community.clark.com/t/student-loan-or-roth-contribution/1146/6 "2022-08-25T16:34:35Z")

</div>

Aren’t your student loans paused (accruing zero interest)? If they **are** paused, I’d be paying $0 on the student loans, and putting $350 + $80 in the Roth.

Even if the student loans are not paused, given the current rate environment, and if you won’t just “blow the extra dough”, you’d be wise to pay as little as possible on both outstanding loans. In other words, instead of paying $350, pay $258 and put the extra $92, plus the $80 into the Roth. If I were 42, I’d have between 90% and 100% of my Roth in equity index fund.