I know, this is MMM's forum so the answer should be HELL YES, BECAUSE YOUR DAMN HAIR IS ON FIRE! I began reading MMM and the forum this past summer, and have drank enough of the kool-aid to understand and even embrace a good portion of the philosophy. Recently I did some rudimentary calculations with Excel, and it seemed that paying off our student loans early rather than putting the extra money to our retirement funds was a wash in our situation. This is long, bear with me.

My wife and I have just shy of $60,000 of student loan debt together and one motorcycle loan. The motorcycle loan is from a family member, with no interest. We are paying $175/month on it. The motorcycle is for sale now, and we have enough equity in it that we will have some money leftover. In addition, we owe a mortgage on our residence and a mortgage on our rental. We do not have c.c. debt. Our student loan debt is as follows:

Loan 1: $15,931.28, 5.75%, minimum payment of $271.07

Loan 2: $13,372.28, 4.25%, minimum payment of $155.00

Loan 3: $12,924.76, 6.3%, minimum payment of $150.00

Loan 4: $12,914.41, 6.3%, minimum payment of $119.00

Loan 5: $5,605.26, 5.00%, minimum payment of $50.21

These student loans are the bane of my existence, every time I see the balances I want to stab these loans in the throat. Right now we are paying $500 per month extra on loans 3 and 4 (payoff highest interest first, right?). For retirement savings we have about $91,000 between five accounts (ROTH and Traditional IRA for me, 403(b), 401(a) and Traditional IRA for my wife), all in low cost index funds. Our goal is to have $1.5M at retirement, not counting any home equity. For my calculations I used excel's future value function and assumed that the annual interest rate on our investments would be 7%. The "number of payments" is the number of monthly payments made. For the last year we have averaged $1085/month of contributions to our retirement funds, including employer contributions. this varies a little every month, my wife is paid hourly so her income fluctuates. In the first set of calculations the extra $500/month goes into our loans, and the loans are snowballed as each individual loan is paid off (highest interest rate to lowest). In the second set of calculations the extra $500/month is put into our savings, and loan payments are snowballed into our retirements savings as they loans are paid off.

**Accelerated loan payments of $500 and Retirement as normal** Annual Interest Rate 7% Number of Payments 54 Amount of Payment -1085 Present Value -91000 Payment is due at the beginning of the period 1 Future Value of the Investment Stream $193,614.99 Annual Interest Rate 7% Number of Payments 200 Amount of Payment -2330 Present Value -193600 Payment is due at the beginning of the period 1 Future Value of the Investment Stream $1,503,629.41 Number of Months 254 |

**Loan Payments as Normal and add $500 extra to retirement** Annual Interest Rate 7% Number of Payments 66 Amount of Payment -1585 Present Value -91000 Payment is due at the beginning of the period 1 Future Value of the Investment Stream $261,481.64 Annual Interest Rate 7% Number of Payments 36 Amount of Payment -1856 Present Value -261500 Payment is due at the beginning of the period 1 Future Value of the Investment Stream $396,952.62 Annual Interest Rate 7% Number of Payments 10 Amount of Payment -2011 Present Value -396900 Payment is due at the beginning of the period 1 Future Value of the Investment Stream $441,436.42 Annual Interest Rate 7% Number of Payments 36 Amount of Payment -2161 Present Value -441400 Payment is due at the beginning of the period 1 Future Value of the Investment Stream $631,005.65 Annual Interest Rate 7% Number of Payments 105 Amount of Payment -2330 Present Value -631000 Payment is due at the beginning of the period 1 Future Value of the Investment Stream $1,500,332.62 Number of Months 253 |

As you can see the number of months to reach at least $1.5M is only one month apart, and when we're talking over 20 years what does one month matter, anyway? If I change the annual interest rate to 6%, the result is 274 months for both scenarios. If it is true that the earlier one pays off debt the earlier they can retire, my calculations must be incorrect.

Here are my questions:

1. Can it be true that not paying off debt early does not necessarily affect one's retirement date? Or is it rather that paying off debts allows one to retire with a smaller 'stache?

2. What mistakes did I make, and which of my assumptions are incorrect?

3. Is there anything else I missed?