Hell all,
First post and I wanted to refrain from a full on case study though I might do that later.
A little about me I have two jobs both with 401ks and this is where the question begins:
Job 1 is my full time job gross about $86,000 and has a unique retirement setup. I contribute 3% pretax and the company contributes 15%. Then I can contribute 4% after tax and the company contributes 2%.
So annually looks like this:
Pre tax employee - $2,580
Pre tax employer - $12,900
After tax employee - $3,440
After tax employer - $1,720
Total = $20,640 which works out to 24% a year
What's nice about this is only $2,580 is attributable to my $17,500 limit
So second job is part time and I earn about $18,500 a year. The company will match 20% of whatever I invest so I put in a dollar they put in 20 cents. So I could almost have 100% of my income withheld and earn 20% return on my money right off the bat.
The question is do that or pay off debt instead?
Debts:
House: $270k @ 3.25% appraised at $300k this mortgage is 1 year old, so prepayments would mean big savings
Student Loans: $45k @ 4.8% $45k @ 6.8%
Vehicles are paid off and no cc debt.
Other than the house assets include:
401ks @ $112,000
IBonds @ $3,000
I am 33 years old and would like to retire at 55 though I am here searching for ways to accelerate it.
So I am in a position to live off of paycheck # 1 and use paycheck # 2 to either throw all at savings or all at the student loans or all at the mortgage.
Now a 20% initial return plus capital appreciation seems to beat even the 6.8% I am currently indentured to via Sallie Mae. I am not as concerned with funding a Roth as I believe it to be more advantageous to get that 20% match.
Any thoughts would be appreciated!