If we have debt should we pay this off before starting a retirement fund?

My husband and I have quite a bit of debt (mostly student loans). We are wondering if we should put all our available money to pay off these loans or start our retirement fund immediately? We are 22 and 23 years old. If we put all our money into paying off the loans, we could do it in about 4-6 years.

If we have debt should we pay this off before starting a retirement fund?
You should always pay off debt as quickly as possible because the interest you are paying on the debt is always higher than the interest that you can get on your savings.





The only two exceptions to this are:





a.) If you are paying a very low rate of interest on your loan, for example UK student loan or subsidised loan from employer.





b.) If you have no savings at all, you should always aim to have a small nest-egg equivalent to a couple of month's salary for emergencies.
Reply:Keeping your bills paid, very good. Student Loan interest can be tax deductible. So, depending on your income, if you don't prepay the loan you are redirecting 25% of your payment to the loan company from what you would otherwise pay the govt for taxes, effectively lowering a 6% rate to a 4.5% rate.





You can invest your money places where it will safely earn higher rates of return (7-8%+), however that isn't in CD's or Money Markets. And your principal is just as safe, maybe safer.





There are many factors you would need to review and consider prior to making a choice, but I would highly recommend that you explore letting your Student Loans ride and redirecting the early payoff payments to much more effective wealth building options.
Reply:definitely put it toward paying off your loans. No matter how long you wait they will never go away. And it would really suck to have to get into the money you were saving for retirement to pay off a bill you knew you owed. I would pile whatever i could into these debts. Start with the smallest. Pile any extra cash you have toward that until it's paid off. keep doing that with each one until they're all paid off. If you do it that way, it could help shorten the time you think it take to pay all these off.
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