Inspired by the New Year and a recent retirement milestone, I decided it would be fun to document my shrinking student loan balance as my retirement balance soars.
Over the holidays I noticed that my 457 Retirement Account had finally reached $50,000! I shared in this very space how I created this account nine years ago so I wanted to update on the progress. Over the years I saved as much as I could in the account but it was only recently that I was able to really increase my contribution. I now contribute 4% pre-tax and 8% post-tax of my paycheck to this account. At the beginning of 2017 I only had $32,000, up from $25,000 in the beginning of 2016.
If I contribute another 12% of my salary in 2018 (and see modest investment returns) I should have a retirement account that exceeds my student loan debt ($61,576.87) by the end of 2018. That's my goal anyway.
According to the amortization schedule it should take me until May 2023 to only owe $50,000 in student loans, so I'm hoping that the retirement balance climbs faster than the debt is scheduled to fall.
This is why when I see people advocate focus on paying off student loan debt before saving for retirement I cringe. I have seen my account and my husband's account gain so much more steadily than the 4% interest rate (actually my husband's student loans are 2%) we pay. And yes, being in debt sucks, but so does getting older without a plan for retirement.
Stay tuned as we try for both. Bring it on, 2018!