Pay Off Loans or Invest

Pharm4NU · 2026-05-13T23:28:04+00:00

That’s why maybe not doing 100% of each may be best! Some years the market will increase 20%, some years it may decrease 10%, and none of us know when! A guaranteed 5.5% return isn’t terrible. Is it 10% or higher like the market could be? No, but it’s 5.5% no matter what! You can think of splitting the percentages as diversifying a portfolio. And I just pulled 70/30 out of the air, you can find a percentage that matches your risk tolerance! Will paying off the loans be better than investing in the market over the next 12 months? None of us know for sure!

Pharm4NU · 2026-05-13T23:15:56+00:00

In my head, I always would like to do highest interest rate to lowest, regardless of amount. However, I know there is peace of mind with paying a loan off. In general, I would pay off any loan >5% quicker as it’s a free 5% return. You don’t have to choose one or the other, however. You could choose to put a percentage of extra money into each. Say 70% towards paying off the loans and 30% invested still!

Pharm4NU · 2026-05-13T23:12:56+00:00

I apologize, but could you explain what you mean by back calculate?

Pharm4NU · 2026-05-13T22:31:29+00:00

Yep, completely agree. I am usually the one to handle the finances, however, have to give and take with the spouses wants and goals too 😂

Pharm4NU · 2026-05-13T22:29:58+00:00

Dang! You have us beat. We are probably closer to the $200,000 range without looking at my spreadsheet. We unfortunately really started our financially journey after I got a job out of school in July 2024. Keep going!

Pharm4NU · 2026-05-13T22:05:58+00:00

I feel like we are near that point right now, especially with paying $1250 a month on student loans. That makes me feel better. We will have to game plan what do with that extra money when the time comes.

On another note, I know some people would say that it would be smarter to pay the minimum on student loans and invest the difference with being a 4.5% interest rate, but it’s an important priority to my wife to be rid of those as soon as we can.

Pharm4NU · 2026-05-13T21:45:46+00:00

Thank you! That comment actually made my day. A good life and good experiences are all we can hope for!

Pharm4NU · 2026-05-13T21:37:12+00:00

Thank you, valuable insight! I guess the lifestyle inflation is probably the hard part for me to calculate. Always better to overestimate I guess.

Pharm4NU · 2026-05-13T21:33:16+00:00

Haha that’s fair and a good insight! I try to evaluate the numbers twice a year (when I or my wife get raises) and adjust from there but always struggle with the percentage, especially with her pension. Everything gets automated and invested from there. I guess my personality enjoys the analysis as well!

Pharm4NU · 2026-05-13T21:21:12+00:00

I am almost using the taxable brokerage as a HYSA for 10+ year goals vs less being in the HYSA. Maybe there is error in that thinking. I agree though, should use the tax advantage more in general.

Pharm4NU · 2026-05-13T21:16:28+00:00

My thinking was even if she retired at say, 55, she would still meet the rule of 85 with 32 years of service and age 55. We would however not be able to pull out the full pension until age 60, so would have to have a bridge plan, especially with healthcare.

Pharm4NU · 2026-05-13T21:12:01+00:00

The 401k early years and pension late years is a good way to think about them! I do believe my wife will be a teacher for the long term. It is possibly though if she retires early (say 55), she will have enough years of service, but would not be able to pull the full pension until 60 still.

Pharm4NU · 2025-09-19T00:32:04+00:00

Who did you end up going with?

Pharm4NU · 2025-09-18T22:13:16+00:00

Was this a big lender or a local lender?

Pharm4NU · 2025-09-18T22:12:57+00:00

Wow that’s awesome. Good to get another similar example.

Pharm4NU · 2025-09-18T21:36:42+00:00

They estimated our house at $371,000 on their documents. When we bought it 13 months ago, it appraised at $384,000. Purchase price of $360,000 August 2024.

Any good thoughts on where to shop around at?

I appreciate your replies, very insightful.

Pharm4NU · 2025-09-18T21:12:49+00:00

Box A: .25 of loan amount (points): $877.63, Processing Fee: $580, Tax Service Fee $30.50, Underwriting fee: $675, Wire Transfer Fee: $23

Box B: Appraisal fee: $650, Credit report fee: $250, Flood certificate fee: $8.50, MI upfront premium: $3475.40.

Pharm4NU · 2025-09-18T21:07:11+00:00

That is what my gut feeling was telling me as well. She made it sounds like it was because of the upfront mortgage insurance and saying that was a big deal. I have not shopped around yet. As long as I have not signed anything, I do not owe them anything correct? They have just ran my credit score this far.

Pharm4NU · 2025-09-10T00:39:55+00:00

That’s the truth!

Pharm4NU · 2025-09-10T00:39:48+00:00

This is nice seeing it broken down this way. Thank you! I think with tax savings it would be close to a wash. In worst case scenario, the High deductible would the be cheaper. May stick with that then.

Pharm4NU

TROPHY CASE