90k in debt and opening an IRA

Hello PFC!

My partner has over 90k in student loan debt. We are wondering if she should prioritize paying off that much debt or if she can open a retirement account with $1,000 and continue making payments towards the student loan?

She does not have any type of retirement account.

Thank you!

Hi @lunarp! It can depend on a few factors, such as the interest rate on the student debt. Also, if it is federal debt, there are a couple considerations there since interest and payments are on pause currently.

Generally, you should prioritize high interest debt (e.g., credit card debt) before you start investing. But, it’s not as black and white with student loans since the interest rates can range from 2-9% about. It can be a personal choice, but I’m a proponent of getting started with investing, even if it is a small dollar amount, while you are paying off the student debt!

Make sure you check out the PFC checklist if you haven’t already!