The Student Loan + Retirement Savings Balance

Should you pay off your student loans or save for your retirement first? This question poses the trade-off: having less money to pay toward student loans or not contributing as much to your retirement account. Especially for young professionals who have less disposable income, the challenge is determining how best to designate those funds.

Here are some things to consider when deciding how to allocate your money:

  • Before you make any other financial decision, set aside an emergency fund: This fund should amount to at least 3 to 6 months’ worth of your expenses.
  • Prioritize creating a personal monthly budget: Evaluate your monthly income (based on take-home rather than gross) and estimate your monthly expenses. Subtract those expenses (including your student loans) from your total income and that difference will give you an idea of how much is leftover to put toward retirement.
  • If your student loan interest is high, consider putting more toward debt: Paying more toward your debt will help you pay less in interest and more toward the principal loan amount.
  • Contribute what you can: Many advisors can attest to the fact that steady contributions to a retirement fund (even $20 or $50 a month in the beginning) will build itself over time because of compound interest. Starting younger gives the account more time to grow with interest AND investment returns, plus having a retirement plan through your workplace could mean you’ll receive employer matches, which is basically “free money”.

In summary, how to handle your finances is based on a number of personal factors like your debt load and how much you’ve already saved for retirement. Balance your short- and long-term goals and set yourself up for a secure future. Need more advice? Contact our team at https://qualifiedplanadvisors.com/contact-us/ and someone will reach out to you shortly!


Advisory products and services offered by Investment Adviser Representatives through Prime Capital Investment Advisors, LLC (“PCIA”), a federally registered investment adviser. PCIA: 6201 College Blvd., 7th Floor, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”). Securities offered by Registered Representatives through Private Client Services, Member FINRA/SIPC. PCIA and Private Client Services are separate entities and are not affiliated


Tax Filing Need-to-Knows for 2020

Have you filed your 2020 taxes yet? We know it can be overwhelming doing your taxes in general and with 2020 being the year of the pandemic, there are even more questions surrounding this year’s tax season and Tax Day. Our advisors are here to help – check out answers to some of the most-asked questions of this year:

  • Are Stimulus Checks Taxable? They’re not considered taxable income. Because they’re an ‘Economic Impact Payment’, the IRS doesn’t count it toward your income. They will still need to be reported on this year’s taxes though and can be filled out on the new entry in the 1040 form.
  • How will unemployment affect my taxes? Unemployment is considered taxable income, so even though the government increased typical weekly unemployment payments, you will still owe taxes on any benefits you received.
  • Last year, tax filings were delayed. Will that happen again this year? The deadline has been extended to May 17th.
  • What happens if I deferred my college loans, rent payments, or mortgage payments? You will not be penalized for this and will not need to take it into consideration when filing this year.
  • If I worked from home in 2020, can I claim deductions for my home office expenses? Unfortunately, you cannot deduct those unreimbursed costs because the Tax Cuts and Jobs Act eliminated those deductions through 2025.
  • What if I owe money for my taxes but can’t pay? You can ask the IRS for a payment plan. The IRS offers different types of installment plans to fit what works best for you.

If you haven’t started yet, here is a helpful checklist you might need to complete the job:

  • Personal Information – 2019 Taxes from State and Federal, Social Security Number
  • Income Information – Including your W-2 forms and 1099 forms
  • Deductions – Including Retirement Account contributions, educational expenses, medical bills, property taxes or mortgage interest, charitable donations, classroom expenses, and state and local taxes.
  • Credits – Child Tax Credit, Adoption Expense Information, First Time Homebuyer Tax Credits, etc.