I’m 55 years old and currently have 2 kids in college. One is graduating in 3 weeks and one has another year and a half to go until graduation. As of today my Federal Parent Plus Loan debt is $67,000 and will probably be $80,000 by the time both kids graduate. The average interest of all the loans combined is right around 7%. I’ve been paying $350 a month on these loans which barely keeps the interest from compounding. When my daughter finishes in 3 weeks I will be able to add another $300 per month to the payments. When my son finishes in a year and a half I will add another $300 per month to the payments totaling $950 a month.
Both my wife and I work and bring in just over $100,000 per year combined. My credit score is 830. I’ve been putting 15% of my pay into Fidelity retirement accounts for the past 30 years and have a $890,000 retirement account as well as a $200,000 pension. My company matches up to 6% of what I contribute to my 401K.
Our home is worth about $250,000 with a $58,000 mortgage left on it currently at 5%. We have an emergency cash fund of about $25,000. We have no other debt except for minimal auto loans. My goal is to retire within 10 years debt free with 1.3M in my Fidelity Retirement Funds.
My question is how to best pay off my parent plus student loan debt?
Should I lower my contributions to my 401K to 6% thereby maintaining my 6% company match and use the 9% surplus to pay down the parent plus loans?
Should I wait to get a final parent plus total payoff after my son graduates and refinance my house to pay it off?
Any other ideas?