How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Megan C Your Own Question

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 12693
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Type Your Finance Question Here...
Megan C is online now
A new question is answered every 9 seconds

I have 100,000 in outstanding student loans. Besides our mortgage

Resolved Question:

I have 100,000 in outstanding student loans. Besides our mortgage that is our only debt. I also have 160,000 in cash that is making next to nothing in a money market. It represents a large portion of our savings. Should I use some of those funds to pay off the loan or invest it. The loan is at 4.25%. I'm 44. Please advise. Thanks.
Submitted: 11 months ago.
Category: Finance
Expert:  Megan C replied 11 months ago.

MyVirtualCPA :

Thank you for your question, and thanks for using JustAnswer.com

MyVirtualCPA :

You should use the cash to pay off your student loans. My answer would be different if the market was better and you could get better rates on your money market.

Customer:

Hello.

MyVirtualCPA :

However, the current rates of return are not enough to make investing the funds more attractive.

Customer:

So bite the bullet and send the check. Its tough to do.

MyVirtualCPA :

I know it is, but think of how you are freeing yourself from the debt

MyVirtualCPA :

You no longer have to worry about it...

MyVirtualCPA :

You will still have $60,000 left - that's a good nest egg

Customer:

I know. It is always in the back of my mind.

MyVirtualCPA :

My answer would be different if you had only $100,000

Customer:

It is but its a step back from building for retirement.

MyVirtualCPA :

But you will still have a good emergency savings balance

MyVirtualCPA :

These funds are NOT in an IRA or401(k) right?

MyVirtualCPA :

This is cash

Customer:

I do. But I'm 44 and don't want to work forever.

Customer:

Cash.

Customer:

I figured you would say that but wanted to hear it from a Pro.

MyVirtualCPA :

Okay. Great. IF you had to pull the funds from a retirement account, I would tell you not to do that because of the tax impacts

Customer:

Thanks for the advice. Know I need to figure out where to put the existing cash.

MyVirtualCPA :

It depends on your risk comfort level

Customer:

Low.

MyVirtualCPA :

If it's all you have, a money market would be wise. But, when you save up even more money you can look to invest in stocks and bonds

MyVirtualCPA :

But I always say don't put money in the stock market that you can't afford to lose

Customer:

I've been there and lost alot hence the 160,000 in a money market.

Customer:

Thanks for the advice. I think I will get rid of the loans.

MyVirtualCPA :

I'm glad I could help today. Another thing you could invest in is real estate - become a landlord

MyVirtualCPA :

You could bring yourself a steady stream of income each month, but there too there is some risk of loss, such as not being able to find a tenant or having someone destroy your property

Customer:

That was a possible plan for the cash.

Customer:

Perhaps I will consider that more strongly. Once I clear the loan balance I will be better able to get another mortgage.

MyVirtualCPA :

It will be easier for you to get financing on a house once you get rid of the student loan debt

MyVirtualCPA :

Exactly

Customer:

I think its what I have to do. Thanks for your help.

MyVirtualCPA :

You're welcome. If you would, please rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

I'll do that. Take care.

MyVirtualCPA :

You too!

Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 12693
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 4 other Finance Specialists are ready to help you
Expert:  Megan C replied 11 months ago.
Thanks, John for your positive rating. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. It was a pleasure working with you today.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
< Last | Next >
  • http://ww2.justanswer.com/uploads/RA/rakhi.v/2012-7-3_14374_RakhiVasavadaL.64x64.jpeg Rakhi Vasavada's Avatar

    Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
  • http://ww2.justanswer.com/uploads/BU/BusinessTutor/2012-2-2_115741_Kouki2.64x64.jpg Manal Elkhoshkhany's Avatar

    Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    1890
    More than 5000 online tutoring sessions.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    1755
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JK/jkcpa/2011-1-16_182614_jkcpa.64x64.jpg JKCPA's Avatar

    JKCPA

    CPA

    Satisfied Customers:

    838
    Bachelors degree and CPA with Accounting experience.
  • http://ww2.justanswer.com/uploads/starside8/2010-2-16_55433_DSCN1175.JPG Eric's Avatar

    Eric

    Financial Manager

    Satisfied Customers:

    558
    Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.
  • http://ww2.justanswer.com/uploads/FA/fastfile/2011-12-15_23139_Klein2011small.64x64.jpg R. Klein, EA's Avatar

    R. Klein, EA

    Accountant

    Satisfied Customers:

    397
    Intuit Ask a Tax Expert. QuickBooks Certified Pro Advisor (all editions)
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    324
    NASD Licensed Rep, 1997-2001, Business Attorney