Should I pay off my student loans first, or invest the difference?
“Pay off the loans, then open a practice” ends $2.84M ahead of “Minimum payments, invest the rest” at 55.
In today's dollars, from the same engine you'd plan with.
Priya is 34 and a physician. After medical school and residency she earns $250,000 a year, and owes $300,000 in student loans at 6.8%, paying $2,500 a month. She rents a nice apartment, works long hours, and spends on delivery dinners and weekends away to decompress.
She could pay the minimum and invest everything else, or put every spare dollar toward the loans until they're gone. One day she'd like to open her own practice. She'd like to be able to stop at 55.
3 futures
Each line is one future, projected year by year. Tap a name in the legend to hide or show it.
The numbers
At 55, the future with the most is “Pay off the loans, then open a practice”: $5.36M in today's dollars, against $2.52M for “Minimum payments, invest the rest”.
In every future, the money lasts to 95, where the projection ends.
| Future | Works until | At 45 | At 55 | At 65 | Money runs out |
|---|---|---|---|---|---|
| Minimum payments, invest the rest | 55 | $958k | $2.52M | $2.49M | Never |
| Pay off the loans first | 55 | $958k | $2.52M | $2.49M | Never |
| Pay off the loans, then open a practice | 55 | $2.00M | $5.36M | $6.52M | Never |
Net worth in today's dollars, by Priya's age, in their plan as written. A single projection with steady returns (no market swings), run by Life Budget's engine as of October 4, 2026: income, payroll and state tax, retirement-account rules, the mortgage and inflation, year by year.
What happens in each future
Minimum payments, invest the rest
- At 52: Every loan is paid off.
- At 55: Last year of work; from here they live on what they've saved.
- The money lasts to 95, where the projection ends.
Pay off the loans first
- At 40: Every loan is paid off.
- At 55: Last year of work; from here they live on what they've saved.
- The money lasts to 95, where the projection ends.
Pay off the loans, then open a practice
- At 38: Every loan is paid off.
- At 55: Last year of work; from here they live on what they've saved.
- The money lasts to 95, where the projection ends.
Questions
Are Priya real?
No. This is a sample household, written to be typical of people asking this question. Their plan runs on the same engine yours would: federal and state income tax, payroll tax, retirement-account rules, mortgages and inflation, year by year.
Is paying off a 6.8% loan better than investing?
Paying it off earns exactly 6.8%, guaranteed. Investing earns whatever the market does, which has averaged more but can be far less for years at a time. This projection uses a steady return, so it shows the expected case; it can't show the risk you avoid by paying the loan off.
Why max out the 401(k) in every future?
Her employer matches part of what she puts in, and every dollar in it lowers this year's tax. Skipping that to pay the loan faster gives up money that doesn't come back.
What does "today's dollars" mean?
Every figure is shown in what money buys now, with inflation taken out, so a number decades from now can be compared with one today.
Can I change her plan?
Some of it. Under "Try it", move when she stops working or the year the practice opens, and the engine re-runs her whole plan; nothing is saved. To change everything, create a free account and plan with your own numbers in the same simulator.
Run your own numbers
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