IRA/Repayment of Student Loans
My son is a senior at Mizzou this year. I took out a Parent Plus Loan for most of his schooling. I was thinking of taking the penalty from my IRA to pay back the loan while there is no interest accruing on the loans at this time. Would the amount of money I’m saving be more than what I would owe taxes on at the end of the year. I’m looking at paying roughly 80,000 out of IRA.
Terry Says
Don’t do that. First, you might benefit depending on your income, from this latest round of forgiveness. They haven’t clearly stated that they will include Parent Plus loans, but it’s a possibility. Details will come out in about a m onth.
Plus loans are THE most expensive loans, by far. After we see how this forgiveness shakes out, you might be able to refi at a place like SoFI.com, depending on your credit. If you get a lower rate, you will benefit from leaving your IRA to continue to grow tax-deferred.
And maybe your son will contribute when he gets a job??
