Читать книгу Personal Finance in Your 20s & 30s For Dummies - Eric Tyson - Страница 59

If you have savings and investment balances available to pay off consumer debt, like high-interest credit-card debt and auto loans, consider doing so. Pay off the loans with the highest interest rates first.

Although your savings and investments may be earning decent returns, the interest you’re paying on your consumer debts is likely higher. Paying off consumer loans on a credit card at, say, 12 percent is like finding an investment with a guaranteed return of 12 percent — tax-free. You’d actually need to find an investment that yielded even more — around 18 percent if you’re in a moderate tax bracket — to net 12 percent after paying taxes in order to justify not paying off your 12 percent loans.

The higher your tax bracket (explained in Chapter 6), the higher the return you need on your investments to justify keeping high-interest consumer debt. This discussion refers to investments in nonretirement accounts. Unless your tax bracket drops because of an extended layoff from work or from going back to school, withdrawing money from retirement accounts is costly because of the requirement to pay current federal and state income taxes on the amount withdrawn, not to mention early withdrawal penalties.

When using your savings to pay down consumer debts, leave yourself enough cash to be in a position to withstand an unexpected large expense or temporary loss of income.