[lovich]

For me personally and for a few others I know, we have loans with 6%+ rates. For one of my loans its over 8%. I've looked at refinancing, which ends up with me paying less money overall but paying a higher amount each month.means I would need more money saved up in my emergency fund and have a higher risk of not making payments if I lost my income.

This has led to me just taking the money I would have put into a 401k and using it to pay off loans, which provide a financial benefit equivalent to having an investment grow by the same rate as the loans interest rate. That lets me snowball my payments and pay off the debt faster and eventually I will move the debt payments over to retirement. I probably would be better off overall putting the money into a 401k or Roth IRA if I could guarantee I would never be out of a job, but having graduated into the workforce during the Great Depression Ive become pretty averse to holding any significant amount of debt after seeing people lose everything

[Jtsummers]

The Roth IRA, at least, can be a part of your emergency fund strategy. Contributions can be withdrawn without penalty (not earnings) at any time. I have an actual e-fund (cd ladder, though the rates on renewal will be even worse so I need a new plan), but for a true catastrophe, that's part of my strategy. It also gives you tax free growth. I've only had one investment pan out well, but it hurt to see 15% of the gains go to taxes. If it had been in my IRA I could've kept that money for reinvesting.