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Tom Meaglia, ChFC®, AEP®,

CLU®, CRPC®, MSFS

Chartered Financial Consultant

Investment Advisor Representative

Chartered Retirement Planning Counselor

CA Insurance Lic. #0567507

 

Meaglia Financial Consulting

2105 Foothill Blvd., #B140, La Verne, CA 91750

 

Toll Free: 800-386-3700

Bus:         909-593-6105

Cell:         818-681-8600

Fax:         909-593-6120

 

Email: tom@meagliafinancialconsulting.com

Website: www.meagliafinancialconsulting.com

March/April 2020

Pay It Off or Invest?

Pay It Off or Invest

Should you pay off your low-interest student loans first or make smaller payments and put the difference toward long-term goals, such as retirement?


Look Short Term
Student loan balances may be at record highs, but this may not necessarily mean that paying off student debt should be a borrower’s top priority. With interest rates on federal student loans still low, it may make more sense to pay the minimum monthly bill (or more if you have the extra cash) and put what’s left toward other financial goals.*


In the short term, you might want to create an emergency fund that’s large enough to fund a few months of expenses should unemployment, disability or another financial crisis occur. This makes sense because using cash you’ve already saved for emergencies will cost less in the long run than running up high-interest credit card debt.


Look Long Term
Down the road, you might want to target other financial goals, such as saving for a down payment on a first home or putting money away for retirement. While millennials may believe they have plenty of time, a look at some numbers pulled from http://investor.gov may surprise them.


Let’s say you have an extra $200 monthly and you put it into a traditional IRA. If you do this every month over 20 years and earn 6% compounded monthly, you would invest a total of $48,000 and see your IRA grow to more than $92,000. If you do the same for 30 years, $72,000 in contributions would grow to almost $201,000. **


Look at an IRA
As luck would have it, you can contribute up to $6,000 ($7,000 if at least age 50) annually. Better yet, you can still contribute for tax year 2019 up to your tax-filing deadline and reduce last year’s tax bite if you qualify. At the same time, you may also contribute for tax year 2020. Talk to a financial professional to learn more.


* The sender of this newsletter does not issue or advise with regard to student loans.


** This information is intended to be for illustrative purposes only and does not reflect any particular investment or investment needs of any specific investor.


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Thomas Meaglia is an Investment Adviser Representative of Coppell Advisory Solutions LLC, dba, Fusion Capital Management, a registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
Insurance and annuity products are not sold through Fusion Capital Management. Fusion does not endorse any annuity or insurance product, nor does it guarantee any insurance or annuity performance. Annuity and life insurance guarantees are subject to the claims-paying ability of the issuing insurance company. If you withdraw money from or surrender your contract within a certain time after investing, the insurance company may assess a surrender charge. Withdrawals may be subject to tax penalties and income taxes. Persons selling annuities and other insurance products receive compensation for these transactions. These commissions are separate and distinct from Fusion's investment advisory fees.
Meaglia Financial Consulting and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.

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