In addition, there are a lot of tax implications with stock options, so you’ll definitely want to hire a CPA or other tax pro to provide guidance. At NerdWallet, we recommend people get on track with their retirement savings, pay off toxic debt such as credit cards and have an emergency fund before they think about other investing or making extra payments on their student loans or other relatively low-rate, tax-deductible debt. If your student loan debt doesn’t feel manageable, look into income-driven repayment plans for your federal loans and possibly refinancing any private student loans. If your debt feels manageable and you want to exercise some options, just remember to talk to that tax pro first! OUR TIPS STOCK OPTIONS CAN BE STRUCTURED A LOT OF DIFFERENT WAYS. Be sure you understand how your company treats options, and consult a CPA or other tax pro about the tax implications. EMERGENCY FUNDS, RETIREMENT SAVING AND GETTING RID OF HIGH-RATE DEBT SHOULD BE TOP PRIORITIES. Only after those bases are covered should you think about investing more or making extra payments on low-rate, tax-advantaged debt such as student loans or mortgages. STOCK OPTIONS OFFER SPECIAL REWARDS AND SPECIAL RISKS. Everyone hopes to get rich with their options, but it’s important to limit the part of your investment portfolio that is invested in your employer. Have a money question? Text or call us at 901-730-6373. Or you can email us at podcast@ nerdwallet.com. To hear previous episodes, return to the podcast homepage.
The article SmartMoney Podcast: ‘Should I Invest or Pay Down My Student Loans?’ originally appeared on NerdWallet.
LIZ WESTON is a columnist at NerdWallet. She is a Certified Financial Planner and author of five money books, including “Your Credit Score.”
SEAN PYLES is a debt writer at NerdWallet whose work has appeared in The New York Times , USA Today and elsewhere.
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