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Pay of debt now or wait?

submitted
a year ago
byrss-bot bottopersonalfinance

I'm 24 making $24k/year after taxes. I'm able to meet all of my payments and live comfortably but I'm only able to save very little. I currently $6k in medical debt that's not accruing interest that I make $220/month payments on. I also have a car 8.35% car loan with $2k left at $150/month. Finally, I have u/29k in a savings investment account from inheritance that has made 1.4% over the last 5 years. I'm disappointed by the performance of my investment account - of course the last 5 years have been poor - but I want to hedge on a larger recession coming. Is it advisable to withdraw from my account to pay off all of my debt? $8k of capital gains would be taxed as I understand, so there would be a small but not insignificant penalty. I don't know how this would impact my credit score in the long term. I'm inclined not to pay off my medical debt in full since it's not accruing interest, but I'm worried if a recession hit and I lost my job I would be unable to make the payments and the value of my savings account would fall sharply.

EDIT: It's a money-market investment account, not a savings account

original posted by CzarDean_ to r/personalfinance on Sun, 21 Apr 2024 15:48:31 GMT.

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