Coworker in Austin said skip the 401k match to pay off student loans, math surprised me

Tbh I always thought free money from the match was a no brainer. But my coworker Dave showed me his spreadsheet where he skipped 3 years of matches to crush a 6.8% private loan. The interest savings beat the match growth by about $2,400 after taxes. I ran my own numbers with my 4.2% federal loan and it didn't make sense, so I kept contributing. Has anyone else actually done the full math on this or just taken the match as gospel?

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joelp818h ago

Did Dave factor in the tax deduction on his student loan interest during those 3 years? Because that deduction phases out at certain income levels, and if he was in the 22% bracket, the government was basically paying a chunk of that 6.8% for him. That would shrink his savings gap quite a bit. Also, nobody talks about the psychological boost of being debt free earlier, which is hard to put a number on but counts for something. Your 4.2% call sounds right though, the match is way harder to beat at that rate.