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Debt vs Invest Calculator

Enter your numbers and get the mathematically optimal answer — should you pay off debt or invest instead?

⚖️ Debt vs Investment Comparison

e.g. 6.5 for student loans, 20 for credit cards
How much extra you can put toward debt OR investing
S&P 500 historical avg: 10.5%
—
by this amount after the time period
Pay Debt Strategy
$0
Net Worth After
Invest Strategy
$0
Net Worth After
0 mo
Months to Pay Off Debt
$0
Interest Saved

The Simple Rule: The 7% Threshold

If your debt interest rate is above 7%, paying off debt gives you a better guaranteed return than the expected market return. Below 7%, investing in index funds has historically been the better financial choice.

But math isn't everything. The psychological value of being debt-free is real — and a plan you'll actually follow beats a mathematically optimal plan you abandon under stress.

What about the employer 401(k) match?
Always contribute enough to get the full employer match BEFORE paying extra on debt or investing elsewhere. A 50% match is an instant 50% return — nothing beats that, not even high-interest debt payoff.
Should I pay off student loans or invest?
Federal student loans at 4–6% fall in the gray zone. The market has historically outperformed these rates, but the margin is narrow. Many financial planners recommend a split: make minimum payments on loans while maxing your Roth IRA, then reassess.
Next Step

📊 Want the Full Framework?

The calculator gives you the number. This guide explains the psychology, edge cases, and when the math doesn't tell the whole story.

Read the Full Guide →