I have a ~$15,000 loan with a 6% interest rate.
My company matches half of my 401K contributions up to 6%, and I am in a 25% tax bracket. I currently contribute 15% of my income to my 401K.
How do I calculate whether it's better to pay more toward the loan, or put more into the 401K?
My rough attempt at the math:
Suppose $X goes to a 401K. After a year this grows to ~1.07 * $X. Profit is ~0.07 * $X
Suppose rather that $X goes towards debt. I lose %25 to tax. I save 0.06 * %X on interest. Profit is 0.06 * $X - 0.25 * $X. Therefore it makes more sense to invest in the 401K.
But I'm not sure if I'm making good assumptions.