How to save thousands on your student loan

Three top pieces of financial advice — from protecting your pension to the rise of the ETF

Re-financing those loans might be a smart bet.
(Image credit: iStock)

Here are three top pieces of financial advice from around the web:

Refinancing student loans

The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Monthly pension or lump sum?

If you're lucky enough to have earned a pension, you don't want to waste it, said Ian Salisbury at Money. When the time comes, it may be hard deciding whether to opt for monthly payments or taking the pension as a lump sum. Enormous checks "are tempting," but a monthly pension is usually the better deal. Not only does the money last for life, but you can typically opt for slightly smaller monthly payouts, so your spouse can continue to receive benefits after your death. Though taking the lump sum and investing it may seem like a smart bet, you're still likely better off with the monthly option, "even if you are the next Warren Buffett." The calculus really only changes if you're in poor health and unmarried, or in dire financial straits. Then "the math favors the lump sum."

The rise of the ETF

It's the "investment equivalent of a puttering hatch-back" overtaking "a gleaming Porsche," said The Economist. Exchange-traded funds are now a bigger business than hedge funds. ETFs had $2.971 trillion in assets at the end of June, $2 billion ahead of the hedgies' $2.969 trillion. Fifteen years ago, ETFs were less than a 10th the size of hedge funds. But "in a world of reduced returns, the low costs of ETFs are more attractive." ETFs trade like stocks, but hold a mix of assets that track the performance of a particular asset class, like the S&P 500, gold, or real estate. They often have extremely low fees, which can make them appealing to investors who already gravitate toward traditional index funds. Barring a "calamitous collapse," they're likely to keep growing.