The good news is you are choosing between two good options, so you really can't go wrong with either decision. If your student loans are subsidized loans, then the U.S. Government is paying the interest for you, so there is no reason to pay anything on the loans until you graduate. If they are not subsidized loans, then you may want to consider paying just the interest on the loans and then contributing to (or even maxing out) your IRA. This will give you the best of both worlds: being able to invest in your IRA and . . . .

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As with many things in the financial world, the best answer is "a little of everything." You should get in the habit of investing in your retirement from day 1, even if it is a small amount. Those who put off contributing to their retirement for 'a little while' often find themselves 10 or even 20 years into their career with no retirement savings. To catch up they need to contribute huge portions of their income to retirement accounts. Here is my recommendation for what to focus on:

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