Where to start when starting late.

[Kamban]

1. OP you are doing very well. Many FMG's come here to USA in their late 30's and early 40's and are highly successful, both academically and financially by age 60. You too can do it at your age of start

2. You are who you are. You can't compare to a derm or some of those high income, high savers on this board. But then again, you are so much better than families with 2 kids living on 50-60K income per year.

3. Don't do anything rash or stupid to try and catch up. Maximize backdoor Roth and 401K and any other retirement plans. If in taxable after that, simple straightforward index funds. By age 65 you will have plenty, trust me.

4. I get it that you can's see yourself paying 6.8% interest rate when the 0% free ride stops. Why don't you check to see if you can refinance to a lower rate. If so, do it when the free ride is over. If not, go ahead and pay it off. Nothing major lost in the long run.

5. Kids who are well educated will do well in college and will get adequate scholarships in state colleges. Mine has to pay only <20K per year in state should she choose to go here. That is something you can easily afford by then once you know the boat is sailing along well.

6. Finally enjoy life and pray for good health, which is more important now than good wealth.

[fatlittlepig]

easy: max 401K, after debt is discharged, put the 7K/month into an index fund, avoid financial advisors.

[Jack_Sparrow]

I wouldn't be doing this. Once it returns to 6.8%, just re-finance it to half that rate (or less). You need to prioritize your own retirement more, which means maxing 401k, Roth IRA (backdoor), and HSA (if applicable). Right now, that's an interest free loan that you can take advantage of.

Yes refinance loans and put more in 401k. Remember taxes are huge. Just do the math, Making 180k means your probably in the 22-24% bracket. Throw on state and local taxes, and your probably paying ~30% taxes of those last dollars earned. So if you are using that 19.5k to pay down student loans. Your earning 25k, paying off 19.5k in student loans and sending ~5-6k to the government for taxes. If you stick 19.5k into your 401k, you keep that extra 5-6k a year. Net worth goes up by 5-6k a year because you've decreased that tax expense. Also that 5-6k grows @ 6-8% for 20 years.

[wideopenspaces]

Op, you are doing great! I'm so impressed with how quickly you are paying down your debt. I hate debt too so I'd pay off the loans in 7 months. Then you'll have an extra 7k to work with each month. Do you have an emergency fund of 3 months of expenses? If not, take 3 months and put 21k to your emergency fund. Then increase your retirement savings to 20% of gross household income, so 42k/year. You are already contributing 9k, so you just need an additional 33k/ yr or 3k/ month. Also how much is your match? That leaves you with 4k/ month. Use some of that to start 529 accounts for the kids. Whatever is left can be used to take a vacation or whatever would increase your quality of life. Personally I would stop paying extra on the mortgage and put it to retirement instead but it's building wealth either way so do what helps you sleep at night. But as you can see, you are going to be just fine and so are your kids :-) strong work!

[TXDoc21]

There has been some great advice here already. Imagine that you had figured this out at age 60 and not where you are now. You have your health and time. You’ve got this.

[Franky1882]

Op, you are doing great! I'm so impressed with how quickly you are paying down your debt. I hate debt too so I'd pay off the loans in 7 months. Then you'll have an extra 7k to work with each month. Do you have an emergency fund of 3 months of expenses? If not, take 3 months and put 21k to your emergency fund. Then increase your retirement savings to 20% of gross household income, so 42k/year. You are already contributing 9k, so you just need an additional 33k/ yr or 3k/ month. Also how much is your match? That leaves you with 4k/ month. Use some of that to start 529 accounts for the kids. Whatever is left can be used to take a vacation or whatever would increase your quality of life. Personally I would stop paying extra on the mortgage and put it to retirement instead but it's building wealth either way so do what helps you sleep at night. But as you can see, you are going to be just fine and so are your kids :-) strong work!

Many thanks - I am feeling a lot better about my situation after reading all the replies.

- My match is 4%
- I do have emergency fund of 3 months - although its very tempting to use against the student loan
- Again I understand the other comments about a 0% student loan - but as you said I hate debt - I know I'm thinking emotionally rather than logically but I just want to get that thing off my back.
- I agree with the comment of the mortgage loan its at 3.125%: so I will divert funds to retirement.

[wideopenspaces]

Many thanks - I am feeling a lot better about my situation after reading all the replies.

- My match is 4%
- I do have emergency fund of 3 months - although its very tempting to use against the student loan
- Again I understand the other comments about a 0% student loan - but as you said I hate debt - I know I'm thinking emotionally rather than logically but I just want to get that thing off my back.
- I agree with the comment of the mortgage loan its at 3.125%: so I will divert funds to retirement.

Glad you're feeling better:-) you're in even better shape since you already have the EF. And that 4% match means you will be saving close to 50k/yr to retirement with your own 20% contribution. So that's great! You might look into refinancing again- we did it in July 2020 and got 3% and are refinancing again right now to 2.25%. Granted it's a 15 yr but that might be a good compromise for you instead of putting extra to your mortgage. Plus it would be paid off around the time the kids go to college so you'd have extra money to cash flow any of those expenses.