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Hey all, hope everyone is having a healthy and improved 2021 compared to last year.
My wife and I are in our 2nd years out as attendings; she's an OBGYN and I'm an ER doc. We graduated in 2019 and live in southern CA. My wife is a W-2 and I'm an independent contractor incorporated under an S-corp. We spent our first year out just saving our extra income to put 20% down on a house. Now, we're trying to figure out how to best allocate said income to put us in the best possible situation in the long-term. We could really use some advice in terms of what-to-put-where.
Here are some numbers, all based on personal bookkeeping from 2020:
Annual income: ~$500k
Annual tax: ~$185k (it was actually closer to 170k last year, but I'm increasing it now that we have property taxes)
Mortgage: $720k. We paid 20% down on a $900k home, our mortgage payments are about ~$3k a month on a fixed 30-year at 2.99%. I've included this payment in annual expenses below. We elected to do a 30 year over a 15 year given that it seemed wiser to put the difference down against our student loans (see below).
Annual expenses: ~$132k (we'll actually be paying less in mortgage than we did in rent, not including upkeep and property taxes). Of note, this includes disability insurance for both of us, life insurance, and umbrella insurance.
Retirement: I have an old 401k from residency that has about 17k in it; I have not yet set up/rolled over to a new retirement account. My wife has a 401k through her job that she has put some money into, probably worth about 20k, but she gets no match.
Educational Debt: Extensive. I have about $470k and my wife has about $220k. I received some scholarship assistance for undergrad but still had to take out some loans to help with living expenses, and I received zero assistance (scholarship or family contribution) for medical school (and I didn't get in to any public medical schools in CA, where I'm from). My wife was able to receive some family assistance for both undergrad and medical school, but she still required loans.
Obviously, the big issue is the debt. Currently, given certain global circumstances, it's collecting a 0% interest rate under Uncle Sam, but who knows how long that will last. Our plan is to aggressively pay that off first, but my big question is, how much (if any) should we be putting towards retirement instead, and if so, which accounts? My first thought is to at least fully fund my wife's 401k and open and SEP IRA or solo 401k for myself, so we can at least reap the tax benefits, but I don't know if this is the best option. Thoughts?
Oh, and because I know it will be brought up, we DO NOT want children.
My wife and I are in our 2nd years out as attendings; she's an OBGYN and I'm an ER doc. We graduated in 2019 and live in southern CA. My wife is a W-2 and I'm an independent contractor incorporated under an S-corp. We spent our first year out just saving our extra income to put 20% down on a house. Now, we're trying to figure out how to best allocate said income to put us in the best possible situation in the long-term. We could really use some advice in terms of what-to-put-where.
Here are some numbers, all based on personal bookkeeping from 2020:
Annual income: ~$500k
Annual tax: ~$185k (it was actually closer to 170k last year, but I'm increasing it now that we have property taxes)
Mortgage: $720k. We paid 20% down on a $900k home, our mortgage payments are about ~$3k a month on a fixed 30-year at 2.99%. I've included this payment in annual expenses below. We elected to do a 30 year over a 15 year given that it seemed wiser to put the difference down against our student loans (see below).
Annual expenses: ~$132k (we'll actually be paying less in mortgage than we did in rent, not including upkeep and property taxes). Of note, this includes disability insurance for both of us, life insurance, and umbrella insurance.
Retirement: I have an old 401k from residency that has about 17k in it; I have not yet set up/rolled over to a new retirement account. My wife has a 401k through her job that she has put some money into, probably worth about 20k, but she gets no match.
Educational Debt: Extensive. I have about $470k and my wife has about $220k. I received some scholarship assistance for undergrad but still had to take out some loans to help with living expenses, and I received zero assistance (scholarship or family contribution) for medical school (and I didn't get in to any public medical schools in CA, where I'm from). My wife was able to receive some family assistance for both undergrad and medical school, but she still required loans.
Obviously, the big issue is the debt. Currently, given certain global circumstances, it's collecting a 0% interest rate under Uncle Sam, but who knows how long that will last. Our plan is to aggressively pay that off first, but my big question is, how much (if any) should we be putting towards retirement instead, and if so, which accounts? My first thought is to at least fully fund my wife's 401k and open and SEP IRA or solo 401k for myself, so we can at least reap the tax benefits, but I don't know if this is the best option. Thoughts?
Oh, and because I know it will be brought up, we DO NOT want children.
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