I am starting my first post-residency job in August. Base salary $350k with a 15% "incentive compensation" at each anniversary. My wife doesn't work and we have 3 kids. Here is my scenario:
Debt:
$300k in DRB, refinanced at 4% for 10yrs
Retirement:
401k and 457b available. 3% of salary match on 401k as long as I contribute a minimum of 5% of my income plus a 3.5% employer contribution vested after 3 years of work.
Mortgage:
$350k at 4% for 30yrs.
I am just wondering where I put my money first, second, third, .... then last. Right now here is my plan, please correct me if I am off track.
1. Max out 401k at $18k and get the match.
2. Max out 457b at $18k.
3. Max out HSA at $6750.
4. During my first six months contribute $5500 to a Roth IRA for my wife and I since my total yearly income for the first year will be just under the limit.
5. Contribute $5500 to traditional IRA to Backdoor Roth conversion for both my wife and I. (Can I even do this if a do a Roth IRA contribution first? If I can't, then I do the Roth IRA during the first six months and then do a backdoor conversion in January of next year and every year following.) I will then do this each January as per WCI.
6. I then plan on making regular payments on my DRB loan so that it would be paid off in 5 yrs, not 10. But then also plan on putting any extra overtime work @$200/hr and the year end bonus towards the loans. In reality, I should be able to pay them off completely in about 3-4 yrs or less depending on overtime.
7. Make after tax contributions into a Vanguard fund to round out a total of 20% of income put into retirement.
This still leaves me with a comfortable month to month budget. It isn't luxurious by any means, but it is still way better than residency.
I am open to suggestions. Thanks in advance.
Debt:
$300k in DRB, refinanced at 4% for 10yrs
Retirement:
401k and 457b available. 3% of salary match on 401k as long as I contribute a minimum of 5% of my income plus a 3.5% employer contribution vested after 3 years of work.
Mortgage:
$350k at 4% for 30yrs.
I am just wondering where I put my money first, second, third, .... then last. Right now here is my plan, please correct me if I am off track.
1. Max out 401k at $18k and get the match.
2. Max out 457b at $18k.
3. Max out HSA at $6750.
4. During my first six months contribute $5500 to a Roth IRA for my wife and I since my total yearly income for the first year will be just under the limit.
5. Contribute $5500 to traditional IRA to Backdoor Roth conversion for both my wife and I. (Can I even do this if a do a Roth IRA contribution first? If I can't, then I do the Roth IRA during the first six months and then do a backdoor conversion in January of next year and every year following.) I will then do this each January as per WCI.
6. I then plan on making regular payments on my DRB loan so that it would be paid off in 5 yrs, not 10. But then also plan on putting any extra overtime work @$200/hr and the year end bonus towards the loans. In reality, I should be able to pay them off completely in about 3-4 yrs or less depending on overtime.
7. Make after tax contributions into a Vanguard fund to round out a total of 20% of income put into retirement.
This still leaves me with a comfortable month to month budget. It isn't luxurious by any means, but it is still way better than residency.
I am open to suggestions. Thanks in advance.
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