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@ENT Doc. I looked up my hospital bond ratings at Moody's. Good stuff. Thanks for the tip.
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I'm at 9% of investments, excluding home equity. Surprised it is that high, but it is 100% VIIIX, which has had the best returns of pretty much anything the last 5 years. At least the Moody rating is excellent.Comment
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457(b) is no brainer when in PSLF. Even if job changes, can take distribution after 120th payment so you are saving 10% of contributions from you income based loan payment.
I also like kicking the tax can down the road but this may or may not be the optimal strategy for everyone.
There might be some psychological benefits too of building up a nice nest egg that you can take as a distribution at termination of employment. If you hate your job you can stand up to your boss and say "if things don't get better, I'm leaving." And really mean it... That could end up improving your long-term salary situation indirectly.
I also fancy living abroad for a year at some point so that account could be good for something like that. Just some random thoughts that I consider when deciding to max it out every year.Comment
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If we're talking about FU money I'd rather have a $1,000,000 taxable account with embedded capital gains than a $1,300,000 457b that gets nailed at the highest tax bracket when I quit.Comment
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If we’re talking about FU money I’d rather have a $1,000,000 taxable account with embedded capital gains than a $1,300,000 457b that gets nailed at the highest tax bracket when I quit.
Depends on distribution options and the tax rate you are deferring, which presumably will be your peak earning years top marginal. In an FI scenario, if you can take distribution over first 5-10 years, you can use that distribution for your early years without touching other assets.
For me in high tax state that I will leave as soon as I change jobs plus PSLF, I suppress my AGI as much as possible. This is a good option for arbitrage in my situation and much better than taxable.Comment
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