Hello folks, I found this website through the student doctor forums and I've been reading several articles a day for the past week. I wish I had come across WCI a lot sooner, because I have never had anyone knowledgeable to go to for financial advice and for years I have ignored everything having to do with long-term finances, but I'm optimistic that my situation is quite salvageable.
The quick version is that I'm a pediatrician in my 2nd year out of residency, working at a 501c3 with 375k of debt on IBR at 6.8% (with Fedloans) and only about 2 years of payments under my belt. My wife and I are reasonably frugal and we live on roughly the same amount of money that we needed in residency, which is about 3k/month. We have a baby. I make $200k with the usual ~4% increase/year. We have ~60k saved up.
I have family who would be willing to lend me ~100k. The plan is to take that money, and 50k of our own savings, pay down the debt to 225k, refinance, and pay it off in 5 years. Unfortunately I do not live near a First Republic branch because they have a very attractive offer of 2.35%; I am only getting rates of about 4% fixed although my credit is excellent.
I would end up paying 150k up front + 250k for the refinanced loan including interest, for a total of 400k. This is in comparison to dragging the loan out for an additional 23 years on IBR and paying more than 700k (plus the 'tax bomb' at the end).
My question is if this is the best plan, or are there any tweaks to this plan? I want to get rid of this albatross, but at the same time there is the nagging question of whether PSLF will remain (Fedloans has verified my payments) and whether even IBR long-term would be better if I can then turn around and dump far more money into retirement accounts.
If I am paying 48k/year for my loans and 36k/year are my expenses, then I still have roughly 36k/year that I can take out pre-tax. I have never put in money for retirement before. My workplace offers a 403b and 457 that has to go through a financial advisor at Edward Jones. I am going to meet with him to find out what exactly are the options with regards to these accounts. Are these the next best place to put in money?
The quick version is that I'm a pediatrician in my 2nd year out of residency, working at a 501c3 with 375k of debt on IBR at 6.8% (with Fedloans) and only about 2 years of payments under my belt. My wife and I are reasonably frugal and we live on roughly the same amount of money that we needed in residency, which is about 3k/month. We have a baby. I make $200k with the usual ~4% increase/year. We have ~60k saved up.
I have family who would be willing to lend me ~100k. The plan is to take that money, and 50k of our own savings, pay down the debt to 225k, refinance, and pay it off in 5 years. Unfortunately I do not live near a First Republic branch because they have a very attractive offer of 2.35%; I am only getting rates of about 4% fixed although my credit is excellent.
I would end up paying 150k up front + 250k for the refinanced loan including interest, for a total of 400k. This is in comparison to dragging the loan out for an additional 23 years on IBR and paying more than 700k (plus the 'tax bomb' at the end).
My question is if this is the best plan, or are there any tweaks to this plan? I want to get rid of this albatross, but at the same time there is the nagging question of whether PSLF will remain (Fedloans has verified my payments) and whether even IBR long-term would be better if I can then turn around and dump far more money into retirement accounts.
If I am paying 48k/year for my loans and 36k/year are my expenses, then I still have roughly 36k/year that I can take out pre-tax. I have never put in money for retirement before. My workplace offers a 403b and 457 that has to go through a financial advisor at Edward Jones. I am going to meet with him to find out what exactly are the options with regards to these accounts. Are these the next best place to put in money?
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