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Me: 35, outpatient pediatrician, full time. 2017 W2 salaried income 219,000. Expect small raise in July, some form of bonus (5-15k) each December and March. Not a ton of ways to boost income (occasionally some extra weekend urgent care)
DW: 35, ancillary health care, 0.8FTE, 2017 W2 salaried income 51k
Finished residency 2014: 344k med school debt
DW finished MA program 2013: 55k grad school debt
Guess when we found WCI...
Family: 2 and 3.5 year old. No more coming
Taxes: Federal 33%, State 9.3%
Current fixed expenses
- my loans: 298k @4.5% 10y fixed (2nd refi 3/2017) = $3,181/month: This was 5.99% 15yr fixed = $2,950/month (11/2014)
- DW loans: 10k @3.375 5y fixed (2nd refi 3/2017) = $186/month. This was 5.35% 10yr fixed but used any bonus payments to lump sum this own down first
- Daycare: $2,400/month total (we have a dependent care FSA for 5k). Anticipate 2.3 more years for oldest, 3.3 more years for younger. They will go to public school once they reach kinder
- Rent: $1,870
- utilities: $427
- Car: $13,760 @ 1.67% 5yr fixed = $403/month, 35 months left (wanted to keep the old one but AC blew at 200k and it's hot here in summer)
- Insurance: Disability and term for me, term for DW, auto, renters, liability: $575
- groceries, gas, kids activities, clothing, occasional date night, etc $1500-2k
Savings
EF: 15k
Currently, we max out my 401(k), her 403(b). I get another 401(k), not a match, just for being alive, that comes to around $15k/year. DW contribues 8% pretax to her pension plan. Our current tax deferred balance is $196k
I also have a pension. If it is unchanged 25 years from now (not betting on it, but hoping for it) I could retire with up to 50% of my salary
THE QUESTION
As you can see, going to an expensive school and being a primary care pediatrician are not an awesome combo. I blame my college self 100% for my 3.3 undergrad GPA and getting into 1/30 med schools I applied to. I was a much better med student and resident, but always wanted to do peds and really like my job most of the time. I have taken on administrative responsibilities which keep my week pretty varied and break up clinic.
We live in a fairly HCOL area. It is my wife's home town, and was just a little cow town with a college when her parents moved here 32 years ago. We moved back after training in an extremely HCOL area. We really like being close to family. Gparents are a little old to do full time babysitting (and didn't work long, successful careers to be unpaid babysitters in retirement), but we feel it's a huge value for the kids to see them multiple times per week (and they bring us dinner a lot).
I would like to pay off the remaining student loans in <5 years, and I think we can do 4. After many, many, long conversations with DW, even if we made some cuts in our monthly budget they would not have a huge impact. We go out to 1-2 nice dinners per year and don't take big vacations (kids probably won't go on a plane until loans are paid off and we celebrate). We could cut back on take out and some kids activities, but we don't have the stomach for some of the more extreme loan payoff tracks. I wish we did, but we're just not there right now.
Until now, I've never really considered not maxing our tax deferred retirement accounts. But if we stopped contributing to our 401(k)/403(b), we would have about $1,700/month more (after taxes) to put toward student loans. I wouldn't quite be able to make the 5 year repayment plan SoFi offered me on a monthly basis, but would have 10-20k more in 2 lump some payments to make in December and March. Using the 7 year option they recently offered me, with these extra payments I think we could pay off the loans in 4-4.5 years.
The big negative:
- over 4-5 years, lose out on 144-180k of contributions (+/- growth) which is somewhere around 60-75k in increased taxes (at 33% and 9.3% marginal rates)
the positive
- save about 40-45k in interest compared to current loan
- the huge morale boost of an end date for the loans that seems much closer than the current one (so my blood pressure goes down)
- DW also has a 457 (U of California) and I can do mega back door roth IRA so we can do a little catch up savings once we have more cash flow
- it's not really no retirement contribution, as I still have my $15k that my group contributes annually
If you made it this far, I can't thank you enough
Dru and Mrs Dru
DW: 35, ancillary health care, 0.8FTE, 2017 W2 salaried income 51k
Finished residency 2014: 344k med school debt
DW finished MA program 2013: 55k grad school debt
Guess when we found WCI...
Family: 2 and 3.5 year old. No more coming
Taxes: Federal 33%, State 9.3%
Current fixed expenses
- my loans: 298k @4.5% 10y fixed (2nd refi 3/2017) = $3,181/month: This was 5.99% 15yr fixed = $2,950/month (11/2014)
- DW loans: 10k @3.375 5y fixed (2nd refi 3/2017) = $186/month. This was 5.35% 10yr fixed but used any bonus payments to lump sum this own down first
- Daycare: $2,400/month total (we have a dependent care FSA for 5k). Anticipate 2.3 more years for oldest, 3.3 more years for younger. They will go to public school once they reach kinder
- Rent: $1,870
- utilities: $427
- Car: $13,760 @ 1.67% 5yr fixed = $403/month, 35 months left (wanted to keep the old one but AC blew at 200k and it's hot here in summer)
- Insurance: Disability and term for me, term for DW, auto, renters, liability: $575
- groceries, gas, kids activities, clothing, occasional date night, etc $1500-2k
Savings
EF: 15k
Currently, we max out my 401(k), her 403(b). I get another 401(k), not a match, just for being alive, that comes to around $15k/year. DW contribues 8% pretax to her pension plan. Our current tax deferred balance is $196k
I also have a pension. If it is unchanged 25 years from now (not betting on it, but hoping for it) I could retire with up to 50% of my salary
THE QUESTION
As you can see, going to an expensive school and being a primary care pediatrician are not an awesome combo. I blame my college self 100% for my 3.3 undergrad GPA and getting into 1/30 med schools I applied to. I was a much better med student and resident, but always wanted to do peds and really like my job most of the time. I have taken on administrative responsibilities which keep my week pretty varied and break up clinic.
We live in a fairly HCOL area. It is my wife's home town, and was just a little cow town with a college when her parents moved here 32 years ago. We moved back after training in an extremely HCOL area. We really like being close to family. Gparents are a little old to do full time babysitting (and didn't work long, successful careers to be unpaid babysitters in retirement), but we feel it's a huge value for the kids to see them multiple times per week (and they bring us dinner a lot).
I would like to pay off the remaining student loans in <5 years, and I think we can do 4. After many, many, long conversations with DW, even if we made some cuts in our monthly budget they would not have a huge impact. We go out to 1-2 nice dinners per year and don't take big vacations (kids probably won't go on a plane until loans are paid off and we celebrate). We could cut back on take out and some kids activities, but we don't have the stomach for some of the more extreme loan payoff tracks. I wish we did, but we're just not there right now.
Until now, I've never really considered not maxing our tax deferred retirement accounts. But if we stopped contributing to our 401(k)/403(b), we would have about $1,700/month more (after taxes) to put toward student loans. I wouldn't quite be able to make the 5 year repayment plan SoFi offered me on a monthly basis, but would have 10-20k more in 2 lump some payments to make in December and March. Using the 7 year option they recently offered me, with these extra payments I think we could pay off the loans in 4-4.5 years.
The big negative:
- over 4-5 years, lose out on 144-180k of contributions (+/- growth) which is somewhere around 60-75k in increased taxes (at 33% and 9.3% marginal rates)
the positive
- save about 40-45k in interest compared to current loan
- the huge morale boost of an end date for the loans that seems much closer than the current one (so my blood pressure goes down)
- DW also has a 457 (U of California) and I can do mega back door roth IRA so we can do a little catch up savings once we have more cash flow
- it's not really no retirement contribution, as I still have my $15k that my group contributes annually
If you made it this far, I can't thank you enough
Dru and Mrs Dru
Those are two big positives IMHO. 
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