Huge fan of WCI here -- I love the book, podcasts, recommended reading -- all of it. Big fans of physician on FIRE too.
Please help with our scenario:
I am 4 years post-fellowship, working at academic medical center and enjoy my job. Unfortunately, the PSLF did not make sense when I examined it as a new attending (income-based payments resulted in early payoff of loan)
Family of 6, wife works a little from home but mostly wrangles our scrum of kids...
Assets:
Savings: $548K ($95K liquid in cash/taxable account, $68K for kids college in 529s, $370K in various retirement accounts)
Salary = 420K
Bonus/side work of 90K per year
Expenses:
Grocery/clothing/utilities/oil and tires for my clunker (upgraded wife's car in 2017) ~ 14K per month
We max out 403b at 18K per year, 457b at 18K per year, backdoor Roths for wife and I at 11K per year, and 10K to 529s for kids per year. University provides match plus additional contribution of about $3500 per month into 403b. We put an additional 2K per month into a taxable retirement account. (Investing/saving $10,500 per month total or ~25% of salary + bonus)
Try to give away 10% of income
Debts:
Student loans: 98K remaining at 3.25% -- paying 3000 per month toward this (had 250K in student loan debt after fellowship; just paid off biggest loan of 150K which was at 3.9% last month)
Home mortgage: 300K at 3.25% 30-year fixed
Other debt: 77K HELOC (this is a leftover from our doctor loan, intended to avoid PMI) at variable interest rate, most recently increased to 4.75% -- paying minimum payments
Auto: 32K at 0% x 5 years (just replaced wife's 11 year old car which was falling apart)
My question is: Which debt should we work to eliminate next? Should I pay off the HELOC and decrease the payments to the student loan (currently 3K per month plus any windfall)? Or should I continue to attack the student debt until it is gone?
The HELOC is irritating because the interest is likely to rise further, but I enjoy the tax benefit as we do for the home mortgage. The student loan debt of $98K remaining is at a fairly low rate but we receive no tax deduction for the interest.
To complicate things, we are REALLY interested in buying recreational land as a weekend getaway for our family which in our state is surprisingly cheap...1-2K per acre. I would like to do this before our oldest child starts high school in 4.5 years.
Please help with our scenario:
I am 4 years post-fellowship, working at academic medical center and enjoy my job. Unfortunately, the PSLF did not make sense when I examined it as a new attending (income-based payments resulted in early payoff of loan)
Family of 6, wife works a little from home but mostly wrangles our scrum of kids...
Assets:
Savings: $548K ($95K liquid in cash/taxable account, $68K for kids college in 529s, $370K in various retirement accounts)
Salary = 420K
Bonus/side work of 90K per year
Expenses:
Grocery/clothing/utilities/oil and tires for my clunker (upgraded wife's car in 2017) ~ 14K per month
We max out 403b at 18K per year, 457b at 18K per year, backdoor Roths for wife and I at 11K per year, and 10K to 529s for kids per year. University provides match plus additional contribution of about $3500 per month into 403b. We put an additional 2K per month into a taxable retirement account. (Investing/saving $10,500 per month total or ~25% of salary + bonus)
Try to give away 10% of income
Debts:
Student loans: 98K remaining at 3.25% -- paying 3000 per month toward this (had 250K in student loan debt after fellowship; just paid off biggest loan of 150K which was at 3.9% last month)
Home mortgage: 300K at 3.25% 30-year fixed
Other debt: 77K HELOC (this is a leftover from our doctor loan, intended to avoid PMI) at variable interest rate, most recently increased to 4.75% -- paying minimum payments
Auto: 32K at 0% x 5 years (just replaced wife's 11 year old car which was falling apart)
My question is: Which debt should we work to eliminate next? Should I pay off the HELOC and decrease the payments to the student loan (currently 3K per month plus any windfall)? Or should I continue to attack the student debt until it is gone?
The HELOC is irritating because the interest is likely to rise further, but I enjoy the tax benefit as we do for the home mortgage. The student loan debt of $98K remaining is at a fairly low rate but we receive no tax deduction for the interest.
To complicate things, we are REALLY interested in buying recreational land as a weekend getaway for our family which in our state is surprisingly cheap...1-2K per acre. I would like to do this before our oldest child starts high school in 4.5 years.
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