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Income before Medical School

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  • Income before Medical School

    Can anyone tell me or point me to a resource on what to do with surplus income prior to medical school.

    Will have roughly $2500 per month and wanted to know if it was better served maxing out an IRA/contributing

    to 401k or if I should be saving cash up to reduce future student loans.

     

    Loans would be at 6% interest

  • #2
    less loans

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    • #3
      I think I'd put it into tax-deferred accounts and then convert them during med school for free. But keeping loans down isn't a bad idea.
      Helping those who wear the white coat get a fair shake on Wall Street since 2011

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      • #4
        I agree that tax-deferred accounts would be smart.  Roth and traditional IRA?  It depends on what your income level is.  I don't think I'd contribute to a 401k, because the money would be unavailable to you until retirement.  The Roth principle would be available penalty and tax free at any time, but you can only place 5500/yr in there.  I'm not as familiar with traditional IRA rules.  Perhaps even a taxable account would be smart so you can access the funds at anytime?

        I would use the funds for living expenses in Med School so you don't have to borrow money for things like rent, etc.  Save as much as you can before you go and avoid as many student loans as possible.  Especially at 6% interest.

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        • #5
          Agree with hightower - contribute $5,500 to Roth ($11k if married) and put the rest toward student loans. The 401k won't be as beneficial at this point as the deduction is not as valuable, unless you have a Roth option, which I would be tempted to consider. Follow your budget to make sure the money doesn't get spent, whatever you decide.
          Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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