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First, thank you to this website, forum, and all of its contributors. As a generally financially-ignorant medical student, these resources have given me some valuable insight and helped me to start making some movements in the right direction.
Some background: I am a fourth-year med student looking forward to graduating in May 2017. I was blessed to be given some money from a relative in the form of a taxable mutual fund, which I have added to over the years (although not at the expense of maximum contributions to a Roth IRA for the past several years). This account now totals just over $34,000.
I am also on an Air Force scholarship to med school, which provides ~$30,000/year in taxable income. Next year, I will obviously be on a resident's salary (given that all goes well with the match!) of $50-60K. If I am selected for a military residency, that income could be more in the $70-80K range.
In terms of minimizing taxes, would it be advisable to liquidate this mutual fund before the end of this year? My wife and I are looking at several larger expenses in the not-so-distant future (down payment on a house, upgrade to a larger vehicle as our family continues to grow) and the $34,000 could be well spent on these items. I obviously do not have a crystal ball, but we did not have a specific future purpose in mind for this fund besides one of several locations for our monthly saving budget.
I am just trying to see what considerations I may be ignoring here. From what I can see, there is obviously no tax benefit to this account (taxed at every turn), and we could stand to save some money in interest from either a mortgage and/or an auto loan. I appreciate your thoughts.
Some background: I am a fourth-year med student looking forward to graduating in May 2017. I was blessed to be given some money from a relative in the form of a taxable mutual fund, which I have added to over the years (although not at the expense of maximum contributions to a Roth IRA for the past several years). This account now totals just over $34,000.
I am also on an Air Force scholarship to med school, which provides ~$30,000/year in taxable income. Next year, I will obviously be on a resident's salary (given that all goes well with the match!) of $50-60K. If I am selected for a military residency, that income could be more in the $70-80K range.
In terms of minimizing taxes, would it be advisable to liquidate this mutual fund before the end of this year? My wife and I are looking at several larger expenses in the not-so-distant future (down payment on a house, upgrade to a larger vehicle as our family continues to grow) and the $34,000 could be well spent on these items. I obviously do not have a crystal ball, but we did not have a specific future purpose in mind for this fund besides one of several locations for our monthly saving budget.
I am just trying to see what considerations I may be ignoring here. From what I can see, there is obviously no tax benefit to this account (taxed at every turn), and we could stand to save some money in interest from either a mortgage and/or an auto loan. I appreciate your thoughts.
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