New Dual Physican Couple
-
- Posts: 31
- Joined: Tue Feb 21, 2017 9:35 am
New Dual Physican Couple
My wife and I are about to get married and I have some questions about the best way to save. We're both in our early/mid 30s and just beginning medical practice. We're both in academics with a relatively low salary for our respective fields and limited investment options (no mega backdoor Roth, etc).
Income: 650k combined
Current retirement savings: Me: 75k Her: 80k
My investments are currently in Vanguard with a 4-fund portfolio split between my employer account, Roth, taxable account, and HSA. She has a fidelity account from a previous employer and an account with Prudential. Her investments were "helpfully" selected by Prudential and in funds that have relatively high ERs (I'll be changing this).
Our plan is to save 20% of our income (120k per year) for retirement and pay down our medical school loans ASAP (especially one of hers at 8.75%). My question is how to best allocate that 120k of savings per year. Should I just keep it simple and put it all in to Roth/Employer/taxable accounts? Is there anything we should do instead?
Income: 650k combined
Current retirement savings: Me: 75k Her: 80k
My investments are currently in Vanguard with a 4-fund portfolio split between my employer account, Roth, taxable account, and HSA. She has a fidelity account from a previous employer and an account with Prudential. Her investments were "helpfully" selected by Prudential and in funds that have relatively high ERs (I'll be changing this).
Our plan is to save 20% of our income (120k per year) for retirement and pay down our medical school loans ASAP (especially one of hers at 8.75%). My question is how to best allocate that 120k of savings per year. Should I just keep it simple and put it all in to Roth/Employer/taxable accounts? Is there anything we should do instead?
-
- Posts: 553
- Joined: Mon Jan 22, 2018 1:26 pm
Re: New Dual Physican Couple
Details on loan amounts?
-
- Posts: 31
- Joined: Tue Feb 21, 2017 9:35 am
Re: New Dual Physican Couple
Mine:
14393 5.46%
186364 6.51 (government loan, eligible for forgiveness in 4 more years)
12997 3.5%
Hers:
25347 8.75% (The loan I want to take care of before the new year)
66434 6.55 (The loan after)
201418 6.5 (Technically eligible for forgiveness, but she didn't start the process in residency/fellowship...shame)
14393 5.46%
186364 6.51 (government loan, eligible for forgiveness in 4 more years)
12997 3.5%
Hers:
25347 8.75% (The loan I want to take care of before the new year)
66434 6.55 (The loan after)
201418 6.5 (Technically eligible for forgiveness, but she didn't start the process in residency/fellowship...shame)
-
- Posts: 2455
- Joined: Tue Mar 07, 2017 3:25 pm
Re: New Dual Physican Couple
That is a boatload of debt at 6.5% and higher. Investing up to the match and then killing the debt is a fine strategy. In fact, I'd love to be getting a guaranteed 6.5% rate of return on my investments for the next few years and call it a day.Toasterthief wrote: ↑Mon Oct 01, 2018 2:33 pm Mine:
14393 5.46%
186364 6.51 (government loan, eligible for forgiveness in 4 more years)
12997 3.5%
Hers:
25347 8.75% (The loan I want to take care of before the new year)
66434 6.55 (The loan after)
201418 6.5 (Technically eligible for forgiveness, but she didn't start the process in residency/fellowship...shame)
Re: New Dual Physican Couple
i would say that beyond any match that you get, you should pay off all loans above 6%. the 5.46% is negotiable, though you should probably just pay that one off too. don't worry about paying off the 3.5% before investing.Toasterthief wrote: ↑Mon Oct 01, 2018 2:33 pm Mine:
14393 5.46%
186364 6.51 (government loan, eligible for forgiveness in 4 more years)
12997 3.5%
Hers:
25347 8.75% (The loan I want to take care of before the new year)
66434 6.55 (The loan after)
201418 6.5 (Technically eligible for forgiveness, but she didn't start the process in residency/fellowship...shame)
the reason is simple. these returns are risk free. you may get 6+% in the market or you may not. either way though, the only reason you'll be earning that excess return, if you get it at all, is because of the risk you are taking. with your loans, you'll be earning over 6% with a certainty.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"
-
- Posts: 393
- Joined: Fri Jul 21, 2017 11:19 am
Re: New Dual Physican Couple
At those rates for the loans, pay off all debts first before even thinking about investing. Unless the market drops 30-50% then I would consider putting half the money towards investing in a taxable account.
Re: New Dual Physican Couple
pay down our medical school loans ASAP
With laser like focus
With laser like focus
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
Re: New Dual Physican Couple
+1000
1. Invest up to the match
2. Pay off loans (2 years)
3. Keep budget extremely low - don't get docitus.
4. Get all proper insurance in place and make sure you stay away from the permanent life insurance scam products.
-
- Posts: 31
- Joined: Tue Feb 21, 2017 9:35 am
Re: New Dual Physican Couple
Thanks everyone, I guess the last few years of the market have made me think that investing may be the better route as long as the loans are below 7-8% or so. It sounds like everyone is unanimous in agreeing to pay off her med school debt ASAP?
-
- Posts: 553
- Joined: Mon Jan 22, 2018 1:26 pm
Re: New Dual Physican Couple
I'd pay off those loans beyond the match yes.
And not that anyone can predict but if my money was on a deep drop within 2 years... well. It kind of is lol
And not that anyone can predict but if my money was on a deep drop within 2 years... well. It kind of is lol
-
- Posts: 233
- Joined: Sun Apr 15, 2018 8:57 pm
Re: New Dual Physican Couple
You should check out the White Coat Investor. Both the blog at https://www.whitecoatinvestor.com and the book. There is tons of financial advice that I think you'll find useful.Toasterthief wrote: ↑Mon Oct 01, 2018 2:59 pm Thanks everyone, I guess the last few years of the market have made me think that investing may be the better route as long as the loans are below 7-8% or so. It sounds like everyone is unanimous in agreeing to pay off her med school debt ASAP?
"Get what you can, and what you get hold, 'Tis the stone that will turn all your lead into gold." |
-Benjamin Franklin
-
- Posts: 31
- Joined: Tue Feb 21, 2017 9:35 am
Re: New Dual Physican Couple
Thanks, I read WCI quite a bit (although his political views coming through gets annoying).SelfEmployed123 wrote: ↑Mon Oct 01, 2018 3:05 pmYou should check out the White Coat Investor. Both the blog at https://www.whitecoatinvestor.com and the book. There is tons of financial advice that I think you'll find useful.Toasterthief wrote: ↑Mon Oct 01, 2018 2:59 pm Thanks everyone, I guess the last few years of the market have made me think that investing may be the better route as long as the loans are below 7-8% or so. It sounds like everyone is unanimous in agreeing to pay off her med school debt ASAP?
Re: New Dual Physican Couple
Yes. I would max out the pretax/tax advantaged first, but after that every penny would go towards paying off the student loans. Nothing in taxable except for a small cash reserve... I would also hold off any lifestyle inflation until those loans were paid off.Toasterthief wrote: ↑Mon Oct 01, 2018 2:59 pm Thanks everyone, I guess the last few years of the market have made me think that investing may be the better route as long as the loans are below 7-8% or so. It sounds like everyone is unanimous in agreeing to pay off her med school debt ASAP?
- goodenyou
- Posts: 3602
- Joined: Sun Jan 31, 2010 10:57 pm
- Location: Skating to Where the Puck is Going to Be..or on the golf course
Re: New Dual Physican Couple
Pay off loans ASAP. If I added correctly, you have $500,000 of loans between the two of you. You won’t find many jobs that you can find that will afford you the ability to pay them off. Many things can happen. I wouldn’t compound my indebtedness with anything else at this time. You don’t want to be in a deep hole ”betting on the come”, especially in today’s medical financial environment. I was there 25 years ago. Best thing I ever did was to hammer away my debt. I had much more clarity of thought and feeling of freedom after they were all paid off. Stay away from stupid doctor schemes.
"Ignorance more frequently begets confidence than does knowledge" |
“At 50, everyone has the face he deserves”
-
- Posts: 711
- Joined: Wed Jan 24, 2018 1:24 am
Re: New Dual Physican Couple
I'd keep it really simple and put all of the $120,000 into either the S&P 500 or the total stock market index ETF, VTI. You can't lose with either of these. Forget bonds. You are young enough to ride out the swings.
And congratulations on the income. It can make you really wealthy down the road.
And congratulations on the income. It can make you really wealthy down the road.
Re: New Dual Physican Couple
Why is OP's occupation relevant?
I've noticed that physicians on this website tend to state their profession. It's interesting to me.
I've noticed that physicians on this website tend to state their profession. It's interesting to me.
Re: New Dual Physican Couple
New doctors often have massive amounts of debt but have (or will soon have) very high incomes. They are also targets of financial salesmen.Clemblack wrote:Why is OP's occupation relevant?
-
- Posts: 31
- Joined: Tue Feb 21, 2017 9:35 am
Re: New Dual Physican Couple
Toasterthief wrote: ↑Mon Oct 01, 2018 6:00 pmTo explain why we're in our early 30s with massive debt and insignificant retirement savings?
Your post is titled "New Dual Physician Couple," and it doesn't mention "massive debt." I'm still not sure why the occupation would be relevant, and I simply pointed out that it's interesting that physicians seem to have a tendency to mention what they do for a living.
-
- Posts: 553
- Joined: Mon Jan 22, 2018 1:26 pm
Re: New Dual Physican Couple
That would have been my guess.Toasterthief wrote: ↑Mon Oct 01, 2018 6:00 pmTo explain why we're in our early 30s with massive debt and insignificant retirement savings?
Cause if I'm just reading a couple makes 650k and have half million on student loans, while I may assume they're doctors. It at least satisfies curiosity
-
- Posts: 1341
- Joined: Sat Aug 05, 2017 8:21 pm
Re: New Dual Physican Couple
Your wife's loans are brutal, $300K at > 6.5%. I would pay those off before doing any investing. How confident are you that you can get a 7% return year after year investing in the market?Toasterthief wrote: ↑Mon Oct 01, 2018 2:33 pm Mine:
14393 5.46%
186364 6.51 (government loan, eligible for forgiveness in 4 more years)
12997 3.5%
Hers:
25347 8.75% (The loan I want to take care of before the new year)
66434 6.55 (The loan after)
201418 6.5 (Technically eligible for forgiveness, but she didn't start the process in residency/fellowship...shame)
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) |
Don't wait to buy real estate. Buy real estate.. and wait.
-
- Posts: 1341
- Joined: Sat Aug 05, 2017 8:21 pm
Re: New Dual Physican Couple
Thats because it tends to consume ones identity. I went out of my way to specifically during residency to have travel, languages, dating, real estate, fitness >>> medicine. I always answer the phone at the hospital with my first name and people think its weird? I dunno. For a long time I've thought it strange that physicians are obsessed with their vocation.Clemblack wrote: ↑Mon Oct 01, 2018 6:08 pmToasterthief wrote: ↑Mon Oct 01, 2018 6:00 pmTo explain why we're in our early 30s with massive debt and insignificant retirement savings?
Your post is titled "New Dual Physician Couple," and it doesn't mention "massive debt." I'm still not sure why the occupation would be relevant, and I simply pointed out that it's interesting that physicians seem to have a tendency to mention what they do for a living.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) |
Don't wait to buy real estate. Buy real estate.. and wait.
-
- Posts: 2684
- Joined: Sun Jan 08, 2017 11:25 am
Re: New Dual Physican Couple
Anything not a part of PSLF needs to be refinanced and attacked.Toasterthief wrote: ↑Mon Oct 01, 2018 2:28 pm My wife and I are about to get married and I have some questions about the best way to save. We're both in our early/mid 30s and just beginning medical practice. We're both in academics with a relatively low salary for our respective fields and limited investment options (no mega backdoor Roth, etc).
Income: 650k combined
Current retirement savings: Me: 75k Her: 80k
My investments are currently in Vanguard with a 4-fund portfolio split between my employer account, Roth, taxable account, and HSA. She has a fidelity account from a previous employer and an account with Prudential. Her investments were "helpfully" selected by Prudential and in funds that have relatively high ERs (I'll be changing this).
Our plan is to save 20% of our income (120k per year) for retirement and pay down our medical school loans ASAP (especially one of hers at 8.75%). My question is how to best allocate that 120k of savings per year. Should I just keep it simple and put it all in to Roth/Employer/taxable accounts? Is there anything we should do instead?
20% for retirement is fine. But if you are doing 2x employer accounts HSA and backdoor rIRA maybe stop there and attack loans next.
Life insurance, disability, etc
Re: New Dual Physican Couple
It does strike me a little odd that you're in an academic center with limited investment options. I'd just double check this. For instance, I picked a random "smaller" medical center - Kansas university and even they have a roth 403b. apologize to anyone from Kansas, no offense intended. A watered down spd is available:Toasterthief wrote: ↑Mon Oct 01, 2018 2:28 pm My wife and I are about to get married and I have some questions about the best way to save. We're both in our early/mid 30s and just beginning medical practice. We're both in academics with a relatively low salary for our respective fields and limited investment options (no mega backdoor Roth, etc).
http://www.kumc.edu/human-resources/ben ... plans.html
But basically, many places will have roth 403b which you then later convert to roth ira. You can call plan to double check this is doable. I would call a few times, as sometimes the plan's reps can be less than knowledgable.
Of course, this doesn't matter until you finish paying down that debt
My profile: https://www.bogleheads.org/forum/memberlist.php?mode=viewprofile&u=86026 |
Virtua lBogleheads® Blog: https://virtualbogleheads.wordpress.com/
-
- Posts: 67
- Joined: Wed May 24, 2017 10:00 pm
Re: New Dual Physican Couple
I am the lone dissent in saying don’t payoff the 6.5% fed loan if you are on track, that is ECF’d for PSLF with fedloan and have 4 years left and plan to stay academic or remain with an eligible employer. I say this despite the recent 99% rejection headline. The loan forgiveness will be tax free. Hopefully someone will crunch the numbers to prove it. If you are not certified at fedloan, keep in mind they are a cess pool of incompetence. Betty is not on your side. The neutering of cfpb student loans ombudsmen certainly does not help. So when you login to my fedloan and the months are off, think twice, cut once.Toasterthief wrote: ↑Mon Oct 01, 2018 2:33 pm Mine:
14393 5.46%
186364 6.51 (government loan, eligible for forgiveness in 4 more years)
12997 3.5%
Hers:
25347 8.75% (The loan I want to take care of before the new year)
66434 6.55 (The loan after)
201418 6.5 (Technically eligible for forgiveness, but she didn't start the process in residency/fellowship...shame)
Re: New Dual Physican Couple
Please, please, please ignore some of the above commenters. Do not forgo tax deferred space to pay down those debts. You refinance those student loans that aren't pslf eligible/weren't paid on during residency to a fixed rate around 4%. You max out your tax deferred space, which includes 403b/401k/457b, backdoor Roth IRA, and HSA (as applicable). After these are maxed, then ignore taxable to start hammering away at those loans. With that salary, it should be no problem to do all of this.
Re: New Dual Physican Couple
What I would do:
Income: $650k
Assume 1/3 lost to taxes: $215k
Remaining: $435k
Costs to live like a resident for another year: $50k
Remaining: $385k
401k+backdoor Roth x 2: $18500 * x 2 + $5500 *2 = $48k
Remaining: $337k
Kill off every loan except the one eligible for forgiveness: $320k
Leftover: $17k --> spend on insurance, then splurge
Should be debt-free in 1, or at most, 2 years. Once loans are gone, redirect the funds to the usual sequence with retirement savings (401k's to match, HSA, backdoor Roth, 401k to max, after-tax 401k rolled over to Roth IRA if available, taxable) and feel free to splurge a lot more.
Income: $650k
Assume 1/3 lost to taxes: $215k
Remaining: $435k
Costs to live like a resident for another year: $50k
Remaining: $385k
401k+backdoor Roth x 2: $18500 * x 2 + $5500 *2 = $48k
Remaining: $337k
Kill off every loan except the one eligible for forgiveness: $320k
Leftover: $17k --> spend on insurance, then splurge
Should be debt-free in 1, or at most, 2 years. Once loans are gone, redirect the funds to the usual sequence with retirement savings (401k's to match, HSA, backdoor Roth, 401k to max, after-tax 401k rolled over to Roth IRA if available, taxable) and feel free to splurge a lot more.
-
- Posts: 1341
- Joined: Sat Aug 05, 2017 8:21 pm
Re: New Dual Physican Couple
Not gonna happen. This isn't extreme early retirement or money mustache forum.wxl31 wrote: ↑Tue Oct 02, 2018 12:36 am What I would do:
Income: $650k
Assume 1/3 lost to taxes: $215k
Remaining: $435k
Costs to live like a resident for another year: $50k
Remaining: $385k
401k+backdoor Roth x 2: $18500 * x 2 + $5500 *2 = $48k
Remaining: $337k
Kill off every loan except the one eligible for forgiveness: $320k
Leftover: $17k --> spend on insurance, then splurge
Should be debt-free in 1, or at most, 2 years. Once loans are gone, redirect the funds to the usual sequence with retirement savings (401k's to match, HSA, backdoor Roth, 401k to max, after-tax 401k rolled over to Roth IRA if available, taxable) and feel free to splurge a lot more.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) |
Don't wait to buy real estate. Buy real estate.. and wait.
Re: New Dual Physican Couple
Good news is in two years you can be close to debt free. That would be the greatest gift you could give yourself/your spouse.
There will be plenty of time in the market for you to be millionaires many times over if you can save later.
Right now the house is on fire. Call the fire department, don't use a garden hose. Live like a college student until these loans are settled. BMW/Porsche/Vacations/Rolex's have to wait for now. Time to pay the pipers.
There will be plenty of time in the market for you to be millionaires many times over if you can save later.
Right now the house is on fire. Call the fire department, don't use a garden hose. Live like a college student until these loans are settled. BMW/Porsche/Vacations/Rolex's have to wait for now. Time to pay the pipers.
-
- Posts: 202
- Joined: Mon Jan 16, 2017 8:23 pm
Re: New Dual Physican Couple
jhwkr542 wrote: ↑Mon Oct 01, 2018 11:43 pm Please, please, please ignore some of the above commenters. Do not forgo tax deferred space to pay down those debts. You refinance those student loans that aren't pslf eligible/weren't paid on during residency to a fixed rate around 4%. You max out your tax deferred space, which includes 403b/401k/457b, backdoor Roth IRA, and HSA (as applicable). After these are maxed, then ignore taxable to start hammering away at those loans. With that salary, it should be no problem to do all of this.
This exactly. Especially if you’re in academics and at an income of 650. Max out tax deferred space and backdoor Roth x2. PSLF all that is eligible. Refi everything else and pay it off super aggressively. Live like a resident for a few years and you’ll be done in no time. We were in a similar spot a few years ago- dual physician couple, similar income, slightly lower debt burden and by living like residents, were able to pay off all the debts and build significantly toward FIRE-ability.
- randomizer
- Posts: 1547
- Joined: Sun Jul 06, 2014 3:46 pm
Re: New Dual Physican Couple
Yes, keep it simple, I'd say. You'll obviously be ok with your incomes as long as you don't let your spending (and debt) get out of control. There's no reason why you shouldn't be able to retire with 5m or 10m quite easily, so there's no need to optimize everything to the limit. Focus on enjoying your life and your work and don't let investing become the center of everything.
87.5:12.5, EM tilt — HODL the course!
Re: New Dual Physican Couple
Have you looked into refinancing with SoFi or DRB or similar? My wife's rates dropped from like 6.8% to around 3.25%.
I also encourage you to use all tax-advantaged space possible, even while paying your loans. We did not do this during my wife's training and we regret it.
I also encourage you to use all tax-advantaged space possible, even while paying your loans. We did not do this during my wife's training and we regret it.
- goodenyou
- Posts: 3602
- Joined: Sun Jan 31, 2010 10:57 pm
- Location: Skating to Where the Puck is Going to Be..or on the golf course
Re: New Dual Physican Couple
Physician employment is not as vulnerable to market fluctuations as other professions. People get sick in good economies and bad economies. Therefore, I may make a different recommendation to someone in a different profession that may be subject to job insecurity. Otherwise, investing and debt strategies should be the same. You could also take the position that some doctors are self-absorbed, self-aggrandizing, narcissistic and overly excited about their accomplishments. It's all in your own perspective. It is why WCI is popular and a "safe space" for doctors.Clemblack wrote: ↑Mon Oct 01, 2018 6:08 pmToasterthief wrote: ↑Mon Oct 01, 2018 6:00 pmTo explain why we're in our early 30s with massive debt and insignificant retirement savings?
Your post is titled "New Dual Physician Couple," and it doesn't mention "massive debt." I'm still not sure why the occupation would be relevant, and I simply pointed out that it's interesting that physicians seem to have a tendency to mention what they do for a living.
"Ignorance more frequently begets confidence than does knowledge" |
“At 50, everyone has the face he deserves”
-
- Posts: 18502
- Joined: Tue Dec 31, 2013 6:05 am
- Location: 26 miles, 385 yards west of Copley Square
Re: New Dual Physican Couple
It makes sense to mention dual physician as the source of the "relatively low" $650k/year income. It eliminates my thoughts that he's talking about only himself, as a new engineer making the typical $65k a year first year salary. You know....decimal place shift by mistake.
Only on Bogleheads can $650k and "relatively low" be said together and be taken seriously.
Only on Bogleheads can $650k and "relatively low" be said together and be taken seriously.
Bogle: Smart Beta is stupid
Re: New Dual Physican Couple
Different risk and career trajectories. For a lawyer, 325k/year may be peak earnings, followed by large salary reductions upon moving to a more lifestyle type job. For an entrepreneur or a saleseman, earnings may be very irregular. If an engineer had a massively negative net worth in his thirties, that would be a major red flag for pending habits, and would be important to address. If he were a cryptocurrency speculator or professional poker player, he may have an appetite for risk and desire to beat the game that could prove harmful for equity investing.Clemblack wrote: ↑Mon Oct 01, 2018 6:08 pmToasterthief wrote: ↑Mon Oct 01, 2018 6:00 pmTo explain why we're in our early 30s with massive debt and insignificant retirement savings?
Your post is titled "New Dual Physician Couple," and it doesn't mention "massive debt." I'm still not sure why the occupation would be relevant, and I simply pointed out that it's interesting that physicians seem to have a tendency to mention what they do for a living.
Specificity also brings connection - other physicians will be attracted to help a fellow schmuck who's just taken it in the teeth for the last decade, and gets 6% debt as a reward.
-
- Posts: 31
- Joined: Tue Feb 21, 2017 9:35 am
Re: New Dual Physican Couple
Thanks for the advice everyone.
Thanks for the advice everyone. To summarize, does this sound reasonable:
1. Consolidate her major (200k, 6.5%) loan at a lower interest rate.
2. Pay off her 25k, 8% loan now.
3. Contribute to our retirement plans to max out our matches, backdoor Roth, and at a minimum, to the 401k limit.
4. Pay off her 60k, 6.5% loan ASAP.
5. Pay off her 200k loan ASAP.
6. Pay off my 15k, 5.5% loan
7. Stay on course to get my loan debt forgiven via PSLF (I've been submitting yearly employment verification forms which have been fine).
My job offers a fairly generous match, however unfortunately doesn't allow for any other other space. I double check with the Vanguard rep again this year, but I'm fairly sure that's the case. I'll look in to her job a bit more as well.lazylarry wrote: ↑Mon Oct 01, 2018 8:59 pmIt does strike me a little odd that you're in an academic center with limited investment options. I'd just double check this. For instance, I picked a random "smaller" medical center - Kansas university and even they have a roth 403b. apologize to anyone from Kansas, no offense intended. A watered down spd is available:Toasterthief wrote: ↑Mon Oct 01, 2018 2:28 pm My wife and I are about to get married and I have some questions about the best way to save. We're both in our early/mid 30s and just beginning medical practice. We're both in academics with a relatively low salary for our respective fields and limited investment options (no mega backdoor Roth, etc).
http://www.kumc.edu/human-resources/ben ... plans.html
But basically, many places will have roth 403b which you then later convert to roth ira. You can call plan to double check this is doable. I would call a few times, as sometimes the plan's reps can be less than knowledgable.
Of course, this doesn't matter until you finish paying down that debt
Thanks for the advice everyone. To summarize, does this sound reasonable:
1. Consolidate her major (200k, 6.5%) loan at a lower interest rate.
2. Pay off her 25k, 8% loan now.
3. Contribute to our retirement plans to max out our matches, backdoor Roth, and at a minimum, to the 401k limit.
4. Pay off her 60k, 6.5% loan ASAP.
5. Pay off her 200k loan ASAP.
6. Pay off my 15k, 5.5% loan
7. Stay on course to get my loan debt forgiven via PSLF (I've been submitting yearly employment verification forms which have been fine).
-
- Posts: 2684
- Joined: Sun Jan 08, 2017 11:25 am
Re: New Dual Physican Couple
sounds good.Toasterthief wrote: ↑Tue Oct 02, 2018 9:43 am Thanks for the advice everyone.
My job offers a fairly generous match, however unfortunately doesn't allow for any other other space. I double check with the Vanguard rep again this year, but I'm fairly sure that's the case. I'll look in to her job a bit more as well.lazylarry wrote: ↑Mon Oct 01, 2018 8:59 pmIt does strike me a little odd that you're in an academic center with limited investment options. I'd just double check this. For instance, I picked a random "smaller" medical center - Kansas university and even they have a roth 403b. apologize to anyone from Kansas, no offense intended. A watered down spd is available:Toasterthief wrote: ↑Mon Oct 01, 2018 2:28 pm My wife and I are about to get married and I have some questions about the best way to save. We're both in our early/mid 30s and just beginning medical practice. We're both in academics with a relatively low salary for our respective fields and limited investment options (no mega backdoor Roth, etc).
http://www.kumc.edu/human-resources/ben ... plans.html
But basically, many places will have roth 403b which you then later convert to roth ira. You can call plan to double check this is doable. I would call a few times, as sometimes the plan's reps can be less than knowledgable.
Of course, this doesn't matter until you finish paying down that debt
Thanks for the advice everyone. To summarize, does this sound reasonable:
1. Consolidate her major (200k, 6.5%) loan at a lower interest rate.
2. Pay off her 25k, 8% loan now.
3. Contribute to our retirement plans to max out our matches, backdoor Roth, and at a minimum, to the 401k limit.
4. Pay off her 60k, 6.5% loan ASAP.
5. Pay off her 200k loan ASAP.
6. Pay off my 15k, 5.5% loan
7. Stay on course to get my loan debt forgiven via PSLF (I've been submitting yearly employment verification forms which have been fine).
Re: New Dual Physican Couple
8. Refinance all those non PSLF loans, yesterdayToasterthief wrote: ↑Tue Oct 02, 2018 9:43 am Thanks for the advice everyone.
My job offers a fairly generous match, however unfortunately doesn't allow for any other other space. I double check with the Vanguard rep again this year, but I'm fairly sure that's the case. I'll look in to her job a bit more as well.lazylarry wrote: ↑Mon Oct 01, 2018 8:59 pmIt does strike me a little odd that you're in an academic center with limited investment options. I'd just double check this. For instance, I picked a random "smaller" medical center - Kansas university and even they have a roth 403b. apologize to anyone from Kansas, no offense intended. A watered down spd is available:Toasterthief wrote: ↑Mon Oct 01, 2018 2:28 pm My wife and I are about to get married and I have some questions about the best way to save. We're both in our early/mid 30s and just beginning medical practice. We're both in academics with a relatively low salary for our respective fields and limited investment options (no mega backdoor Roth, etc).
http://www.kumc.edu/human-resources/ben ... plans.html
But basically, many places will have roth 403b which you then later convert to roth ira. You can call plan to double check this is doable. I would call a few times, as sometimes the plan's reps can be less than knowledgable.
Of course, this doesn't matter until you finish paying down that debt
Thanks for the advice everyone. To summarize, does this sound reasonable:
1. Consolidate her major (200k, 6.5%) loan at a lower interest rate.
2. Pay off her 25k, 8% loan now.
3. Contribute to our retirement plans to max out our matches, backdoor Roth, and at a minimum, to the 401k limit.
4. Pay off her 60k, 6.5% loan ASAP.
5. Pay off her 200k loan ASAP.
6. Pay off my 15k, 5.5% loan
7. Stay on course to get my loan debt forgiven via PSLF (I've been submitting yearly employment verification forms which have been fine).
-
- Posts: 347
- Joined: Tue Jan 20, 2015 11:40 am
Re: New Dual Physican Couple
Refinance and consolidate your student loans. You should be able to get a lower rate and save few thousands.
-
- Posts: 2684
- Joined: Sun Jan 08, 2017 11:25 am
Re: New Dual Physican Couple
interesting. has he been politicizing his blog recently?Toasterthief wrote: ↑Mon Oct 01, 2018 3:07 pm Thanks, I read WCI quite a bit (although his political views coming through gets annoying).
-
- Posts: 31
- Joined: Tue Feb 21, 2017 9:35 am
Re: New Dual Physican Couple
An update:
- Wife's student loans: 245k down to 66k left at 1.8%
- My student loans: 180k, eligible for PSLF in 3.5 years
- 1 car loan, 22k @ 3%
- Bought a house in January, on a 15 year fixed at 3%
We paid off my wife's 24k student loan, 26k from mine
Our emergency fund is at approximately 60k
We have an extra $100k sitting in a bank, ready to pay off the remainder of her 66k student loan.
Our retirement accounts now sit at approximately $340k between the two of us.
With respect to tax advantaged accounts, we're doing a backdoor Roth IRA, HSA, we're maxing out my 401k (19k + generous 8% match from my employer), her 401k (19k + less generous match), and her institutional 457 (19k), as well. I've also been putting 5k/month in to a taxable account, and may increase this.
I've also opened a solo 401k to put away some extra consulting money, but unfortunately it's going to be relatively little in comparison, and nowhere near the 57k limit. Neither of our employers allow for a "mega backdoor Roth."
My question is whether (if at all?) it might make sense to consider alternative investments with our "extra" money that's currently going in to a taxable account. I've thought about real estate investment, and I'd love to hear people's thoughts here about investment properties. My understanding is that over the long term, the IRR of real estate isn't substantially different than the market as a whole, but I'm open to thinking about alternative investment streams. Syndicated real estate deals seem like something that's probably more reasonable for me to be involved in, but I don't have a great basis for being able to evaluate how good/bad a deal may be. Does anyone have any suggestions?
- Wife's student loans: 245k down to 66k left at 1.8%
- My student loans: 180k, eligible for PSLF in 3.5 years
- 1 car loan, 22k @ 3%
- Bought a house in January, on a 15 year fixed at 3%
We paid off my wife's 24k student loan, 26k from mine
Our emergency fund is at approximately 60k
We have an extra $100k sitting in a bank, ready to pay off the remainder of her 66k student loan.
Our retirement accounts now sit at approximately $340k between the two of us.
With respect to tax advantaged accounts, we're doing a backdoor Roth IRA, HSA, we're maxing out my 401k (19k + generous 8% match from my employer), her 401k (19k + less generous match), and her institutional 457 (19k), as well. I've also been putting 5k/month in to a taxable account, and may increase this.
I've also opened a solo 401k to put away some extra consulting money, but unfortunately it's going to be relatively little in comparison, and nowhere near the 57k limit. Neither of our employers allow for a "mega backdoor Roth."
My question is whether (if at all?) it might make sense to consider alternative investments with our "extra" money that's currently going in to a taxable account. I've thought about real estate investment, and I'd love to hear people's thoughts here about investment properties. My understanding is that over the long term, the IRR of real estate isn't substantially different than the market as a whole, but I'm open to thinking about alternative investment streams. Syndicated real estate deals seem like something that's probably more reasonable for me to be involved in, but I don't have a great basis for being able to evaluate how good/bad a deal may be. Does anyone have any suggestions?
Re: New Dual Physican Couple
That's an impressive achievement. Good for you.
Real estate can be very rewarding financially, with the caveat that it works best in an area that is going to appreciate (not one that has already gone wild) and also that you have the *time* to deal with it. A two physician family (do you have kids?) doesn't have a lot of bandwidth to manage real estate. I have seen very successful real estate development between a physician and another family member who ran everything, but the MD was always on the phone at work over his other business stuff, and the old "Don't mix business and family" adage persists for a reason.
I'd say you are already doing superbly and better is the enemy of good. Give it a little more time to decide, unless you want to go into real estate big time and you live in an area that has not already appreciated.
Real estate can be very rewarding financially, with the caveat that it works best in an area that is going to appreciate (not one that has already gone wild) and also that you have the *time* to deal with it. A two physician family (do you have kids?) doesn't have a lot of bandwidth to manage real estate. I have seen very successful real estate development between a physician and another family member who ran everything, but the MD was always on the phone at work over his other business stuff, and the old "Don't mix business and family" adage persists for a reason.
I'd say you are already doing superbly and better is the enemy of good. Give it a little more time to decide, unless you want to go into real estate big time and you live in an area that has not already appreciated.
"It is difficult to get a man to understand something when his salary depends upon his not understanding it." Upton Sinclair
- goodenyou
- Posts: 3602
- Joined: Sun Jan 31, 2010 10:57 pm
- Location: Skating to Where the Puck is Going to Be..or on the golf course
Re: New Dual Physican Couple
Don’t complicate your plan. Keep it simple. Pay off your loans ASAP. Continue to live frugally and save in a tax efficient manner. Avoid reaching for yield and making stupid doctor mistakes with investing. Your life and job satisfaction will be better when you are debt free. The clouds on the horizon of medicine are not looking so good.
"Ignorance more frequently begets confidence than does knowledge" |
“At 50, everyone has the face he deserves”
- Blueskies123
- Posts: 737
- Joined: Sat Nov 15, 2014 6:18 pm
- Location: South Florida
Re: New Dual Physican Couple
In the future you might check out this site:
https://www.whitecoatinvestor.com/
His site focuses on helping medical professions with simialar questions.
https://www.whitecoatinvestor.com/
His site focuses on helping medical professions with simialar questions.
If you find yourself in a hole, stop digging
-
- Posts: 99
- Joined: Tue Apr 16, 2019 4:05 pm
Re: New Dual Physican Couple
Just a quick question. If the 2 of you are making $650k per year why are you trying for debt forgiveness? Or are you? You could have all the debt paid off in 3-4 years.
-
- Posts: 31
- Joined: Tue Feb 21, 2017 9:35 am
Re: New Dual Physican Couple
Thanks. We live in a relatively high COL area (on a coast), and we're thinking of having kids in the next year or two. Neither of us has a ton of extra time to manage a real estate business (and I'm not going to spend a weekend painting), which is why syndication is somewhat attractive.WWJBDo wrote: ↑Thu Dec 19, 2019 9:12 am That's an impressive achievement. Good for you.
Real estate can be very rewarding financially, with the caveat that it works best in an area that is going to appreciate (not one that has already gone wild) and also that you have the *time* to deal with it. A two physician family (do you have kids?) doesn't have a lot of bandwidth to manage real estate. I have seen very successful real estate development between a physician and another family member who ran everything, but the MD was always on the phone at work over his other business stuff, and the old "Don't mix business and family" adage persists for a reason.
I'd say you are already doing superbly and better is the enemy of good. Give it a little more time to decide, unless you want to go into real estate big time and you live in an area that has not already appreciated.
Fair enough, and that's something I'm taking into account.goodenyou wrote: ↑Thu Dec 19, 2019 9:55 am Don’t complicate your plan. Keep it simple. Pay off your loans ASAP. Continue to live frugally and save in a tax efficient manner. Avoid reaching for yield and making stupid doctor mistakes with investing. Your life and job satisfaction will be better when you are debt free. The clouds on the horizon of medicine are not looking so good.
We aggressively paid off my wife's loans because she didn't consolidate/play the debt forgiveness game the right way. As for why I'm going for forgiveness, at this point, it's stubbornness. I've done the calculation and I "only" will come out ahead by about 60k by doing public service loan forgiveness versus refinancing at the currently very attractive rates. Still, one of the reasons I took my current (relatively low paying in comparison to private practice) job was because I could get the debt forgiven.iraconfused wrote: ↑Thu Dec 19, 2019 10:17 am Just a quick question. If the 2 of you are making $650k per year why are you trying for debt forgiveness? Or are you? You could have all the debt paid off in 3-4 years.
-
- Posts: 8626
- Joined: Wed Apr 08, 2015 11:31 am
- Location: West coast of Florida, near Champa Bay !
Re: New Dual Physican Couple
Very nice progress!
Congrats to you and your wife!
Broken Man 1999
Congrats to you and your wife!
Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
-
- Posts: 118
- Joined: Wed Jun 26, 2019 2:22 pm
Re: New Dual Physican Couple
I've just read the most recent 20 or so replies. They are almost unanimous in recommending paying off the student loans aggressively. But the OP says he has 183K in loans that are eligible for forgiveness in 4 years. Why pay a nickel more than is required on that loan? What am I missing?
- neurosphere
- Posts: 5205
- Joined: Sun Jan 17, 2010 12:55 pm
Re: New Dual Physican Couple
Here's my take when I get asked a version of this question (which is almost daily). Forgiveness is a government subsidy or program just like many others, and if OP is eligible, why not take it? I suspect people would take a home mortgage interest deduction, or a credit for solar panels put on their home, or a tax abatement for X, etc, regardless of income.iraconfused wrote: ↑Thu Dec 19, 2019 10:17 am Just a quick question. If the 2 of you are making $650k per year why are you trying for debt forgiveness? Or are you? You could have all the debt paid off in 3-4 years.
I sometimes spend an embarrassingly long amount of time to correctly report and claim $310 in foreign tax credit each year, for example, and will continue to do so regardless of what my "denominator" is, lol.
In this case the OP will have be soon eligible for many thousands of dollars to do what he would do anyway, which is show up to work. The situation might be different if he (?) had decided to stay in an eligible job solely for the forgiveness eligibility. I do know some people who feel somewhat guilty taking forgiveness, in which case I advise to donate it to charity, or to give it back to the government later.
Re: New Dual Physican Couple
Of course it's relevant. Doctors can find a high pay job anywhere in the country, never get laid off or fired, and generally can work as long as they want to. With such stable, predictable cash flow, they can afford a very aggressive portfolio, i.e 100% equity, especially they are young.