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Credit card transfer for wifes IRA

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  • Avatar Ekanive23 
    Participant
    Status: Resident
    Posts: 10
    Joined: 06/16/2019

    Finishing residency next summer. Am going for PSLF. Is it advisable to use balance transfers to max out wifes retirement account (tax deferred) to lower my plsf payment? I have no other credit card debt, own both cars, have two mortgages (rental property with 500 cash flow positive) and 1350 a month for primary residence. This balance transfer would happen prior to December 31st.

    Benefits
    Increased retirement savings
    Paying less to the man (loan repayment)

    Risks
    Less disposable money
    Something happening and not able to pay it off by the 15 month window.

    Plan on living like a Resident. Also am insured properly.

    #238700 Reply
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 1666
    Joined: 02/11/2019

    Financially probably.
    Morally…

    Seems on par with taking out extra loans that are “going to get paid off anyways”

    “Never let your sense of morals prevent you from doing what is right.”

    #238717 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2693
    Joined: 01/03/2017

    I don’t think wealthy people would recommend using balance transfers as a guide to building wealth. I would recommend lowering expenses in order to maximize her retirement account. Do you have an emergency fund? How far away are you from maxing it out?

     

    I vote no because I don’t want to contribute to your wife’s retirement account.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #238718 Reply
    Avatar ZZZ 
    Participant
    Status: Spouse
    Posts: 668
    Joined: 06/18/2018

    Haha.

    2nd example this week of someone gaming the system to get everyone else to pay their student loans. These dumb IBR programs are rife with moral hazard.

    #238719 Reply
    Avatar Ekanive23 
    Participant
    Status: Resident
    Posts: 10
    Joined: 06/16/2019

    It’s a government program that is there. Other people get it so why not us? I blame the cost of education more than anything else.

    This pslf is going to take off in the next 4-5 years and I figure I should be a part of it. I don’t quite see what’s wrong with it. I’m giving back to a non for profit as well.

    #238726 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2693
    Joined: 01/03/2017
    Other people get it so why not us?

    Click to expand…

    Other people get food stamps, Medicaid, etc., too.

    This pslf is going to take off in the next 4-5 years and I figure I should be a part of it. I don’t quite see what’s wrong with it. I’m giving back to a non for profit as well.

    Click to expand…

    There’s a difference between using a program and abusing it. You’re going to do what you’re going to do no matter what kind of responses you get. I just don’t think this program was designed with physicians in mind. With that said, I don’t see anything wrong with you participating in PSLF. I do take issue with purposely taking advantage of the program.

    Benefits
    Increased retirement savings
    Paying less to the man (loan repayment)

    Click to expand…

    You’re not “paying less to the man”. You’d be paying back what you borrowed and what you signed to borrow.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #238728 Reply
    Avatar Ekanive23 
    Participant
    Status: Resident
    Posts: 10
    Joined: 06/16/2019

    Ok, I see your guys points on this being gaming the system. However, some of the attitude toward just buckling down and repaying is a little off base and out of touch. I came out with a lot of debt and it’s the only reasonable option and my wife is an FMg with debt too.

    #238732 Reply
    MPMD MPMD 
    Participant
    Status: Physician
    Posts: 2428
    Joined: 05/01/2017

    i would come down on the side of this being at best ethically shaky although i’m sure it’s perfectly legal. in effect you are kind of falsely lowering your AGI no?

    ethics aside, have you pushed a pencil through what this is actually going to save you? a few grand a year maybe? seems like it will be quite a bit of trouble for not all that much money. these financial gymnastics often have a very low ROI as it were.

    #238733 Reply
    Avatar Ekanive23 
    Participant
    Status: Resident
    Posts: 10
    Joined: 06/16/2019

    I started listening to student loan planner podcasts and you hear about some great techniques. To minimize debt burden and repayment

    To the people that said save more, I just started moonlighting and am working on it. Having 1 baby and a new one on the way is tough. Also my emergency fund is about two months of savings without paying for a nanny. The nanny eats away a lot of saving for the time being.

    #238734 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2693
    Joined: 01/03/2017
    medical school scholarship sponsor
    However, some of the attitude toward just buckling down and repaying is a little off base and out of touch. I came out with a lot of debt and it’s the only reasonable option and my wife is an FMg with debt too.

    Click to expand…

    I will respectfully disagree. It’s not the only reasonable option. Also, nobody made you go into whatever amount of debt you have. Were you uneducated regarding the actual cost of your education and debt? Probably. But you have nobody to blame.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #238735 Reply
    Avatar Ekanive23 
    Participant
    Status: Resident
    Posts: 10
    Joined: 06/16/2019

    I didn’t have a ton of options as a an applicant so went to an expensive school. Our school preached pslf from the beginning which is rediculous. I think the problem is more on the rediculous prices than it is on the borrower. Less shade toward us with 400 k plus of loans and more toward the system would be appropriate.
    I’m not even going into some of the ultra high paying specialties and they are the ones that use this pslf the best cause of long training.

    #238739 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2693
    Joined: 01/03/2017
    I didn’t have a ton of options as a an applicant so went to an expensive school. Our school preached pslf from the beginning which is rediculous. I think the problem is more on the rediculous prices than it is on the borrower. Less shade toward us with 400 k plus of loans and more toward the system would be appropriate.

    Click to expand…

    One option is not going to medical school but that is neither here nor there. The prices are part of the problem but not the entire problem. I’m sorry but you’re not a victim in this situation.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #238741 Reply
    Avatar Ekanive23 
    Participant
    Status: Resident
    Posts: 10
    Joined: 06/16/2019

    Only reason I’m not a victim is cause of programs like PSLF. If that didn’t exist a lot of people who weren’t silver spoon wouldn’t have had a reasonable shot to make a life after these loans.
    I had no idea people had such disdain for a program that benefits so many.

    #238742 Reply
    Avatar Ekanive23 
    Participant
    Status: Resident
    Posts: 10
    Joined: 06/16/2019

    The not going to medical school is laughable. Tell that to all the kids who’s parents can’t afford college. Numbers are different, magnitude is same when you consider salary difference.

    #238743 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2693
    Joined: 01/03/2017
    I had no idea people had such disdain for a program that benefits so many.

    Click to expand…

    Nobody here is putting it down. There are several people who disagree with how you’re planning on using it.

    The not going to medical school is laughable. Tell that to all the kids who’s parents can’t afford college. Numbers are different, magnitude is same when you consider salary difference.

    Click to expand…

    You made it sound like you had no choice but to go to medical school and take out $400k. I disagree with that.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #238747 Reply

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