Forum Replies Created
HSA can be set up through your employer or on your own. You need to figure out if your health insurance is a high deductible plan ($1300 deductible for individual, $2600 for family). They’re very different than FSAs as they’ll roll over year to year and you can invest them. If you do it on your own, most people around here like HSA bank. Optum is good too. I have optum through my employer but that was a Wells Fargo convert so I have terrible investment choices. I may move funds to HSA bank if optum doesn’t expand my investment choices.
I don’t, and I won’t. Anybody who guarantees they can beat a 3 fund portfolio is lying. They might be able to, but it’d be more luck than skill. If you want a second look, you can post your portfolio over at bogleheads. Lots of people do, the advice is free, and that community isn’t trying to sell you anything.
I’d use the HSA space if you have a HDHP. It’ll fill up fast, but always use the tax-advantaged space before starting a taxable.
All of this is noise. You’re investing for the long haul. Best way to maximize returns is to have your money in the markets as long as possible. Dump it in according to an asset location that fits your risk tolerance and let it grow. The last step may be the most important: don’t panic if it loses value.
Priority would be to make sure you know what the tax implications are (how much you’re going to owe on it, so you can plan out how much you have to work with). I’d refinance the loans. Then probably backdoor roths (assuming 401ks already maxed) and apply some towards loans.
I think you’d be lucky to break even. My wife and I did buy to start residency, but 1. we didn’t know what we were doing 2. we planned to live in the area after residency and here were are 6 years later and 3. we started residency at/near the bottom of the housing market/crash and were pretty sure of this fact. Now, 6 years later, the house has gone up in value around $40k, but we’ve put a lot of money into it. I think we had about the best possible outcome, and the outcome wasn’t that good. On the flip side, the worse possible outcome is pretty bad.
This seems like too much penny pinching for my taste. Looking at our budget of $8k per month, discretionary spending is probably only $1k. The vast majority goes towards student loans, PITI, bills/utilities, food, gas, and school/babysitter. Those alone are budgeted for around $6500.
I would use a much different definition for financially savvy. These rules are more supersaver/maximum wealth-builder. I would regard financially savvy as having the knowledge to maximize the dollars that are earned to utilize to one’s desires.Click to expand…
Financially savvy to one person or in one circumstance may not apply to another person or in other circumstances.
I have not had a retirement plan for the past 17 years. The costs of opening a 401K plan for my 7 or 8 employees when I am the sole provider was not financially feasible. I could have done solo backdoor Roth but the amounts are not that great. So almost all my savings are in taxable accounts. It was not worth working a 2nd job just to open a solo 401K/IRA.
I also keep a large sum in the bank account rather than investing it immediately. For many it might seem foolish and unwise but in commercial real estate investing one needs to have large sums of money to put as payment to grab the opportunity before it slips by.
Financially savvy for me might seem be like a putz to the OP.Click to expand…
Correct, that’s why my definition tried to be all-inclusive. It’s not the same as stealth wealth. In your situation, I would consider the way you’re managing your retirement “savvy” because you’ve decided that way is the best way to maximize your income.
I guess I will clarify my definition of financially savvy—
My definition will be someone who is like me–
Click to expand…
- lives below their means (saving aggressively, >>50% take home)
- invests aggressively (not risky investments per se, but investing large amounts of money monthly)
- avoiding real estate, and other questionable investments
- avoiding financial advisors/products
- DIY mentality, very limited amount of outsourcing
I would use a much different definition for financially savvy. These rules are more supersaver/maximum wealth-builder. I would regard financially savvy as having the knowledge to maximize the dollars that are earned to utilize to one’s desires. Want a McMansion? Go for it. New boat? Sure. Fancy new Tesla? Why not?
But if you’re using a 0% down doctor’s loan with a high interest rate on a home you can’t afford, if you’re paying a high fee financial advisor, if you’re not contributing enough to a 401k even to get the match, these are signs that you’re leaving lots of money on the table and don’t realize the true cost of what you’re buying. I think excluding income from the definition is necessary (i.e. higher salaries can overcome poor financial decisions).
I would consider maybe 1 other person (and me of course! 😎 ) in my 14 physician group to be financially savvy.
Both of you might be better served selecting REPAYE to mitigate interest accrual and lower your monthly payment. Also, likely file joint which will probably lower your tax liability vs MFS.Click to expand…
With attending level salaries? I was under the impression that there is no income cap for REPAYE therefore it is not ideal when making attending level salaries–any potential interest savings is dwarfed by the huge non-capped monthly payment? From what I’ve read here on WCI, some recommend REPAYE during residency and then switching out to PAYE/IBR after residency. Am I missing something?Click to expand…
I missed that you’re now an attending. If your AGI is sufficiently high to exceed the 10-year standard payment cap (which means your AGI should be approximately 1.4x your student loan balance with REPAYE), then you’re probably a good candidate to refi if you’re not pursuing PSLF.Click to expand…
Wife and I are both attendings now. I have refinanced my loans. Wife is pursuing PSLF. I’m essentially trying to minimize our payments for PSLF, and if I can do that by MFS, then we may (probably?) come out ahead by doing MFS just to lower the PSLF payments based on her annual gross (part time urgent care peds maxing out 403b and 457b). Since the tax breaks lost for MFS are already lost at our income levels, I think we will, but I don’t have all of our tax forms yet to have our CPA calculate it. Sort of an informal poll.
Thanks for all the replies! I’m glad to see it’s not a crazy idea. I’ll have our CPA crunch the numbers both ways. Most of those deductions we’re phased out of based on income, so I’m not worried about those.
I’d refinance those that weren’t eligible for pslf and attack those. I’d also suggest living kind of like a resident but worse. Banking on PSLF in 10 years seems like a big gamble in this case that could cost tons of money. If it didn’t work out in 10 years, they may be in a similar predicament, only worse.