Student loan payments: Actual numbers

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Pokemon
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Re: Student loan payments: Actual numbers

Postby Pokemon » Tue Jul 12, 2016 3:36 pm

bern victim wrote:if you can't deduct it you may as well get the tax advantaged growth of roth!


In terms of tax advantaged accounts, we get 18k on 401k and 5.5 on traditional which we can convert. Is there anything else?

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Tue Jul 12, 2016 7:09 pm

If your 401k allows for it, the mega backdoor Roth. If you have kids, 529 accounts for college (though the standard advice is you should fully fund retirement accounts before funding college accounts).

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Desert Fox
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Re: Student loan payments: Actual numbers

Postby Desert Fox » Tue Jul 12, 2016 7:42 pm

Is there any reason to back door IRA money that is going to sit in a low interest savings account for a year or two until I buy a house. 1% of 5000 dollars for two years seems like a waste of effort. Esp if the IRA accounts have fees.

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Tue Jul 12, 2016 7:55 pm

Direct answer: I wouldn't bother.

Indirect answer: I would make sure to max out your Roth every year and not pull money out of it.

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Tue Jul 12, 2016 7:57 pm

Desert Fox wrote:Is there any reason to back door IRA money that is going to sit in a low interest savings account for a year or two until I buy a house. 1% of 5000 dollars for two years seems like a waste of effort. Esp if the IRA accounts have fees.

Don't out anything into an IRA that has fees. I would probably still contribute just in case you don't buy a house or end up being able to do so with other money.

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Desert Fox
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Re: Student loan payments: Actual numbers

Postby Desert Fox » Tue Jul 12, 2016 8:03 pm

Are there IRAs that have no fees?

I wonder how I ask for if I can do the megabackdoor roth. I bet that 53k limit includes the extra 20k I get in my trad, 401k from the mandatory contributions my firms makes me make.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Tue Jul 12, 2016 11:33 pm

Desert Fox wrote:Are there IRAs that have no fees?

I wonder how I ask for if I can do the megabackdoor roth. I bet that 53k limit includes the extra 20k I get in my trad, 401k from the mandatory contributions my firms makes me make.


My Fidelity Roth IRA has no fees. I self manage the funds in it so i'm paying fees for some ETFs which i hold but that's it.

anonnymouse
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Re: Student loan payments: Actual numbers

Postby anonnymouse » Wed Jul 13, 2016 1:34 am

Desert Fox wrote:Is there any reason to back door IRA money that is going to sit in a low interest savings account for a year or two until I buy a house. 1% of 5000 dollars for two years seems like a waste of effort. Esp if the IRA accounts have fees.


Not only is there no reason, you can't do it without paying a penalty. While regular Roth contributions can be withdrawn at any time without penalty (principal contributions only, can't withdraw gains), there is a five year lockup on converted Roth contributions.

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Wed Jul 13, 2016 1:39 am

anonnymouse wrote:
Desert Fox wrote:Is there any reason to back door IRA money that is going to sit in a low interest savings account for a year or two until I buy a house. 1% of 5000 dollars for two years seems like a waste of effort. Esp if the IRA accounts have fees.


Not only is there no reason, you can't do it without paying a penalty. While regular Roth contributions can be withdrawn at any time without penalty (principal contributions only, can't withdraw gains), there is a five year lockup on converted Roth contributions.

There is no penalty on first time home purchase up to 10k. Normally you'd have to pay taxes but if it's non-deductible in the first place then you should be fine.

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Desert Fox
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Re: Student loan payments: Actual numbers

Postby Desert Fox » Wed Jul 13, 2016 3:19 am

anonnymouse wrote:
Desert Fox wrote:Is there any reason to back door IRA money that is going to sit in a low interest savings account for a year or two until I buy a house. 1% of 5000 dollars for two years seems like a waste of effort. Esp if the IRA accounts have fees.


Not only is there no reason, you can't do it without paying a penalty. While regular Roth contributions can be withdrawn at any time without penalty (principal contributions only, can't withdraw gains), there is a five year lockup on converted Roth contributions.


Ah good to know.

anonnymouse
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Re: Student loan payments: Actual numbers

Postby anonnymouse » Wed Jul 13, 2016 9:44 pm

Tiago Splitter wrote:
anonnymouse wrote:
Desert Fox wrote:Is there any reason to back door IRA money that is going to sit in a low interest savings account for a year or two until I buy a house. 1% of 5000 dollars for two years seems like a waste of effort. Esp if the IRA accounts have fees.


Not only is there no reason, you can't do it without paying a penalty. While regular Roth contributions can be withdrawn at any time without penalty (principal contributions only, can't withdraw gains), there is a five year lockup on converted Roth contributions.

There is no penalty on first time home purchase up to 10k. Normally you'd have to pay taxes but if it's non-deductible in the first place then you should be fine.


No penalty on growth for first time homebuyer. But there's still a five year lockup. I misspoke earlier. Instead of saying you can't do it without paying penalty, it should have just said "you can't do it because of the 5 year lockup"

If DF is buying more than 5 yrs from now, different story.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Fri Jul 15, 2016 5:10 pm

Damn. I just called my loan servicer to look into applying for revised PAYE. I have currently in repayment: 7K federal consolidated loan and 69K of Stafford loans, with a total monthly payment of $150 on the level plan. If I enrolled in PAYE, I was told, my monthly payments would go up by $310.

What am I missing? My salary is $90-100K. Most people on here seem to advocate PAYE for big law salaries, which are almost double mine, so how are your payments coming out lower on PAYE?

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Fri Jul 15, 2016 5:55 pm

Anonymous User wrote:Damn. I just called my loan servicer to look into applying for revised PAYE. I have currently in repayment: 7K federal consolidated loan and 69K of Stafford loans, with a total monthly payment of $150 on the level plan. If I enrolled in PAYE, I was told, my monthly payments would go up by $310.

What am I missing? My salary is $90-100K. Most people on here seem to advocate PAYE for big law salaries, which are almost double mine, so how are your payments coming out lower on PAYE?

Because they have much higher balances than you do.

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Mlk&Ckies
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Re: Student loan payments: Actual numbers

Postby Mlk&Ckies » Fri Jul 15, 2016 6:04 pm

Anonymous User wrote:Damn. I just called my loan servicer to look into applying for revised PAYE. I have currently in repayment: 7K federal consolidated loan and 69K of Stafford loans, with a total monthly payment of $150 on the level plan. If I enrolled in PAYE, I was told, my monthly payments would go up by $310.

What am I missing? My salary is $90-100K. Most people on here seem to advocate PAYE for big law salaries, which are almost double mine, so how are your payments coming out lower on PAYE?


Wait, I don't get it, by level do you mean standard repayment plan? Because no way your monthly payments are only $150/month on a standard repayment plan.

Also, yeah, for most people with gargantuan loans, we're talking about moving monthly payments from $2.5k/month to $1kish a month, so cry me a river $300/month.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Fri Jul 15, 2016 6:19 pm

Mlk&Ckies wrote:
Anonymous User wrote:Damn. I just called my loan servicer to look into applying for revised PAYE. I have currently in repayment: 7K federal consolidated loan and 69K of Stafford loans, with a total monthly payment of $150 on the level plan. If I enrolled in PAYE, I was told, my monthly payments would go up by $310.

What am I missing? My salary is $90-100K. Most people on here seem to advocate PAYE for big law salaries, which are almost double mine, so how are your payments coming out lower on PAYE?


Wait, I don't get it, by level do you mean standard repayment plan? Because no way your monthly payments are only $150/month on a standard repayment plan.

Also, yeah, for most people with gargantuan loans, we're talking about moving monthly payments from $2.5k/month to $1kish a month, so cry me a river $300/month.

tbf that's because you make double what he makes

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Mlk&Ckies
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Re: Student loan payments: Actual numbers

Postby Mlk&Ckies » Fri Jul 15, 2016 6:26 pm

sorry, I'm in a sour mood today

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Fri Jul 15, 2016 10:42 pm

Sorry, I am the dumb one here. I have 43K in grad PLUS loans that are not yet in repayment. So I had to call my loan servicer back and ask for what my payments will be once those loans are in repayment as well. The figures they quoted me earlier didn't account for my Grad PLUS debt at all.

When those loans enter repayment, my total monthly payments for all loans will be $611 under rePAYE, compared to $826/month under the 25 year standard repayment plan.

I think I will go with the latter since I'm getting married next year and my partner makes the same as I do. Spousal income counts against you for rePAYE right?

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Tiago Splitter
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Re: Student loan payments: Actual numbers

Postby Tiago Splitter » Fri Jul 15, 2016 10:44 pm

Anonymous User wrote:Spousal income counts against you for rePAYE right?

Yes. Under regular PAYE you can choose to file separately and not count the spouse's income.

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zot1
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Re: Student loan payments: Actual numbers

Postby zot1 » Sat Jul 16, 2016 7:42 am

My payments only cover the monthly interest. It's better to not look at my balances. Ever.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Sat Jul 16, 2016 8:26 am

zot1 wrote:My payments only cover the monthly interest. It's better to not look at my balances. Ever.

aren't you PSLF? if I was PSLF I wouldn't even think about my loans at all. direct deposit min payments at forget it

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zot1
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Re: Student loan payments: Actual numbers

Postby zot1 » Sat Jul 16, 2016 7:29 pm

JenDarby wrote:
zot1 wrote:My payments only cover the monthly interest. It's better to not look at my balances. Ever.

aren't you PSLF? if I was PSLF I wouldn't even think about my loans at all. direct deposit min payments at forget it


I am PSLF.

I wish I didn't have to think of them but you know, Congress.

Pokemon
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Re: Student loan payments: Actual numbers

Postby Pokemon » Sun Jul 17, 2016 1:28 am

bk1 wrote:If your 401k allows for it, the mega backdoor Roth. If you have kids, 529 accounts for college (though the standard advice is you should fully fund retirement accounts before funding college accounts).


I do not think I can do the mega backdoor Roth. Does that mean I am stuck with 18k in 401k and 5.5 in traditional Ira which I can convert to Roth. Is this really worth it? I have maxed my 401k but been too lazy to set up the Ira stuff. Also, if I set up traditional Ira, and then think about converting it, is this something I should pay an advisor to guide me through and tell me whether it is a good idea, or something that one can do on their own.

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Sun Jul 17, 2016 5:19 pm

Pokemon wrote:
bk1 wrote:If your 401k allows for it, the mega backdoor Roth. If you have kids, 529 accounts for college (though the standard advice is you should fully fund retirement accounts before funding college accounts).


I do not think I can do the mega backdoor Roth. Does that mean I am stuck with 18k in 401k and 5.5 in traditional Ira which I can convert to Roth. Is this really worth it? I have maxed my 401k but been too lazy to set up the Ira stuff. Also, if I set up traditional Ira, and then think about converting it, is this something I should pay an advisor to guide me through and tell me whether it is a good idea, or something that one can do on their own.

1. I believe that's the extent of tax-advantaged accounts.
2. Waiting is not technically an issue. That said, you will owe money if you convert any gains (whereas you don't owe money on conversions of after-tax contributions). Investing it pre-conversion, defeats the point of the Roth conversion. So you can put it in the trad IRA, not invest it and let it sit a while before converting, but I don't see why you would since you'd be missing out on putting it into the market.
3. It is very simple to do yourself, you don't need an adviser.

Beachbum89
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Re: Student loan payments: Actual numbers

Postby Beachbum89 » Mon Jul 18, 2016 2:13 pm

I just refinanced just under $130k in federal loans with First Republic Bank. My interest rates on my federal loans were anywhere from 5%-7.6% fixed with over 700 dollars in interest accruing per month. I'm now locked into a 2.6% fixed rate and my monthly payment stayed about the same. However, instead of being on a 10 year plan, I'm now on a 7 year plan paying about $1650 a month with only about $275 of that being interest. The rates I was offered by First Republic were significantly better than anything I was offered by SoFi or Earnest. Anyone looking to refinance that lives in an area that First Republic serves (San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland (Oregon), Boston, Palm Beach (Florida), Greenwich or New York City) should seriously consider them for refinancing. If interested, message me for more details and a $200 referral for both of us.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Mon Jul 18, 2016 3:08 pm

^ everytime I have tried in Palm Beach it shuts me down, even though there are branches here, as saying the area is a no go for student loans. I guess I should just call them up




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