How long did it take/is it taking to pay off your debt in Biglaw? Forum

[Anonymous User]

I’ve always read that the general rule of thumb is that you can pay off about ~200k in 3-4 years if you live cheaply and decide to pay off aggressively versus invest.

Would love if others wanted to share their real-life data points.

For example:

Began job with $210k debt. C/O 2018.
Still about $130k left, though I did max out my 401k last year. Refinanced early (and actually twice, now).

[Anonymous User]

Started biglaw in fall 2016 with around $110,000 in debt. Never refinanced, and the loans were fully paid off by February 2019, so a little under 2.5 years.

I was aggressive in terms of plowing any free cash I had (annual bonus, etc.) into loans, but wasn’t otherwise overly frugal - for example, I didn’t have a roommate, didn’t forego taking any trips, or anything like that.

I think from a pure financial perspective there is probably a good argument I did the wrong thing; throwing that money at the stock market would have been at least a marginally better play.

But I was just so happy to be done.

[Anonymous User]

100k debt took me 2.25 years to pay off (including spending 1 year clerking).

[Anonymous User]

C/O 2016, I had about $235k (pretty much full sticker), paid it all off by Dec. 2020. Agree that might have gotten a better return in stock market but I was able to buy a condo in DC in the meantime and didn't particularly feel like I was cutting down. No dependents though, and I am pretty cheap...

[Anonymous User]

C/O 2020. Started with $160k. Down to $116k after just crossing the 5 month threshold. Will have my debt paid off after 1.8 years based on my current rate. I'm also maxing out my 401k and HSA.

Here's what I do: no vices (alcohol, tobacco, drugs, etc.), cheap hobbies (probably spend $1,000/yr. on hobbies), cheap food (I don't eat out or get delivery), reasonable living expenses for my city (and doing Boston/Chicago/DC biglaw instead of NY), no transportation costs (no car and living a 10min walk from the office, when we do have to go in), limited travel (pandemic helps, but I've taken a couple of trips with each costing about $500-$750). I also threw 2/3 of my stub-year tax refund towards my loans and put 1/3 in my emergency fund. My calculations also anticipate throwing all of my bonus towards loans (my firm always pays out its fall bonus). Of course, the student loan interest freeze is saving me several thousand dollars too (at least $5,000 over the course of the pandemic).

Post-401k/HSA contribution, $3350 of each paycheck goes towards student loans ($80,400/yr.), 50% (roughly $1450 pays rent), and 50% goes towards my living expenses/travel/hobbies (with whatever is left over being moved to my emergency fund).

If my firm matches these spring bonuses, I can probably do it in 1.7 years.Will probably buy myself a base Model 3 to celebrate once I wrap my loans up, especially if the EV credit is back. Look forward to having car/house loans that are actually backed by physical assets and can be dischargeable in bankruptcy court.

[Auxilio]

Post-401k/HSA contribution, $3350 of each paycheck goes towards student loans ($80,400/yr.), 50% (roughly $1450 pays rent), and 50% goes towards my living expenses/travel/hobbies (with whatever is left over being moved to my emergency fund).

I don't understand how this works. I'm not even maxing out my 401k (although I'm close) and my takehome is only ~$4675 as a C/O 2018. ~$700 goes to state income tax so let's assume you are in a state without that. I'd still only take home less than $5400 per paycheck. But you are apparently taking home well over $6k per paycheck, while making $30k less than me.

[Anonymous User]

I don't understand how this works. I'm not even maxing out my 401k (although I'm close) and my takehome is only ~$4675 as a C/O 2018. ~$700 goes to state income tax so let's assume you are in a state without that. I'd still only take home less than $5400 per paycheck. But you are apparently taking home well over $6k per paycheck, while making $30k less than me.

OP here. Pulled up my bank account, and I get paid ~$4700 every two weeks. Do you get paid bi-weekly? If so, that'd be a factor, because you'd get paid 26 times a year vs the 24 times a year I get paid (twice a month). My other guess is just state/local income tax differences from our respective localities. I know in several other major markets I'd be paying $5,000-$10,000/yr. more in taxes. Was concerned that perhaps something weird was happening on my end, but I ran it through an online income tax calculator and it came out at approximately what I net a pay period.

[Anonymous User]

I’ve always read that the general rule of thumb is that you can pay off about ~200k in 3-4 years if you live cheaply and decide to pay off aggressively versus invest.

Would love if others wanted to share their real-life data points.

For example:

Began job with $210k debt. C/O 2018.
Still about $130k left, though I did max out my 401k last year. Refinanced early (and actually twice, now).

Also started with $210k. Class of 2019. At $153k now. Right now I 'pay' (i.e., save for as long as covid forbearance is still in effect) 4k/month toward my loans.

[Anonymous User]

It took me 16 months to pay off $110k in debt. I maxed out traditional 401k, HSA and did Backdoor Roth, and then committed every extra penny above a $10k emergency fund to pay down the debt. I paid the debt off the day that each paycheck hit my account. It also helped that I was in a lower tax bracket than I would be in if I was single because I was married and my wife was a full-time student with no income. We lived cheaply in a $900 one bedroom apartment in non-NYC location with the biglaw salary. C/o 2017.

[Anonymous User]

C/O 2018 - I graduated with 210K in debt, and I'm at 145 now. I refinanced after a year, and I wish I'd done it earlier, since I went from paying 6% to 1%. I maxed out 401k every year and lived frugally with few trips and indulgences, but in a studio in a non-lux neighborhood with a crappy commute. This year was actually the turning point, because I had about 130K in savings, and I put it into buying a home. From a purely financial perspective, I should have refinanced immediately, put all those savings into the market, and just continued to rent. From a purely emotional perspective I should have paid off all the loans and enjoyed the freedom. There really is no perfect way to orient your cash, it's always a tradeoff of physical comfort, emotional freedom, and financial return.

[jake768]

200k, paid it in full during 6 years of biglaw. also married a doctor and assumed her 250k in med school debt. yay millennials.

[Anonymous User]

$260,000 in debt and from the time payment kicked in until they were paid in full was about 6 years. I did that working biglaw for about 4 of those years, working for lower pay 1.5 years and then .5 years were taking time off between jobs without pay.

Just budgeted and had an SO that was cool taking awesome trips but doing it cheaply and not living the high life in NYC/splitting rent with SO, etc. Finally paid off the loans recently and it feels great. Definitely take advantage of the salary and get your shit in order personal finance wise, you also don't want to work for 4 years in a grueling environment just to start over at $0 so make sure you are investing and putting money away in addition to paying off debt.

[Sackboy]

200k, paid it in full during 6 years of biglaw. also married a doctor and assumed her 250k in med school debt. yay millennials.

The upside here is that your SO has incredible job stability and is pretty much guaranteed $200-$500k for the rest of SO's career, depending on the specialty. Sounds like you won the lottery. Can't ask for a SO with a better occupation than a Dr (perhaps an unemployed trust fund SO or actual royalty).

[NoLongerALurker]

On track to pay off about 300k (including undergrad) but end of fifth year (maybe during sixth year). Have no way lived cheaply — I’m financially irresponsible and will probably regret this sooner rather than later but hey, data point

[papermateflair]

It took me four years (2013-2017) to pay off my $140,000 in loans. I contributed to my 401(k), and built a two year emergency fund during that time because I was concerned about having a safety net in case I was fired (going to law school during a recession does things to the mind!). My firm didn't pay market bonuses, and this was when starting salaries were $160,000, so it was a little less to work with. My rent was pretty low since I was in a secondary market, and I lived pretty reasonably, but obviously having bonuses of any sort would have really helped put a big dent in them faster.

[kobe1020]

C/O 2017. graduated with about $100k. 2.5 yrs to pay everything off. got an expensive car in between and travel internationally twice a year. however lived pretty frugal otherwise - minimized expense on alcohol/clothes/other crap.

[Best]

C/O 2016 with 140k. I won't be paying it off anytime soon. Lifestyle inflation got me good. Maybe any future student loan cancellations won't have a means test.

[Anonymous User]

Took 5 years to pay $120k. Could have killed them in 3 if I hadn't bought a house at that time. This was on old $160k payscale and low bonus years.

[Anonymous User]

Class of 2015 and I'm going to finish paying off the $195,000 debt I graduated law school with (~$9k of that was from undergrad) in September this year, so right around the six year mark. I would have been able to do it faster, but I clerked for a year after a year in biglaw, and between the interest and the fact that I couldn't make significant payments while clerking, I was more or less back where I started when I finished my clerkship in Fall 2017. I also went to a boutique that pays biglaw market salary, but significantly below market bonuses so I earn less than my classmates still in biglaw.

I've also been maxing out my 401(k) and a backdoor Roth IRA each year since 2018, and have also accumulated significant cash savings (1 year emergency fund, part of a down payment for a house, etc.).

[avenuem]

As a gambling man I'm waiting for one of two things. Either Congress deletes my debt in whole or part, whichever is greater, or my firm pays it off to induce me to accept their offer to join the partnership.

[Pro Era]

I'm c/o 2017. Borrowed ~$150k in federal student loans and ~$75k from a relative at a near 0% interest rate. Refinanced the federal loans after 1 year in big law for a sub-3% rate (took some time to build up the necessary liquidity to refinance as a K-JD with a barren bank account after my bar trip), and am on pace to pay those off in around 3.5 years, assuming no additional contributions from bonuses or paychecks. I've been pretty blasé about pre-paying the refinanced federal loans - I'll contribute part of my annual bonus each year, but paychecks go into my brokerage account, my HY savings account (for emergencies, life milestone expenses, etc.), or monthly expenses/traveling. The $75k will take another 7ish years to repay, but I'm in no rush to do so. While I'm looking forward to the peace of mind of being debt free, I can't justify aggressively paying down my loans early at those rates when the market's been roaring.

[Anonymous User]

c/o 2016, paid off ~$220k federal loans in ~3.5 years (refinanced after ~1 year for a sub 3% rate)

[Anonymous User]

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[Anonymous User]

What should I consider when deciding whether to aggressively throw money at my student loans (about 110k left at 2.0%) versus investing through my firm's "mega back door" Roth?

I know the general advice for biglaw associates -- even for those that want to aggressively pay off their debt -- is to still max out their normal retirement accounts (i.e. $19,500 in a 401k and $6k in a Roth IRA). For all intents and purposes, my firm's benefits package effectively allows me to make $43k of Roth IRA contributions annually (as opposed to that normal $6k annual limit).

Does the advice still hold? "Should" I be feeding aggressively into my Roth IRA? I know the basics. My interest rate is far lower than average low-cost index fund returns, and loading up a retirement account while young is an added perk in the 'invest vs pay off debt' question. But there's obviously the mental burden of having debt, and even from a cost maximization perspective, the mental/emotional relief from paying off my debt may boost my mood and allow me to coast through high-paying biglaw that much longer to even it out, anyway.

What should I be considering? Am I missing anything? Any advice or thoughts are welcome.