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Hi all,
Disclaimer: brand new to this site and to investing in general, so please cut me some slack if I make ridiculous mistakes in my thought processes and/or if my knowledge base in the material is lacking. I appreciate your help in advance!
My situation: 25 years old, just started my last year of med school, will be starting residency in July 2014 (5 years at annual income ~56-58k/year). I will have roughly 100k in student loans at 6.8% by the time I graduate in June 2014. My fiance just graduated from nursing school and landed a job 2 weeks ago (74k/year). She has no debt, her parents were able to help her out. We are planning on getting married in May 2014. We very recently got approached to start an index universal life - although after reading some of the long but very useful threads on here (instead of studying for my boards that are coming up in 2 weeks) I know I am not going anywhere near that. However, all of this did get us thinking about what we should be doing with our money - saving, investing, paying off loans, etc.
Here's my question: should we be maxing out our Roth IRAs or paying off loans or a combination of both? I know Roth IRA is capped at $5500 and only people with incomes <$115,000 or a combined income of <$160,000 can contribute. Should we take advantage of that right now as we are both below the max income limit and will be below that limit for the next 5 years while I'm in residency. After I'm done with residency and get a real job, we may not qualify to make any contributions to the Roth (not trying to be pretentious, just want to make the best use of my money). OR should we be paying off my loans with whatever we are able to save? Again, the interest is 6.8% and I have to start making payments in about a year once I graduate med school and start residency. She has a 403b and 457 offered through her new job as well (but no matching contributions from the employer). I have a feeling that its probably not a good idea to put any money into the 403b and 457 before maxing out the Roth IRA and paying off the student debt.
Please advice on what may be the best move given my situation or if you have any other suggestions! Thanks.
Disclaimer: brand new to this site and to investing in general, so please cut me some slack if I make ridiculous mistakes in my thought processes and/or if my knowledge base in the material is lacking. I appreciate your help in advance!
My situation: 25 years old, just started my last year of med school, will be starting residency in July 2014 (5 years at annual income ~56-58k/year). I will have roughly 100k in student loans at 6.8% by the time I graduate in June 2014. My fiance just graduated from nursing school and landed a job 2 weeks ago (74k/year). She has no debt, her parents were able to help her out. We are planning on getting married in May 2014. We very recently got approached to start an index universal life - although after reading some of the long but very useful threads on here (instead of studying for my boards that are coming up in 2 weeks) I know I am not going anywhere near that. However, all of this did get us thinking about what we should be doing with our money - saving, investing, paying off loans, etc.
Here's my question: should we be maxing out our Roth IRAs or paying off loans or a combination of both? I know Roth IRA is capped at $5500 and only people with incomes <$115,000 or a combined income of <$160,000 can contribute. Should we take advantage of that right now as we are both below the max income limit and will be below that limit for the next 5 years while I'm in residency. After I'm done with residency and get a real job, we may not qualify to make any contributions to the Roth (not trying to be pretentious, just want to make the best use of my money). OR should we be paying off my loans with whatever we are able to save? Again, the interest is 6.8% and I have to start making payments in about a year once I graduate med school and start residency. She has a 403b and 457 offered through her new job as well (but no matching contributions from the employer). I have a feeling that its probably not a good idea to put any money into the 403b and 457 before maxing out the Roth IRA and paying off the student debt.
Please advice on what may be the best move given my situation or if you have any other suggestions! Thanks.
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