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Student loans, retirement, buying a home, high cost of living, how to prioritize?

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  • Student loans, retirement, buying a home, high cost of living, how to prioritize?

    I am a 31 yo health professional living in an area of the US with a very high cost of living. I have still have a large student loan at $143,000 at 4.74%. My income gross income is $110,000. Each pay period health care premiums of $52, HSA contributions of $50, and 4% contribution to 401k(which is matched 100% so I obtain max benefit), along with taxes are taking about 43% of my income due to my single status. My rent is $1485/month which includes all my utilities except internet and cell phone. I do not own a car but spend about $110 in public transit costs per month. I contribute $96/month to a Roth IRA. My other utilities are $74/month.

    I currently have $10k set aside in an emergency fund. I have about $19,000 in my Roth IRA and $20,000 in my 401k.

    Condos in a safe part of the city start around $250k, often with considerable HOA fees of at least $250/month.

    I don't know what I should prioritize in terms of saving for a home down payment, saving for retirement, or paying the mortgage size student loan. I currently pay $1640/month in student loan payments(1184 is the minimum) and that will finish off the loan in 9 years.

    I have been thinking about consulting with a CFP since this is starting to really stress me out.

  • #2
    everything you own is one big retirement fund, that is what your net worth is for and that is how i treat it, inflows vs outflows. in my eyes, buying a house is the same thing as putting money into savings
    retired in 2009 at the age of 39 with less than 300K total net worth

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    • #3
      Originally posted by FrugalOD View Post
      I am a 31 yo health professional living in an area of the US with a very high cost of living. I have still have a large student loan at $143,000 at 4.74%. My income gross income is $110,000. Each pay period health care premiums of $52, HSA contributions of $50, and 4% contribution to 401k(which is matched 100% so I obtain max benefit), along with taxes are taking about 43% of my income due to my single status. My rent is $1485/month which includes all my utilities except internet and cell phone. I do not own a car but spend about $110 in public transit costs per month. I contribute $96/month to a Roth IRA. My other utilities are $74/month.

      I currently have $10k set aside in an emergency fund. I have about $19,000 in my Roth IRA and $20,000 in my 401k.

      Condos in a safe part of the city start around $250k, often with considerable HOA fees of at least $250/month.

      I don't know what I should prioritize in terms of saving for a home down payment, saving for retirement, or paying the mortgage size student loan. I currently pay $1640/month in student loan payments(1184 is the minimum) and that will finish off the loan in 9 years.

      I have been thinking about consulting with a CFP since this is starting to really stress me out.
      Do you mind renting? Owning a home isn't something you have to do.

      Personally, I'd do this:
      1) 15% of gross to retirement
      2) got money left? extra payment on student loans
      3) still got money left? either more toward retirement, or save for home (depending on how important that is to you)
      seek knowledge, not answers
      personal finance

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      • #4
        It's fine to ask a CFP how to achieve your goals, but I don't think you should ask one what your goals should be. If you track your net worth and cash flow, then it may be easier for you to set priorities.

        Thinking long term, are you okay with the student loans continuing for 9 more years?

        Is owning a home important to you or is it just a financial decision?

        Do you have excess cash flow after covering all of your expenses?

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        • #5
          Do you happen to work in a public service sector?

          "Qualifying employment is any employment with a federal, state, or local government agency, entity, or organization or a not-for-profit organization that has been designated as tax-exempt by the Internal Revenue Service (IRS) under Section 501(c)(3) of the Internal Revenue Code (IRC)."

          If so, you could try for student loan forgiveness under the Public Service Loan Forgiveness program. If not, maybe you could find a job in that area and get out from under that student loan debt.



          Just a thought.

          Tom

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