Hi MMM community,
We're trying to get the jump on retirement planning. Not married yet. I have a reasonable income in tech space while she (F) has OK income in health space as physical therapist. I'll try to skip the fluff. Our goal is to be debt free and in a position retire early with a home and kids as soon as possible. Located in Oregon.
Earner #1
- M/27 salary of $93,153
- Salary will increase by 3% soon, also doing contract that will make ~$25k add'l in Spring 2019
- Paying 27.9% in taxes
- 15% of income going to 401k & ~$500 per month to Roth
- Loans: $4k student at 3.15%
- Net worth is about $50k, all in retirement account
- $28k loan on vehicle project at 2.49%, paying $668 monthly, expected to sell for min $55k after about 60 hours more work
Earner #2
- F/29 salary of $65,000
- Just graduated physical therapy school in May, loan payments start this month (December)
- Paying 27.4% 25.85% in taxes
- $125 to 401k (just enough to max employer match)
- $230k in student loans with breakdown below
FEDERAL (All Fixed Rate)
- $4,577.02 @ 6.8%
- $4,457.84 @ 6.8%
- $14,122.92 @ 6.75%
- $1,066.60 @ 6.75%
- $21,974.33 @ 6%
- $24,233.58 @ 5.84%
- $22,807.01 @ 5.31%
- $3,278.23 @ 4.5%
- $3,118.96 @ 3.4%
PRIVATE (Sallie Mae)
- $37,565.72 @ 9.625%
- $17,252.99 @ 8.875%
- $17,722.16 @ 8.375%
- $60,743.91 @ 8.125%
One sec feeling like I might throw up after typing that... Our budgets have been independent with me (Earner 1) paying for most everyday things. Here's how each of our budgets stands currently:
Earner 1 (Myself) | Take Home Income $4,321
- Rent: $650
- Utilities: $120
- Groceries: $400
- Dining out: $100
- Auto/Rent Insurance: $268.19 (Both of us)
- Cell: $76
- Car: $668.64 (Investment, built van into RV, almost done and should sell for $20k profit)
- Fuel: $100
- Gym: $162.80 (Both of us)
- Other: $300
- Roth: $500
- Total: $3,345.63 (Remaining $967 has gone towards van project and catching up on Roth contributions)
Earner 2 (Partner) | Take Home Income $3,430
- Orthopedic Residency: $300 (this is extra continuing ed for 24 months, guarantees pay increase at end)
- Rent: $300
- Groceries: $200
- Car: $239 (3 year lease, one year into it)
- Fuel: $50
- IRS tax owing from 2017: $100 ($1,500 left)
- Cell paid by parents
- Flexible money: $150
- Total: $1,339 with $2,091 leftover to put towards loans
Our game plan is to buckle down on the food budget and to finish the van project that is costing almost $700 a month to own. With me cosigning, LendKey has offered to refinance the private loan at 6.29% fixed for 10 years.
Here's where we're looking for in terms of advice:
- How should paying the private and federal loans be prioritized and handled given refinancing options?
- Is the LendKey refinancing option the best you would expect? How often can/should we refinance in the future in order to get a better rate?
- How would getting married impact our plan to pay aggressively? Would we be better off remaining 'single' as far as the IRS is concerned?
- Does the PSLF program make any sense for this situation, given how much of the debt is private?
- Should Earner 2 be contributing more to retirement? Less?
- Where else might we save money?
Thank you in advance for your input.