Good morning MMMers!
At the moment my wife and I are paying the minimums on our 2 debts, student loan ($63k) and mortgage ($103k), investing $500/mo into a taxable brokerage (VTSMX), and saving the remaining surplus in a savings account to frontload our IRA's in January. The mortgage is a 7/1 but will not adjust for another 5+ years (currently at 3.625%). The student loan is adjustable, and has just been adjusted up to 4.5%; I expect it will continue to climb each quarter. I would like opinions on what to do moving forward. Our marginal tax rate (after deductions) is 15%, but is very close to the 25% bracket and may spill over next year.
I could continue along our current path and wait until the student loan interest creeps up a bit more. At what point should I take action? Once the student loans are on the radar, should I continue to front-load the IRAs, DCA them, or wait until the last minute instead? Should we still contribute $500 to the taxable brokerage or put that on-hold while the student loans are being focused down? Either way, I plan on contributing enough to the brokerage account that we can convert it to VTSAX and get the savings in fees.
What are y'all's thoughts?
Right now I'm leaning towards adding to the brokerage to get it to a bit over $10k (so VTSMX -> VTSAX), turning off the automatic investments to the brokerage, and setting up the IRA's to autodraft once per month in 2017 ($500/mo each). Keep a $10k emergency fund and funnel any further excess into the student loan.