Author Topic: Case Study with college.  (Read 1543 times)


  • Stubble
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Case Study with college.
« on: July 25, 2017, 09:03:25 AM »
Hi everyone.

So my GF is facing some dilemma and I want to help her with the different approaches to solve it.
She is starting a Masters Degree this Summer, for the next 3 years.

Her loan was approved for 34K at 6.8% (Or around this number, I will make her check again).
She would have to start paying it off right after she is done. 10 year repayment.

On the other hand, she inherited a tIRA from her dad with ~110K.

We want to minimize the taxes so she loses the less money.
What makes more sense? To move 11K every year to a Roth IRA and then pay the loan in full after 3 years? (or 5 years considering roth IRA lets you withdraw that money without penalty after 5 years)

She currently works and makes around 30K (social worker) and she would still work during the time she is studying.

If I forgot any important details, please ask and I will provide the info as accurate as possible.


  • Senior Mustachian
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Re: Case Study with college.
« Reply #1 on: July 25, 2017, 06:50:20 PM »
If she used tax software for her 2016 return, using the same software for some "what if...?" returns could help confirm tax effects.

The case study spreadsheet can be used for a graphical picture of what different amounts of tIRA withdrawals would do.

Note that the saver's credit is not available for years in which she is a "full time student."