Author Topic: Good Reason Not to Pay Down My Student Loan but need advice  (Read 1779 times)

jcrites2

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Good Reason Not to Pay Down My Student Loan but need advice
« on: February 28, 2016, 12:19:23 AM »
Guten Abend,

I am married but will be filing my taxes as married but separate this year because I am on a income based student loan repayment program.  On top of that I am a government employee and in five years the rest of my loans will be forgiven.  I have already paid for 5 years so I am getting close.  My big problem is this:

I want to get my taxable income as low as legally possible this year so what I do pay on my student loans is the least amount possible.  I am already maxing out my 457b government retirement account at $18,000 a year.  I don't think I am allowed to do a traditional IRA but I could be wrong.  We don't have a HSA at my employer and my insurance is really good.  Is there any other way I could invest money that would bring down my taxable income?  Are municipal bonds an option?  I am willing to take a lower return rate depending on the situation.  For example, if I could invest another$10,000 pre tax that could lower my monthly payment by $250-$350 a month which I could then just simply invest.  Any ideas or should I just take my lumps for the next five years?  I have zero debt outside of loans.

Rural

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Re: Good Reason Not to Pay Down My Student Loan but need advice
« Reply #1 on: February 28, 2016, 05:01:22 AM »
You can do both a 457b and a 401k or 403b, so check to see if you have either of those available. If so, that's another 18k.

GrowingTheGreen

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Re: Good Reason Not to Pay Down My Student Loan but need advice
« Reply #2 on: February 28, 2016, 08:20:01 AM »
In addition to investments, have you looked at tax credits at all?  My state gives a dollar-for-dollar credit when you donate to schools and certain charities.  It ends up being a wash on the state, but we lowered our federal taxable income by about $2k by doing this.

ShoulderThingThatGoesUp

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Re: Good Reason Not to Pay Down My Student Loan but need advice
« Reply #3 on: February 28, 2016, 08:58:19 AM »
Why do you think you can't contribute to a tIRA? Research that seriously before dismissing it.

Nickels Dimes Quarters

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Re: Good Reason Not to Pay Down My Student Loan but need advice
« Reply #4 on: February 28, 2016, 11:23:22 AM »
Government worker here with loans as well. I also work very hard to lower my AGI as much as I can each year. I have the government retirement, deferred comp, HSA, and traditional IRA contributions. Student loan interest is deducted to also lower AGI. At work, I take advantage of whatever I can that is deducted from my paycheck pre-tax and makes sense for me financially.

Good luck!

NDQ