The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Mr. Nice FI on December 10, 2017, 02:27:01 PM
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I am planning to start graduate school in the summer of 2018. I am wondering if I should continue maxing out my Roth IRA until I begin school, or if I should save up for tuition.
The total cost for the master's program will be around 100k, which will be financed mostly through student loans (probably around 6.5-7%), but I should start out making between 120-140k straight out of school and plan to pay the loans back in 2 years max. So the question essentially is, should I max out my Roth IRA until school starts, or save all of that money for tuition to lower my loan needs?
Thanks in advance for any insight.
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I don't know how loans for grad school work but will any of them be subsidized loans? If so then I would max out the Roth before and if possible during grad school and take advantage of the tax free growth, particularly since you are expecting to have a higher income after completing school.
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I would seek out an employer to sponsor the masters or pay cash for it. I would not borrow on the assumption that my potential new income will take care of everything.
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I don't know how loans for grad school work but will any of them be subsidized loans? If so then I would max out the Roth before and if possible during grad school and take advantage of the tax free growth, particularly since you are expecting to have a higher income after completing school.
The loans generally aren't subsidized for grad school. My thinking is that any money that I save now for tuition will have a guaranteed return of 6.5-7%, which seems attractive when compared to buying more stocks at these inflated prices. Thank you both for responding.
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I don't know how loans for grad school work but will any of them be subsidized loans? If so then I would max out the Roth before and if possible during grad school and take advantage of the tax free growth, particularly since you are expecting to have a higher income after completing school.
Subsiding student loans were taken away from graduate students a few years back.