Hey everyone, currently paying ~50% of my take home paycheck to my students loans while sacrificing quite a bit. On track to pay this debt 6 years early (4 year actual payoff vs 10 year term). I'd really like to speed this process up by using any form of tax break or retirement fund loophole possible. Don't quality for student loan repayment tax breaks. Any ideas? HW R&D TC $120-125k
Keep your foot on the gas. It’s tough but it’s worth it. I’m not aware of any retirement fund loophole but you could temporarily stop the contribution to your retirement fund and apply that extra amount to debt. Are you single tax payer, married, or head of household? As a bachelor paying off debt, I always had a side job or gig to help accelerate the payoff.
Single but with a gf and her kid sister. Living in the bay area as a research scientist but I def feel like I'm struggling. I'm contributing 10% to my 401k, perhaps I can bring it down to 6%? Idk
My advice is very dependent on where you live. Consider buying a house/townhouse/condo that you can afford and pay your student loan off on the regular schedule. There are possible tax breaks on paying the mortgage interest, and the equity in the property could surpass the interest savings of paying off your loans early. I really wish I followed this advice sooner in life.
I live in the Bay Area so some property sadly isn't an option until I pay off my student debt. Unlike a lot of the younger crowd in the area I'm not paid with explosive stock or have mommy and daddy make a down payment on my home. I do have a self managed ROTH Ira, 401k, and "individual stock" portfolio. Possible to use any of those?
You’ll pay taxes and a penalty on the 401k and pay a penalty on the Roth if you withdraw early. Capital gains on stocks are also taxable but you could liquidate them. I encourage you to keep working and paying off that debt. You’ll find yourself in such a great place when you have no debt, tons of cash coming in every month, and the ability to live on a budget. This is what sets people up for success and wealth.
How much is your total debt?
Started at 100k in 2016, down to about 38k now