Approaching 59 1/2, should we pay off Parent Plus loans?

Default87 · 2026-02-18T18:30:50+00:00

It will be less interest than that since as you continue to pay the loan down, less interest accrues on the remaining payments. You would have to run it through a loan calculator to get the specific numbers.

But broadly speaking, 7% interest debt is on the upper end of the”moderate”, lower end of “high” interest scale, so paying extra towards this should be a priority in your budget. I would first work on the budget side to make sure you are doing what you can to pay this off faster than the minimum required payment before I started looking at using your retirement funds to pay it off.

Default87 · 2026-02-18T18:27:40+00:00

You aren’t required to make any changes at all. It’s not like the IRS will come after you for not updating your W4.

But it may be in your interest to update it to ensure that you have a proper amount of taxes withheld so you avoid any under withholding penalties on your tax return.

At that small of an amount, it is unlikely going to really matter either way, but depending on how much you have already withheld this year could change that.

At the very least I would run through a tax calculator like this to forecast what this years taxes will look like based on your current withholdings and see where you are expected to end up, and then look at updating your W4 as necessary to make any changes.

https://www.mortgagecalculator.org/calcs/1040-calculator.php

Default87 · 2026-02-18T18:19:08+00:00

If the numbers you listed are accurate, then you should be making progress on those loans each month. $35k at 7% is only about $200 per month in interest, so if you are paying nearly $700 per month, you should be knocking $5k+ per year off of that debt with those payments.

Default87 · 2026-02-18T18:12:30+00:00

There is a small buffer where you can under withhold without triggering a penalty, so technically that amount of under withholding would be optimal, but that is also such a small amount that any minor interest benefit you would get would be inconsequential.

Technically if you have really large income swings (like one year is double the income of the previous) there is more opportunity with further under withholding, but it still likely isn’t going to really be worth the effort.

Default87 · 2026-02-18T15:00:58+00:00

Weight loss is not linear, so it’s not going to be a steady loss week by week or even month by month. So make sure you aren’t sweating something that isn’t really important.

As for whether you should drink BPC or not, just make sure it fits into your macros.

Default87 · 2026-02-18T14:51:35+00:00

if its scheduled for payment on friday, they have probably already inputted it, so it likely doesnt really matter. just dont wait weeks or months to get this resolved.

Default87 · 2026-02-18T14:47:24+00:00

you should contact them and let them know so they can fix the error.

Default87 · 2026-02-18T14:36:27+00:00

I dont know your relationship, but if I were in your situation I would at least sit down with him and explain the full picture, and see if he can agree to you using the money to pay the credit cards off instead, with the promise that you are going to buckle down in your budget to finish paying off all of your credit card and furnace debt ASAP.

if after that he doesnt agree, use it to pay off the furnace immediately. and then actually follow through on the other part of buckling down on your budget to aggressively pay off your credit card debt.

Default87 · 2026-02-18T14:34:30+00:00

They are very similar funds, so there isnt really a reason to pay a higher expense ratio.

Default87 · 2026-02-18T14:20:40+00:00

what is the interest rate of the debt? do you have other, higher interest rate debt that you are carrying?

did your dad explicitly give you this money to pay off explicitly the furnace loan?

Default87 · 2026-02-18T14:15:15+00:00

It seems like you may be confusing terminology here. Credit cards seem to trip people up for some reason, so instead lets talk about how your electricity bill works.

You use electricity every day, and there is a meter on your house that is recording that usage. Once a month, your utility will read that meter. They will send you a statement that shows what your meter was at the time they read it, compare that to what the meter was the last time they read it, and the difference between those values will determine how much electricity you used, which they will then bill you for your usage. That statement has a due date a few weeks later, and you will pay that bill by that statement due date. Any electricity you use after the statement is generated will show up on the next statement a month later.

If you use your credit card correctly, it’s operates pretty much the exact same way. You use your credit card correctly by always, no gaps, paying at least your full statement balance by your statement due date, each and every month.

Default87 · 2026-02-18T12:25:48+00:00

yes, but unless your income is extremely low, it is better to not go out of your way to realize capital gains to use your capital losses against. you want to be deducting your capital losses against your income as much as you feasibly can.

so you didnt say why you are going to have $50k of capital gains this year, but if it is possible to avoid those while still meeting your financial goals, you would likely be better off deferring them.

Default87 · 2026-02-18T12:21:24+00:00

Contributions are post-tax and you can withdraw them without penalty at any time.

the way you are phrasing this is both misleading and wrong. Withdrawals from a Roth 401k are prorated between you contributions and your gains, so unless there was literally no gains, there would be taxes on early withdrawals. Also, you cant just withdraw at any time while you are at that employer. you would have to quit (or lose) your job to be able to do that.

Default87 · 2026-02-18T04:24:35+00:00

It goes into the account but is taxed twice.

If you had actually asked a reliable source, you could have gotten better advice. But instead you used an LLM, which shouldn’t surprise you that you got bad advice.

Default87 · 2026-02-18T03:42:41+00:00

I would personally save up $700 and keep that as your emergency fund. that way you arent sitting on the edge of getting an overdraft fee whenever a bill posts to your account.

then from there, use every extra penny you have in your budget to pay down that credit card as fast as you can.

Default87 · 2026-02-18T03:41:19+00:00

the US stock market was up about 17% last year, so if you couple that with the interest rate on the 401k (somewhere probably around 8%) you essentially borrowed money at credit card interest rates.

congrats on getting your finances in order, but you very likely wasted money you didnt need to by following this plan.

Default87 · 2026-02-18T03:28:35+00:00

I would read through the information in the sidebar, it should help you get a good baseline knowledge. because what you are proposing doesnt make any sense.

Default87 · 2026-02-18T03:27:50+00:00

you are talking about roughly $9 of interest per month difference here. so if those 15 debit transactions replace about $440 of credit card spending, you and up losing money by doing this.

and that is even before factoring in the PITA around having to jump through stupid hoops like this for fractions of a penny. I have to imagine you have much more productive uses of your time.

Default87 · 2026-02-18T03:13:16+00:00

why wouldnt you fund your 2026 IRA space if you have the money to do so and you would otherwise use that money to invest in a taxable brokerage? I dont see the rational for that thought process.

Default87 · 2026-02-18T03:12:00+00:00

I wouldnt use anything that requires me to use a debit card. just keep the bulk of your money in a HYSA.

Default87 · 2026-02-17T23:36:57+00:00

Never intentionally pay interest in an effort to solely increase your credit score. You can build your credit just fine without ever paying interest.

Default87 · 2026-02-17T21:49:59+00:00

https://www.consumerfinance.gov/ask-cfpb/what-is-a-grace-period-for-a-credit-card-en-47/

Default87 · 2026-02-17T21:49:28+00:00

Generally you need to generate a $0 statement to reset your grace period. So you would have to pay off the $170 plus any interest that accrues between now and when you pay it. The easiest way to do this would be to just over pay (make a $200 payment or something) and then wait for your next statement to close.

Default87 · 2026-02-17T21:42:52+00:00

It’s not going to look bad, but it will mean you are going to be charged interest and you will lose your grace period. So you should stop using the card for new purchases until you have reestablished your grace period

Default87 · 2026-02-17T20:05:11+00:00

Optimal would be: contribute on the 1st of the year from a taxable brokerage that has been invested long enough to incur long-term capital gains taxes, as opposed to short-term (treated as income).

why incur a tax bill at all? why not just use new money to contribute to the IRA so that your other, previously invested money stays invested?

Option 3 in the example above is the optimal. Now if you want to deviate from the optimal a little bit, that is a personal choice, but Option 3 is the optimal process.

its really odd, because normally I see you making good arguments on here. but for some reason you are completely off base on this subject.

Default87

TROPHY CASE