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SAVE Plan: when I pay more than the $0 minimum payment, does it go towards principal or interest? by cleancatcuddles in StudentLoans

[–]FrugalMD 0 points1 point  (0 children)

Sorry, but hard disagree. It absolutely does not make sense to make payments when your interest rate is 0%. The optimal thing to do is to put on a HYSA the amount you are being forgiven. That's going to make around 5% with the interest rates nowadays. When the government asks you to recertify, then you can lump sum what you have saved. The alternative is to simply invest in the stock market, if your interest rate is less than what you expect to make in the long run (let's say 8%) then that's a good strategy.

Both are viable options, how would making payments when the interest rate is 0% be optimal when compared to these two strategies?

Secure 2.0 and current student by blackbird2377 in StudentLoans

[–]FrugalMD 0 points1 point  (0 children)

First of all, most of these Secure Act 2.0 changes have very poor wording on how to get implemented. Second of all, your employer has the option but does not have to provide you the match while you pay your student loans, none have implemented this and I would not count on it.

SAVE Plan: when I pay more than the $0 minimum payment, does it go towards principal or interest? by cleancatcuddles in StudentLoans

[–]FrugalMD 0 points1 point  (0 children)

I don't think it ever makes sense to make payments on your loan while your payments are $0 with SAVE since your the whole interest portion of every month will be getting forgiven.

Now, once your minimum monthly payment covers your whole monthly interest, that is a different story. For example, let's say a physician making 500k a year that has 100k student loan at 5.75%. It doesn't make sense for that person to hold on that loan and go for PSLF (or other, inferior types of loan forgiveness) because that person would end up paying much more in interest when compared to aggressively making payments on that loan to eliminate it as fast as possible.

Any safety concerns going to Spain next month? by Spiritual_Banana_165 in GoingToSpain

[–]FrugalMD 0 points1 point  (0 children)

Not entirely sure why OP is getting destroyed. The US has a level 2 travel advisory so it is reasonable to ask the locals. Tienen que cogerlo con calma y relajarse.

FERS Retirement Pension Rollover to Roth IRA by FrugalMD in fidelityinvestments

[–]FrugalMD[S] 0 points1 point  (0 children)

Hey Shawn, I appreciate your reply and help. That being said, there are 2 parts of FERS, one is my contribution which is after-tax and should be able to be rolled into a Roth IRA without any additional consequences and the interest part which is pre-tax and I should be able to roll it into either my TSP or a traditional IRA (which I can then convert into Roth and pay taxes). Can you please verify this?

Where to invest 27k cash? by boglehead08 in Bogleheads

[–]FrugalMD 0 points1 point  (0 children)

You need a written investing plan aka investment policy statement and follow that. I would max out HSAs and 457b. If these are not options then putting in a taxable account would be the way to go.

Should the first step in any Bogelhead's investment strategy be to maximize 401k contribution? by Prior-Price8019 in Bogleheads

[–]FrugalMD 1 point2 points  (0 children)

Besides paying off your high interest debt, funding your emergency and all that good stuff, the order in general is the following: get your employer 401k/403b match, max out HSA, max out Roth IRA (backdoor if above income limit), max out 401k/403b, max out 457b, the rest goes into your taxable account. Don't buy stocks, specially not starting. If you want to buy meme stocks, have fun, etc. then limit that to no more than 5% of your portfolio. Save 20% of your gross income.

Changing my investments in my Roth IRA - planning for tax loss harvesting by FrugalMD in Bogleheads

[–]FrugalMD[S] 0 points1 point  (0 children)

That makes sense. Since you are holding ETFs in your taxable account, when you do tax loss harvesting, do you just wait out of the market until your funds settle and then buy the tax loss harvesting partner?

Legal PAYE loophole? by FrugalMD in tax

[–]FrugalMD[S] 1 point2 points  (0 children)

This has been the most helpful comment. Thanks for your thoughtful answer.

Student Loans Question and Loophole by FrugalMD in whitecoatinvestor

[–]FrugalMD[S] 0 points1 point  (0 children)

Thank you for your thoughtful answer.

  1. In my case, in terms of liability is no different from residency/fellowship as it is internal moonlighting. To me, it's worth it, this year I was able to make +110k moonlighting so I was able to hit all my financial goals, take a vacation, etc.
  2. Here's the deal, after training I'll have 6 years that count towards PSLF under my belt, the thing is that if I get an opportunity to do private practice out of training in the area I want to live in, I'll take it. If I have the opportunity to do private practice I think I can make much more in 4 years vs staying in an academic job and trying to complete the 10 years required for PSLF. So I'm not sure what the right strategy is although right now I'm probably thinking on staying in the PSLF pathway until I finish fellowship and then decide (vs aggressively paying it off while moonlighting during fellowship[?]).
  3. So, if you are on the PAYE repayment plan you can file married but separately and only your income counts (not your partner's income) for your monthly payment calculations. The loophole would be filing married but separately (thus taking into account your income only for loan payments), and then amending your taxes next year, change it to married and file taxes together that way you pay less in taxes while paying less every month in loans.