Congrats? How much student loan debt did you have double that amount in student loan debt?
When will you be able to retire?
- Thread starter SEIOWA CLONE
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Congrats? How much student loan debt did you have double that amount in student loan debt?
I'd be tempted to change jobs to make an extra $13,000 over the next few years if I was you. Make sure everything lines up tax wise. Plenty of teachers "retire early", start collecting on their IPERS, and work a second career - it's a really smart move.
For me, I plan to "retire" from the day job after I get the kids through college (long, long ways off for me) then farm full time until I physically can't, it becomes not fun for me, or I have kids/grandkids that are able and want to take things over. 2-3 years ago I would have said I wanted to quit the job ASAP to farm full time but I changed jobs and like what I am doing now and as the family grows I realize the steady pay-check and health insurance is a big deal.
For me, I plan to "retire" from the day job after I get the kids through college (long, long ways off for me) then farm full time until I physically can't, it becomes not fun for me, or I have kids/grandkids that are able and want to take things over. 2-3 years ago I would have said I wanted to quit the job ASAP to farm full time but I changed jobs and like what I am doing now and as the family grows I realize the steady pay-check and health insurance is a big deal.
I don't try to give too much advice because of the changes in time. For example, back when I graduated, I was one of the higher earners and I didn't make as much as him. I had 50% of my annual salary in loans. I did go a little different route, I saved and built cash. Then moronically bought a new pickup when my cars transmission went out. If I could change anything, I would have bought an older vehicle and blew up my students loans quicker.
We were in the same boat as well, and we dug ourselves out of the hole. We graduated with $120,000 in debt between cars and student loans. I had a good paying job as an engineer, but my wife worked as a teller in a bank for like $12/hr. We committed ourselves to getting out. We roughly followed the Ramsey debt snowball plan and paid it all off in 7 years. We were debt free at 31, except the house. We're now 35 and still debt free minus our house with a healthy emergency fund and retirement accounts. It's tough and takes a lot of sacrifice, but you can do it.
A) no one forced the student loans onto you
B) the car payments you mention while having student loans are a budget killer. Probably would be best do drive paid-for cars that have a total value of less than 10% of your annual income for sure (less if possible) while paying off the student loans. Investment in cars above this level with student loans is asking for trouble. For a while after college my wife and I had less than 4% of our annual income invested in paid-for cars while we started retirement savings and house down-payment savings. Since then we have upped our car investment (still paid-for) to about 15% of our annual income - we are spoiled now!
I, too, had a great job which I enjoyed. But I was working tons of hours (they hired two people to cover my responsibilities after I left). My parents and in-laws were aging and our children were having kids and could use our assistance. So I retired at 59-1/2 and haven’t looked back. Started a free-lance writing business which enables me to continue a skill I enjoy and generates additional funds I’ve used to finance hobbies and support causes in which I believe. Just returned from three months in Florida (yeah, I missed the horrible Iowa winter) and enjoyed a trip to Israel. Couldn’t have done any of that if I were still working full time. Do I miss my former job? Sure, especially the people. But I’ve managed to save enough financial resources (not yet collecting SS) to maintain my lifestyle and my departure from John Deere after 37 years freed up a position and provided great opportunities for the persons who replaced me.
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A) Can be a little messy. I thought I was ok until I got married. Wife had more in loans than me and her financial situation wasn't as great. Can't control that situation since I did not know her in college. Different backgrounds and family situations can vary the whole student loan thing. I don't pass judgment on people in this situation. Growing up in a farm family, I understand how easy it is for farmers to jockey income and collect grants that others kids can't. I had less in loans than others when I went. My folks had been through a couple rodeos and had the game figured out when I hit.
B) Cars are a killer, I did have a problem having my wife on the road with the kids come daycare with a vehicle that wasn't VERY dependable. Didn't want her stranded during winter. When we were single or just married it was a little different. She had a 30 mile commute at the time and I still wanted her in something decent. 4% (2% for each's vehicle) would have given her a 400 dollar car. That thing would have been a break down machine on a 30 mile each way commute.
Basically it is very hard to compare situations. Is it best to avoid loans, yes. Is it feasible in all situations, no.
You could always try picking up a side job. Here are some apps .
You could always try picking up a side job, to help hedge the 13K. Here are some apps you could look into. .
Agree and understand your point on the student loans - it's different for everyone but there are alternatives like community college, working more, taking a year off of college to work to save money up, etc that most people don't consider or look down their nose at.
You are right - length of commute, ability/inability to borrow a car from friends/family if yours breaks down, mechanical aptitude, etc all factor into that. I just see way too many people driving $40,000 cars and wondering why they don't have any money for savings or debt reduction.
Our situations sound similar. Student loan to income ratios for my wife and I were completely reversed. I made 80% of the income and had 20% of the student loans and vice versa for her.
One thing in our situation that pissed me off royally was that her parents bought her a car when she was in college. They made the payments for her while she was in school, but the agreement was that she would take over payments once she graduated. The problem was, they decided what car to get her and "surprised" her with it. So, they bought her a used car, but it had like 3,000 miles on it so it was basically a brand new car. That came with a payment that she would never be able to afford based upon her major and projected income. So, we ended up eating that once she graduated and paying for a car we probably would've never bought in the first place.
WRT the subject question - am hoping to retire at 50, if we are able to sell our business for what we hope to. Worst case, I will have enough in 401(k) to retire comfortably at 60.
WRT to "working" after retirement, I have a couple ideas of part-time work that will keep me interested. Don't think I could just 100% do housekeeping and gardening and travel.
WRT the OP decision: by my appx math, you are making ~$50k now, and would make roughly $30k in Mizzou plus the $34k pension income. So for 4 years, you will net an additional $52k plus some interest. If you save it all, then over 30 years of retirement that is ~$2k per year in retirement.
I'd say if you LOVE your current job, $2k per year on a Mizzou question mark is not worth it. You might be better served to stay LONGER in your current job, if you love it, if that might result in a higher IPERS payout 4 years from now. My $0.02.
WRT to "working" after retirement, I have a couple ideas of part-time work that will keep me interested. Don't think I could just 100% do housekeeping and gardening and travel.
WRT the OP decision: by my appx math, you are making ~$50k now, and would make roughly $30k in Mizzou plus the $34k pension income. So for 4 years, you will net an additional $52k plus some interest. If you save it all, then over 30 years of retirement that is ~$2k per year in retirement.
I'd say if you LOVE your current job, $2k per year on a Mizzou question mark is not worth it. You might be better served to stay LONGER in your current job, if you love it, if that might result in a higher IPERS payout 4 years from now. My $0.02.
Ya I can work from anywhere in the world (with stable internet) I’m going to keep collecting that check as long as I can and just adjust or add location(s) as I feel like it.
I agree with you completely. The only thing I will add, and this was true in our case, is that a lot of people make bad decisions before they know they're bad decisions. I bought a brand new car in my last year of college that came with a $450 monthly payment. I had a job in place with a good salary, and on paper, I could afford it. However, once we looked at all the debt we had, I hated that payment from beginning to end.
I'm much smarter about money now, but my wife and I both learned the hard way because we didn't get a lot of great advice from our parents in that arena.
I'm in an occupation that is notoriously difficult to retire from. I've basically just conceded to being here in some capacity for a long, long time.
Jacktronic
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Strong Boomer energy with this one.
I'm in agreement with you for most things, probably came off a little lecturing type. Probably my dad with a kid leaving for college next fall part of me.
In regards to community college, I won't let me kids go there no matter what. Maybe a year of schooling would be ok, but seen more times than not that community college blows up in people's face than being a help. Back in my day, you could only get 60 credits to transfer and needing 128, it basically put everyone on the 4 1/2 to five year plan no matter what.
I have now talked to kids and they say a local one here in north iowa (not saying names
) will tell you that everything is fine and dandy and then you check with the universities and they start eliminating classes that count for you. End up with another semester added on. If you live in the town of the CC, or within 10 miles, it possibly saves by living at home; but it you live 35-40 miles from one like we do, it doesn't save much especially if you live in the dorms or an apartment. Another piece of crap they have been pushing is this Hope grant, you are told you get it for going to a CC. GUESS WHAT, everyone is eligible whatever school you go to. I know I will get taken to task about CC and I don't care, I honestly have not seen it save money for anyone who has a strong idea what they want to do for a career and live a distance from the CC.
Good for you. Given the circumstances, I would do the same thing! Fortunately while I have a stout work load, it’s not to the degree yours was!
This. You need to be able to live on 90% of your income, whether that is $20k per year or $200k per year.
My daughter has a double major from ISU and is making about $20k annually (Liberal Arts FTL). I am still encouraging her to put away 10% to Roth.
Admittedly, you can have a lot nicer things, and don't have to make hard choices if it's $200k per year.
