As a doctor or physician, your medical school debt is mostly likely a substantial amount. However, despite your higher income, it is very expensive to live your life. As a result, you want to both pay off your debt but also save money for the future. Read on to learn some facts about investing versus paying off your debt!
Paying Off Your Debt
Unfortunately, the debt you accumulated during medical school will increase in amount because of interest. Therefore, if you currently have loans with a high interest rate, you will definitely want to pay it off as much as possible. The reason is because no matter what you invest, you typically end up losing more money than gaining since the debt will increase faster than your investments. One way to pay off the debt faster is to consolidate them, if you can. This way, you will be paying one amount each month and it’ll be easier to organize and schedule payments. You should also pay the minimum amounts due for your debt on time because it will help you avoid extra interest, penalties, or ruining your credit score.
If you are looking to invest, one of your best options is to see what your current employer offers for a retirement plans. Most companies offer a 401(k) plan and they match a certain percentage of what you contribute to it.
Although your 401(k) is reserved for your retirement, it is always a great idea to save extra money with your own investments. The reason is because once you’re ready to retire, you might discover the amount from your 401(k) is not enough to sustain your post-retirement lifestyle. To figure out how much to save, you should think about what you want to do when you’re retired, what the benefits from your Social Security will be, the amount from taxes, and estimated investment returns. To figure out which accounts to invest in, you will want to determine your future tax bracket and the fees on your investment account.
For more tips on saving and investing, please refer to our blog often!
If you are a doctor or physician and are interested in purchasing a home, look no further than the experts at Physician Mortgage Specialist! Our professionals will help find the best physician home loans for you.
Sign up today by filling out the form on our Homepage and you can expect a call from one of our experts within 30 minutes.