Note: These case studies are hypothetical and do not involve any real Alchemy Wealth Management clients.
This is not tax, legal or investment advice and should not be construed as such.
- Name: Laura
- Age: 30
- Occupation: Residency
- Income: $63,000
- Retirement Savings: $15,000
- Debt: $235,000 (Student Loans)
About:
Laura recently graduated from medical school and is currently in residency. She is curious how to tackle her student loan payments. Should she pay them off as aggressively as possible? Or maybe make the minimum payments and count on student loan forgiveness? She wants to max out her 401(k) at work but also feels like she needs to start saving for a house. Laura isn’t quite sure how to balance her cash flow or prioritize her goals.
Goals:
Laura’s primary goal is paying off her student loans. Laura feels behind on her retirement savings and wants to begin saving for a house soon as well, but doesn’t know if she could even qualify for a mortgage with such large student loans.
Challenge:
Laura hears lots of contradictory and confusing information in regard to the “best” way to pay off student loans. Her boss tells her to make minimum payments and the loan will be forgiven after ten years of payments. Her mom tells her that debt is too risky, and she needs to pay them off as fast as possible. Her classmate told her that she would have to pay taxes on the entire account balance if her loans were forgiven. Her uncle tells her that the interest rate on her loans is low and that it is a “healthy” debt, she should never make an extra loan payment.
Laura is confused and overwhelmed by the whole process and doesn’t know who/what to believe.
Results:
Laura partners with a Fee-Only Fiduciary Financial Advisor at Alchemy Wealth Management.
Together with her Financial Advisor she works through and prioritizes her goals. They work together to help get her current financial situation more organized so she can have a more complete and comprehensive understanding of her current financial situation. They develop a comprehensive financial plan that involves eliminating her student loans while balancing it with her goal to purchase a home in 3 years and retire by age 58.
Most importantly Laura now has peace of mind that she is on the right track and is taking the proper next steps to achieve her financial goals.