it’s gotten better since trump stopped blocking all of them
Oh, I have no idea. I’m pretty ignorant on the subject, but I just tossed it out there as something to consider. That’s a good idea to take into account.
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It will restart the clock.
The denials almost always have to do with being on the wrong repayment plan. Only some of the plans are eligible and you must make 120 consecutive payments while working. The Obama reforms actually made this more complicated.
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With the Trump tax cut, there is now not only a higher standard deduction, but also a cap on the state and local tax (SALT) deduction. The mortgage interest cap was also lowered somewhat, to the interest paid on 750k of principal (primary and secondary homes). The result is that a lot of people are now taking the standard deduction where before they were able to take the SALT and mortgage interest deductions (if they did not run into AMT problems). It’s mostly a wash, and the lower rates with the higher standard deduction combine to lower the overall taxes of those folks.
My response probably should have been made to CN rather than RM. My main point was that most people, far as I can tell, no longer receive any benefit from mortgage interest deductions, so it really shouldn’t factor into a rent versus own calculation.
Mrs Cooler’s 120 months just finished. I’d advise what Surf suggested above and have her employer get an employer/employee verification form filled out every year. That way when you go for a final submission you can hopefully make it as smooth as possible. I’ve mentioned before that Mrs Cooler’s employee verifications have been questioned in the past because her employer used a different color pen than she did or her employer wrote the date in the incorrect spot. She’s changed jobs a few times over the past 10 years but each clearly qualify for PSLF. But hopefully after she submits it this week it should be all good and just wait the few months for them to process the final verification/submission.
Edit to add: you can still do the employer verification submissions for the prior 18 months or so since payments have been paused due to Covid. As long as she’s been working for a qualifying employer those months count even if you weren’t making any payments.
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Good to hear. Thanks! Congrats to you and her; hopefully it’s a smooth finish.
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If you’ve been verifying all along, that info should already be on file and then you’ll just need to submit the final employer verification form and final application. Every year after you submit the employer verification they’ll tell you how many payments you have left, so they should have all that already.
We’ve saved all our hard copy letters in a large folder now though just in case.
One other point to add is that you need to be working for a qualifying employer when you submit for the forgiveness and when it’s actually forgiven.
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I just moved $35k from my old employer’s 401k to Vanguard. Somebody give me some guidance on which funds to put it in?
I’m 47, and my wife and I will both have pensions from WA state, but we’re way behind on other retirement so growth is where I think I need to be.
Answers would vary heavily on a few things I’d think, like how confident you are in those pensions existing when you retire and if you could you live off just those pensions.
eta: if you could live off them, and you are confident they’ll be there, then you should be more aggressive.
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VTSAX VFIAX VOO VTI are the big ones look at the company percents they throw in and pick imo.
Their target retirement funds are hard to beat when it comes to set it and forget it. I’m heavy in VFIFX for this reason. If you just want to Yolo it up without bond hedging, then there the total stock index.
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Think I might do target but choose a target 5 or 10 years beyond my expected retirement for extra growth.
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Totally within the realm of the reasonable
Vanguard Total Market
This is a good thing to think about, but it’s important to recognize that although there are widespread public sector pension funding issues, they are not universal. A lot of public sector workers will receive all or if not then most of their earned pensions.
It’s a good idea for public sector workers with some financial aptitude to get familiar with their plan’s actuarial reports. I know that doesn’t sound super exciting but it’s really the only way to get a handle on the risk that the pensions don’t work out as planned. Generally plans fall into three categories:
A - high funded ratio (over 80%) with reasonable assumptions (fund will earn less than 7% per year forever)
B - high funded ratio (over 80%) with aggressive/unreasonable assumptions (fund will earn more than 7% per year forever)
C - lower funded ratio (under 80%) with aggressive/unreasonable assumptions (fund will earn more than 7% per year forever)
These are arbitrary thresholds but they should give someone a good sense of how their plan is being managed. Type A plans are going to almost certainly deliver their promises. Type B plans are very likely to mostly deliver promises, with a good chance that at some point they will ask workers to put a little more in and/or reduce the benefit for future service (i.e. you keep what you have earned already but earn less for future years of work).
Type C plans are the ones that carry a real risk of benefit default. The general fact pattern indicates a lack of risk management in the plan, and the math is unfavorable as there is an inflection point where an underfunded plan paying 100c on the dollar in benefits to current retirees will run out of money at some point if they don’t make big cash contributions or attain heroic investment returns.
Quickly scanning @Fatboy8 's Washington state plan, they look like a Type B plan to me. No immediate concerns, you can plan around receiving that pension, but you should be monitoring communications from the pension committee carefully and accepting that additional future savings might be in the cards.
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Take a look at life strategy funds, I prefer the constant asset allocation relative to target date funds.
Good suggestion, especially for people that have a public sector DB pension as well. Think of the DB pension as a fixed income investment, then carrying a moderate equity % through retirement makes more sense.
Apparently some mutual fund company started a fund with the ticker MEME
It now has $420 billion in assets (way more than Bridgewater, the largest hedge fund)