I have a family member (A&M Bachelors degree) about to finish with a PharmD. Pharmacy is looking a lot worse now than it did 5+ years ago. The market is saturated in big cities due to all the new schools that started offering a PharmD. So more and more grads every year don't really make you feel very positive about the future. The high salaries are already starting to go down and hours are getting cut. Its not uncommon for a Walgreens to only guarantee 32 hours...which means it will take longer to pay off the big loans.
With that in mind, how would you handle the following situation:
-single
-lets assume $100k/yr salary
-no 401k matching in the first year, lets say 4% match in year 2
- $130k in student loans
Where should the disposable income go to after saving up for some sort of emergency savings? 100% to pay off loans? Or would you contribute some to the 401k before using the rest for loans?
With the uncertainty in the industry, I'm thinking they should try to pay off those loans as soon as possible. My initial thought is to forget about the 401k in Year 1 and focus on the loans. In Year 2, contribute to the 4% match (free money) and after that put the rest toward the loans. No sure about interest rates on the loans but I'm assuming they are not great.
Thoughts?
With that in mind, how would you handle the following situation:
-single
-lets assume $100k/yr salary
-no 401k matching in the first year, lets say 4% match in year 2
- $130k in student loans
Where should the disposable income go to after saving up for some sort of emergency savings? 100% to pay off loans? Or would you contribute some to the 401k before using the rest for loans?
With the uncertainty in the industry, I'm thinking they should try to pay off those loans as soon as possible. My initial thought is to forget about the 401k in Year 1 and focus on the loans. In Year 2, contribute to the 4% match (free money) and after that put the rest toward the loans. No sure about interest rates on the loans but I'm assuming they are not great.
Thoughts?