IBR vs Aggressive Paydown
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ASSUMPTIONS/INPUTSIBR Scenario
Aggressive Paydown Scenario with 401k contributions
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Starting Salary$88,000.00yearSalary
AGI if maxing 401k
Estimated Tax Bill
Estimated Take-Home Pay
Available $$ for Loan Payments or Investmetns
Loan payments
Loan Interest Deduction
Loan BalanceInvestment Amount
Investment Account Balance
Loan PaymentLoan Balance
Loan Interest Deduction
Available to Invest
Investment Account Balance
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Salary Annual Growth2%1$88,000.00$70,000.00$10,500.00$59,500.00$19,500.00$13,200.00$2,500.00$55,000.00$6,300.00$6,300.00$19,500.00$55,000.00$0.00$0.00$0.00
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Income Based Repayment15%2$89,760.00$71,760.00$10,764.00$60,996.00$20,996.00$13,464.00$2,500.00$45,402.50$7,532.00$14,147.00$20,996.00$39,102.50$0.00$0.00$0.00
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401k contribution$18,000.003$91,555.20$73,555.20$11,033.28$62,521.92$22,521.92$13,733.28$2,500.00$34,912.36$8,788.64$23,642.99$20,667.71$20,667.71$0.00$1,854.21$1,854.21
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Starting Loan Amount$55,000.004$93,386.30$75,386.30$11,307.95$64,078.36$24,078.36$14,007.95$2,500.00$23,465.84$10,070.41$34,895.55$0.00$0.00$0.00$24,078.36$26,025.27
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Student Loan Interest Rate6.55%5$95,254.03$77,254.03$11,588.10$65,665.93$25,665.93$14,288.10$2,500.00$10,994.91$11,377.82$48,018.15$0.00$0.00$0.00$25,665.93$52,992.46
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Annual Living Expenses$40,000.006$97,159.11$79,159.11$11,873.87$67,285.24$27,285.24$14,573.87$0.00-$2,573.03$12,711.38$63,130.44$0.00$0.00$0.00$27,285.24$82,927.33
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Effective Tax Rate15%7$99,102.29$81,102.29$12,165.34$68,936.95$28,936.95$14,865.34$0.00-$17,315.43$14,071.61$80,358.56$0.00$0.00$0.00$28,936.95$116,010.65
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Return on Invested Money5%8$101,084.34$83,084.34$12,462.65$70,621.69$30,621.69$15,162.65$0.00-$33,314.93$15,459.04$99,835.53$0.00$0.00$0.00$30,621.69$152,432.87
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9$103,106.03$85,106.03$12,765.90$72,340.12$32,340.12$15,465.90$0.00-$50,659.71$16,874.22$121,701.52$0.00$0.00$0.00$32,340.12$192,394.63
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RESULTS10$105,168.15$87,168.15$13,075.22$74,092.92$34,092.92$15,775.22$0.00-$69,443.83$18,317.70$146,104.30$0.00$0.00$0.00$34,092.92$236,107.29
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IBR Scenario11$107,271.51$89,271.51$13,390.73$75,880.78$35,880.78$16,090.73$0.00-$89,767.62$19,790.06$173,199.57$0.00$0.00$0.00$35,880.78$283,793.44
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Costs12$109,416.94$91,416.94$13,712.54$77,704.40$37,704.40$16,412.54$0.00-$111,738.12$21,291.86$203,151.41$0.00$0.00$0.00$37,704.40$335,687.51
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Loan Payments-$320,725.2813$111,605.28$93,605.28$14,040.79$79,564.49$39,564.49$16,740.79$0.00-$135,469.51$22,823.69$236,132.67$0.00$0.00$0.00$39,564.49$392,036.37
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Loan Forgiveness Tax Bill
$90,553.6114$113,837.38$95,837.38$14,375.61$81,461.78$41,461.78$17,075.61$0.00-$161,083.56$24,386.17$272,325.48$0.00$0.00$0.00$41,461.78$453,099.96
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Total Costs-$230,171.6815$116,114.13$98,114.13$14,717.12$83,397.01$43,397.01$17,417.12$0.00-$188,710.14$25,979.89$311,921.64$0.00$0.00$0.00$43,397.01$519,151.97
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Benefits16$118,436.41$100,436.41$15,065.46$85,370.95$45,370.95$17,765.46$0.00-$218,487.77$27,605.49$355,123.21$0.00$0.00$0.00$45,370.95$590,480.52
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Mortgage Tax Deductions
$12,500.0017$120,805.14$102,805.14$15,420.77$87,384.37$47,384.37$18,120.77$0.00-$250,564.18$29,263.60$402,142.97$0.00$0.00$0.00$47,384.37$667,388.92
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IBR Net Cost-$217,671.6818$123,221.24$105,221.24$15,783.19$89,438.06$49,438.06$18,483.19$0.00-$285,096.91$30,954.87$453,204.99$0.00$0.00$0.00$49,438.06$750,196.42
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IBR Taxable Investment Account Balance
$568,412.0419$125,685.67$107,685.67$16,152.85$91,532.82$51,532.82$18,852.85$0.00-$322,253.94$32,679.97$508,545.21$0.00$0.00$0.00$51,532.82$839,239.06
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IBR Investment Account less Cost$350,740.3620$128,199.38$110,199.38$16,529.91$93,669.48$53,669.48$19,229.91$0.00-$362,214.42$34,439.57$568,412.04$0.00$0.00$0.00$53,669.48$934,870.49
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Total$2,138,168.54$1,778,168.54$320,725.28$12,500.00$61,163.71$0.00
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Aggressive Paydown Scenario
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Costs
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Loan Payments-$61,163.71
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Benefits
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Mortgage Tax Deductions
$0.00
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Aggressive Paydown Net Cost
-$61,163.71
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Aggressive Paydown Taxable Investment Account Balance
$934,870.49
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Aggressive Paydown Investment Account less Cost
$873,706.78
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Aggressive Paydown beats IBR by...
$522,966.41
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