What professional do I call to help me figure out this somewhat urgent i
July 17, 2019 8:04 AM Subscribe
I have a job offer and need to crunch numbers to see which option makes the most financial sense. I do not have an accountant or a financial planner. Haven't had enough going on in my life to need either before. Who do I call?
I need to find someone to help me look at AGI, projected future AGI, loan payment calculations, anticipated AGI-lowering opportunities, salary, cost of living, etc. Who would I hire to help? Or if there is anyone here that does this stuff for fun who would let me pay you for your time? Personal finance subreddit was not helpful, as they expect me to have more numerical sense than I have I guess.
I have to make a decision fairly quickly as these things go and want to manage the process effectively.
I need to find someone to help me look at AGI, projected future AGI, loan payment calculations, anticipated AGI-lowering opportunities, salary, cost of living, etc. Who would I hire to help? Or if there is anyone here that does this stuff for fun who would let me pay you for your time? Personal finance subreddit was not helpful, as they expect me to have more numerical sense than I have I guess.
I have to make a decision fairly quickly as these things go and want to manage the process effectively.
Accountants tend to be more about what has already happened than what might happen in the future, so I'd look for a financial planner. If you already have a relationship with a bank there might be someone there who could help you too, especially if they're the ones to whom your loan payments will be going.
posted by ubiquity at 8:11 AM on July 17, 2019 [1 favorite]
posted by ubiquity at 8:11 AM on July 17, 2019 [1 favorite]
I don't believe there really is someone who could help you with that, not at the level where you are comparing future opportunities based on location cost of living differences. Most people that can do that skill reasonably well are working for major corporations where the investments are more fixed and knowable (vs you - who they will have to ascertain not just your current lifestyle but your future one as well).
You might be able to find a financial planner who can compare your current job opportunities to one another, and then maybe answer your loan and AGI questions. Anything beyond that is going to be 50/50 guessing.
posted by The_Vegetables at 8:29 AM on July 17, 2019 [4 favorites]
You might be able to find a financial planner who can compare your current job opportunities to one another, and then maybe answer your loan and AGI questions. Anything beyond that is going to be 50/50 guessing.
posted by The_Vegetables at 8:29 AM on July 17, 2019 [4 favorites]
If you already have a relationship with a financial planner who already has all of your info and knows your short and long term goals, this would totally be something they'd do.
But I suspect that all of the data gathering (retirement plans and other benefits especially) might be hard to parse quickly.
posted by k8t at 9:01 AM on July 17, 2019
But I suspect that all of the data gathering (retirement plans and other benefits especially) might be hard to parse quickly.
posted by k8t at 9:01 AM on July 17, 2019
If you already have a relationship with a bank there might be someone there who could help you too
In my experience, financial planners at a bank (especially if it's one at your bank who you can see for free) are basically trying to sell you investments. You should seek out a fee-only financial planner.
posted by number9dream at 9:32 AM on July 17, 2019 [4 favorites]
In my experience, financial planners at a bank (especially if it's one at your bank who you can see for free) are basically trying to sell you investments. You should seek out a fee-only financial planner.
posted by number9dream at 9:32 AM on July 17, 2019 [4 favorites]
Are you actually trying to imagine a budget for a new job in a new place, where you would have different costs and pay different state tax? That's a lot easier to understand. You want your new income but also the costs of housing, food etc in a new area (there are websites that give averages for different zip codes). You can do a tax calculator for a new income in a new state, using this year's tax rates. You can figure out loan payments with different amounts/terms/rates using a spreadsheet or a loan payment calculator online. That's the approach I'd take.
posted by chesty_a_arthur at 9:37 AM on July 17, 2019 [1 favorite]
posted by chesty_a_arthur at 9:37 AM on July 17, 2019 [1 favorite]
Best answer: Can you share what's the specific problem that you're trying to solve and what state you're in (or what state the new job is in)? That might help with recommendations as well as how to frame the questions to get the right results.
It sounds like you're trying to evaluate whether a new job offer keeps you within an AGI range to qualify for a favorable loan interest rate or repayment plan. If so, I think an accountant would be a better bet than a financial planner because you need an expert who understands the new tax regulations, standard vs itemized deductions, and tax-advantaged vehicles to keeping AGI within a certain range. A financial planner will likely not have that level of expertise.
Here's what I would recommend:
1. Find an accountant or else give this a try yourself with TurboTax and an online AGI calculator
2. AGI reduction opportunities - this has a good short list of the types of things that can be deducted.
-- In general, biggest dollar items may be retirement plan contributions, student loan interest, medical expenses.
-- Not sure, but may be worth asking an accountant if putting aside money in a Donor Advised Fund will help you offset AGI. With a Donor Advised Fund, you can decide when and who to provide donations to, and isn't limited to a calendar year. For example, if you set aside $10K, then you can use that to fund nonprofit donation for future years.
-- Other Mefites may have more info, so hopefully you get more suggestions here.
3. Salary & Cost of Living - to keep it simple, just focus on big-ticket items and do your own online research: rent/mortgage, transportation (if a car is required if you don't own one now), state income taxes (some states have low or no state income taxes) to figure how how your daily living expenses net out. You can just set up a simple spreadsheet that lists out the 50/30/20 rules popularized by Elizabeth Warren, and figure out whether the new salary & COL keeps you within the 50% range for "needs" expenses.
posted by hampanda at 11:06 AM on July 17, 2019 [3 favorites]
It sounds like you're trying to evaluate whether a new job offer keeps you within an AGI range to qualify for a favorable loan interest rate or repayment plan. If so, I think an accountant would be a better bet than a financial planner because you need an expert who understands the new tax regulations, standard vs itemized deductions, and tax-advantaged vehicles to keeping AGI within a certain range. A financial planner will likely not have that level of expertise.
Here's what I would recommend:
1. Find an accountant or else give this a try yourself with TurboTax and an online AGI calculator
2. AGI reduction opportunities - this has a good short list of the types of things that can be deducted.
-- In general, biggest dollar items may be retirement plan contributions, student loan interest, medical expenses.
-- Not sure, but may be worth asking an accountant if putting aside money in a Donor Advised Fund will help you offset AGI. With a Donor Advised Fund, you can decide when and who to provide donations to, and isn't limited to a calendar year. For example, if you set aside $10K, then you can use that to fund nonprofit donation for future years.
-- Other Mefites may have more info, so hopefully you get more suggestions here.
3. Salary & Cost of Living - to keep it simple, just focus on big-ticket items and do your own online research: rent/mortgage, transportation (if a car is required if you don't own one now), state income taxes (some states have low or no state income taxes) to figure how how your daily living expenses net out. You can just set up a simple spreadsheet that lists out the 50/30/20 rules popularized by Elizabeth Warren, and figure out whether the new salary & COL keeps you within the 50% range for "needs" expenses.
posted by hampanda at 11:06 AM on July 17, 2019 [3 favorites]
If you can't find a planner who could do this, you could start by calculating cost of living comparisons between locations via Bankrate.com
A long time ago on The Green when I had just returned from living outside the country, I was juggling a long list of financial decisions that needed to be made. I asked if there were an online subscription service with expert researchers who could do the math for all kinds of knotty but small-bore financial decisions--what car to buy, car insurance to get, credit card to choose, health insurance, mortgages. The advice was that I pretty much had to do it myself. I still think such a subscription service with mini-experts doing the research and math would be useful to many consumers who don't have time or expertise to deal with everyday but knarly financial decisions. Yours is one of them.
posted by Elsie at 11:09 AM on July 17, 2019
A long time ago on The Green when I had just returned from living outside the country, I was juggling a long list of financial decisions that needed to be made. I asked if there were an online subscription service with expert researchers who could do the math for all kinds of knotty but small-bore financial decisions--what car to buy, car insurance to get, credit card to choose, health insurance, mortgages. The advice was that I pretty much had to do it myself. I still think such a subscription service with mini-experts doing the research and math would be useful to many consumers who don't have time or expertise to deal with everyday but knarly financial decisions. Yours is one of them.
posted by Elsie at 11:09 AM on July 17, 2019
Response by poster: The deciding factor is whether a higher salary will offset the loss of a student loan repayment benefit. The loans are under REPAYE but AGI will fluctuate.
Net salary is $10k increase pre tax, $4k after taxes. Cost of living is 6% lower in the new location. Daycare is about $4800 cheaper in the new location (annual). Retirement, healthcare, and leave are all comparable. It boils down to how the student loan payments will work. If anyone is willing and able to further assist please MeMail.
posted by crunchy potato at 11:53 AM on July 17, 2019 [1 favorite]
Net salary is $10k increase pre tax, $4k after taxes. Cost of living is 6% lower in the new location. Daycare is about $4800 cheaper in the new location (annual). Retirement, healthcare, and leave are all comparable. It boils down to how the student loan payments will work. If anyone is willing and able to further assist please MeMail.
posted by crunchy potato at 11:53 AM on July 17, 2019 [1 favorite]
That doesn’t sound all that tough of a call and you have a decent handle on it. It looks like you should probably go for the move: everything is better (financially) except the loan payment.
Two more pieces of info that would help: put that 6% decrease in cost of living into dollars/yr. In general compare dollars to dollars, don’t mix dollars with percents.
Secondly, tell us roughly in dollars your current loan amount and payment, and what the new payment will go up to. You might not be sure of the new payment but a guess will help. If you don’t want to put it publicly, just add up current AGI-costs/yr in one column and after move in another. This of course ignores intangibles (friends, family, culture) and future unpredictable things like what if you get fired from new job.
I’m not entirely sure of the 10k AGI/4K net. That’s possible but the way marginal tax rates work it seems less likely, unless new state has substantially higher income tax than current state. If you’ve done that part carefully nevermind.
TLDR: this move seems very unlikely to be a net financial negative on the short term based on what you’ve provided, but I’m just some rando on the Internet :)
posted by SaltySalticid at 1:47 PM on July 17, 2019 [1 favorite]
Two more pieces of info that would help: put that 6% decrease in cost of living into dollars/yr. In general compare dollars to dollars, don’t mix dollars with percents.
Secondly, tell us roughly in dollars your current loan amount and payment, and what the new payment will go up to. You might not be sure of the new payment but a guess will help. If you don’t want to put it publicly, just add up current AGI-costs/yr in one column and after move in another. This of course ignores intangibles (friends, family, culture) and future unpredictable things like what if you get fired from new job.
I’m not entirely sure of the 10k AGI/4K net. That’s possible but the way marginal tax rates work it seems less likely, unless new state has substantially higher income tax than current state. If you’ve done that part carefully nevermind.
TLDR: this move seems very unlikely to be a net financial negative on the short term based on what you’ve provided, but I’m just some rando on the Internet :)
posted by SaltySalticid at 1:47 PM on July 17, 2019 [1 favorite]
You can use the repayment estimator at the FSA website to get an idea of how your student loan payments would change with your income.
But generally, once you're above the 150% poverty guideline level, for REPAYE you can expect your payment to increase by roughly 10% of any increase in AGI (may be less, shouldn't be more). So most likely you'd be paying about $400 more a year (if the AGI calculation is right--60% off the gross seems like a lot, I live in NYC and I don't get bitten that hard). Since you're in REPAYE, you don't have to show partial financial hardship to "stay" in the program even if you're no longer paying less than you would have under the standard plan, meaning you don't have to worry about outstanding interest capitalizing. There may be some weird scenario under REPAYE where you would lose by having your income increase, but it's not what's generally supposed to happen. Note also that by paying the loan down faster, you will save on interest, unless you actually get all the way to the 25-year forgiveness mark.
posted by praemunire at 2:52 PM on July 17, 2019 [2 favorites]
But generally, once you're above the 150% poverty guideline level, for REPAYE you can expect your payment to increase by roughly 10% of any increase in AGI (may be less, shouldn't be more). So most likely you'd be paying about $400 more a year (if the AGI calculation is right--60% off the gross seems like a lot, I live in NYC and I don't get bitten that hard). Since you're in REPAYE, you don't have to show partial financial hardship to "stay" in the program even if you're no longer paying less than you would have under the standard plan, meaning you don't have to worry about outstanding interest capitalizing. There may be some weird scenario under REPAYE where you would lose by having your income increase, but it's not what's generally supposed to happen. Note also that by paying the loan down faster, you will save on interest, unless you actually get all the way to the 25-year forgiveness mark.
posted by praemunire at 2:52 PM on July 17, 2019 [2 favorites]
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Sorry for the typo.
Also how much should I expect to pay for this help?
posted by crunchy potato at 8:05 AM on July 17, 2019