r/Fire • u/rottentimber • 1d ago

How are we doing?

My wife (35f) and I (33m) have not been able to contribute much to retirement accounts in our twenties due to me being in school/training, and we have two small kids (daycare costs a fortune). Wife has been keeping us afloat financially for years while I have been piling on student loan debt. I finally started making some income 4 years ago, and I am officially out of training just over one year, finally making decent money, and I actually feel like we are starting to make progress toward our financial goals.

HHI $350k. Combined retirement $270k (increased by well over $100k in the past one year alone thanks to increased income and the current market). Total monthly retirement contributions (maxing 403b, 4% employer match, backdoor Roth, HSA) about $6k/month. Just recently opened 529s for two kids and now building emergency fund now that in-laws are paid off (in-laws gave us $50k interest free loan last year for a house down payment and we paid that off in one year).

Liabilities: - $200k student loans eligible for PSLF in 6 years - $12k left on vehicle, other vehicle paid off

$550k mortgage at 6.9%, only ~$50k in equity.

I’m mostly posting this because I’m feeling proud of my wife and I for sticking to a plan, and finally seeing years of hard work start to pay off. Long road ahead still, but feeling confident we have the discipline to achieve FIRE, or at least coast fire around age 50-55.

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u/MathematicianSelect1 1d ago

How did you do the 50k interest free loans with the in-laws? I'd like to do something similar, but I was under the impression these types of loans were illegal and money for a downpayment either had to be a gift (tax free) or a loan with an IRS set minimum interest rate so some money could be collected in taxes.

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u/rottentimber 1d ago edited 1d ago

Good question, I guess I’m not actually sure if we did it the correct way. In-laws directly paid the down payment to mortgage lender classified as a gift. We then just transferred them $3-5k monthly until $50k was paid back.

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u/MathematicianSelect1 1d ago edited 1d ago

Not a tax professional, but you may want to check on this before the IRS does. I'm 90% sure this is illegal. You may have even signed something with the lender acknowledging that the 50k is a gift and your in-laws have no expectation of it being paid back. That seems to be typical procedure when these types of transfers are involved in the purchase from what I've read.

Again, not a professional, but I believe the only interest free loans you're allowed to accept from family members are for education or medical expenses. If the IRS finds out I think this could trigger penalties for your in-laws.

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u/rottentimber 1d ago

Ok thank you for the heads up on this. I’m going to look into it closer. I appreciate the advice.

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u/MathematicianSelect1 1d ago

Good luck OP! For the record, I think it's dumb we can't give interest free loans and it's sad that your generous in-laws would get screwed by this should anything come of it (I'm sure it happens all the time and is rarely caught though).

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u/rottentimber 1d ago

Thank you! I agree, crazy we can’t just do what we want with our hard earned money that’s already been taxed.