Title: Can Dr. Sharma Retire Early While Paying Off $280K in Student Loans? Tagline: Is My Early Retirement Dream Achievable? Calculating Present Value to Optimize Savings & Debt Repayment Problem: Dr. Anya Sharma, a 35-year-old physician, is laser-focused on two goals: aggressively paying down her $280,000 in student loan debt and maximizing her contributions to her retirement accounts. She contributes the maximum $23,000 to her 401(k) annually and an additional $6,500 to her Roth IRA. Anya estimates she can increase her annual savings rate by $5,000 by year 4, and by an additional $3,000 to $8,000 each year after that. However, Anya is unsure if she can achieve her early retirement goal if she prioritizes debt repayment and saves aggressively now. At what present value would her future savings need to be to support her desired lifestyle, and is her current plan on track? Solution: By using the Present Value Calculator, Anya can project the present value of her future investment returns needed to meet her retirement goals, considering her current savings rate and anticipated debt paydown. By entering her target retirement age, desired annual income in retirement, expected inflation rate (3%), and assumed rate of return on investments (7%), Anya can determine the lump sum needed at retirement and then back into the present value of her future savings. Using a conservative estimate, she discovers that her projected savings will need to generate approximately $2,000,000 in present value at retirement age. ROI: Anya discovers her current plan, while aggressive, falls short of her early retirement target. She is presented with alternative scenarios. Scenario 1: Anya can make an extra $12,000 principal payment on her student loans each year, which will cut nearly $85,000 of interest paid and shave off 5 years of the loan. She can then use those funds toward investing. Scenario 2: Anya starts a small side hustle that generates $20,000 per year and invests 50% of that income into after-tax brokerage investments, and she uses the other 50% towards loan repayment. Because of this, Anya learns she is on pace to retire 3-5 years earlier than anticipated, which generates approximately $150,000 to $250,000 in additional retirement income because of compounding growth. Description: Can I really retire early while aggressively paying off student loans? Use this calculator to find out! Category: Lead Gen