Debts Doctor - Calculator

1. Read through our "Input and Graphs Glossary" to understand how the inputs in the model affect the calculator

2. Enter your personal numbers as instructed and/or our suggested values available in the "input glossary"

3. Press "Calculate"

4. Click on the "Results" section to view the amounts that you can expect to pay under the different loan repayment plans and to view your estimated net worth in 10, 20, 30, and 40 years

5. Go to the "Graphs" section to visually view how your estimated loan payments and net worth will change over time. Refer to the "Graphs" section in the "Input and Graphs Glossary" to better understand the outputs in the figures.

6. Go to the "Amortization Table" tab to get an in depth break down of how all of the numbers resulted in the outputs that you are seeing.

I. INPUTS

Resident Salary - Amount you plan to earn as a resident. This value will increase by 3% a year while you are a resident/fellow depending on the number of "years in residency" you selected.

Attending Salary - Amount you estimate that you will earn as an attending. This value will increase by 3% a year.

Tax Rate - Input your effective tax rate. This varies significantly by state and your income level, but generally, expect it to be between 35-40% for the average physician, higher if you are in California or New York. You can type "Effective tax rate at XXX income in XYZ state" into a search engine and usually get an estimate.

Unsubsidized Loan Amount - Unsubsidized loan amount that you borrowed during your training (most common loan borrowed for medical school)

Loan Rate - Interest rate on your loan. Use the average rate of all of your loans

Payment Plan - Select PAYE vs SAVE vs STANDARD to see how the different payment plans would affect your estimated net worth.

Family Size - Include spouse + number of dependent children. This affects your monthly loan repayment.

Spouse Income - The amount your spouse makes, if applicable. This value will increase by 3% a year. If filing your taxes JOINTLY, this number WILL affect your monthly loan repayments.

Tax Filing - Select "Joint" if you are filing your taxes with a spouse or "Separate" if you file by yourself or separately from your spouse. This selection will affect your monthly loan repayment (higher payments if you file jointly and your spouse brings in income)

Starting Savings Amount / Starting Investment Amount - Enter the amount you have in savings and/or amount you have in an investment account BEFORE entering residency.

Percentage of Income Saved or Invested as a Resident - Amount of your resident salary AFTER taxes that you think you will be able to save. Depending on where you live between 5-15% is a fair estimate. Most residency programs force you to contribute some amount to a retirement plan.

Percentage of Income Saved or Invested as an Attending - Amount of your attending salary AFTER taxes that you think you will be able to save. This really depends on your spending and how much you earn, but about 15-30% is probably a fair estimate.

Percentage of Savings Invested Each Year - The percentage of your AFTER tax savings (based on the "percentage of income saved or invested as an attending selected above) that you expect to put in an investment account each year (vs hold in cash). We think that between 50%-80% is a fair estimate. The higher the percentage, the more risky your portfolio would be.

Average Return on Investment - The yearly rate of return that you expect to earn in your investment accounts. This is one of the most important contributors to your future net worth. About 5% per year would be conservative, 7% would be moderate, and 10% or greater would be aggressive. I recommend using between 5%-7% to get a conservative estimate.

Years of Residency - Number of years that you will be in residency AND fellowship.

II. GRAPHS

Monthly Loan Payment On Each Payment Plan - Hover over the graph to view the estimated monthly loan repayment with each plan and tax filing status during a particular year

Cumulative Amount Paid on Loan with Each Payment Plan - The total estimated amount that you have spent on loan repayment at the beginning of each interval year under each payment plan and tax filing status.

Loan Balance Overtime - Your loan balance at the beginning of each interval year after making payments. During the first few years, your income driven payments may not even cover the interest payments, which is why the loan balance does not decrease or will even increase despite payments.

Net Worth and Purchasing Power Over Time - This figure shows your estimated net worth over 10 year intervals. Due to inflation, the value of the dollar decreases with time (I.E. $1,000 today is worth more than $1,000 dollars in 10 years). To account for this, we created a value that illustrates what your estimated net worth in 10, 20, 30, 40 years can purchase in todays value of the dollar, which is shown by the Green line.

Net Worth at Different Return on Investment Rates - The return on investment rate is the average yearly percentage increase of your investments. This figure illustrates how your net worth would change based on conservative return on investment rates (5%) vs extremely aggressive return on investment rates (12%). Higher rates are ideal, but in reality, targeting aggressive return on investment rates will result in a higher risk investment portfolio.

1. This tool was designed for unsubsidized federal loans

2. The tool assumes that your loans are primarily from your graduate studies. This is important because under the new "SAVE" plan, undergraduate loan payments are based on 5% of your discretionary income instead of the usual 10% of your discretionary income.

3. It assumes that your non-invested savings (cash) will generate a 1% return per year (via interest payments from a bank)

4. It assumes that you and your spouse's salary (if applicable) grow at an average rate of 3% per year

5. The estimated total net worth does NOT account for capital gains taxes accrued in your investment accounts. It assumes that the amounts in your investment accounts are held long term or held in a post-tax retirement account

6. Future real estate purchases are not considered separately in this model. They are assumed to be part of your "investment account".

7. The net worth calculation assumes a constant average yearly return on investment throughout your entire life.

8. The net worth in today's dollars assumed a 3.1% average inflation rate per year

At Debts Doctor, we are committed to providing a free tool to assist you with loan repayment. We are NOT financial advisors and this is NOT financial advice. If you have concerns about the accuracy of the tool, please contact us! We are unable to provide personal advice on loan repayment. While we have done our best to ensure this tools accuracy, we are not liable for any inaccuracies or misleading numbers that this tool may provide. Additionally, we DO NOT collect or store your inputs into the calculator. Things change quickly in this space! We also urge you to do your research before making a financial decision.