Do you ever get worried about the tax bomb? What is your strategy to mitigate the tax bomb once you’ve reach 25 years and the debt is forgiven?
Assuming you’re making less than $130k USD equivalent (therefore it’s $0/mo under IDR)
Those with federal student loans living and working overseas
byu/Dry-Chemical-9170 inStudentLoans
Posted by Dry-Chemical-9170
1 Comment
Just gotta plan ahead for it. If you’re using FEIE and your payments are $0 then theoretically the tax bomb should be significantly less impactful than if you were paying down the loans over the entire time from a cash flow perspective.
Obviously a lot of factors to look at but you want to minimize the amount that the balance grows so you may want to consider RAP when it becomes available to make sure the balance doesn’t keep growing (interest subsidy).