Thanks so much for everyone who joined us, and congrats to the three tumbler winners, Joe B, Garrett S, and Casey! You will all be emailed shortly. I had a lot of fun, and I hope you all did as well!
Sorry to ask such a hard hitting question, but how excited does Bo really get? Is he typically that cheerful and excited on the day to day? Once again sorry for asking the real questions but we need answers!
We all get super excited on show days! They're just so much fun. The Clark Howard episode was one that we were all REALLY excited for. And of course any show where B&B get to dress up in costume. But Bo really is excited for every show!
Thanks! Answering the real questions out here. Glad we got to the bottom of it. I appreciate all you and the team do. Been a huge fan for a years and I look forward to many more.
I'm about to buy Treasury I-bonds given their fantastic rate of return for the next 6-12 months. Are there other bonds or commodities that I'd be wise to consider given the market?
With Biden hinting at some student loan forgiveness. Would it be more wise to hold off on refinancing student loans to a lower percent now? Rates from private lenders have already increased by .5% since he announced the last pause on student loan interest in March and I would hate to miss a chance to lock in a 3.5 percent interest rate on my loans but also don’t want to miss out on potential forgiveness. Would love to know your thoughts
Great Question - I'm following for quality answers! Many reports I've seen discuss 'positive' impacts of 'additional spending' options for households and the 'lower debt-to-income' ratio as it relates to retail spending and housing markets, respectively. What I haven't come across have been solutions to new student loan borrowers and the impact it'll have on educational costs...
As a kid (now 69), I recall folks keeping their bearer bonds in their safety box (along with a pair of scissors). And in those days, rates were high enough for this to work. At lower rates, this is so much harder.
We ran across a RE investment group about 10 years ago and put a fair portion of our NW into MF syndications; now we have several, they are a bit like bonds, pay a pretty good rate (on average) and return more at the end; rinse & repeat.
I've always thought it is great to aspire to reaching that point, but the much larger nest egg needed to make that possible made it unfeasible, or at least required delaying retirement longer than I was comfortable with. In the end I think its about balance. We each need to decide what point we feel we are financially secure enough. Although I suppose if interest rates stay high enough, interest could do better than the 4% rule!
Where does Employee Stock Purchase Plan (ESPP) fall into the Financial Order of Operations (FOO)? We have the ability to buy company stock at 15% discount every quarter. Maximum purchase is 10% salary.
Not an advisor, but as someone who has been burnt by employee stock before, sell ASAP and diversify LOL - barring some wild swings you probably won't have all that much in gains to worry about, and by the time another 9 go by, could just as easily be looking at losses.
You pay your ordinary income tax rate on the day they vest. My point was that three months later you’re unlikely to see any major capital gains, so I’d rather unload them immediately then hold for a year and risk capital losses.
I have heard the Money Guy team say that if your marginal tax rate (fed+state) is less than 25%, contribute to Roth. If it's 30% or higher, contribute to traditional. Doesn't this decision really come down to expected marginal tax rate in retirement? Do you have any tips for estimating taxes in retirement, or rules of thumb?
My question comes from this situation. Take a person who makes a steady income during their whole working life, but is never ultra high income. They pay a marginal rate of 24% while working, so they contribute to Roth as you suggest. When they retire, they will have a ton of Roth money and a bit of traditional from their employer match. In retirement now, most of their income will be coming from Roth assets. Depending on their state, they might not be paying taxes on social security income. In this situation, they will likely be in a much lower tax bracket in retirement than while working. With this in mind, shouldn't they actually have invested more heavily in Traditional to minimize taxes?
It's impossible to know exactly what your tax rate will be in retirement of course, and in some cases it is difficult to even project. The rule we have is based on tax rate now since everyone can figure that out, although being in a lower tax bracket now may not necessarily mean Roth contributions are the best option. The scenario you bring up, where someone accumulates a large amount of Roth and is in a super low tax bracket in retirement, is definitely something that should be taken into account. That would fall under account structure; if you have a ton in Roth, you'll probably be in a lower tax bracket, so there could be some bug advantages to contributing more to pre-tax. A wrote an article a few months back about the different considerations that go into whether or not to contribute to Roth: https://fyi.moneyguy.com/p/should-i-contribute-to-roth-accounts?s=w
Great question, you'll want to look into financial power of attorney and ensure they are durable so they remain in effect if the individual becomes incapacitated. It's important to make sure whoever has control over decisions is someone very trusted by the family who has their best interests at heart. So many older Americans get taken advantage of financially, even without any diminished mental capacity. It's best to have a plan before they decline cognitively so they can clearly articulate their wishes and you can get a plan in place that reflects them. A visit with an estate attorney and a fee-only financial advisor might not be a bad idea, either.
I have IRA's, 401K's and a taxable account with other mutual funds. Every year I get hit by large Capital gains in my taxable investments that I have to pay taxes on (a first world problem). Can you make any suggestions on how to do tax planning to ensure I don't find myself on the bad side of the IRS?
Increase your withholding, or pay at least 110% of the tax you owed the previous year for the safe harbor. Could also go the estimated taxes route but it's more work if you have W2 income anyway.
It might be too late for that- the cost basis is such that I would have significant Captial gains if I tried to convert to an ETF. ETF's were not originally available.
For my monthly investing, is it better to use a mutual fund instead of an etf, so that all of my money is invested? I'm unable to buy fractional etf shares through my brokerage firm.
There are pros and cons of mutual funds and ETFs. One big pro of mutual funds is that you can invest a dollar amount, which enables you to set up automatic investing of the same amount every month. Mutual funds trade once per day, and ETFs trade throughout the day like stocks (this could be a con or a pro depending how you look at it). If you are investing in a tax-advantaged account, the mutual fund may be worth considering; in a taxable account, an ETF may be more tax-efficient.
With interest rates being so low for so long, we may have forgotten how to make money on our money with low risk. As the market evolves what should a good financial mutant be doing to maximize the return on our cash allocation?
Daniel, I have a question regarding money and marriage. Can you explain briefly about prenuptial agreements, specifically what is commonly included in them and do these legal contracts hold up when going through a divorce?
Good Morning Daniel! With the current inflation making I-Bonds and TIPS look great right now, should investors be looking to add more to their long-term (10+ years) portfolios now, or do equities still seem like the better long term option?
My wife and I want to retire in our 50's. We are in our 20's (I'm 29 she is 24) right now. At the moment we are close to maxing out our employer sponsored accounts and are completely maxing out our Roth accounts. We are investing around 40% of our gross to these accounts. How do we know when to start putting money into a taxable account to bridge the gap between beginning retirement and being able to access those tax advantaged accounts?
My wife and I are both 35, and both have pensions, 403bs, and Roths, with the 403b and Roths funded maximally each year. She qualifies for a 457 and I do not. We both are unsure we sent to stay at our companies for the long term and would like to retire around age 45-50. Are there any downsides to hyper-saving after these accounts in her 457 instead of a brokerage account? Is this money that only she can access if I retire early and she does not?
I currently max out a Roth IRA, HSA and contribute to a Roth 401k. Does it make sense to just contribute to those tax free buckets or should I have a taxable account even though I’m not maxing out my 401k? I currently contribute about 30% gross to retirement
Financial advice often recommends investing in an index fund, but financial advisors spend a lot of effort creating and recommending diversified portfolios. What gives?
Diversified portfolios often do contain index funds, so the two aren't necessarily at odds with each other. Financial advisors can create a custom plan that is more personalized to your financial situation and retirement goals than a target date fund or index fund may be. We practice what we preach and use index funds as a large part of our investment strategy. Often you may hear advisors suggest index funds or target date funds before you reach a level where a more personalized portfolio makes sense, but that absolutely doesn't mean that a personalized portfolio won't also utilize index funds.
I'm moving to a HCOL area and will want to buy a house. Houses may be out of my price range, but condos won't. Can condos be treated the same way in the FOO as houses? Is it a good idea to hold onto it later and rent it out when I upgrade?
In TMG reddit page there is an entire discussion in which many users, which seem knowledgeable, are asserting that Traditional is always better than Roth (401K) with few exceptions. The reasoning is that almost always retirees have tax rates below 12%. Also, that you can convert to Roth later in years of low income (e.g. one of the spouses got laid off). Could you explain if this is a flawed logic?
Covid gave me a chance to reevaluate our retirement planning. I have recently realized how “retirement rich” I am but how little I have access to for the next 10 years or so. After reading more (and listening to MG podcasts) I finally opened a brokerage account to start filling that bucket. I still have my employer retirement and Roth going strong…would it make sense to back off on those and focus more on the brokerage account to even out these buckets a little more?
Loved the Clark Howard show. What kind of investment should a person make with rollover money from previous jobs that just sits there?. Currently in Target Retirement funds.
Hi Daniel! What’s your super hero avatar? My question, how can i compare between after tax and pre tax, from a reference frame perspective. or how can i calculate the after tax value of my pre tax bucket. Just so that i can troll my co-workers! :)
Hi Daniel! What’s your super hero avatar? My question, how can i compare between after tax and pre tax, from a reference frame perspective. or how can i calculate the after tax value of my pre tax bucket. Just so that i can troll my co-workers! :)
What's a good rule of thumb for how much of one's gross or take home pay one should spend on leisurely things? This is assuming you are already meeting the 25% savings goal.
I like the flexibility regarding the down payment on your 1st house. I understand the Money Guy show says 20% down isn’t needed for your 1st house. What if I have been saving for a while, and I just started watching your show over the past year, and I already have 20% saved? Should I put 20% on the house or invest the excess? I’m 30 years old and about to jump into the messy middle!
I am 33 years old and married. I believe I have a savings addiction. I ran the numbers and found myself saving close to 40% of my salary. By savings I mean my TSP contribution, 2 brokerage accounts with Ally, 1 brokerage account with Fidelity, and 2 savings account. Salary is around $64K.
Any suggestions on getting myself to spend more money and save less?
Hey Daniel, love the FYI by FTE! I am wanting to start investing just a little bit I to my sons college fund, but I am not quite at that step yet. Is it ever ok to skip steps in the FOO? Thanks!
Morning Daniel: Question on my mortgage. I am a 36 year old physician and was lucky enough to buy my first home with no money down and avoided any PMI by taking a 7/1 ARM (30 year) at 2.875%. In my situation, does it make sense to take some of my 25-30% savings rate and start putting it towards the mortgage to balance this for the future likely higher interest rate?
With housing prices at these highs and stock markets dipping I am tempted to cash out the house and move/ rent somewhere that would keep my housing cost in a similar place. Why is this a dumb idea? It probably is but can you tell me some reasoning to not do it?
I'm 37 and would like to retire by 50. How early should I start planning for retirement and the amount of money I will need in after-tax or bank account to bridge the gap between being able to access retirement accounts?
Realizing my EF is a bit inflated, but also have a couple of mid-term maybes on the horizon, OK to trickle money into the market with my normal monthly investments or silly to keep too much on the sidelines in this interest rate environment?
Hi Daniel, I have a question about Social Security. I am 10 years younger than my husband, but my Social Security payment is projected to be higher than his. I understand that if I wait until Full Retirement Age, he can claim the spousal benefit. But how does that work if he will be eligible to claim Social Security before I am?
There have been conversations about I bonds recently. How does the team feel about holding an emergency fund in I bonds? I know it would have to be laddered over several years because of the $10,000 limit per person, but would it be more advantageous over "High" yield savings accounts? Pros/Cons? It seems like a safe place to store your money and protect it against inflation. I know you would have to factor in the first year not being able to withdraw the money, which is why the ladder approach helps, and then the rule about losing the last three months of interest if cashed out before five years.
That's exactly what you should be using I bonds for. For some reason TMG keep getting hung up on the one year lockup. I agree they aren't great for people who dip into their emergency fund regularly. But if you are the type of person who keeps a month or two float in checking anyway and another month or so in savings that you never touch, (laddered) I bonds are fantastic for the rest of your emergency fund. Assuming you keep not touching it, it's guaranteed to never lose value. And at some point the fixed rate will likely go up again, which will be nice when the inflation ends. I think it's an individual thing though. I wouldn't recommend them to someone who has "emergencies" every few months or who doesn't have other savings for reasonably predictable unpredictable expenses like car or home repairs.
In this environment, does it make more sense to hold cash to prepare for a potential recession (still dollar cost averaging into tax advantaged retirement accounts) or should that cash be deployed into investments?
Is it ever a good idea to keep your whole life policy? I’ve had a $25,000 policy for over 30 years and the dividends pay the premiums so it’s not costing me anything. I am single with adult children.
I've been escrowing what would be my student loan payments and future expenses(expected auto repairs/insurance, etc) - should I instead invest that knowing that the current Student Loan rate is 0% and in forbearance? I'm already saving more than 25% of my income and maxing my roth IRA/HSA.
I’m switching from public sector to private sector. Alongside a 50% increase in pay, I will now have access to an ESPP. The company is a healthcare organization that I presume will have typical returns for the market over the next few years, but the program only ends up being a 5% discount on the stock. What should I keep in mind when evaluating whether to participate and at what amount?
Hi everyone! I am looking for advice on where to put my deceased mom's pension money. The pension plan is closing and I want to start a fun for my 8 month old. I have already started a 529 for him, but are there other good options? Thank you!
Thanks so much for everyone who joined us, and congrats to the three tumbler winners, Joe B, Garrett S, and Casey! You will all be emailed shortly. I had a lot of fun, and I hope you all did as well!
Daniel, you did an excellent job hosting with Brian this week!! Can you co-host again? Love the show, and I listen every week. Thank you all!
Sorry to ask such a hard hitting question, but how excited does Bo really get? Is he typically that cheerful and excited on the day to day? Once again sorry for asking the real questions but we need answers!
We all get super excited on show days! They're just so much fun. The Clark Howard episode was one that we were all REALLY excited for. And of course any show where B&B get to dress up in costume. But Bo really is excited for every show!
That Clark Howard show was very fun, never heard of him prior but immediately subscribed to his podcast!
Thanks! Answering the real questions out here. Glad we got to the bottom of it. I appreciate all you and the team do. Been a huge fan for a years and I look forward to many more.
Bo is really excited you asked that question...
I'm about to buy Treasury I-bonds given their fantastic rate of return for the next 6-12 months. Are there other bonds or commodities that I'd be wise to consider given the market?
Subscribed. Wondering if I bonds would be an option for emergency fund parking during inflationary times.
Like them or covered call etfs??
Why is there no FTE DAN Tik Tok to follow for exclusive personal finance tips?
With Biden hinting at some student loan forgiveness. Would it be more wise to hold off on refinancing student loans to a lower percent now? Rates from private lenders have already increased by .5% since he announced the last pause on student loan interest in March and I would hate to miss a chance to lock in a 3.5 percent interest rate on my loans but also don’t want to miss out on potential forgiveness. Would love to know your thoughts
How would student loan forgiveness affect the economy?
Great Question - I'm following for quality answers! Many reports I've seen discuss 'positive' impacts of 'additional spending' options for households and the 'lower debt-to-income' ratio as it relates to retail spending and housing markets, respectively. What I haven't come across have been solutions to new student loan borrowers and the impact it'll have on educational costs...
Is there an option to have an annual checkup and pay an hourly fee with Abound Wealth while in the wealth accumulation phase?
I would be interested in this!
With I bonds becoming relevant again and the rates changing again in May, is this a good semi liquid investment?
Hi FTE. What is the Money Guy Show think of using only dividends to live off of instead of the typical 4% drawdown method?
Oooo, great question. I’ve thought of doing the same.
As a kid (now 69), I recall folks keeping their bearer bonds in their safety box (along with a pair of scissors). And in those days, rates were high enough for this to work. At lower rates, this is so much harder.
We ran across a RE investment group about 10 years ago and put a fair portion of our NW into MF syndications; now we have several, they are a bit like bonds, pay a pretty good rate (on average) and return more at the end; rinse & repeat.
I've always thought it is great to aspire to reaching that point, but the much larger nest egg needed to make that possible made it unfeasible, or at least required delaying retirement longer than I was comfortable with. In the end I think its about balance. We each need to decide what point we feel we are financially secure enough. Although I suppose if interest rates stay high enough, interest could do better than the 4% rule!
Where does Employee Stock Purchase Plan (ESPP) fall into the Financial Order of Operations (FOO)? We have the ability to buy company stock at 15% discount every quarter. Maximum purchase is 10% salary.
Free money is free money. It would be after your 401(k) match.
I should add that there is only a 3 month vesting period before it could be sold. We plan on holding for a year or more though for LTCG.
Not an advisor, but as someone who has been burnt by employee stock before, sell ASAP and diversify LOL - barring some wild swings you probably won't have all that much in gains to worry about, and by the time another 9 go by, could just as easily be looking at losses.
Holding for a year lets you pay the much lower capital gains tax rate instead of ordinary income tax rates. Huge difference.
You pay your ordinary income tax rate on the day they vest. My point was that three months later you’re unlikely to see any major capital gains, so I’d rather unload them immediately then hold for a year and risk capital losses.
I have heard the Money Guy team say that if your marginal tax rate (fed+state) is less than 25%, contribute to Roth. If it's 30% or higher, contribute to traditional. Doesn't this decision really come down to expected marginal tax rate in retirement? Do you have any tips for estimating taxes in retirement, or rules of thumb?
My question comes from this situation. Take a person who makes a steady income during their whole working life, but is never ultra high income. They pay a marginal rate of 24% while working, so they contribute to Roth as you suggest. When they retire, they will have a ton of Roth money and a bit of traditional from their employer match. In retirement now, most of their income will be coming from Roth assets. Depending on their state, they might not be paying taxes on social security income. In this situation, they will likely be in a much lower tax bracket in retirement than while working. With this in mind, shouldn't they actually have invested more heavily in Traditional to minimize taxes?
Thanks!
It's impossible to know exactly what your tax rate will be in retirement of course, and in some cases it is difficult to even project. The rule we have is based on tax rate now since everyone can figure that out, although being in a lower tax bracket now may not necessarily mean Roth contributions are the best option. The scenario you bring up, where someone accumulates a large amount of Roth and is in a super low tax bracket in retirement, is definitely something that should be taken into account. That would fall under account structure; if you have a ton in Roth, you'll probably be in a lower tax bracket, so there could be some bug advantages to contributing more to pre-tax. A wrote an article a few months back about the different considerations that go into whether or not to contribute to Roth: https://fyi.moneyguy.com/p/should-i-contribute-to-roth-accounts?s=w
I say redo your future tax math as single not married.
What safeguards can you put into place to protect an investor who might be developing dementia?
Great question, you'll want to look into financial power of attorney and ensure they are durable so they remain in effect if the individual becomes incapacitated. It's important to make sure whoever has control over decisions is someone very trusted by the family who has their best interests at heart. So many older Americans get taken advantage of financially, even without any diminished mental capacity. It's best to have a plan before they decline cognitively so they can clearly articulate their wishes and you can get a plan in place that reflects them. A visit with an estate attorney and a fee-only financial advisor might not be a bad idea, either.
Thanks Daniel.
I have IRA's, 401K's and a taxable account with other mutual funds. Every year I get hit by large Capital gains in my taxable investments that I have to pay taxes on (a first world problem). Can you make any suggestions on how to do tax planning to ensure I don't find myself on the bad side of the IRS?
Increase your withholding, or pay at least 110% of the tax you owed the previous year for the safe harbor. Could also go the estimated taxes route but it's more work if you have W2 income anyway.
What about holding a similar etf in your taxable account and mutual funds in your tax advantaged accounts?
It might be too late for that- the cost basis is such that I would have significant Captial gains if I tried to convert to an ETF. ETF's were not originally available.
For my monthly investing, is it better to use a mutual fund instead of an etf, so that all of my money is invested? I'm unable to buy fractional etf shares through my brokerage firm.
There are pros and cons of mutual funds and ETFs. One big pro of mutual funds is that you can invest a dollar amount, which enables you to set up automatic investing of the same amount every month. Mutual funds trade once per day, and ETFs trade throughout the day like stocks (this could be a con or a pro depending how you look at it). If you are investing in a tax-advantaged account, the mutual fund may be worth considering; in a taxable account, an ETF may be more tax-efficient.
Thanks for the answer.
For me. It depends on the account type. I personally avoid MTFs in my Brokerage Account.
With interest rates being so low for so long, we may have forgotten how to make money on our money with low risk. As the market evolves what should a good financial mutant be doing to maximize the return on our cash allocation?
What are your thoughts around holding bonds in an increasing rate environment? Are there other options for fixed income?
At what point in our financial journey is it worthwhile considering switching from a low cost target date fund to another strategy?
Daniel, I have a question regarding money and marriage. Can you explain briefly about prenuptial agreements, specifically what is commonly included in them and do these legal contracts hold up when going through a divorce?
Good Morning Daniel! With the current inflation making I-Bonds and TIPS look great right now, should investors be looking to add more to their long-term (10+ years) portfolios now, or do equities still seem like the better long term option?
My wife and I want to retire in our 50's. We are in our 20's (I'm 29 she is 24) right now. At the moment we are close to maxing out our employer sponsored accounts and are completely maxing out our Roth accounts. We are investing around 40% of our gross to these accounts. How do we know when to start putting money into a taxable account to bridge the gap between beginning retirement and being able to access those tax advantaged accounts?
My wife and I are both 35, and both have pensions, 403bs, and Roths, with the 403b and Roths funded maximally each year. She qualifies for a 457 and I do not. We both are unsure we sent to stay at our companies for the long term and would like to retire around age 45-50. Are there any downsides to hyper-saving after these accounts in her 457 instead of a brokerage account? Is this money that only she can access if I retire early and she does not?
Is the S&P500 overly concentrated, and if so, how does that impact investors who primarily use an S&P500 index fund for their retirement investments?
I currently max out a Roth IRA, HSA and contribute to a Roth 401k. Does it make sense to just contribute to those tax free buckets or should I have a taxable account even though I’m not maxing out my 401k? I currently contribute about 30% gross to retirement
Financial advice often recommends investing in an index fund, but financial advisors spend a lot of effort creating and recommending diversified portfolios. What gives?
Diversified portfolios often do contain index funds, so the two aren't necessarily at odds with each other. Financial advisors can create a custom plan that is more personalized to your financial situation and retirement goals than a target date fund or index fund may be. We practice what we preach and use index funds as a large part of our investment strategy. Often you may hear advisors suggest index funds or target date funds before you reach a level where a more personalized portfolio makes sense, but that absolutely doesn't mean that a personalized portfolio won't also utilize index funds.
You can diversify across differing index funds
I'm moving to a HCOL area and will want to buy a house. Houses may be out of my price range, but condos won't. Can condos be treated the same way in the FOO as houses? Is it a good idea to hold onto it later and rent it out when I upgrade?
In TMG reddit page there is an entire discussion in which many users, which seem knowledgeable, are asserting that Traditional is always better than Roth (401K) with few exceptions. The reasoning is that almost always retirees have tax rates below 12%. Also, that you can convert to Roth later in years of low income (e.g. one of the spouses got laid off). Could you explain if this is a flawed logic?
Thank you!
Covid gave me a chance to reevaluate our retirement planning. I have recently realized how “retirement rich” I am but how little I have access to for the next 10 years or so. After reading more (and listening to MG podcasts) I finally opened a brokerage account to start filling that bucket. I still have my employer retirement and Roth going strong…would it make sense to back off on those and focus more on the brokerage account to even out these buckets a little more?
Loved the Clark Howard show. What kind of investment should a person make with rollover money from previous jobs that just sits there?. Currently in Target Retirement funds.
Hi Daniel! What’s your super hero avatar? My question, how can i compare between after tax and pre tax, from a reference frame perspective. or how can i calculate the after tax value of my pre tax bucket. Just so that i can troll my co-workers! :)
Hi Daniel! What’s your super hero avatar? My question, how can i compare between after tax and pre tax, from a reference frame perspective. or how can i calculate the after tax value of my pre tax bucket. Just so that i can troll my co-workers! :)
What's a good rule of thumb for how much of one's gross or take home pay one should spend on leisurely things? This is assuming you are already meeting the 25% savings goal.
I like the flexibility regarding the down payment on your 1st house. I understand the Money Guy show says 20% down isn’t needed for your 1st house. What if I have been saving for a while, and I just started watching your show over the past year, and I already have 20% saved? Should I put 20% on the house or invest the excess? I’m 30 years old and about to jump into the messy middle!
I am 33 years old and married. I believe I have a savings addiction. I ran the numbers and found myself saving close to 40% of my salary. By savings I mean my TSP contribution, 2 brokerage accounts with Ally, 1 brokerage account with Fidelity, and 2 savings account. Salary is around $64K.
Any suggestions on getting myself to spend more money and save less?
Hey Daniel, love the FYI by FTE! I am wanting to start investing just a little bit I to my sons college fund, but I am not quite at that step yet. Is it ever ok to skip steps in the FOO? Thanks!
Morning Daniel: Question on my mortgage. I am a 36 year old physician and was lucky enough to buy my first home with no money down and avoided any PMI by taking a 7/1 ARM (30 year) at 2.875%. In my situation, does it make sense to take some of my 25-30% savings rate and start putting it towards the mortgage to balance this for the future likely higher interest rate?
With housing prices at these highs and stock markets dipping I am tempted to cash out the house and move/ rent somewhere that would keep my housing cost in a similar place. Why is this a dumb idea? It probably is but can you tell me some reasoning to not do it?
I'm 37 and would like to retire by 50. How early should I start planning for retirement and the amount of money I will need in after-tax or bank account to bridge the gap between being able to access retirement accounts?
Realizing my EF is a bit inflated, but also have a couple of mid-term maybes on the horizon, OK to trickle money into the market with my normal monthly investments or silly to keep too much on the sidelines in this interest rate environment?
is it too late to submit a question?
What do you think mortgage interest rates will go to the summer?
do you think it is too late to buy TIPS as the unexpected inflation has already been priced in and now they are no longer a good deal?
Hi Daniel, I have a question about Social Security. I am 10 years younger than my husband, but my Social Security payment is projected to be higher than his. I understand that if I wait until Full Retirement Age, he can claim the spousal benefit. But how does that work if he will be eligible to claim Social Security before I am?
There have been conversations about I bonds recently. How does the team feel about holding an emergency fund in I bonds? I know it would have to be laddered over several years because of the $10,000 limit per person, but would it be more advantageous over "High" yield savings accounts? Pros/Cons? It seems like a safe place to store your money and protect it against inflation. I know you would have to factor in the first year not being able to withdraw the money, which is why the ladder approach helps, and then the rule about losing the last three months of interest if cashed out before five years.
That's exactly what you should be using I bonds for. For some reason TMG keep getting hung up on the one year lockup. I agree they aren't great for people who dip into their emergency fund regularly. But if you are the type of person who keeps a month or two float in checking anyway and another month or so in savings that you never touch, (laddered) I bonds are fantastic for the rest of your emergency fund. Assuming you keep not touching it, it's guaranteed to never lose value. And at some point the fixed rate will likely go up again, which will be nice when the inflation ends. I think it's an individual thing though. I wouldn't recommend them to someone who has "emergencies" every few months or who doesn't have other savings for reasonably predictable unpredictable expenses like car or home repairs.
In this environment, does it make more sense to hold cash to prepare for a potential recession (still dollar cost averaging into tax advantaged retirement accounts) or should that cash be deployed into investments?
Is it ever a good idea to keep your whole life policy? I’ve had a $25,000 policy for over 30 years and the dividends pay the premiums so it’s not costing me anything. I am single with adult children.
I've been escrowing what would be my student loan payments and future expenses(expected auto repairs/insurance, etc) - should I instead invest that knowing that the current Student Loan rate is 0% and in forbearance? I'm already saving more than 25% of my income and maxing my roth IRA/HSA.
With international and bond fund lagging behind equities, is it still recommended to invest in international and bond funds?
I’m switching from public sector to private sector. Alongside a 50% increase in pay, I will now have access to an ESPP. The company is a healthcare organization that I presume will have typical returns for the market over the next few years, but the program only ends up being a 5% discount on the stock. What should I keep in mind when evaluating whether to participate and at what amount?
Hi everyone! I am looking for advice on where to put my deceased mom's pension money. The pension plan is closing and I want to start a fun for my 8 month old. I have already started a 529 for him, but are there other good options? Thank you!