Inflation has been persistently high, supply chain issues could impact holiday shopping, and proposed legislation might eliminate backdoor Roth conversions and mega backdoor Roth conversions. What questions do you have about the latest financial news or personal finance in general?
As a reminder, three participants in the Q&A will be chosen at random to receive a matte black Money Guy tumbler!
This was a lot of fun, thanks for joining me everyone! Our three tumbler winners are Mary, Mike, and Nick. I've sent each of you an email letting you know you won. If you didn't win a tumbler today, we will definitely be doing another Q&A in the future so stay tuned! And we also give away tumblers on the show every other Tuesday. Thanks again to everyone that participated in the Q&A!
It’s October! Do you know what that means?
Only 2 more months until Net Worth By Age!
Hi Daniel! I'm curious about the money guy take on ESG investing, trying to put my dollars to work in companies that align with my values. Can this be part of a reasonable retirement plan? How does this type of investing compare to the more standard index target retirement funds? Thanks in advance!
What is the best way to balance trying to reach the max retirement contributions and trying to fund high dollar items, ie home renovations and other quality of life items? I am in my mid-twenties (50k pre-tax) and would not be able to max my Roth and HSA contributions without having a slim budget. I am also using my employer match at 6%
I’m wondering where in your three bucket strategy you should put REITS. I feel like it should be in a Roth because of the high amount of dividends but on the other hand they probably won’t grow as much as stocks.
Daniel, I don’t really understand crypto and haven’t put any money into in. Am I missing out on a great investment by rebuking it?
Many times I have seen Money Guys, B&B, present a chart attributed to you, showing what it takes to become a Millionaire by age 65 starting at various ages today. I seems like this is really a moving target. Clearly, a 65yo (year old) with a million today has a much larger buying power that a 30yo today who dutifully saves to become a millionaire in 35 years. And the Millionaire that today's 65yo saw as a child had a much larger buying power. The buying power degrades with time given inflation; for instance, at a 2% inflation rate, the 30yo will experience about 99% price inflation or 49% erosion of his/her buying power. Wouldn't be a good idea to set more realistic expectation? How about putting up a constant buying power savings chart.
What are the best resources for health insurance during early retirement? How to know how much to budget for health insurance if you want to retire early?
What is the right mix between pre-tax contributions and Roth contributions to ensure you have maximum flexibility using the three bucket strategy you all discuss for retirement.
Daniel, how do you feel about the robot vesting trend? The automatic tax loss harvest features look enticing. Am I missing something?
What role does investing in crypto play vs traditional mutual fund / ETFs in hedging inflation?
What’s better in 2022: maxing out pretax 401k contributions to be under the child tax credit limit (mfj less than $150k, two kids under six) or maxing out 401k Roth contributions? Approx 20 years from retirement
I need to find a support group for spending my saved money and passive income. Do you have clients with similar issues and how do you help them. 39, Married, Dual Military Pension and very frugal.
Do the Roth changes only affect IRAs or is it also on 457bs? My earnings are above the income limit to contribute directly to a Roth IRA, but I can contribute to my work Roth 457b. Is it better to just contribute to the 457b and bypass all the hassle of doing a backdoor Roth conversion?
Open enrollment is going on in our company and we have to decide on the HSA plan and funding. I've been investing in my HSA since it started and doing well, but it's hard to "spread the word" without feeling like I'm bragging. What's a good way to share the power of investing in the HSA for the future? As pointed out in previous shows, most people will only put in what they think they will use for the year and are missing out on some powerful tax-free growth. I've looked into some of the older Money Guy videos and articles, but they are either little snippets or a few years old. Not bad, but not as good as the recent content that has been put out.
Knowing that international and bond funds have not performed well for a while, does it make sense to continue investing in those two types of funds?
When you have Roth v. Traditional accounts - a lot of people talk about them pre-tax post-tax advantages - if you are maxing them out, and can afford to do so, wouldn't that be a larger part of the strategy before moving into traditional investing accounts?
Love the show! What's your opinion on the rise of "financial coaches" commonly found on social media? Do they have their place alongside certified financial advisors/planners, or should all financial coaching be handled by licensed professionals?
Hey Daniel...I know you are only mentioning backdoor Roths, but do you think that is just the beginning? Do you think the Roth option will go away altogether? I currently contribute 6% to my Roth 401K and am looking to start a Roth IRA once I am debt free (beginning of 2023). Thanks for the help. Have a great day.
I am currently at step 7 and looking to build up a taxable account. Should I start simple with just a total us stock index fund or should I mix in international for the foreign tax credit and tax loss harvesting?
i am interested in tax free retirement income steam, i have been doing a mixture of pre-tax 401k and after tax with roth conversion. Let's say backdoor and mega backdoor is completely gone, would it be making more sense to do pretax, or do Roth?
We have marginal tax bracket of 35%, the thought process is 2 x 19500 can save about $12000 to put after tax brokerage account or currently the after tax 401k as of right now.
It is still appealing to get rid of the uncertainly down the road and do Roth, then, the tax burden is also kinda high right now, when adding other FICA tax, etc.
Thanks for your comments and feedback in advance.
In a world of building a better future for our children and ever changing path for what there career could be, should a 529 be the best route or maybe have an IRA or something different as an Avenue of saving for them but having the money free enough to where if they do not go to school they could at least have a down payment for a home?
Hey Daniel, aka FYI by FTE the CFP!
My 403b combines Roth and pre-tax contributions together. Should I put future Roth contributions in a separate fund in an effort to keep Roth money separate from pre-tax money?
How could I get the Money Guys to take me on as a client?
Did $34,192 as a Roth conversion with tax rate of 15.4%. Took my RMD $13436.71. Should I do more with the back door Roth?
Do you know if the proposed legislation still includes changing the marginal tax rates and standard deductions from the tax cut and jobs act?
Aloha! I recently received a 25% raise through a promotion. I'm currently saving for a duplex to "house hack". For the past year, I reduced my Roth 401k contribution to 15% (excluding employer match) to save more cash for a house, but with rising inflation across the board, should I be putting more money aside for day to day expenses? Should I lower my retirement savings rate to save more cash for a duplex?
Wages have really taken off lately and it seems like everyone is hiring. My husband has been a stay-at-home dad for about five years now and is planning on re-entering the workforce in the near future. He will be making considerably less than I do and is considering working only part time. What's the best way for us to use the extra income? We are in our mid-thirties and on step nine of the FOO.
Hey Daniel! My husband and I are needing to buy another car. We have been saving for quite some time to make this purchase. Should we finance the car? Or pay cash?
Our bank isn't open on weekends, and we live in a rural area- about 2 to 3 hours from anywhere we can buy a car. How do you manage a weekend car purchase if you aren't financing and your bank isn't open?
Should I do all Roth? I’m divorced with 2 kids. I’ll have a size able pension when I retire. Online calculator says 1.6 million cash out or about 8k/month payment. I currently have 250k in retirement (80k of this is Roth). Social security should be about 3k/month and I make $145k/yr. I live in California.
What do you think about holding part of a large emergency fund in I bonds? My rudimentary understanding is the quarterly interest is based on the inflation index which seems appealing right now. This money is for possible vehicle replacement in the next 3-5 years.
At what net worth is it a good idea to have an estate plan and not only a will?
Today is my 30th birthday and happy to be fully representing the messy middle with a 1-year-old!
My wife and I have a strong retirement nest egg but are not sure how to navigate college savings.
Granted we have no idea if our child or maybe eventual children will want to go to college.
Currently, we have a 529 plan set up but, is there any value in setting up a different investment account for our child even though it won't have the tax benefits of a 529 we know it won't be penalized if not used for school expenses? what even are my options?
I have a relative who is 55 and is now just starting to get active on building for retirement.
She makes $40k a year at her new job. She will be on moving to step 5 of the FOO as she will be clearing her credit card debt of $1000 this month.
Seeing as she may not be retiring till at least 70, would you still recommend a target date retirement index fund for her ROTH IRA if the percentage of bonds in the fund will be higher, as opposed to going aggressive into a sole S&P500 index fund?
If you are older than your spouse by several years, should you focus on Roth conversations with your account first, even if your IRA is lower in value.
Has inflation affected the calculation used to decide whether or not to delay social security? If the cumulative COLA is greater than the delayed benefit, then is it worth collecting sooner?
My wife is a school teacher and will retire with a pension. How do you account for pension income when looking at the 20/25% of income?
My company doesn't have a 401k match. As long as I can still meet my other financial goals, is there any reason to dollar cost average into my Roth 401k over the whole year instead of just filling it up in the first six months? (I do this with my Roth IRA and wondered if I should do the same with my Roth 401k.) After my two Roth accounts are maxed out I invest in my taxable brokerage account. Thanks for the help!
I'm in step 9 of Foo and I'm doing the 3 bucket strategy. Which accounts do you recommend putting bonds, and growth stocks in?
Should you always roll over your retirement accounts to your new employer? I have a 457b governmental account that allows withdrawals at any age as long as I leave the employer. If I take a position elsewhere, I would rather not rollover to a new type of account and simply keep with my previous employer. Any cons to watch out for with this method?
Curious to know if Roth contributions are more valuable with the proposed legislation… for someone who is 28 does it make sense to go over the 30% combined marginal tax bracket to be able to get Roth dollars
FTE Daniel: How do you recommend valuing a pension in retirement planning? I will be fortunate enough to be eligible for a pension after serving >20 years in the military. I will start receiving the pension when I retire from the military at age 43 (I am currently 37). My wife and I are diligent savers and investors and have accumulated approximately 900K across taxable and non taxable accounts, but am unsure how to account for the pension. Appreciate your guidance and love the show!
Can my spouse have a Family HSA with the intention to max it out at 7200 if I elect a low deductible plan at my work and he elects the high deductible plan at his?
Hi Daniel, what advice can you give about tax burden implications for a brokerage account? My wife and I buy and hold the Fidelity S&P 500 index fund and the Fidelity Large Cap Index Fund. Thanks!
I am thinking about getting a new car since the used car market is crazy right now. I make more than enough where the truck I want would be well un 10% of my annual and i would still be able to fully max out retirement acounts and save more on top of that. But as my first big purchase it feels werid to be spending so much? Any suggestions on how to get over the fear of spending?
What is the best way to use a Donor Advised Fund as part of step 7-9. Is it best to think of those funds as step 8 pre-paid future expenses? What else falls into step 8 as we are saving 15% beyond the 19.5k and Roth/HSA are maxed as well...
Daniel - I understand the power of contributing to an HSA, now that open enrollment is coming up, what considerations other than the tax advantages should I look at when deciding if a high-deductible plan is a good fit for my family? My wife and I are already in step 5 (sans the HSA) of the FOO. Both of us worked outside the US until 2014 so we feel we are a little behind in retirement savings.
I retired last year and have a paid off house and retirement of about a million. 10% is in Roth and 90% in IRA. How can I tell if doing Roth conversions would be helpful to me during these initial few years of retirement?
Other than the Moneyguy show, what other Personal Finance podcasts are worth subscribing to?