Kevin, of all the CFP TH-cam channels providing financial planning education, yours is my favorite. Your low key, thoughtfully organized delivery, with an occasional mention of California tax implications really hits the target. If I wasn’t a DIY’er or if there was a suitable alternative to AUM, I’d be calling. Thanks for the terrific content!
Thanks for this great video. One thing I regret is not investigating the Roth 401(k). I think I was first offered a Roth in 2008 or thereabouts. I wrongly assumed that, based on income limits for the Roth IRA, that I didn’t qualify. If I’d known the what I know now is likely a common mantra on this channel. I did an MBA in the early 90s and had a great macro teacher who was prone to distractions. One day, he spent 15 minutes talking about 401(k)s versus IRAs. He showed the impact of fees and how to read mutual fund disclosures. The impact of even modest 12b-1 fees over a 30 or 40 year period was stunning. He suggested rolling funds into an IRA every time we change jobs. It was great advice. I took it to a bit of an extreme and ended up changing jobs about every three years, one big driver was taking charge of my own investing. If you have the time-and more importantly the drive-to do it yourself, I think it’s worth considering.
Loved the HSA discussion… I have been doing this for the past five years and I use Google sheets just to put all my expenses per year and then I have a folder for my receipts. What I’ve noticed is some of my receipts have lightened up and you can barely read them… Is there a way I can go back and get these receipts and maybe start doing it digital any easy ways of doing this… Now I feel like I have to go back and get receipts that I can barely see.
EXCELLENT overview. Thank you for providing the 30,000 foot view. Regarding #3 HSA, please consider inserting the caveat in every mention of HSA’s, it is only available to those that have high deductible health insurance plans. Not sure what percentage of folks have such plans, but we’ve never had one in our careers.
Yes! This is exactly our issue. Employer health insurance plan is not an HDHI plan, even though it qualifies numbers-wise. I had high hopes of having another investing vehicle in my hubbies final 5 years of working, but alas the hopes were slashed. I wish there was another way.
Five tops: checking, emergency, savings, brokerage, roth ira. Skip emergency and roth if under extreme financial pressure. Anything more than 5 is splitting hairs and making life complicated.
i dont know all the terms but please correct me if i am wrong….i moved my deferred compensation into a roll over IRA. It is tax deferred but it was moved into a qualified tax deferred roll over IRA so triggered no taxes at that point. It went direct to the new account without it coning to me. So once in the roll over IRA ….i transfer money into a traditional IRA (amounts so I dont go over my tax bracket) which then gets transferred to a roth. So if I am thinking correctly the taxable event occurs when the monies are pulled from the traditional IRA into the ROTH. And yes it’s being done with my accountant and advisor.
Great video. I would add that you mat want to see if you can take loans from work account before brokerage. i am able to take loans from work account and difference is the interest i pay goes into my account as well. With the brokerage account the interest you pay does not go to you
Isn't a simple IRA essentially a traditional 401K for small business? It would be treated the same way in retirement planning as the other tax deferred qualified plans.
Any chance you have a video how self directed IRA accounts impact retirees? How would your retirement strategy change if you were to have a SDIRA account?
In my mind, a SDIRA is just like an IRA except it allows to hold alternative investment like real estate and gold bullion. You need to show greater due diligence with these investments as they aren't regulated like securities. If you overpaid for gold coins or a house, the SEC can't help you. Just like an IRA you would sell some of the underlying investments and take taxable distributions just like from a traditional IRA. There's usually a custodian involved so it likely more complicated than just transferring funds to your bank account with a few mouse clicks.
You really shouldn't suggest an HSA as an account that everyone should have. You have to remember that you have to have crummy health insurance to have an HSA. Personally I never had bad enough insurance to qualify for an HSA. As a person with a pension I never worked at any place that offered a 401K or 403B. So I don't have either. Yet another account type that is not available to everyone. I feel the same about IRA accounts. I am now retired, but while I was working the amount of money I could have put into an IRA was trivial. The same goes for Roth IRAs. They only came into existence at the very end of my career and the contribution limits were trivial. Of the account types you listed I only have checking accounts, some CDs, a pension plan and a brokerage account. I hold treasuries via a Treasury Direct account. How much you keep in readily available accounts depends on your net worth and your cash needs. I am one of those people you don't like who keeps a healthy checking balance, but it is trivial relative to my total portfolio.
@@todddunn945 It's just a way of lowering premiums, just like having a $5000 deductible on your collision coverage will give you a lower premium than if you go with a $0 deductible. It's the exact same policy otherwise.
You guys always mention 401k and 403b, while leaving out 457b. Basically all the same types of employer sponsored plans(although I think the 457b actually has some advantages).
Thanks, I get it and you're not my financial advisor, random guy on the internet haha. Was just thinking about that earlier today with the rmd age increasing to 75 eventually, that's a lot more money that people could potentially be taxed on. Great video as always!
@@matthewowcarz8259 The ultimate goal is to enjoy your retirement, not minimize your tax burden. I know people who did Roth conversions early in their retirement to save on taxes down the road and just ended up leaving more money for their heirs instead of enjoying it themselves.
@@matthewowcarz8259 The whole traditional vs Roth really comes down to tax brackets. What marginal tax rates you're paying on the income you're investing and what tax rates you'll pay on the distributions you take in retirement. If you read books by David McKnight you would know that higher tax rates are inevitable so unless you're already in a high tax bracket, the Roth makes a lot of sense. You'll want a mix of traditional, Roth and brokerage money in retirement to give you flexibility. When I was younger I always assumed that I would be in a lower tax bracket in retirement but that won't be the case for me.
HSA are a very bad idea. As we age simple things become more complex. If you don't dot and (i) or cross a (t) with an HSA, the penalties would wipe out 10 years worth of tax savings. Managing an HSA at 40 years old vs 80 years old is a world of difference!
I reposted this, because I wasn’t clear enough on the taxation of MLPs - so I just edited it out.
Kevin, of all the CFP TH-cam channels providing financial planning education, yours is my favorite. Your low key, thoughtfully organized delivery, with an occasional mention of California tax implications really hits the target. If I wasn’t a DIY’er or if there was a suitable alternative to AUM, I’d be calling. Thanks for the terrific content!
Somehow you take financial stuff that usually makes my eyes glaze over and keep me interested! Thank you Kevin!
That’s a great compliment. I try. It’s such a balancing act between providing enough information and getting bogged down in the details. Thank you.
@@foundryfinancial You're welcome! Keep up the good work! 👍🏻😁
Thanks for this great video.
One thing I regret is not investigating the Roth 401(k). I think I was first offered a Roth in 2008 or thereabouts. I wrongly assumed that, based on income limits for the Roth IRA, that I didn’t qualify. If I’d known the what I know now is likely a common mantra on this channel.
I did an MBA in the early 90s and had a great macro teacher who was prone to distractions. One day, he spent 15 minutes talking about 401(k)s versus IRAs. He showed the impact of fees and how to read mutual fund disclosures. The impact of even modest 12b-1 fees over a 30 or 40 year period was stunning. He suggested rolling funds into an IRA every time we change jobs. It was great advice.
I took it to a bit of an extreme and ended up changing jobs about every three years, one big driver was taking charge of my own investing. If you have the time-and more importantly the drive-to do it yourself, I think it’s worth considering.
It's important to remember that one cannot contribute to an HSA if on Medicare. Contributions have to stop 6 months prior to going onto Medicare.
Loved the HSA discussion… I have been doing this for the past five years and I use Google sheets just to put all my expenses per year and then I have a folder for my receipts. What I’ve noticed is some of my receipts have lightened up and you can barely read them… Is there a way I can go back and get these receipts and maybe start doing it digital any easy ways of doing this… Now I feel like I have to go back and get receipts that I can barely see.
EXCELLENT overview. Thank you for providing the 30,000 foot view. Regarding #3 HSA, please consider inserting the caveat in every mention of HSA’s, it is only available to those that have high deductible health insurance plans. Not sure what percentage of folks have such plans, but we’ve never had one in our careers.
Thank, Jonathan. Yeah, I wish I’d mentioned that on the HSA.
Yes! This is exactly our issue. Employer health insurance plan is not an HDHI plan, even though it qualifies numbers-wise. I had high hopes of having another investing vehicle in my hubbies final 5 years of working, but alas the hopes were slashed. I wish there was another way.
May I suggest a similar 30,000 ft overview of the 6 elements of Financial Planning?
Five tops: checking, emergency, savings, brokerage, roth ira. Skip emergency and roth if under extreme financial pressure. Anything more than 5 is splitting hairs and making life complicated.
Great video!! Thank you!!
Great video. Can you please do a video on your last point, pay attention to asset location.
i dont know all the terms but please correct me if i am wrong….i moved my deferred compensation into a roll over IRA. It is tax deferred but it was moved into a qualified tax deferred roll over IRA so triggered no taxes at that point. It went direct to the new account without it coning to me. So once in the roll over IRA ….i transfer money into a traditional IRA (amounts so I dont go over my tax bracket) which then gets transferred to a roth. So if I am thinking correctly the taxable event occurs when the monies are pulled from the traditional IRA into the ROTH. And yes it’s being done with my accountant and advisor.
Great video. I always learn something. Thanks!
Thank you.
Great video. I would add that you mat want to see if you can take loans from work account before brokerage. i am able to take loans from work account and difference is the interest i pay goes into my account as well. With the brokerage account the interest you pay does not go to you
That’s a great point. I wish I’d mentioned it.
It would be great to hear how simple IRAs work into retirement planning
Isn't a simple IRA essentially a traditional 401K for small business? It would be treated the same way in retirement planning as the other tax deferred qualified plans.
Any chance you have a video how self directed IRA accounts impact retirees? How would your retirement strategy change if you were to have a SDIRA account?
In my mind, a SDIRA is just like an IRA except it allows to hold alternative investment like real estate and gold bullion. You need to show greater due diligence with these investments as they aren't regulated like securities. If you overpaid for gold coins or a house, the SEC can't help you. Just like an IRA you would sell some of the underlying investments and take taxable distributions just like from a traditional IRA. There's usually a custodian involved so it likely more complicated than just transferring funds to your bank account with a few mouse clicks.
What do you think of VUSXX instead of HYSA for the highest tax bracket? The only disadvantage is lack of FDIC.
I keep my "cash" in SGOV since it is state tax exempt.
I'm not clear on the distinction between the cash management account and a the taxable brokerage account since it can hold cash.
It’s basically the same. But they’ll give you checks, debit card, etc
You really shouldn't suggest an HSA as an account that everyone should have. You have to remember that you have to have crummy health insurance to have an HSA. Personally I never had bad enough insurance to qualify for an HSA. As a person with a pension I never worked at any place that offered a 401K or 403B. So I don't have either. Yet another account type that is not available to everyone. I feel the same about IRA accounts. I am now retired, but while I was working the amount of money I could have put into an IRA was trivial. The same goes for Roth IRAs. They only came into existence at the very end of my career and the contribution limits were trivial. Of the account types you listed I only have checking accounts, some CDs, a pension plan and a brokerage account. I hold treasuries via a Treasury Direct account. How much you keep in readily available accounts depends on your net worth and your cash needs. I am one of those people you don't like who keeps a healthy checking balance, but it is trivial relative to my total portfolio.
High deductible doesn’t equal crummy. We have incredible healthcare with a high deductible plan.
@@foundryfinancial Personally I never had health insurance with a deductible. So I view a deductible and copays as indicators of crummy insurance.
@@todddunn945 It's just a way of lowering premiums, just like having a $5000 deductible on your collision coverage will give you a lower premium than if you go with a $0 deductible. It's the exact same policy otherwise.
You guys always mention 401k and 403b, while leaving out 457b. Basically all the same types of employer sponsored plans(although I think the 457b actually has some advantages).
It actually does. I also left out the TSP.
#8...Bitcoin Account
HSA is eligible only for High deductible health plan, right?
Right
How to open HSA account?
You have to have an HSA eligible health plan.
What's your thought on saving in Roth ira/401k to manage RMDs in retirement?
Very smart, but of course “it depends.”
Thanks, I get it and you're not my financial advisor, random guy on the internet haha. Was just thinking about that earlier today with the rmd age increasing to 75 eventually, that's a lot more money that people could potentially be taxed on. Great video as always!
@@matthewowcarz8259 The ultimate goal is to enjoy your retirement, not minimize your tax burden. I know people who did Roth conversions early in their retirement to save on taxes down the road and just ended up leaving more money for their heirs instead of enjoying it themselves.
@@matthewowcarz8259 The whole traditional vs Roth really comes down to tax brackets. What marginal tax rates you're paying on the income you're investing and what tax rates you'll pay on the distributions you take in retirement. If you read books by David McKnight you would know that higher tax rates are inevitable so unless you're already in a high tax bracket, the Roth makes a lot of sense. You'll want a mix of traditional, Roth and brokerage money in retirement to give you flexibility. When I was younger I always assumed that I would be in a lower tax bracket in retirement but that won't be the case for me.
@@martinlord8837but also not run out of money in retirement
My understanding is that only individuals under a high deductible health plan qualify for an HSA account? I have got this wrong?
You have it right. I should do a whole video on it. It’s a bit complex. I just skimmed the surface.
HSA are a very bad idea. As we age simple things become more complex. If you don't dot and (i) or cross a (t) with an HSA, the penalties would wipe out 10 years worth of tax savings. Managing an HSA at 40 years old vs 80 years old is a world of difference!
Is this your personal experience? I’ve not run across this. It’s fairly easy to administer properly.