Kim is newly divorced and celebrating the freedom to make her own financial decisions. She’s struggling to make a living — also as a new realtor — and wants to get started with real estate…but how can she do that on limited funds?
Kim also wants to know: should she move her funds from an actively managed Fidelity IRA to a Vanguard Roth IRA?
Chaz is 22 and has $2,100 – $2,500 left each month to put toward savings. Where should he keep this money if he’d like to move out-of-state in the near future?
Joe is a new real estate agent and he’s looking for ways to save. Is opening a SEP IRA a good account when you’re no longer a W2 employee?
Grace has a similar concern: she’s a tutor, but she’s paid as a contractor. Should she forget about her Vanguard brokerage account and open a SEP IRA or Solo 401k?
Anonymous just got a raise, and while awesome, it might push her income to a level that prohibits her from making full Roth IRA contributions. Should she make a partial contribution this year, or start adding money to a Traditional IRA to do a backdoor conversion?
My friend and former financial planner, Joe Saul-Sehy, joins me to tackle these questions. Let’s dive in!
Kim asks (at 1:03 minutes):
I’m 55 and as of January 2021, finally divorced. After 17 years of not having a say in how my money is managed, I’m free to make financial decisions, though I’m not sure what to do next.
I have $325,000 in an actively managed Fidelity IRA, $5,500 in an investment account at Fidelity, and a $65,000 emergency fund in a savings account. For the next five years, I’ll receive $2,100 per month in child support.
I’m struggling to make a living as a new realtor; for the last two years, I’ve only made around $20,000 per year. I bought a small house in a small expensive town which I can’t move out of as I need to keep my kids in their school district.
Should I move my retirement to Vanguard and put it in a Roth, even if it means taking a tax hit? Or is it too late for me to do that? I’d also like to own real estate, but I don’t know how to get started with the little amount of money I have. Any thoughts?
Chaz asks (at 23:59 minutes):
I recently graduated from college, and at 22, I have a job that pays $70,000 per year. I have around $8,000 in a Roth IRA, and $2,000 in various stocks that I’ve purchased.
I live with my parents in Los Angeles, and my living expenses are around $1,000 per month. This leaves me with about $2,200 – $2,500 in savings every month.
Eventually, I’d like to get out of California and purchase property somewhere cheaper. Nothing around me makes sense to purchase. While I save up to move out-of-state, what should I do with my leftover money?
Joe asks (at 34:47 minutes):
I’m a newer real estate agent, and I’m no longer a W2 employee. Like many, our lives changed dramatically when the pandemic hit. Now that I’m not a W2 employee, should I open a SEP IRA?
Grace asks (at 34:47 minutes):
I’m sort of in panic-mode as I’m wondering if I messed up my tax planning for retirement. I’m an independent contractor and I mostly work with one business as a tutor. Since I’m technically self-employed, I don’t receive retirement benefits, and I don’t know what to do for my retirement planning.
I make about $88,000 per year. I put $6,000 into a Vanguard Traditional IRA, max out an HSA at Fidelity, and also have a Vanguard brokerage portfolio where I invest in VTSAX. Overall, I have $30,000 in the Traditional IRA, $6,000 in the HSA, and $40,000 in the brokerage portfolio.
Did I mess up my retirement planning? Should I have opened a SEP IRA or a Solo 401k, instead of putting the $40,000 into the brokerage portfolio?
“Olivia” asks (at 48:59 minutes):
I recently got a raise, but I think it’s pushing me to an income level where I may not be able to contribute the full maximum amount to my Roth IRA. I’m so close to the range that I’ll need to calculate my AGI to figure this out for sure, but I’m in the ballpark where I could probably make a partial contribution.
Given that, should I do my taxes normally for next year, make a partial contribution, and fill out the IRS form to calculate how much I can contribute? Or should I start adding money to a Traditional IRA so I can do a backdoor conversion before I do my taxes? What would you suggest?
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