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Tag: retirement savings

September 18, 2024By Paula Pant

#541: Your Dream Retirement Might Hinge on This One Choice, featuring Katie Gatti Tassin, host of Money with Katie

Ever wondered if you’re making the right choice between a Traditional and Roth 401(k)? You’re not alone.

In this episode, Katie Gatti Tassin, host of MorningBrew’s Money with Katie podcast, joins us to tackle this common retirement savings dilemma.

We deep-dive into the debate between using Traditional vs. Roth 401(k) accounts for retirement savings, in the context of:

Future tax rates
Tax complexities for small business owners and high earners
Social Security uncertainty
Stock-based compensation
Incentives for business owners vs. employees

Katie explains her strategy for maximizing retirement savings while minimizing taxes. She suggests that for some people in higher tax brackets, maxing out a traditional 401(k) and then investing the tax savings elsewhere might be the way to go.

But as we dig deeper, it becomes clear that there’s no one-size-fits-all answer.

We explore the Traditional vs Roth question, discussing how your current income and expected retirement spending can affect your choices.

It’s not just about the math, though. The unpredictability of future tax rates and policies adds another layer of complexity to the decision.

Social Security plays a major role, as well. We discuss its current funding situation and the challenges it might face in the future.

This leads to a fascinating discussion about how AI might impact future costs and lifestyles. Could things actually get cheaper in the future?

Taxes for high earners and small business owners is another focus. We break down some misconceptions about who falls into high tax brackets. It’s not always as simple as it seems.

Stock-based compensation is another hot topic. We discuss how it affects corporate decision-making and the wider economy. This leads to an interesting comparison of the incentives for business owners versus employees.

Throughout the episode, we keep coming back to one key point: no matter which type of account you choose, the most important thing is to contribute as much as you can.

Your contribution amount has a bigger impact on your retirement savings than the type of account you use.

By the end of this interview, you’ll have a better understanding of the factors that go into choosing between a Traditional and Roth 401(k). More importantly, you’ll see how this decision fits into the bigger picture of retirement planning and overall financial health.

Keep reading...

August 21, 2024By Paula Pant

#533: Q&A: My Insurance Bill Jumped 60 Percent – Should I Drop It?!

Kristin is floored by the 60 percent increase in her homeowner’s insurance this year. Should she cancel the policy and self-insure instead?

Susana and her husband are torn. They bought their dream home last year but now need to relocate indefinitely. What should they do with the house?

An anonymous caller wants to help his soon-to-be wife invest a five-figure gift she received in another country. How do they untangle the complexities of managing money from abroad?

Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.

Enjoy!

Keep reading...

June 7, 2024By Paula Pant

#512: Don’t Let One Big Bill Blow Up Your Budget (Here’s How)

An anonymous caller who received a large inheritance feels paralyzed by all the investment philosophies he’s read about. How does he pick a winning strategy he can stick with?

Josh is an expectant dad looking to buy a bigger house but doesn’t know how much everything will cost. Should he save more or invest more?

Another anonymous caller worries that large expenditures like buying a new car or replacing her home’s roof will blow up her budget in retirement. How does she plan for unexpected expenses?

Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.

Enjoy!

Keep reading...

June 5, 2024By Paula Pant

#511: Q&A: “I’m Scared of Running Out of Money in Retirement!”

Sara is five years from retirement with a paid-off house. But she’s worried that her money will run out before she turns 80. What does she need to do now to protect her future self?

Lauren is a personal finance nerd who gets it. But one question perplexes her: When should she choose an ETF […]

Keep reading...

April 3, 2024By Paula Pant

#496: The Pay Cut Price of Freedom

How much of a pay cut would you take for a lighter workload?

Paul, 35, is grappling with that question. Like many of us, Paul says he loves his job, but the hours are demanding. He would love to work less. But he didn’t think the opportunity would come so soon.

You see, Paul is a dedicated saver. He’s spent years trying to build financial independence. He’s amassed a net worth of $910,000, with no debt.

His ideal early retirement, which would be filled with travel and hobbies, requires more money. Besides, he enjoys his career.

That’s why Paul thought he’d work full-time for several more years. He felt happy with that plan.

But an interesting opportunity recently arose.

Paul’s workplace has offered him the chance to drop his hours – and his salary – by 25 percent. He’d love to work less. But the salary cut is earlier than he’d planned.

Should he take it?

Today, we kick off the podcast episode with this question.

After that, we turn our attention to an anonymous caller. She and her husband want to retire at 55. They also want a bigger home, a better car, and to start growing their family. Can they afford it all?

Meanwhile, Tim spent his 20’s in medical school. He missed out on retirement savings during those years. He’s eager to catch up. What’s the shortest path to get there?

Finally, Matthew and his family dream of leaving Florida for the Pacific Northwest. Will they regret selling everything to start over?

Former financial planner Joe Saul-Sehy and I tackle these four questions in today’s episode.

Enjoy!

Keep reading...

November 8, 2023By Paula Pant

#471: Ask Paula: I Came Into A Lot of Money. What Should I Do With It?

Bob split a $350,000 windfall between savings and paying down his mortgage. But now he’s wondering if he made a good choice. Can Paula and Joe do the math to justify his gut-driven decisions?

Julia wants to tap the equity from a second home to buy a third home in Texarkana, Texas. Is this a good plan?

Joey Jr. wants to retire early, put two kids through college and buy a vacation home within the next five years. How can he afford to do it all?

An anonymous caller wonders if $1 million is a good budget for a retirement pad.

Former financial planner Joe Saul-Sehy and I tackle these four questions in today’s episode.

Enjoy!

Keep reading...

September 14, 2023By Paula Pant

#461: Ask Paula: A Year Off Work, a Career Change, and a Divorce: How to Make It Work

Today we’re featuring a special episode recorded LIVE in front of an audience at Podcast Movement, an industry conference in Denver.

Former financial planner Joe Saul-Sehy and I tackle two questions in today’s episode. Our first question comes from a soon-to-be-single-mother on the precipice of divorce. How should she navigate this financially?

Our second question comes from the spouse of a Purple Heart veteran of the war in Afghanistan. She and her husband would like to take a one-year sabbatical from work when they turn 40, which is in five years. They’d also like to pivot into lower-paying but more enjoyable careers. How should they map out their money for this transition?

Joe and I dedicate this episode, recorded live on stage, to answering these two questions. Enjoy!

Keep reading...

May 10, 2023By Paula Pant

#440: Ask Paula: Am I Saving Enough For Retirement?

“Barbara,” an anonymous caller from Episode 422, is struggling with a scarcity mindset. How does she stop worrying about the future and build the confidence to enjoy life now?

Samantha and her partner have lived out of their truck for 20 years. They sorta-kinda feel ready to buy a house and settle down. But they’re hesitating. What if they hate it?

An anonymous caller wants to retire and travel in 20 to 30 years. How does she know if she’s saving enough?

Trace plans to take a mini-retirement next year. Where should she keep her savings until then?

Former financial planner Joe Saul-Sehy and I tackle these four questions in today’s episode.

Enjoy!

Keep reading...

April 12, 2023By Paula Pant

#436: Ask Paula: How Do I Pay for Grad School?

Jeremy wants to attend graduate school. Should he take student loans or cash out his investment portfolio?

Andy is wondering if the 4 percent rule stands up to high inflation. (There’s a shockingly simple answer!)

Did Rudolfo discover a hack to supercharge his 401k investing?

Nandini is overwhelmed by her investing choices. What accounts should she use? What funds should she pick?

Former financial planner Joe Saul-Sehy and I tackle these four questions in today’s episode.

Enjoy!

P.S. Got a question? Leave it here.

Keep reading...

March 22, 2023By Paula Pant

#433: Ask Paula: Should I Quit My Cushy Job?

Should “Walker,” an anonymous caller, give up a cushy job to take a year-long sabbatical in Europe?

Blue wants to rent out his East Coast home, take a sabbatical from work, travel to the West Coast with his family, and start a YouTube channel and other entrepreneurial projects. How should he manage his money to make this happen?

Melissa regrets buying a house two years ago in Ft. Lauderdale. She’s poured $30,000 into repairs, all of which she borrowed. Her home-related debts have mounted. She’s over-extended. Should she cut her losses?

Former financial planner Joe Saul-Sehy and I tackle these three questions in today’s episode.

Enjoy!

P.S. Got a question? Leave it here.

Keep reading...

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Afford Anything

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