Afford Anything

Tag: retirement savings

By Paula Pant

#197: Ask Paula – Traditional IRA vs. Roth IRA — What Should I Choose?

Should Bret invest in a Traditional IRA or a Roth IRA?

If Amanda gets married, how will her child support be affected? What about her student loan forgiveness?

Joe is investing in bonds, which average a rate of return that’s equal to the interest rate on his mortgage. Should he switch to all-equities and redirect his bond investments into mortgage payoff, instead?

Taunia has a car loan, a 401k loan, a home improvement loan, a primary mortgage, and a second mortgage. She also has an emergency fund that only covers two months of expenses, and she’s trying to save for college for her two children. What should she prioritize?

Mickey has a six-month emergency fund. Should he leave it in a savings account or invest in bond ladders?

David made $10,000 from a side hustle last year. Can he open a Solo 401k or SEP-IRA for his side hustle business? If so, which one should he choose?

Should Andy invest in a Target Retirement Date fund, or should he split his money between a U.S. index fund and an international index fund?

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

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By Paula Pant

#195: Ask Paula – I Make $168,000 Per Year and Spend $5,000 Per Year. What’s Next?

Alex makes $168,000 per year, combined between her full-time job and her side hustle. Her company pays for breakfast, lunch and dinner during the work week, plus a cell phone subsidy, health, dental and vision insurance, a gym membership, and commuting costs. She also househacks, so her living expenses are only $400 per month. What should she do with her ample savings?

Christine is 38 and earns $70,000 per year running her own business. She holds $70,000 in investment accounts, has another $16,000 in savings, bought a condo with 20 percent down, and has no debt. What can she do to fast-track her path to financial independence?

Amy is unsure whether she should pay off her mortgage, downsize to a smaller home, or invest.

Katherine is 23 and househacking into a duplex. How much should she set aside for cash reserves?

Miriam started a podcast and wants to know how to morph a passion into a lucrative income stream.

Nick wonders if the FIRE movement should plan an annual gathering … you know, like a FIRE Festival. (But not like the Fyre Festival.)

I tackle these six questions in today’s episode.

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By Paula Pant

#193: Ask Paula – I Spent Ten Years in School, and Now I’m Behind on Retirement Savings

Lori is behind on retirement savings, as a result of being a full-time student for more than a decade. She makes good money and lives frugally, but she’s aware that she’s behind for her age. What should she do?

Sierra wonders whether she should apply her savings towards paying off her mortgage or building investments.

Jenessa plans to retire at age 35, and she’s wondering if the 4 percent withdrawal rule applies for such a long time horizon. Her friend swears that it’s designed to cover a 30-year retirement, not a 60+ year retirement. Is that correct?

Jacqui is 24 and recently married. She’d like to open a 529 College Savings Plan for her future children, which she doesn’t plan on having for another 8 to 10 years. Should she do this?

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By Paula Pant

#189: Ask Paula – How Does My Net Worth Compare to Others My Age?


Julie, age 27, calculated her expected net worth based on the formula taught in the classic personal finance book The Millionaire Next Door. She’s concerned. Her current net worth is significantly lower than the number that the formula revealed. Is she on-track?

Anonymous wants to save for a downpayment on a home. Should she reduce her 401k contributions in order to amass these savings? Should she store some of that money in a Roth IRA?

Samantha is more than halfway finished with paying off her debt. In order to make this happen, she took on a second job. How much will she owe in taxes?

Maxime works at a job in which his 401k only offers expensive choices. Should he put his money in a taxable brokerage account, instead?Leslie’s parents are going to retire in five years, but they’ve only saved $65,000. What should they do? How can she help?

Clare is creating an estate plan. What should she be thinking about?

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By Paula Pant

#185: Ask Paula: How Do I Talk to Friends who Ridicule the Idea of FIRE?

Hello from Austin, Texas! I’m living in an Airbnb here for the next 5 weeks. Listen to the end of today’s episode to find out why … and discover how these next 5 weeks, for me, exemplify the “why” of financial independence.

In the meantime, though, the show must go on! Here are the questions that we’re answering in today’s episode.

An anonymous listener named Seeking FIRE wants to know how she can talk about financial independence with people who ridicule the topic. What do you say to those who laugh at the very idea?

Russell owns a landscaping company and is also a part-time student. He’d like to earn more money on the side, but his schedule is overbooked. What can he do?

Nick and his family are moving to the Washington D.C. area for approximately two to six years. They own two rental properties free-and-clear, and would like to buy a personal residence when they move. How should he save for the downpayment?

Gerardo lives in Mexico and wants to retire on his investment portfolio, using the 4 percent withdrawal rule. How should he invest, given currency fluctuations and other international factors?

Anonymous left her job and wants to know if she should roll over her 401k from her old employer.

We tackle these five questions in today’s episode. We also answer a comment from a listener who says that individual stock-picking and active management doesn’t get the credit it deserves.

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By Paula Pant

#172: Ask Paula – Should I Buy a Nice Car or Save My Money?


Should a 25-year-old homeowner with healthy savings and no debt (other than his mortgage) upgrade his car? Should he make this choice if his current car is fine, and upgrading puts him into new debt?

Should a couple without access to an employer-sponsored retirement plan put their savings into a taxable account, or should they save for a downpayment on a rental property?

The market is fluctuating like mad; if someone has a lump-sum of cash, should they invest it now or should they slowly meter it in?

Should someone without an emergency fund enroll in an HSA-qualified health insurance plan? Or should they stick with a plan that has a smaller deductible?

How should a husband-and-wife team that’s self-employed and running a company together handle their health insurance?

Former financial planner Joe Saul-Sehy and I answer these five questions on today’s podcast. Enjoy!

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By Paula Pant

#167: Ask Paula – Should I Pay Off Student Loans While in School?

Angelisa is a college senior with $30,000 in student loans. She has a part-time job, from which she’s saved $2,500. Should she keep saving money, or should she get a headstart on paying down her student loans while she’s in school?

Mackenzie is also a college senior with some student loans. She recently received a settlement from a car accident. Should she invest this money? If so, how?

Franchesca is 35 and is carrying $212,000 in debt, mostly student loans. Could she reach financial independence, even with a late start?

Erica wants to make environmentally-friendly investments. How should she approach this?

Caroline is 42 and has started making after-tax (non-Roth) 401k contributions. Is this a good idea?

An anonymous listener is curious about podcasting. How did I get started?

I answer these six questions on today’s podcast episode, alongside former financial planner Joe Saul-Sehy. Enjoy!

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By Paula Pant

#163: Ask Paula – The Future of Index Fund Investing

Does my employer match count against my 401k contribution limits? Should I invest in a Traditional or Roth TSP? Should I invest more aggressively in stocks right now, or should I hold cash and bonds until the next downturn? Should I get a mortgage or keep renting until I can buy a home in cash? Do you think index investing will dramatically change in the coming decades?

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

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By Paula Pant

#159: Ask Paula – I Have Three Kids and I’m Hoping for Financial Independence

Should a 36-year-old father of three invest primarily in Traditional or Roth retirement accounts? Should Rose, a grandmother of four, open a Vanguard account for each of her grandchildren?

Should Nancy, who lives overseas and is the sole breadwinner in her family, invest in a Traditional or Roth TSP?

Should Scott’s wife rollover her 403(b) from her former employer into an IRA?

Should Patrick, age 35, cancel his life insurance plan?

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

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By Paula Pant

#155: Ask Paula & Joe – How Can I Send My Four Children to College?

How can a schoolteacher dad and stay-at-home mom send their four kids to college? Where should a 23-year-old keep the savings that she’s accumulating to buy a home by the time she’s 27 or 28?

What should a listener know about retirement planning if he has a pension? And should a listener rollover his 401k […]

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Afford Anything