Afford Anything

Tag: roth conversion ladder

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#448: Ask Paula: We Make $300k. Why Are We NOT Financially Independent?

An anonymous caller is dealing with guilt over spending a large cash gift. What’s the best use if she doesn’t have an obvious financial goal to throw at it?

Eric reached financial independence a few years ago but he hesitates to quit his job. What the heck is a Roth conversion ladder and how can he overcome his psychological barriers?

Another anonymous caller and his wife earn $300,000. He feels like they should be financially independent but they’re far from it. What’s going on?

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

Enjoy!

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By Paula Pant

#322: Ask Paula – I Want to Retire at 50; How Do I Bridge the Gap?

Jess wants to reach financial independence by the time she’s 50. But she’s worried that she doesn’t have enough money in cash or taxable brokerage accounts to bridge the gap in her first few years of retirement. What moves should she make, if any?

Yisell wants to invest money now. Should she cash out her $70,000 pension in hopes to generate more than the $1,000 per month she’s guaranteed from it?

Abbey is 22 and she would like to go back to graduate school for nurse anesthesia. Should she save up and pay for it in cash, or invest her money and take out federal loans?

Eliana enjoyed our interview with Paul Merriman on the two-fund portfolio. She’s curious about what growth stocks and value stocks are, and how they fit into a passive index fund investing strategy.

Finally, Sneezy wants to know: why aren’t stocks a good hedge against inflation?

My friend and former financial planner, Joe Saul-Sehy, joins me to answer these questions on today’s episode. Enjoy!

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By Paula Pant

#297: Ask Paula – Should I Househack or Pay Off My Student Loans?

George is torn between paying down his student loan debt (which he deferred) or buying a househack. Which is better for his long-term goal of reaching financial independence?

Hanan wants to figure out if a backdoor Roth IRA conversion will work for her. She also wants to investigate whether a Vanguard Institutional 500 Index Trust and a Vanguard Institutional Total Bond Market Index Trust are ideal. Are trusts different from index funds or mutual funds and if so, how?

June and her husband netted $400,000 from the sale of some golden parachute ISOs. They want to help their children pay for college and are trying to figure out how to strategically use this money. Should they pay off their home, buy rentals, fund 529s, or Roth their 401ks?

Mario is curious to know: is his two-fund portfolio at a 90/10 split is a good asset allocation for his Roth IRA?

Vivian is worried about bridging the gap between when she retires and when she claims Social Security. Will her plan of doing a Roth conversion ladder work out the way she hopes?

My friend and former financial planner, Joe Saul-Sehy, joins me to answer these five questions. Enjoy!

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By Paula Pant

#280: Ask Paula – Could This NYC Couple Contribute Only $10,000 Per Year Towards Retirement?

Amy and her husband have $900,000 saved for retirement. They’re 40 years old and plan to retire at 65. Due to a job change + pay cut, they might only have $10,000 per year to save for the next 25 years. Will this be enough, given their yearly expenses of $144,000?

Janie wants to get a solar power system for her house, but isn’t sure how to pay for it. Should she borrow funds from her seven-month emergency fund, or use funds from a taxable brokerage account that were earmarked for retirement?

CJ and his wife netted $200,000 from the sale of their home. They aren’t sure when they’ll purchase their next home – their timeline could be as short as three years or as long as six years. Where should they keep the $200,000 to use towards a downpayment on their next home?

Brandon wants to retire in the next five to ten years. He contributes 20 percent to his Roth 401k. Since he can’t withdraw those contributions early, does it make more sense to contribute up to the match of his 401k and invest the rest in an IRA with the goal of doing a Roth conversion?

Anonymous “am I missing out?” wants to know: when is tax-loss harvesting worthwhile?

My friend and former financial planner Joe Saul-Sehy and I answer these questions on today’s episode. Enjoy!

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By Paula Pant

#260: Ask Paula – Should I Fire My Financial Advisor During a Pandemic?

Katelyn wants to fire her financial advisor and move her investments from mutual funds into Vanguard index funds. Should she do this during the pandemic? Or should she wait?

Marisa asks: can you invest in a Roth IRA if your income is inconsistent and might exceed the cap?

Anonymous “Flo” had a Simple IRA at her old job that she can no longer contribute to. She also can’t contribute to a 401k until she’s been at her new job for a year. Where should she put her money in the meantime?

Mary received an $80,000 grant of RSUs from her employer when she started. These RSUs began to vest after one year, and the price per share has increased 44 percent. What should she do with the shares?

Anonymous “Olivia” is interested in a Roth conversion ladder, but wants to know: does the pro-rata rule apply here as it does with a backdoor Roth conversion?

My friend and former financial planner Joe Saul-Sehy and I tackle these questions in today’s episode. Enjoy!

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By Paula Pant

#108: Ask Paula – I Don’t Know How to Invest

Former financial advisor Joe Saul-Sehy joins me to answer audience questions about investing strategies, early retirement, and tax planning.

Whitnee asks:

I’m 31, and my husband and I save half of our combined income. We’ve maxed out our H.S.A. accounts and we’re getting an employer match in our 401k. We have $80,000 stashed as cash […]

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By Paula Pant

#94: Ask Paula – The Early Retirement Episode

Early retirement? Yes please.

This week, I answer questions from the audience around early retirement planning, health savings and debt pay-off.

Question #1: How can I avoid early-withdrawal penalties?

Our first caller is Christianna, who asks two questions:

I’m interested in early retirement. How can I avoid early withdrawal penalties? How does early retirement impact the […]

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