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Speaker 1: Joel, I sure do like roth iras. Did you know that?

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Speaker 1: I did know that. I also like them. We really

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Speaker 1: like roth iras, and we talk about them a good bits.

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Speaker 1: And recently we've gotten some emails where folks will say

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Speaker 1: how we will casually mention the name of something right

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Speaker 1: like a roth Ira, but we don't actually go into detail.

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Speaker 1: We don't explain it. And I wanted to say, yeah,

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Speaker 1: we have, like we've done this before, but we've just

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Speaker 1: done it in the past, We've done it a while ago. Uh,

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Speaker 1: And that kind of raised an interesting point. It helped

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Speaker 1: us to realize that, wait a minute, we probably need

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Speaker 1: a point folks to some of these older episodes because

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Speaker 1: we can't explain, re explain, you know, exactly why it

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Speaker 1: is we like a roth Ira every single time we

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Speaker 1: talked about them, and we can't do forty minutes on

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Speaker 1: the roth Ira every single time we mentioned I mean

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Speaker 1: we could, it would up end every episode that we

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Speaker 1: did because we mentioned it, you're way too frequently. So yeah,

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Speaker 1: we wanted to toss this one back in the feed

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Speaker 1: for anybody out there who's kind of trying to figure

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Speaker 1: out how to invest A roth Ira is just the

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Speaker 1: perfect vehicle for so many folks, but also too for

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Speaker 1: for people who have been investing for a while. There

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Speaker 1: are so many awesome facets that the roth IRA has

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Speaker 1: and we tried to point them all out in this episode.

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Speaker 1: And so, no matter where you are on your investing journey,

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Speaker 1: hopefully you get something out of this one. That's right. Yeah,

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Speaker 1: they check a lot of the boxes that we're looking

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Speaker 1: forward when it comes to investing. And so, yeah, we

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Speaker 1: wanted to share this bestie episode about raths not just

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Speaker 1: because they're amazing retirement savings vehicles, but also but because

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Speaker 1: you still have time to contribute to a WRATH or

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Speaker 1: to a traditional IRA until May seventeen. You still have

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Speaker 1: a solid month and a half to contribute to those

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Speaker 1: IRA accounts, uh, in particular your one from last year.

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Speaker 1: So like, we're not super concerned about you contributing to

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Speaker 1: your iras this year, but yeah, not yet, although if

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Speaker 1: you want to jump on it, you know, if if

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Speaker 1: you're able to, but we wanted to make sure that

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Speaker 1: you know that your window is closing quickly to be

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Speaker 1: able to contribute to those accounts for last year. Yeah,

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Speaker 1: so now that you know you've still got time to

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Speaker 1: contribute to your wrath. Take a listen to this Bestie

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Speaker 1: episode and hopefully it'll convince you to actually make it happen.

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Speaker 1: Welcome to have the money. I'm l on that. And

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Speaker 1: today we're discussing the beauty of the roth Ira rath

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Speaker 1: I ra a. That's what we're gonna be talking about today, Joel.

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Speaker 1: We're going to discuss the benefits of roth iras, the flexibility,

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Speaker 1: and why pretty much everyone that's listening to this why

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Speaker 1: they should have a roth Ira as well. Yeah, I've

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Speaker 1: got one. I wrote a song about it. That's how

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Speaker 1: much I love my roth Ira. I got that roth

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Speaker 1: I right tattoo going on now? All right, but real quick, Matt.

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Speaker 1: Before we start talking about how much we love the

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Speaker 1: roth Ira and the many benefits that it has, I

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Speaker 1: wanted to mention to you that I did kind of

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Speaker 1: make a splurge recently. I got some money for my

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Speaker 1: birthday at the end of February, and I knew what

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Speaker 1: I wanted. I was holding out for some bone conduction headphones. Yeah,

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Speaker 1: that sounds kind of funny. It sounds weird, so for

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Speaker 1: bone conduction. Yeah, So for folks who don't know what

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Speaker 1: bone conduction headphones are. First I'll tell you what they are,

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Speaker 1: and then I'll tell you why I wanted them. Okay,

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Speaker 1: so they actually sit on your temples as opposed to

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Speaker 1: going inside your ear. And so the cool thing about

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Speaker 1: bone conduction headphones is that the sound travels through the

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Speaker 1: bones right there. And I don't know what bones they

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Speaker 1: are through, like three little bones inside your ear jump

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Speaker 1: that kind of bounce around, and that's what that's what

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Speaker 1: makes sound right exactly. Yep. And they're like super tiny

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Speaker 1: like sounds a big grain of brice. Yeah, So the

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Speaker 1: sound travels through the bone as opposed to through the

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Speaker 1: ear canal, and therefore, having bone conduction headphones, you can

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Speaker 1: hear the world around you really well, whereas you couldn't

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Speaker 1: even if you're wearing earbuds. So I can wear them

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Speaker 1: while I'm biking, Yeah, that was gonna say. This is

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Speaker 1: I'm sure especially handy when you're commuting to work on

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Speaker 1: the bike. Exactly. I can listen to a podcast or

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Speaker 1: to some music or whatever, but still be very aware

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Speaker 1: of what's going on around me. Obviously I'm looking right

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Speaker 1: while I'm biking, but but to be able to hear

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Speaker 1: the sounds, yeah, hearing is clutch when you're in, particularly

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Speaker 1: when you're on the roads. Yeah, so bone bone conduction headphones.

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Speaker 1: I found a sale on some really good ones that

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Speaker 1: are normally a hunter Bucks and they almost never go

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Speaker 1: on sales, so I got it for sixty. So I

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Speaker 1: was pretty happy about that. And yeah, maybe we'll throw

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Speaker 1: a link up because I don't honestly, I don't think

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Speaker 1: I've even never heard of these before until you mentioned it,

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Speaker 1: and I was like, I guess it's exactly what it

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Speaker 1: sounds like, bone conduction, Like it puts the sound through

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Speaker 1: your your headbones and you get to hear stuff. Yeah,

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Speaker 1: it's pretty clutch. Uh. And yeah, they're not necessarily cheap,

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Speaker 1: like I said, regularly a hundred. I got them for sixty,

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Speaker 1: but totally worth it. If it's something that's going to

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Speaker 1: allow you to actually kind of listen to a podcast,

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Speaker 1: listen to music, why you can still be aware of

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Speaker 1: of the sounds around you. You could like listen to

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Speaker 1: something while you're watching your kids or something like that.

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Speaker 1: I don't know, maybe that's not a good recommendation. These

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Speaker 1: are obviously bluetooth as well, right, yes, like they're not Yeah,

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Speaker 1: they're not picking up to your phone. Yep, So they

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Speaker 1: work for Bluetooth, so they're awesome. Well for me, I'll

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Speaker 1: say real quick, I work from home, and typically when

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Speaker 1: I'm put popping things into my ear, I like that

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Speaker 1: because as if the girls are home from school or

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Speaker 1: something like that and they're screaming in the background and

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Speaker 1: I'm still working, like that allows me to block out

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Speaker 1: some of that sounds. So I guess in my case,

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Speaker 1: for those instances, it's still good to have the old

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Speaker 1: school maybe over the ear headphones or the or the

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Speaker 1: buds that actually go into your ear. But is the

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Speaker 1: audio pretty good? It's actually pretty good. Yeah. If you

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Speaker 1: turn it up too high, there's like kind of like

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Speaker 1: a buzzing effect that gets award. Is that your earbones

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Speaker 1: buzzing together? I think so, because the vibrations are shaking

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Speaker 1: your head. Yeah, So you don't want it to get

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Speaker 1: too intense, so you Yeah, if you keep it on

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Speaker 1: a regular, normal level, it's not like you're getting sick

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Speaker 1: base or that it's the best audio you've ever heard

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Speaker 1: in your life. It's certainly nothing on that level. But

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Speaker 1: it's for functionality's sake. They're really good at get done. Yeah,

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Speaker 1: I want to try them out, all right, Let it

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Speaker 1: I'll let you borrow them, Okay, Matt, onto the topic

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Speaker 1: of hand. We're talking about roth ey Ras, why they rock,

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Speaker 1: why they're awesome, And the thing is, man investment terms

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Speaker 1: can be confusing. There are lots of different vehicles that

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Speaker 1: we can invest inside of. It's hard to know which

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Speaker 1: ones we should take advantage of. A lot of our

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Speaker 1: listeners in Americans have access to a four oh one K.

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Speaker 1: There are four seven b s, and then different kinds

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Speaker 1: of our IRA s. There's traditional, there's ross, there's set bras.

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Speaker 1: But raths are one of the most flexible retirement accounts

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Speaker 1: and we're big fans of them for so many reasons.

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Speaker 1: So I'm looking forward to kind of getting into why

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Speaker 1: they're so great, helping people think through why they should

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Speaker 1: consider opening a roth Ira account. All right, Jill. Before

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Speaker 1: we launched into roth Ira a s, I'm gonna introduce

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Speaker 1: our beer this episode. We have Superior Barley Lime, which

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Speaker 1: is a tequila barrel aged barley wine style ale with lime.

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Speaker 1: It's like bud Light lime, but barley wine lime. Oh dude,

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Speaker 1: Oh dude, No, I don't think so. I don't I

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Speaker 1: don't think we can even draw correlation here. Probably not

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Speaker 1: yet so at barley wine is such a fascinating style

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Speaker 1: of beer to me, it possesses that these flavors that

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Speaker 1: no other style of beer can accomplish. And the fact

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Speaker 1: that this was aged in tequila barrels with a little

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Speaker 1: bit of lime. And I'm really excited to dig into

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Speaker 1: this one. And big thanks to our listener Heather for

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Speaker 1: sending this one into us. We're really excited to try

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Speaker 1: this one to Heather out of Wisconsin, even though this

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Speaker 1: beer is out of Michigan. Is that right, that's right,

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Speaker 1: this is from a triple route. Yeah. Looking forward to

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Speaker 1: breaking this down and talking more about this at the

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Speaker 1: end of the episode. But now Matt onto the subject

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Speaker 1: at hand. We're talking about roth iras and how awesome

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Speaker 1: they are. They're beautiful, really, and it's important to note

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Speaker 1: that investment terms can be confusing. There are all sorts

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Speaker 1: of different vehicles that people can invest inside of. It's

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Speaker 1: hard to know which ones we should take advantage of.

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Speaker 1: A lot of our listeners have access to a four

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Speaker 1: oh one K. I think fifty of Americans have access

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Speaker 1: to four oh one case where they work. If not,

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Speaker 1: maybe they have access to a four seven B. There

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Speaker 1: are lots of different kinds of i ras. There are

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Speaker 1: set bras, they're traditional iras, but the roth is one

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Speaker 1: of my favorite kinds of iras. And it's also one

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Speaker 1: of the most flexible retirement vehicles out there. And so

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Speaker 1: I think it's important to kind of talk about why

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Speaker 1: people should cant that are saving in a roth and

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Speaker 1: the advantages that it comes along with and Jil, before

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Speaker 1: we get two into the details of the roth ira,

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Speaker 1: it's it's good to clarify that the rath is an

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Speaker 1: investment vehicle, right. It's not an actual investment itself, but

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Speaker 1: it's it's an account that you open, and so once

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Speaker 1: you've opened an account or a roth ira, you can

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Speaker 1: then fill it with investments things like stocks and bonds,

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Speaker 1: mutual funds, our favorite index funds that we often talk about.

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Speaker 1: But by default, when you first move money into that account,

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Speaker 1: it's gonna sit there as cash typically until you make

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Speaker 1: a purchase, until you buy those stocks, until you buy

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Speaker 1: those index funds. And so a lot of times folks

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Speaker 1: can get confused as to thinking, cool, I I opened

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Speaker 1: a wrath, I'm investing. Now, Yes, you have opened that

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Speaker 1: account and you have the framework to invest, but now

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Speaker 1: you get to fill that vehicle full of all of

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Speaker 1: your favorite stocks and bonds and again our favorite low cost,

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Speaker 1: widely diversified index funds. Yeah, and a lot of people

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Speaker 1: discuss whether roth iras or traditional iras are better, and

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Speaker 1: whether you decide to invest in a roth ira or

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Speaker 1: a traditional ira. Well, so much of its centers around

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Speaker 1: whether or not you think your taxes are going to

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Speaker 1: be higher in the future than they are today. And

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Speaker 1: so with the rath, you actually pay taxes on the

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Speaker 1: money before you actually end up putting that money into

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Speaker 1: your roth ira, your investment grows tax free. And then

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Speaker 1: once you reach the age of fifty nine and a half,

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Speaker 1: I don't know why they do halfs. It's so weird, right, yeah,

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Speaker 1: bliss ball MND every single time, I'm like, why can

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Speaker 1: we just say fifty nine or sixty or just sixty, Like,

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Speaker 1: why not sixty? It's a nice round, you know, hard number.

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Speaker 1: It's silly, it's weird. Yeah, But then distribt distributions are

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Speaker 1: tax free traditional iras. You don't pay any taxes right

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Speaker 1: now on the money that you're contributing, but you do

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Speaker 1: pay taxes when you withdraw on the back end. So

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Speaker 1: that's the main difference. It's tax structure. It's whether you

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Speaker 1: pay taxes now or whether you pay taxes later, and

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Speaker 1: so there are all sorts of discussions that happen around this.

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Speaker 1: We like the RATH for a few reasons, and in

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Speaker 1: particular because of the way the current tax law is structured.

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Speaker 1: For a lot of low and mid to income folks,

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Speaker 1: taking the tax hit now actually makes the most sense

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Speaker 1: because tax rates haven't been lower in quite some time. Yeah, man, Like,

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Speaker 1: the fact is that nobody knows what their tax work

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Speaker 1: is going to be in the future. But what we

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Speaker 1: do know is that the greatest wealth is created by

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Speaker 1: paying taxes when the rates are the lowest. And essentially,

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Speaker 1: when you open a roth IRA and you go ahead

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Speaker 1: and pay those taxes now, it's sort of like ripping

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Speaker 1: the band aid off, just clean and quickly, right now,

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Speaker 1: versus maybe leaving it on. They're thinking, well, maybe down

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Speaker 1: the road it'll hurt less. Well, you don't really know

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Speaker 1: if it'll hurt less. It might hurt less or it

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Speaker 1: might hurt way more because that band aid has become

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Speaker 1: one with your body. I don't know that sounds kind

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Speaker 1: of gruesome, but Jill, you know what I'm saying. It's

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Speaker 1: just a matter of getting it over with and kind

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Speaker 1: of facing the facts, facing the music, and kind of

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Speaker 1: moving on with life. No completely. I think it's the

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Speaker 1: devil you know versus the devil you don't, and the

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Speaker 1: fact that we know that tax rates are at essentially

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Speaker 1: the lowest they've been in a long time for low

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Speaker 1: to middle income folks, it just makes sense to maximize

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Speaker 1: on that. And there's certainly a lot of speculation about

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Speaker 1: the current level of debt that the United States is

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Speaker 1: in and the fact that we continue to dig ourselves

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Speaker 1: in a bigger and bigger hole that's very foreboding when

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Speaker 1: it comes to what taxes could be in the future.

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Speaker 1: And so I think it makes a lot of sense

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Speaker 1: to to take the devil that you know right now

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Speaker 1: that taxes are actually, you know, pretty low, and so

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Speaker 1: ripping that band aid off, paying the taxes and contributing

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Speaker 1: to a rath makes a lot of sense. There are

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Speaker 1: a lot of other reasons that the wrath is excellent,

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Speaker 1: but but knowing that taxes are are incredibly low right

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Speaker 1: now for a lot of folks in that boat, I

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Speaker 1: feel like that puts another big check mark in the

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Speaker 1: box of take the hit now. And so some quick specifics.

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Speaker 1: When it comes to qualifying for a wrath IRA, you

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Speaker 1: have to have earned income. And so that means that

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Speaker 1: if you are a parent, I've heard about this a

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Speaker 1: lot jole where a parent will open up a roth

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Speaker 1: IRA for their teenage kid and say, if they just

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Speaker 1: had a summer job where they earned like four thousand dollars,

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Speaker 1: As a parent, you can't max that out for them

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Speaker 1: and contribute the you know, the full maximum of six

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Speaker 1: thousand dollars. Your contributions cannot seed what that individual actually earned.

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Speaker 1: So that might seem like a no brainer, but that's

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Speaker 1: something to keep in mind for sure. Yeah. The only

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Speaker 1: exception of that is a married couple filing jointly, they

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Speaker 1: could open a spousal wrath for the non working spouse

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Speaker 1: and so yeah, that's a really good way to be

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Speaker 1: able to maximize your wrath savings when only one person

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Speaker 1: in a relationship is actually working. But again, you have

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Speaker 1: to be married filing your taxes jointly. Yeah, so with

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Speaker 1: that six thousand dollar contribution limit, you and your spouse

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Speaker 1: you can contribute a total of twelve thousan dollars, which

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Speaker 1: is a good chunk of change. Every single year. Just

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Speaker 1: make sure that you're not earning too much. You must

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Speaker 1: earn less than a hundred and thirty seven thousand dollars.

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Speaker 1: If you're single, there's a phase out that begins at

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Speaker 1: two thousand where you're not able to take full advantage,

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Speaker 1: and if you're married filing jointly, you must make less

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Speaker 1: than two hundred and three thousand dollars, although the phase

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Speaker 1: out for married couple starts at a hundred and ninety

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Speaker 1: three thousand. Again, that seems like a lot of money,

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Speaker 1: but the reason we're mentioning that is that you can

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Speaker 1: be a pretty high earner right and still contribute to

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Speaker 1: a roth ira. You know, we mentioned how the way

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Speaker 1: that taxes are set up currently, it's pretty advantageous too

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Speaker 1: low and middle class folks to get their roth ira started.

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Speaker 1: But you can be making pretty good money man, and

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Speaker 1: still contribute to a roth ira and take advantage of

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Speaker 1: those benefits. Yeah, and if you actually make more money

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Speaker 1: than Matt just mentioned when it comes to those roth

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Speaker 1: ira limits, there are other ways to get your money

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Speaker 1: into a wrath account, and we'll get into those kind

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Speaker 1: of further on down in the episode. But next, let's

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Speaker 1: get to the specific reasons that a roth ira is

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Speaker 1: incredibly flexible and also confunction as a glorified emergency fund.

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Speaker 1: We'll get to those right after the break. Jill, you

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Speaker 1: just mentioned a glorified emergency fund. We're gonna get to

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Speaker 1: that here in a second. I know that's your favorite

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Speaker 1: aspects of roth iras, and well, you know that's a

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Speaker 1: big part of why they're so flexible. First, quickly, let's

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Speaker 1: talk about how you have have more specific fund options

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Speaker 1: than you likely would have through your workplace retirement accounts. So,

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Speaker 1: whether that be your four oh one k R four

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Speaker 1: fifty seven B, you know, you get to choose the

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Speaker 1: company that you want to do business with when you

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Speaker 1: open up your own roth ira A. When you have

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Speaker 1: an employer sponsored retirement account, essentially you have a limited menu.

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Speaker 1: It's sort of like getting the demo version of that

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Speaker 1: video game when you're a kid, like man, I gotta

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Speaker 1: pay more to get the whole game. Just crush level

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Speaker 1: one now, I'm ready, but keep crushing that level one

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Speaker 1: because I can't afford the game. But oftentimes you are

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Speaker 1: limited in what you can invest in, and oftentimes that

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Speaker 1: means you are stuck with options that aren't so great.

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Speaker 1: It means funds that have higher expense ratios. And what

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Speaker 1: that means is, over the long term, the money that

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Speaker 1: you have invested in, you're gonna be earning less. Yeah,

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Speaker 1: fees on a retirement account are a killer, but lots

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Speaker 1: of employers do have great options, right. It's it's not

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Speaker 1: that there aren't, especially in bigger employers with a low

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Speaker 1: cost provider. It's not that there aren't a lot of

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Speaker 1: good options because most employers do make available a lot

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Speaker 1: of low cost, really solid index funds, do they. You

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Speaker 1: wouldn't know, Well, yeah, that's that's that's why I'm asking

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Speaker 1: because I literally have never had a work sponsored retirement account,

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Speaker 1: being self employed basically my entire life. So yeah, I

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Speaker 1: don't know what that's like, Joel. You gotta peel back

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Speaker 1: the curtain a little bit. Let me peek inside, all right,

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Speaker 1: all right. So it's it's really depending on the company.

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Speaker 1: It's at least where I work, it's not that bad.

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Speaker 1: We're with Vanguard, but we do have fewer fund choices

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Speaker 1: inside of my four oh one K than I have

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Speaker 1: with my roth IRA that my employer has essentially designated

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Speaker 1: a certain amount of funds. I think it's like eighteen

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Speaker 1: that I can invest inside of. Whereas if I'm investing

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Speaker 1: in a ROTH IRA through Vanguard on my own versus

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Speaker 1: in my employer's plan, I have access to essentially thousands

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Speaker 1: of different ETFs, index funds and mutual funds. It's like

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Speaker 1: the world is my oyster, and I get to determine

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Speaker 1: my own future. And so I don't obviously forgo investing

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Speaker 1: in my work for oh one K because there's an

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Speaker 1: awesome match associated with it, and it's just a great

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Speaker 1: retirement vehicle. And like I said, I have access to

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Speaker 1: really good funds, but it's just important to know that

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Speaker 1: depending on your employer, you might not have access to

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Speaker 1: quite as good as funds. And opening up a ROTH

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Speaker 1: on your own, well, you can choose where you want

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Speaker 1: to do business and you can pick the exact funds

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Speaker 1: that make the most sense for you. Yeah, and Joel,

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Speaker 1: we've mentioned this before, but if you are in the

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Speaker 1: wealth building stage of life, if you've got a few

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Speaker 1: decades left to go before you're looking at retiring, you're

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Speaker 1: gonna be looking at something like a total stock market

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Speaker 1: index fund where you have exposure to a lot of stocks.

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Speaker 1: This isn't a specific investing episode where we're talking about

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Speaker 1: what's investing. But of course I just wanted to mention that. Alright,

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Speaker 1: mat So, can we get to one of my favorite

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Speaker 1: elements of the WRATH now, it's the emergency fund factor.

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Speaker 1: Let's get to it. Okay, all right, thank you. So

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Speaker 1: I feel like the great thing about investing in a

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Speaker 1: roth ira, if you do it consistently through the years,

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Speaker 1: a roth ira can actually function for you as a

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Speaker 1: glorified emergency fund. And the reason that is is because

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Speaker 1: you're allowed to take out your contribution tax and penalty

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Speaker 1: free at any time. And so this upside to the

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Speaker 1: rath actually kind of comes with the downside because if

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Speaker 1: you are undisciplined, you can take out money that you've

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Speaker 1: set aside for your future to spend it on a

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Speaker 1: flat screen TV or something just just incredibly silly, bad idea,

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Speaker 1: super bad idea. Wait, are you mentioned the flat screen TV?

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Speaker 1: Because on the Stop Buying New Stuff episode I mentioned

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Speaker 1: how I like I like my four KTV tool. Yeah,

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Speaker 1: I'm just trying to drag you through the dirt again, right, No,

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Speaker 1: I'm definitely not trying to do that, buddy. But the

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Speaker 1: ability to pull out your contributions tax and penalty free

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Speaker 1: is really cool if you're making a major purchase or

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Speaker 1: making an investment. So whether taking a little bit out

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Speaker 1: of your ROTH EYRA contributions helps you get to the

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Speaker 1: point where you're able to put down on a mortgage

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Speaker 1: and avoid p m I, or you're taking some out

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Speaker 1: in order to be able to buy our rental property

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Speaker 1: in all cash. That ability to take those contributions out

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Speaker 1: tax and penalty free is one of the ask things

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Speaker 1: about the WRATH. It's just flexible, and ultimately, if you've

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Speaker 1: been doing it for quite a while and you've built

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Speaker 1: up a substantial investment savings in a ROTH, you can

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Speaker 1: just keep less money in a savings account because you

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Speaker 1: know you can take out just a small amount of

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Speaker 1: those contributions if an emergency should come up. Yeah, man,

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Speaker 1: having an emergency fund, right, having that financial margin, having

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Speaker 1: that cushion, it's so important. But that's one of the

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Speaker 1: huge bummers of keeping a lot of cash like that

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Speaker 1: sitting around and a savings account is that it's not

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Speaker 1: earning a ton of money. So like I know, you

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Speaker 1: like to do. You like to have that money working

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Speaker 1: for you growing in the market, And the fact is,

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Speaker 1: emergencies don't come along all that often, but if it

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Speaker 1: ever does happen, yeah, you've got that rath Ira money.

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Speaker 1: You've got those contributions that you can draw on. And

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Speaker 1: I want to piggyback as well, back to you know,

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Speaker 1: with some of the reasons that you gave for pulling

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Speaker 1: some of those contributions out, which is to make money. Right, Like,

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Speaker 1: we're not advocating, like we said, the flat screen or

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Speaker 1: any other sort of consumption based purchase, but a sort

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Speaker 1: of purchase that might make you money. Essentially, that's the

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Speaker 1: definition of an investment. And so we're talking about taking

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Speaker 1: money out of one investment to put into another. And

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Speaker 1: that might be the case when it comes to real

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Speaker 1: estate or another maybe a business that you're thinking about

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Speaker 1: starting up, where the return could be substantially more than

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Speaker 1: what you would earn in the market. I think it's

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Speaker 1: just incredibly important to distinguish the difference between withdrawing money

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Speaker 1: for a big purchase for consumption versus withdrawing money for

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Speaker 1: a purchase that might make you money. And so obviously

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Speaker 1: we're leaning towards the side of things that would make

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Speaker 1: you money. So I have taken money out of my

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Speaker 1: wrath Ira. Matt contributions only because just to reiterate, you

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Speaker 1: can't take out the growth. If you take out the growth,

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Speaker 1: you'll be taxed and penalized on those withdrawals. So you

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Speaker 1: want to stick to only the amount that you've contributed

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Speaker 1: to your wrath in order to avoid those taxes and penalties.

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Speaker 1: But I have withdrawn from my wrath twice in my life.

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Speaker 1: And the first time that I withdrew money from the

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Speaker 1: wrath was not really a good reason. I had a

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Speaker 1: car that had kind of major engine t bubbles and

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Speaker 1: I needed to get it fixed, and so I withdrew

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Speaker 1: money from my wrath before I realized how dumb that

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Speaker 1: was in order to try to keep my emergency savings

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Speaker 1: account intact, which is backwards thinking, Really, I should have

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Speaker 1: taken the emergency fund and kept the money in my

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Speaker 1: wrath and then tried to rebuild that savings fund. And

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Speaker 1: then the other time that I withdrew money from my

428
00:20:20,520 --> 00:20:23,959
Speaker 1: wrath was literally just to get to that down payment

429
00:20:24,080 --> 00:20:27,000
Speaker 1: on a rental property. And in that example, I was

430
00:20:27,280 --> 00:20:30,800
Speaker 1: taking investment money and funding another investment. So yeah, don't

431
00:20:30,880 --> 00:20:32,800
Speaker 1: do what it did on number one. But if there's

432
00:20:32,800 --> 00:20:35,119
Speaker 1: an investment that you think makes sense, I think that

433
00:20:35,119 --> 00:20:37,160
Speaker 1: that is one of the best reasons to have money

434
00:20:37,160 --> 00:20:39,760
Speaker 1: in a wrath is because of that flexibility. Joel, I'm

435
00:20:39,800 --> 00:20:43,160
Speaker 1: sure that car repair was early on in your financial career, right,

436
00:20:43,200 --> 00:20:45,399
Speaker 1: It sure was, really yeah, and it was not the

437
00:20:45,440 --> 00:20:48,320
Speaker 1: smartest decision, that's for sure. But Joe, let's quickly kind

438
00:20:48,320 --> 00:20:51,560
Speaker 1: of talk about the difference between your contributions and the earnings.

439
00:20:51,880 --> 00:20:54,600
Speaker 1: And we've had folks asked before you know that I've

440
00:20:54,600 --> 00:20:57,480
Speaker 1: contributed to my wrath IRA, and now I do want

441
00:20:57,480 --> 00:20:59,600
Speaker 1: to pull a little bit out. How do I make

442
00:20:59,640 --> 00:21:02,240
Speaker 1: sure that the government, because it's the government, right, they're

443
00:21:02,240 --> 00:21:04,119
Speaker 1: the ones who care if you take money out of

444
00:21:04,160 --> 00:21:07,679
Speaker 1: your retirement account because there's tax implications associated with that.

445
00:21:08,119 --> 00:21:09,840
Speaker 1: And so the question is, how do I make sure

446
00:21:09,920 --> 00:21:12,359
Speaker 1: that the money I withdraw from my rath I ra

447
00:21:12,440 --> 00:21:15,359
Speaker 1: A are the contributions and not the earnings, Like, how

448
00:21:15,400 --> 00:21:18,320
Speaker 1: do I designate that right? So, say, for for instance,

449
00:21:18,400 --> 00:21:21,399
Speaker 1: you've invested twenty five dollars over the past five years,

450
00:21:21,760 --> 00:21:24,200
Speaker 1: Let's say hypothetically that has now grown to forty thousand.

451
00:21:24,720 --> 00:21:26,560
Speaker 1: We've had folks ask how do I make sure that

452
00:21:26,600 --> 00:21:29,320
Speaker 1: I'm not drawing that fifteen thousand dollars in growth and

453
00:21:29,359 --> 00:21:32,919
Speaker 1: that instead I am drawing from that twenty five dollars. Well,

454
00:21:32,920 --> 00:21:35,280
Speaker 1: the fact is is that it doesn't matter. As long

455
00:21:35,320 --> 00:21:37,679
Speaker 1: as you are taking out less than what you have

456
00:21:37,800 --> 00:21:41,080
Speaker 1: originally contributed, you are in the clear. If you've kept

457
00:21:41,119 --> 00:21:43,720
Speaker 1: up with your paperwork. By default, the government knows that

458
00:21:43,760 --> 00:21:46,119
Speaker 1: you're going to be withdrawing from the contributions and that

459
00:21:46,160 --> 00:21:49,280
Speaker 1: you're not going to take the tax penalty by you know,

460
00:21:49,320 --> 00:21:52,080
Speaker 1: withdrawing your actual earnings. And so you know, from that

461
00:21:52,119 --> 00:21:55,520
Speaker 1: standpoint you'll be concerned with somehow naming or designating the

462
00:21:55,560 --> 00:21:58,080
Speaker 1: money that you are withdrawing, but do make sure that

463
00:21:58,119 --> 00:22:00,760
Speaker 1: you hang onto the paperwork from the company that you

464
00:22:00,800 --> 00:22:03,960
Speaker 1: have your roth ira with. Yeah, another really cool thing

465
00:22:04,040 --> 00:22:07,080
Speaker 1: about roth iras is that when you get really old,

466
00:22:07,359 --> 00:22:09,919
Speaker 1: when you reach the age of seventy and a half,

467
00:22:09,960 --> 00:22:13,040
Speaker 1: you don't have to take what's known as required minimum distributions,

468
00:22:13,400 --> 00:22:16,600
Speaker 1: Whereas with a four oh one k and a traditional ira,

469
00:22:17,119 --> 00:22:21,440
Speaker 1: you actually are forced by the government to start withdrawing funds. Well,

470
00:22:21,480 --> 00:22:24,440
Speaker 1: with a roth ira, that ain't the case, and so

471
00:22:24,600 --> 00:22:26,639
Speaker 1: that's kind of cool. If you want to keep your

472
00:22:26,640 --> 00:22:30,440
Speaker 1: money growing and keep it invested, that obviously a long

473
00:22:30,440 --> 00:22:33,920
Speaker 1: way down the line. But it's another element of flexibility

474
00:22:33,960 --> 00:22:36,760
Speaker 1: that the rath adds to, kind of the way you

475
00:22:36,800 --> 00:22:40,680
Speaker 1: tap your retirement funds as you age. Yeah, that's so great.

476
00:22:40,840 --> 00:22:42,960
Speaker 1: If you're still working some you know, if you have

477
00:22:43,160 --> 00:22:45,800
Speaker 1: enough money coming in to cover your living expenses, you

478
00:22:45,880 --> 00:22:49,280
Speaker 1: don't have to take that money out. This is not required.

479
00:22:49,720 --> 00:22:52,639
Speaker 1: And that's especially good, by the way, for airs if

480
00:22:52,680 --> 00:22:55,480
Speaker 1: you eventually desire to see some of your your children

481
00:22:55,600 --> 00:22:58,600
Speaker 1: or people that you love inherit some of your money. Meant,

482
00:22:58,640 --> 00:23:01,320
Speaker 1: a roth ira is just a great equal for inheritance

483
00:23:01,359 --> 00:23:04,400
Speaker 1: money and jel. Another benefit we wanted to cover when

484
00:23:04,440 --> 00:23:07,200
Speaker 1: it comes to roth ira a s is how you're

485
00:23:07,280 --> 00:23:10,440
Speaker 1: essentially tricking yourself into saving more money when you are

486
00:23:10,520 --> 00:23:13,600
Speaker 1: investing into a rath. And what we mean by that

487
00:23:13,720 --> 00:23:17,240
Speaker 1: is that with a roth you have more post retirement money.

488
00:23:17,320 --> 00:23:19,679
Speaker 1: Let me explain it. So, with a traditional ira, you

489
00:23:19,720 --> 00:23:22,919
Speaker 1: get the tax benefits now, right, So you contribute to

490
00:23:23,119 --> 00:23:26,239
Speaker 1: your four one K or your traditional ira, and you

491
00:23:26,280 --> 00:23:28,960
Speaker 1: realize that tax benefit that year or the next year

492
00:23:28,960 --> 00:23:31,760
Speaker 1: when you do your taxes, and chances are most folks

493
00:23:31,800 --> 00:23:35,160
Speaker 1: aren't likely to invest that additional benefit right those savings

494
00:23:35,800 --> 00:23:38,560
Speaker 1: because it's just seen as a bonus. But with a RATH,

495
00:23:38,760 --> 00:23:43,800
Speaker 1: that tax benefit occurs during retirement, once you've presumably stopped working,

496
00:23:44,280 --> 00:23:47,560
Speaker 1: and you realize that tax benefit when you need it more, right,

497
00:23:47,560 --> 00:23:50,040
Speaker 1: when you're older and you are not working. And it

498
00:23:50,119 --> 00:23:53,320
Speaker 1: also happens that this is when typically when you're wiser

499
00:23:53,359 --> 00:23:56,560
Speaker 1: and you're less likely to spend that money on consumption.

500
00:23:57,359 --> 00:23:59,400
Speaker 1: Did I explain that right? Does that make sense? Yeah?

501
00:23:59,440 --> 00:24:01,560
Speaker 1: I think The way I think about it too, is

502
00:24:01,560 --> 00:24:04,040
Speaker 1: is that contributing money to a ROTH as opposed to

503
00:24:04,040 --> 00:24:07,960
Speaker 1: a traditional IRA is basically this sweet forced method of savings.

504
00:24:08,359 --> 00:24:11,119
Speaker 1: Because most people think about it in terms of a

505
00:24:11,200 --> 00:24:13,639
Speaker 1: lump sum that they have to invest every year. Most

506
00:24:13,840 --> 00:24:17,119
Speaker 1: people then use a method called dollar cost averaging in

507
00:24:17,200 --> 00:24:18,840
Speaker 1: order to you know, put their money in once a

508
00:24:18,840 --> 00:24:21,840
Speaker 1: month or every paycheck. But ultimately most people say, you

509
00:24:21,880 --> 00:24:23,760
Speaker 1: know what, I've got four thousand dollars this year that

510
00:24:23,800 --> 00:24:26,240
Speaker 1: I can contribute to a retirement account, or I've got

511
00:24:26,560 --> 00:24:29,040
Speaker 1: six thousand dollars this year that I can contribute to

512
00:24:29,080 --> 00:24:32,119
Speaker 1: a retirement account. And the fact is, if you decide

513
00:24:32,119 --> 00:24:34,760
Speaker 1: to contribute to a traditional I array instead of a

514
00:24:34,840 --> 00:24:37,400
Speaker 1: ROTH iray, well, in effect, you're putting in less money,

515
00:24:37,440 --> 00:24:40,000
Speaker 1: because if you put six thousand dollars into a traditional

516
00:24:40,000 --> 00:24:43,520
Speaker 1: i arra, that's six thousand dollars will be tax someday

517
00:24:43,600 --> 00:24:46,120
Speaker 1: when you withdraw it in retirement, whereas if you put

518
00:24:46,119 --> 00:24:48,199
Speaker 1: it into a roth i array. Is this kind of

519
00:24:48,680 --> 00:24:52,960
Speaker 1: forced method of saving more because that six thousand dollars

520
00:24:53,000 --> 00:24:55,680
Speaker 1: will never be taxed ever. Again, Yeah, you got that

521
00:24:55,720 --> 00:24:58,159
Speaker 1: additional tax fee maybe if you want to look at

522
00:24:58,160 --> 00:24:59,800
Speaker 1: it that way upfront, like you kind of paid a

523
00:25:00,000 --> 00:25:01,399
Speaker 1: a little bit. It's all right. If I want to

524
00:25:01,400 --> 00:25:03,760
Speaker 1: get this six thousand dollars in the market invested in

525
00:25:03,760 --> 00:25:05,119
Speaker 1: the rath, I'm gonna have to pay a little bit

526
00:25:05,119 --> 00:25:07,560
Speaker 1: more because it's gonna be taxed. However, like you said,

527
00:25:07,600 --> 00:25:09,479
Speaker 1: in the long term, you know that money is never

528
00:25:09,520 --> 00:25:11,359
Speaker 1: gonna be taxed again, and so in the end you're

529
00:25:11,359 --> 00:25:13,800
Speaker 1: gonna end up with more money. Yeah. Man, I feel

530
00:25:13,840 --> 00:25:17,359
Speaker 1: like this conversation about a roth hira versus a traditional ira,

531
00:25:17,720 --> 00:25:20,960
Speaker 1: good people come down on different sides of this, and

532
00:25:21,040 --> 00:25:23,520
Speaker 1: ultimately you and I we would say whether you like

533
00:25:23,560 --> 00:25:26,240
Speaker 1: the traditional ira better or a roth ira better, the

534
00:25:26,520 --> 00:25:29,000
Speaker 1: most important thing is to actually get started and to

535
00:25:29,080 --> 00:25:32,679
Speaker 1: continue to invest through the months and years. But we

536
00:25:32,760 --> 00:25:34,880
Speaker 1: like the ROTH for a lot of reasons. And let's

537
00:25:34,880 --> 00:25:37,080
Speaker 1: get into some of those other reasons as well as

538
00:25:37,119 --> 00:25:39,520
Speaker 1: what you should do if your employer offers a RATH

539
00:25:39,720 --> 00:25:41,920
Speaker 1: for oh one K. We'll get to that right after

540
00:25:42,000 --> 00:25:54,119
Speaker 1: the break. Okay, Joel, Let's bring it back from the break,

541
00:25:54,240 --> 00:25:56,920
Speaker 1: and before we continue to talk about the ROTH IRA

542
00:25:57,119 --> 00:26:00,639
Speaker 1: and other post tax accounts, let's mention out you know,

543
00:26:00,720 --> 00:26:03,159
Speaker 1: we are not hating on pre tax accounts like a

544
00:26:03,200 --> 00:26:06,680
Speaker 1: traditional IRA or a four oh n K. There's certainly

545
00:26:06,760 --> 00:26:10,720
Speaker 1: benefits to having your retirement accounts diversified. We think it's

546
00:26:10,760 --> 00:26:14,119
Speaker 1: wise to have multiple buckets of retirement money because, like

547
00:26:14,160 --> 00:26:16,399
Speaker 1: we mentioned at the very beginning of this episode, we

548
00:26:16,440 --> 00:26:18,680
Speaker 1: don't know what the tax rate is going to be

549
00:26:18,840 --> 00:26:20,760
Speaker 1: by the time you hit retirement. We don't know what

550
00:26:20,760 --> 00:26:22,480
Speaker 1: it's going to be for us, and so to have

551
00:26:22,640 --> 00:26:24,840
Speaker 1: options when the time comes, that's gonna put you in

552
00:26:24,840 --> 00:26:28,080
Speaker 1: a position of financial strength. Really, what we're focusing on

553
00:26:28,119 --> 00:26:30,359
Speaker 1: here is how the RATH I RAY is just so

554
00:26:30,440 --> 00:26:33,840
Speaker 1: incredibly flexible and just gives you a lot of agility

555
00:26:33,880 --> 00:26:36,600
Speaker 1: when it comes to being creative with your money in ways.

556
00:26:36,640 --> 00:26:40,800
Speaker 1: In addition to just putting that money into a retirement account. Yeah,

557
00:26:40,840 --> 00:26:43,159
Speaker 1: if you are contributing money to a four oh one

558
00:26:43,240 --> 00:26:45,919
Speaker 1: K through work and then a roth iray on the side,

559
00:26:46,280 --> 00:26:48,760
Speaker 1: it's a kind of perfect yin and yang, right that

560
00:26:48,880 --> 00:26:51,320
Speaker 1: they balance each other like that, sort of like you

561
00:26:51,359 --> 00:26:54,359
Speaker 1: and me Joel something like that, something like that. And

562
00:26:54,400 --> 00:26:56,720
Speaker 1: I love how when you do get to the point

563
00:26:56,720 --> 00:26:59,720
Speaker 1: where you're ready to withdraw your funds that you have

564
00:26:59,840 --> 00:27:03,360
Speaker 1: a lot of control over your tax situation in retirement

565
00:27:03,720 --> 00:27:07,119
Speaker 1: if you have access to pre tax and post tax

566
00:27:07,480 --> 00:27:10,840
Speaker 1: retirement funds. And that's exactly what you're doing, how you're

567
00:27:10,880 --> 00:27:13,040
Speaker 1: setting yourself up. If you're contributing to a four oh

568
00:27:13,080 --> 00:27:16,560
Speaker 1: one K and to a roth Ira, you're just making

569
00:27:16,560 --> 00:27:19,800
Speaker 1: it really easy on yourself when it comes to what

570
00:27:20,080 --> 00:27:23,360
Speaker 1: sort of taxes you pay every single year when you're

571
00:27:23,400 --> 00:27:27,080
Speaker 1: withdrawing those funds to live on. Yeah. And another example

572
00:27:27,080 --> 00:27:29,480
Speaker 1: of that is the WRATH four O n K And

573
00:27:29,520 --> 00:27:31,600
Speaker 1: so this is sort of a hybrid between the four

574
00:27:31,600 --> 00:27:33,600
Speaker 1: O one K that you have offered hopefully through your

575
00:27:33,600 --> 00:27:37,040
Speaker 1: employer if you're a W two earner, but coupled with

576
00:27:37,119 --> 00:27:39,960
Speaker 1: the benefits of the RATH and JUEL. You want to

577
00:27:40,000 --> 00:27:42,000
Speaker 1: explain how that works a little bit, Yeah, so a

578
00:27:42,119 --> 00:27:44,440
Speaker 1: rath four o one k is being offered at more

579
00:27:44,480 --> 00:27:48,199
Speaker 1: and more employers around the country. Also, the government offers

580
00:27:48,240 --> 00:27:51,359
Speaker 1: a rath TSP, so if you have access to that,

581
00:27:51,520 --> 00:27:53,560
Speaker 1: that's a great option for you as well. It is

582
00:27:53,560 --> 00:27:55,919
Speaker 1: just kind of marriage of a four oh one K

583
00:27:56,000 --> 00:27:58,680
Speaker 1: and a roth ira. And the great thing about contributing

584
00:27:58,680 --> 00:28:00,199
Speaker 1: to a roth four oh one K or to a

585
00:28:00,280 --> 00:28:03,360
Speaker 1: roth TSP is that you can actually contribute a whole

586
00:28:03,359 --> 00:28:06,600
Speaker 1: lot more. We mentioned that the contribution limits on a

587
00:28:06,680 --> 00:28:09,960
Speaker 1: roth ira are only six thousand dollars and so while

588
00:28:10,000 --> 00:28:11,960
Speaker 1: that's great and there are probably a lot of people

589
00:28:11,960 --> 00:28:14,080
Speaker 1: listening to this that are saying, man, I hope one

590
00:28:14,160 --> 00:28:16,879
Speaker 1: day I can max up just that roth ira, right,

591
00:28:16,960 --> 00:28:19,600
Speaker 1: there are also a lot of other people who want

592
00:28:19,680 --> 00:28:21,680
Speaker 1: to do more. And if you have access to a

593
00:28:21,800 --> 00:28:24,280
Speaker 1: roth four oh one k, you can contribute up to

594
00:28:24,440 --> 00:28:26,840
Speaker 1: nineteen thousand dollars a year if you're under the age

595
00:28:26,840 --> 00:28:29,640
Speaker 1: of fifty and twenty five thou dollars a year if

596
00:28:29,720 --> 00:28:32,200
Speaker 1: you are over to that age. It's that's just another

597
00:28:32,200 --> 00:28:35,280
Speaker 1: way for you to pay the taxman now and to

598
00:28:35,320 --> 00:28:38,160
Speaker 1: set aside a bunch of money invested for your future.

599
00:28:38,440 --> 00:28:40,080
Speaker 1: I'm a big fan of the RATH four oh one

600
00:28:40,160 --> 00:28:43,200
Speaker 1: K and TSP. The interesting thing to Matt is that

601
00:28:43,280 --> 00:28:44,800
Speaker 1: let's say you have a RATH four ow one K

602
00:28:45,000 --> 00:28:49,320
Speaker 1: through work and your employer offers a match, Well, their

603
00:28:49,400 --> 00:28:52,240
Speaker 1: match actually goes into a traditional four one K, whereas

604
00:28:52,640 --> 00:28:55,600
Speaker 1: your contributions are going into the ROTH version. And so

605
00:28:55,640 --> 00:28:58,320
Speaker 1: at the same time you're contributing to the ROTH version,

606
00:28:58,640 --> 00:29:01,360
Speaker 1: you're creating kind of that same in how your investment

607
00:29:01,360 --> 00:29:04,120
Speaker 1: funds are treated when it comes to taxes. And I

608
00:29:04,160 --> 00:29:06,719
Speaker 1: think that's kind of cool too. Yeah, that's right. Essentially,

609
00:29:06,760 --> 00:29:10,280
Speaker 1: you're creating a sort of a hybrid diversified approach when

610
00:29:10,280 --> 00:29:12,400
Speaker 1: it comes to the tax benefits that you would receive

611
00:29:12,480 --> 00:29:15,440
Speaker 1: on your different retirement accounts. And another way that you

612
00:29:15,480 --> 00:29:19,080
Speaker 1: are able to do that is through backdoor wrath iras.

613
00:29:19,760 --> 00:29:22,960
Speaker 1: And this is Joel, something you mentioned alluded to earlier,

614
00:29:23,280 --> 00:29:26,719
Speaker 1: but real quickly, if you are a high income earner

615
00:29:26,840 --> 00:29:29,920
Speaker 1: right and you no longer qualify to contribute to your

616
00:29:29,920 --> 00:29:32,239
Speaker 1: wrath ira because you make too much, well, you can

617
00:29:32,240 --> 00:29:35,640
Speaker 1: still contribute that money to a traditional IRA and then

618
00:29:35,680 --> 00:29:38,760
Speaker 1: convert it to a roth ira. This is a way

619
00:29:38,800 --> 00:29:42,600
Speaker 1: to essentially get around the income limits that are put

620
00:29:42,640 --> 00:29:46,520
Speaker 1: onto ross using a conversion. When you convert that money

621
00:29:46,520 --> 00:29:48,840
Speaker 1: from a traditional ira to a roth, you will have

622
00:29:48,920 --> 00:29:51,200
Speaker 1: to pay the taxes on those right. And so when

623
00:29:51,240 --> 00:29:54,520
Speaker 1: you originally contributed to your traditional ira, you received a

624
00:29:54,560 --> 00:29:57,040
Speaker 1: tax benefit, you no longer needed to pay those taxes.

625
00:29:57,240 --> 00:29:59,200
Speaker 1: But when you convert that money to a wrath, just

626
00:29:59,240 --> 00:30:01,080
Speaker 1: like when you would typic they contribute money to a

627
00:30:01,160 --> 00:30:03,680
Speaker 1: roth ira, you have to pay those taxes to be

628
00:30:03,720 --> 00:30:05,560
Speaker 1: prepared for that. And so really that's all we're gonna

629
00:30:05,560 --> 00:30:08,080
Speaker 1: say about the backdoor wrath, because we really could spend

630
00:30:08,080 --> 00:30:11,480
Speaker 1: an entire episode talking about the backdoor wrath on how

631
00:30:11,480 --> 00:30:13,719
Speaker 1: it's great for high income earners who are looking, like

632
00:30:13,720 --> 00:30:16,560
Speaker 1: we said, to diversify their tax liability when it comes

633
00:30:16,560 --> 00:30:19,200
Speaker 1: to the retirement accounts. Maybe we'll say that for an

634
00:30:19,200 --> 00:30:21,760
Speaker 1: episode down the road. Who knows. Yeah, there are a

635
00:30:21,760 --> 00:30:24,080
Speaker 1: lot of great resources out there for folks that are

636
00:30:24,120 --> 00:30:27,280
Speaker 1: interested in doing a backdoor wrath. But really this episode

637
00:30:27,320 --> 00:30:29,440
Speaker 1: is all about how great the roth ira is. And

638
00:30:29,480 --> 00:30:31,320
Speaker 1: so we did want to touch on the backdoor wrath.

639
00:30:31,400 --> 00:30:33,560
Speaker 1: We wanted to touch on the rath four O one K,

640
00:30:33,920 --> 00:30:35,720
Speaker 1: but when it comes down to it, we're talking about

641
00:30:35,720 --> 00:30:39,880
Speaker 1: this roth ira and Ultimately, it's pretty amazing in its simplicity.

642
00:30:40,120 --> 00:30:42,120
Speaker 1: You pay tax on your income and then you know what,

643
00:30:42,120 --> 00:30:44,360
Speaker 1: you're trying to funnel as much as you can up

644
00:30:44,360 --> 00:30:47,520
Speaker 1: to that six thousand dollar level each for an individual,

645
00:30:47,600 --> 00:30:50,560
Speaker 1: twelve thou dollars if you're married, and if you're over

646
00:30:50,640 --> 00:30:53,640
Speaker 1: fifty extra grand each. Right, But really having a roth

647
00:30:53,720 --> 00:30:56,840
Speaker 1: hi ray can give you a certain amount of flexibility

648
00:30:56,920 --> 00:30:59,000
Speaker 1: when it comes to saving for your retirement. You know,

649
00:30:59,040 --> 00:31:01,680
Speaker 1: putting your money is into four one k. It's great,

650
00:31:01,760 --> 00:31:04,120
Speaker 1: we encourage it, but at the same time, it's it's

651
00:31:04,120 --> 00:31:07,840
Speaker 1: pretty much inaccessible for decades on end, and a WRATH

652
00:31:07,960 --> 00:31:11,080
Speaker 1: gives you this ability to invest for the long term

653
00:31:11,200 --> 00:31:14,320
Speaker 1: while also having just a little bit of accessibility in

654
00:31:14,360 --> 00:31:17,480
Speaker 1: case you want to diversify your investments later on down

655
00:31:17,520 --> 00:31:20,040
Speaker 1: the line. And it can also even turn into just

656
00:31:20,120 --> 00:31:23,160
Speaker 1: kind of this great emergency fund. If you've been investing

657
00:31:23,240 --> 00:31:25,920
Speaker 1: in a WRATH for a lot of years, it's got

658
00:31:25,960 --> 00:31:29,560
Speaker 1: more flexibility than any other retirement account I know of.

659
00:31:29,960 --> 00:31:32,239
Speaker 1: And so it's just really important for people to know

660
00:31:32,440 --> 00:31:35,240
Speaker 1: that they can and should if they have earned income

661
00:31:35,480 --> 00:31:38,200
Speaker 1: and qualify to contribute to a wrathy, they should really

662
00:31:38,200 --> 00:31:42,640
Speaker 1: strongly consider it. Yes, please contributes right. Big picture here,

663
00:31:42,720 --> 00:31:45,680
Speaker 1: we're talking about the differences often here between a roth

664
00:31:45,800 --> 00:31:49,080
Speaker 1: ira and a traditional ira. And if that's the sort

665
00:31:49,120 --> 00:31:51,320
Speaker 1: of argument that you're having with yourself or you know,

666
00:31:51,400 --> 00:31:54,240
Speaker 1: with your friends, well you're gonna be okay, right, Like,

667
00:31:54,320 --> 00:31:56,560
Speaker 1: that's the big thing. If you are investing in one

668
00:31:56,600 --> 00:31:59,440
Speaker 1: of those, you're doing great. As long as you are

669
00:31:59,480 --> 00:32:02,640
Speaker 1: investing and you're investing consistently, you're gonna be okay. But

670
00:32:02,720 --> 00:32:05,000
Speaker 1: in particular, if you are younger, if you're in a

671
00:32:05,040 --> 00:32:08,240
Speaker 1: lower tax bracket, and given our current tax laws, for

672
00:32:08,360 --> 00:32:10,560
Speaker 1: most folks, investing in a roth ira is going to

673
00:32:10,640 --> 00:32:13,080
Speaker 1: be the way to go. And also, if you see

674
00:32:13,080 --> 00:32:15,640
Speaker 1: your career on a trajectory where you know you're gonna

675
00:32:15,640 --> 00:32:17,680
Speaker 1: be earning a lot more money way down the road,

676
00:32:18,000 --> 00:32:20,560
Speaker 1: well you're gonna be at a higher tax bracket pretty

677
00:32:20,600 --> 00:32:22,920
Speaker 1: much guaranteed if that's the case. So again, if you're

678
00:32:22,960 --> 00:32:24,800
Speaker 1: young and you're not earning a ton of money, but

679
00:32:24,920 --> 00:32:27,400
Speaker 1: you are investing a lot of money, your tax rate,

680
00:32:27,400 --> 00:32:30,000
Speaker 1: your tax bracket it's pretty low. Invest that money and

681
00:32:30,040 --> 00:32:32,240
Speaker 1: go ahead and pay the taxes. Now, allow that money

682
00:32:32,240 --> 00:32:34,640
Speaker 1: to grow tax free. Well, at the same time, maintaining

683
00:32:34,640 --> 00:32:37,360
Speaker 1: some incredible flexibility over that money. All right, maw, Let's

684
00:32:37,360 --> 00:32:39,200
Speaker 1: get back to the beer. Today. On the show, we

685
00:32:39,320 --> 00:32:42,840
Speaker 1: drank Superior barley Line by Triple Root Brewing, and one

686
00:32:42,880 --> 00:32:46,120
Speaker 1: of our listeners, Heather, she sent this beer over. Man.

687
00:32:46,200 --> 00:32:48,680
Speaker 1: I love a good barley wine, and it's pretty rare.

688
00:32:48,680 --> 00:32:50,160
Speaker 1: I don't even know if we've had one on the

689
00:32:50,200 --> 00:32:52,800
Speaker 1: show yet, And this one is fascinating because it was

690
00:32:52,880 --> 00:32:56,480
Speaker 1: aged in tequila barrels with lime, which kind of gives

691
00:32:56,480 --> 00:32:59,160
Speaker 1: it that kind of margarite di vibe. Sounds kind of crazy, right,

692
00:32:59,200 --> 00:33:01,800
Speaker 1: it sounds crazy. I love a good barley wine personally

693
00:33:01,840 --> 00:33:04,240
Speaker 1: because I feel like they have these notes of figs,

694
00:33:04,440 --> 00:33:08,480
Speaker 1: raisins and plums, and this one in particular just really

695
00:33:08,520 --> 00:33:10,800
Speaker 1: had some fantastic flavors and then a little bit of

696
00:33:10,840 --> 00:33:13,600
Speaker 1: that tequila barrel shining through. At the same time. This

697
00:33:13,680 --> 00:33:15,600
Speaker 1: was a really good beer. Yeah, I agree with you.

698
00:33:15,720 --> 00:33:18,400
Speaker 1: Those big boozy flavors are you know, what you can

699
00:33:18,480 --> 00:33:20,720
Speaker 1: come to expect out of a barley wine. But in

700
00:33:20,760 --> 00:33:23,120
Speaker 1: particular I can tell that it was aged and barrel

701
00:33:23,680 --> 00:33:24,960
Speaker 1: and I feel like I could pick out a little

702
00:33:24,960 --> 00:33:26,240
Speaker 1: bit of the lime. It sort of had like this

703
00:33:26,280 --> 00:33:28,880
Speaker 1: sort of bitter brightness sort of like you said, shining

704
00:33:28,920 --> 00:33:31,280
Speaker 1: through a little bit there, and it kept that boozy

705
00:33:31,400 --> 00:33:34,280
Speaker 1: sweetness from getting too heavy down that sweet path instead

706
00:33:34,360 --> 00:33:36,920
Speaker 1: kept kind of kept it bright and drinkable. This was

707
00:33:37,160 --> 00:33:41,600
Speaker 1: a very unique and exceptional beer. I think we're incredibly

708
00:33:41,680 --> 00:33:43,960
Speaker 1: lucky to have our hands on this. And again, thanks

709
00:33:43,960 --> 00:33:46,640
Speaker 1: so much to Heather for sending this one our away.

710
00:33:46,680 --> 00:33:49,320
Speaker 1: We really appreciate it. Yeah, Matt, that was a incredibly

711
00:33:49,360 --> 00:33:51,400
Speaker 1: unique beer. So I feel like we kind of already

712
00:33:51,400 --> 00:33:53,920
Speaker 1: gave some final thoughts on why the rath i Ra

713
00:33:54,240 --> 00:33:56,880
Speaker 1: is such a good investment vehicle. The last thing I

714
00:33:56,960 --> 00:33:59,640
Speaker 1: want to say is to get started. If you haven't

715
00:33:59,640 --> 00:34:02,320
Speaker 1: opened roth Ira, if you've kind of been investing in

716
00:34:02,360 --> 00:34:04,120
Speaker 1: your four own k up to the match and you're

717
00:34:04,120 --> 00:34:06,600
Speaker 1: looking for something else to do. We'll open up a

718
00:34:06,680 --> 00:34:11,480
Speaker 1: roth Ira. And we like companies like Charles Schwab, Vanguard

719
00:34:11,520 --> 00:34:14,000
Speaker 1: and Fidelity. Those are some of the best low cost

720
00:34:14,040 --> 00:34:16,919
Speaker 1: investment firms out there. And you can have a roth

721
00:34:17,040 --> 00:34:20,080
Speaker 1: opened in about five minutes. Really, it's not that hard.

722
00:34:20,360 --> 00:34:22,040
Speaker 1: And so yeah, the next thing to do is actually

723
00:34:22,080 --> 00:34:24,239
Speaker 1: take some action and make it happen. We'll have links

724
00:34:24,280 --> 00:34:26,920
Speaker 1: to those companies and more on our show notes at

725
00:34:27,000 --> 00:34:30,279
Speaker 1: how to money dot com. Yes we will, and if

726
00:34:30,320 --> 00:34:32,200
Speaker 1: you found this episode helpful, we would love to hear

727
00:34:32,239 --> 00:34:34,719
Speaker 1: from you. Leave us a review over at Apple Podcasts

728
00:34:34,880 --> 00:34:38,319
Speaker 1: or wherever you listen to podcasts. Alright, buddy, until next time,

729
00:34:38,920 --> 00:34:40,439
Speaker 1: Best friends Out, Best Friends Out,