1 00:00:00,120 --> 00:00:02,640 Speaker 1: Welcome to How the Money. I'm Joel on Matt and 2 00:00:02,680 --> 00:00:06,480 Speaker 1: today we're discussing the massive retirement account changes that impact you. 3 00:00:26,280 --> 00:00:30,680 Speaker 1: That's right, Joel, the massive changes, the specific changes that 4 00:00:30,720 --> 00:00:33,520 Speaker 1: took place at the end of last year and lots 5 00:00:33,520 --> 00:00:36,680 Speaker 1: of them, well not the changes. What it's kind of 6 00:00:36,680 --> 00:00:39,760 Speaker 1: like caval cascading arrangement of changes. So we're gonna talk 7 00:00:39,760 --> 00:00:41,720 Speaker 1: about this like when they're going to be implemented, how 8 00:00:41,760 --> 00:00:44,120 Speaker 1: they're going to be implemented past, but it may not 9 00:00:44,240 --> 00:00:48,599 Speaker 1: actually be implemented for years, even a decade, uh from now. 10 00:00:48,760 --> 00:00:52,040 Speaker 1: Some started beginning of this year someone until seven's We 11 00:00:52,360 --> 00:00:55,360 Speaker 1: thought about calling this episode working Towards a more Secure 12 00:00:55,440 --> 00:01:00,160 Speaker 1: retirement because it's the secure two point oh secure active point. Yeah, 13 00:01:00,200 --> 00:01:02,120 Speaker 1: but we feel like we're burying the topic a little 14 00:01:02,120 --> 00:01:04,679 Speaker 1: bit because this truly is, it's really important. It actually 15 00:01:04,880 --> 00:01:07,000 Speaker 1: so it kind of makes me think of instruction manuals. 16 00:01:07,200 --> 00:01:09,440 Speaker 1: A lot of folks may have gotten some electronics or 17 00:01:09,480 --> 00:01:11,280 Speaker 1: like a new toy. In my case, I got a 18 00:01:11,319 --> 00:01:13,560 Speaker 1: trigger grill for Christmas and it comes with with like 19 00:01:13,600 --> 00:01:17,280 Speaker 1: this fat instruction manual, And essentially what we're doing is 20 00:01:17,280 --> 00:01:20,440 Speaker 1: we're sitting down and we are reading that instruction manual, 21 00:01:20,440 --> 00:01:23,320 Speaker 1: and we're making sure that you know how to properly 22 00:01:23,400 --> 00:01:25,280 Speaker 1: run your retirement accounts. A lot of times you can 23 00:01:25,360 --> 00:01:27,120 Speaker 1: kind of throw that instruction manual to the side and think, 24 00:01:27,240 --> 00:01:28,640 Speaker 1: I just kind of figure this out, but we think 25 00:01:28,640 --> 00:01:30,920 Speaker 1: this is truly important. We're the kind of nerds who 26 00:01:30,920 --> 00:01:34,200 Speaker 1: sit down and uh read page after page and make 27 00:01:34,240 --> 00:01:36,520 Speaker 1: sure that that you are going to be able to 28 00:01:36,520 --> 00:01:38,760 Speaker 1: say for retirement in correct way. And the truth is 29 00:01:38,800 --> 00:01:41,120 Speaker 1: there there are a lot of changes, some of which 30 00:01:41,280 --> 00:01:43,800 Speaker 1: might not impact you, but we're gonna kind of highlight 31 00:01:43,840 --> 00:01:45,960 Speaker 1: the most important ones, the ones that we think are 32 00:01:46,000 --> 00:01:48,960 Speaker 1: going to impact the biggest swath of our listeners, and 33 00:01:48,960 --> 00:01:50,280 Speaker 1: a lot of them will. I mean we're talking, we're 34 00:01:50,280 --> 00:01:53,760 Speaker 1: gonna talk a lot about RATH accounts, but also accounts. 35 00:01:53,880 --> 00:01:56,600 Speaker 1: There are new retirement accounts out there for the self employed. 36 00:01:56,920 --> 00:01:59,760 Speaker 1: There's quite an array of changes that took place, and 37 00:02:00,000 --> 00:02:02,040 Speaker 1: sure we're going to cover all of those today. Before 38 00:02:02,080 --> 00:02:04,160 Speaker 1: we get to that, I wanted to mention one other account, 39 00:02:05,080 --> 00:02:06,800 Speaker 1: just to money the waters a little more, and that 40 00:02:07,000 --> 00:02:09,560 Speaker 1: is donor advice funds. And we've talked about those. We 41 00:02:09,639 --> 00:02:11,680 Speaker 1: talked about those in November when we talked about giving, 42 00:02:11,680 --> 00:02:13,959 Speaker 1: and we think giving your money away is really important. 43 00:02:13,960 --> 00:02:16,560 Speaker 1: But if you're the kind of money nerd who wants 44 00:02:16,600 --> 00:02:19,840 Speaker 1: to suck money aside and give it in future years, 45 00:02:20,080 --> 00:02:21,840 Speaker 1: a donor avice fund can can help you do that, 46 00:02:21,840 --> 00:02:24,040 Speaker 1: and it can actually help you grow the dollars that 47 00:02:24,080 --> 00:02:26,840 Speaker 1: you want to give. And we've talked about how Daffy 48 00:02:27,000 --> 00:02:29,680 Speaker 1: is a really cool website daffy dot org to do that. 49 00:02:29,840 --> 00:02:32,600 Speaker 1: D a f f y and listener Jared apparently heard 50 00:02:32,639 --> 00:02:33,960 Speaker 1: us talk about a couple of years ago and he 51 00:02:34,000 --> 00:02:36,400 Speaker 1: opened up an account with Daffy. But he he emailed 52 00:02:36,440 --> 00:02:38,760 Speaker 1: us Matt and this is so cool. I thought this 53 00:02:38,840 --> 00:02:42,240 Speaker 1: was awesome because he won a ten thousand dollar prize 54 00:02:42,280 --> 00:02:44,959 Speaker 1: that Daffy was giving away dollars so that he could 55 00:02:44,960 --> 00:02:47,600 Speaker 1: then give that money away, so that he has extra 56 00:02:47,680 --> 00:02:51,720 Speaker 1: ammunition now in his giving arsenal, all because he participated 57 00:02:51,720 --> 00:02:53,840 Speaker 1: in this, in this Daffy giveaway to give away the 58 00:02:53,919 --> 00:02:56,520 Speaker 1: charity is and nonprofits of his choice of this designation. 59 00:02:56,560 --> 00:02:58,440 Speaker 1: And on top of that, on top of that, Daffy 60 00:02:58,480 --> 00:03:01,480 Speaker 1: has uh this way that you can allow other people 61 00:03:01,520 --> 00:03:03,600 Speaker 1: to give your money away too. So he gave some 62 00:03:03,680 --> 00:03:05,520 Speaker 1: of his money away that he are that he won 63 00:03:05,600 --> 00:03:07,680 Speaker 1: in this ship stakes to his co workers. He said, 64 00:03:07,680 --> 00:03:09,359 Speaker 1: he listen, you've got a hunter Bucks. You've got a 65 00:03:09,440 --> 00:03:11,239 Speaker 1: hunter Bucks. You've got a hunter Bucks. Where do you 66 00:03:11,280 --> 00:03:12,920 Speaker 1: want it to go to? And they were able to 67 00:03:12,960 --> 00:03:16,280 Speaker 1: decide which nonprofits to donate that money too. So that's 68 00:03:16,360 --> 00:03:17,960 Speaker 1: kind of fun, Like, that's a really cool way to 69 00:03:18,000 --> 00:03:21,040 Speaker 1: incorporate people around you into the giving mindset too. But 70 00:03:21,360 --> 00:03:24,240 Speaker 1: just how that was fun to highlight love donor advised funds, 71 00:03:24,320 --> 00:03:27,400 Speaker 1: love Daffy and the fact that Jared won ten thousand 72 00:03:27,440 --> 00:03:30,799 Speaker 1: bucks because he so that's a lot of money, a 73 00:03:30,840 --> 00:03:32,640 Speaker 1: lot of money, and real quick, it's worth mentioning that 74 00:03:32,720 --> 00:03:34,920 Speaker 1: donor advice funds they're not just for those out there 75 00:03:34,920 --> 00:03:38,320 Speaker 1: who are completely crushing it. It's not for the ultra rich. 76 00:03:38,480 --> 00:03:41,160 Speaker 1: And so there are ways that you clump your donations 77 00:03:41,160 --> 00:03:43,680 Speaker 1: so that way you get the tax credit for those 78 00:03:44,040 --> 00:03:47,360 Speaker 1: the tax deduction for those donations as opposed to just 79 00:03:47,440 --> 00:03:50,240 Speaker 1: taking the standard deduction. And so this truly is something 80 00:03:50,280 --> 00:03:52,200 Speaker 1: for for everyone out there who is giving them money. 81 00:03:52,200 --> 00:03:53,960 Speaker 1: Should we should ride about that in an upcoming How 82 00:03:53,960 --> 00:03:55,440 Speaker 1: the Money newsletter, which, by the way, if you're not 83 00:03:55,520 --> 00:03:57,800 Speaker 1: signed up how to Money dot Com slash newsletter, and 84 00:03:58,040 --> 00:04:00,280 Speaker 1: Matt just one other cool thing about Daffy. I love 85 00:04:00,360 --> 00:04:02,120 Speaker 1: that you can donate with a credit card and not 86 00:04:02,120 --> 00:04:05,640 Speaker 1: pay any fees. That's a cool way to like. Obviously, 87 00:04:05,960 --> 00:04:07,360 Speaker 1: we don't want you to go in debt to give, 88 00:04:07,680 --> 00:04:10,280 Speaker 1: but if you're using a credit card strategically to meet 89 00:04:10,280 --> 00:04:13,680 Speaker 1: a sign up bonus or something like that, then I 90 00:04:13,680 --> 00:04:16,600 Speaker 1: think that's really I love that Daffy allows users the 91 00:04:16,640 --> 00:04:19,239 Speaker 1: ability to do that. And if you're wondering which credit 92 00:04:19,240 --> 00:04:21,120 Speaker 1: card has the best sign up bonuses, how to money 93 00:04:21,160 --> 00:04:23,719 Speaker 1: dot com slash credit cards. That's right, man. Let's mention 94 00:04:23,800 --> 00:04:26,120 Speaker 1: the beer we're having on this episode. It's an Imperial 95 00:04:26,200 --> 00:04:29,599 Speaker 1: Strawberry White Ale by Tennessee Brewerks. We'll give our thoughts 96 00:04:29,600 --> 00:04:31,240 Speaker 1: on it at the end of the episode, but let's 97 00:04:31,240 --> 00:04:33,120 Speaker 1: get onto the subject in hand. We are talking about 98 00:04:33,800 --> 00:04:37,080 Speaker 1: the massive retirement account changes that impact you. And we've 99 00:04:37,160 --> 00:04:41,080 Speaker 1: always said that the basics of personal finance aren't terribly 100 00:04:41,080 --> 00:04:44,279 Speaker 1: difficult to comprehend. They're not impossible to wrap your mind around, 101 00:04:44,279 --> 00:04:47,080 Speaker 1: and in fact, most people understand them quite clearly. Even 102 00:04:47,080 --> 00:04:49,440 Speaker 1: my three year old she don't understand some of the 103 00:04:49,440 --> 00:04:52,719 Speaker 1: basics right. The general principles are fairly easy to understand, 104 00:04:52,760 --> 00:04:55,120 Speaker 1: like don't spend more than you make like that. It 105 00:04:55,120 --> 00:04:58,279 Speaker 1: doesn't take a rocket scientist really understand that. But incentives 106 00:04:58,720 --> 00:05:01,159 Speaker 1: change everything and might even get you to do something 107 00:05:01,160 --> 00:05:03,400 Speaker 1: that you're not terribly keen on doing. It makes me 108 00:05:03,440 --> 00:05:05,960 Speaker 1: think of Matt You remember the TV show Fear Factor? 109 00:05:06,360 --> 00:05:08,480 Speaker 1: I do. Okay, I never watched it. Okay, Well, I 110 00:05:08,520 --> 00:05:10,600 Speaker 1: remember people used to eat really weird stuff. They used 111 00:05:10,600 --> 00:05:14,719 Speaker 1: to lie down in glass coffins with spiders crawling over them. Ystian. Yeah, 112 00:05:15,040 --> 00:05:16,400 Speaker 1: you had to overcome your fears. You had to do 113 00:05:16,400 --> 00:05:19,600 Speaker 1: crazy stuff. And the fact is most of us wouldn't 114 00:05:19,640 --> 00:05:22,640 Speaker 1: choose to do any of those stunts if it weren't 115 00:05:22,640 --> 00:05:24,760 Speaker 1: connected to the possibility of winning a lot of money, right, 116 00:05:24,800 --> 00:05:27,240 Speaker 1: But people were like, listen, okay, I'm gonna win thousands 117 00:05:27,320 --> 00:05:30,920 Speaker 1: of dollars or potentially million dollars for letting spiders crawl 118 00:05:31,040 --> 00:05:33,200 Speaker 1: over me. All right, I guess I'm in right. So 119 00:05:33,240 --> 00:05:38,080 Speaker 1: then incentive kind of changes someone's mindset and their decision making. 120 00:05:38,839 --> 00:05:40,040 Speaker 1: You know what, I'm going to go on that show 121 00:05:40,080 --> 00:05:41,920 Speaker 1: and I'm gonna do that crazy stunt because I might 122 00:05:41,920 --> 00:05:43,640 Speaker 1: make some money at the end. Of the day. And 123 00:05:43,640 --> 00:05:45,720 Speaker 1: and that's true. For like, if you asked me to 124 00:05:45,760 --> 00:05:47,920 Speaker 1: get into a coffin of spiders or something, I would 125 00:05:47,920 --> 00:05:49,760 Speaker 1: say no, Like I wouldn't do it unless there was 126 00:05:49,800 --> 00:05:51,240 Speaker 1: like a million bucks at the end of the rainbow. 127 00:05:51,440 --> 00:05:53,120 Speaker 1: But these are the kind of things like that. There 128 00:05:53,120 --> 00:05:55,880 Speaker 1: are things in this bill that are going to change 129 00:05:55,920 --> 00:05:58,600 Speaker 1: the incentives for how and where you invest in the future. 130 00:05:58,600 --> 00:06:00,800 Speaker 1: We're gonna discuss that. We're talking about some of our 131 00:06:00,839 --> 00:06:02,920 Speaker 1: favorite changes in this bill. We're gonna talk about how 132 00:06:03,160 --> 00:06:05,840 Speaker 1: you should react to these changes based on your situation 133 00:06:05,960 --> 00:06:08,919 Speaker 1: in today's episode. That's right, man, When the rules of 134 00:06:08,920 --> 00:06:12,120 Speaker 1: the game have changed, we need to adjust our behavior accordingly. 135 00:06:12,480 --> 00:06:15,960 Speaker 1: And at the end of last year, the Consolidated Appropriations 136 00:06:15,960 --> 00:06:19,400 Speaker 1: Act of three that was as signed into law, all 137 00:06:21,160 --> 00:06:23,680 Speaker 1: of it. Would you write every single page it's I 138 00:06:23,760 --> 00:06:26,159 Speaker 1: will I will say. Folks were only talking about how 139 00:06:26,279 --> 00:06:28,480 Speaker 1: you know how big it was, But like it's definitely 140 00:06:28,920 --> 00:06:31,719 Speaker 1: the margin, the margins are pretty are pretty fat, and 141 00:06:31,760 --> 00:06:34,720 Speaker 1: it's like there's definitely double spacing going on. It's kind 142 00:06:34,720 --> 00:06:35,960 Speaker 1: of like what you used to do in high school 143 00:06:36,080 --> 00:06:38,920 Speaker 1: just to get that page paper up the length exactly. Yeah, 144 00:06:39,040 --> 00:06:41,039 Speaker 1: but you know, Luckily, we're we're mostly concerned with just 145 00:06:41,120 --> 00:06:44,719 Speaker 1: a portion of it, the Secure Act two point oh, 146 00:06:44,720 --> 00:06:47,559 Speaker 1: which is it's all about saving for retirement. But even 147 00:06:47,680 --> 00:06:50,480 Speaker 1: just that portion, it's nearly four pages long. But yeah, 148 00:06:50,640 --> 00:06:52,599 Speaker 1: lucky for you, we are into this kind of stuff. 149 00:06:52,600 --> 00:06:54,320 Speaker 1: So let's let's parse out what you need to pay 150 00:06:54,360 --> 00:06:57,200 Speaker 1: attention to. And one of the changes that will affect 151 00:06:57,240 --> 00:06:59,359 Speaker 1: a ton of folks, most folks out there, is that 152 00:06:59,400 --> 00:07:02,760 Speaker 1: the bill al allows you to withdraw one tho dollars 153 00:07:02,800 --> 00:07:07,040 Speaker 1: for quote unquote family and personal emergency expenses from retirement 154 00:07:07,040 --> 00:07:09,400 Speaker 1: accounts like a like a four win K or an 155 00:07:09,400 --> 00:07:13,800 Speaker 1: IRA without incurring a ten percent penalty. There are other 156 00:07:13,840 --> 00:07:16,240 Speaker 1: stipulations as well, other rules, but here's the thing, We're 157 00:07:16,280 --> 00:07:18,800 Speaker 1: not even gonna cover those because we don't want you 158 00:07:18,920 --> 00:07:22,640 Speaker 1: touching your retirement accounts. That is what your emergency fund 159 00:07:22,680 --> 00:07:24,600 Speaker 1: is for. So if you hear folks that work, if 160 00:07:24,600 --> 00:07:28,080 Speaker 1: you hear you know, water cooler talk being discussed, how 161 00:07:28,240 --> 00:07:31,240 Speaker 1: hey you can talk tap a thousand bucks of that 162 00:07:31,240 --> 00:07:33,920 Speaker 1: that pesky money that keeps getting siphon out of your paycheck, 163 00:07:34,160 --> 00:07:35,800 Speaker 1: that is something to bring it back into your own 164 00:07:36,080 --> 00:07:38,320 Speaker 1: know how to think about that is not money? That 165 00:07:38,360 --> 00:07:41,600 Speaker 1: we want you touching, even though Congress has has left 166 00:07:41,600 --> 00:07:45,040 Speaker 1: a pretty broad I mean literally it's just family and 167 00:07:45,080 --> 00:07:48,480 Speaker 1: personal emergency expenses. So it seems like a very wide 168 00:07:48,480 --> 00:07:51,679 Speaker 1: swath of explanations that you could give for tapping that money. 169 00:07:51,680 --> 00:07:53,840 Speaker 1: That is not money that we want you tapping. That 170 00:07:53,920 --> 00:07:56,040 Speaker 1: is money that we want you to leave in your accounts. 171 00:07:56,040 --> 00:08:00,000 Speaker 1: That way it can continue to grow into even more 172 00:08:00,000 --> 00:08:02,320 Speaker 1: are future dollars for your future self. Yeah, it's it's 173 00:08:02,320 --> 00:08:04,320 Speaker 1: one of those things where it seems like a benefit, 174 00:08:04,360 --> 00:08:06,280 Speaker 1: it seems like a nice thing. It's like, hey, yeah, 175 00:08:06,320 --> 00:08:08,360 Speaker 1: if you need this money for any reason, go ahead, 176 00:08:08,360 --> 00:08:10,400 Speaker 1: tap it, pull it out, and guess what, We're not 177 00:08:10,400 --> 00:08:12,320 Speaker 1: going to charge you that penalty on top. And it 178 00:08:12,360 --> 00:08:15,880 Speaker 1: seems like great. Not makes this money more accessible, But 179 00:08:15,920 --> 00:08:18,000 Speaker 1: that's exactly what we don't want is this money to 180 00:08:18,000 --> 00:08:20,120 Speaker 1: be more accessible. This is money we want you to 181 00:08:20,160 --> 00:08:22,560 Speaker 1: lock away for your future. And there are some extreme 182 00:08:22,600 --> 00:08:25,360 Speaker 1: circumstances where it makes sense to take money out of 183 00:08:25,520 --> 00:08:28,720 Speaker 1: a retirement account, but that's what emergency savings is for, 184 00:08:28,760 --> 00:08:30,880 Speaker 1: and that's what building up that de fund and having 185 00:08:30,880 --> 00:08:33,080 Speaker 1: more money on hand in your savings account is for. 186 00:08:33,400 --> 00:08:35,080 Speaker 1: We we don't want you to have to ever pull 187 00:08:35,080 --> 00:08:37,319 Speaker 1: out money from a retirement account. That's not the goal. 188 00:08:37,400 --> 00:08:39,680 Speaker 1: But if it comes down to, like you selling a 189 00:08:39,760 --> 00:08:44,080 Speaker 1: kidney or or tapping kid you know, well, go ahead 190 00:08:44,120 --> 00:08:46,360 Speaker 1: and kidney, go into the thousand bucks, hang on to 191 00:08:46,400 --> 00:08:48,520 Speaker 1: the kidney. Yeah, I mean exactly that, And that's what 192 00:08:48,679 --> 00:08:51,280 Speaker 1: that's what I think Congress is trying to say people 193 00:08:51,559 --> 00:08:53,640 Speaker 1: kidneys if they don't, they don't want a black market 194 00:08:53,640 --> 00:08:55,520 Speaker 1: for that. They don't want you on Craigslist selling your 195 00:08:55,520 --> 00:08:58,560 Speaker 1: body parts. But it's one of those things where I 196 00:08:58,640 --> 00:09:00,640 Speaker 1: get why they're going in this direction, and but how 197 00:09:00,640 --> 00:09:03,080 Speaker 1: the money listeners like that. Hopefully this this is going 198 00:09:03,120 --> 00:09:04,559 Speaker 1: to apply to you don't care about that part of 199 00:09:04,600 --> 00:09:06,480 Speaker 1: it exactly, But let's talk about a bunch of other stuff, 200 00:09:06,520 --> 00:09:08,800 Speaker 1: Matt that does is going to impact a lot of 201 00:09:08,840 --> 00:09:12,840 Speaker 1: our listeners, and automatic enrollment into employee retirement plans is 202 00:09:12,840 --> 00:09:14,839 Speaker 1: one of them. It's one of the major changes from 203 00:09:14,840 --> 00:09:18,680 Speaker 1: this bill, and it's a money psychology move that's going 204 00:09:18,760 --> 00:09:21,559 Speaker 1: to impact millions of folks positively who aren't currently saving 205 00:09:21,559 --> 00:09:23,440 Speaker 1: for their own retirement. Again, though that might not be 206 00:09:23,440 --> 00:09:25,960 Speaker 1: a whole lot of our listeners, most of our of 207 00:09:26,080 --> 00:09:28,680 Speaker 1: the how the money community is putting money in a 208 00:09:28,679 --> 00:09:31,160 Speaker 1: workplace retirement account if they have access. I hope so. Yeah, 209 00:09:31,200 --> 00:09:34,000 Speaker 1: But starting five, a bunch of employers who have at 210 00:09:34,080 --> 00:09:37,839 Speaker 1: least ten employees. Churches and nonprofits are exempt from this rule. 211 00:09:38,040 --> 00:09:41,120 Speaker 1: They're now required, though, to automatically opt in employees by 212 00:09:41,120 --> 00:09:44,240 Speaker 1: stashing away at least three percent and up to ten percent. 213 00:09:44,320 --> 00:09:46,600 Speaker 1: Like if you had like an employer who was like, no, 214 00:09:46,760 --> 00:09:50,520 Speaker 1: we want and investing so much, they could automatically enroll 215 00:09:50,559 --> 00:09:52,800 Speaker 1: you at ten percent of your your paycheck into that 216 00:09:52,840 --> 00:09:55,199 Speaker 1: workplace retirement account. That's what we would do. Yeah, that's 217 00:09:55,240 --> 00:09:58,360 Speaker 1: probably we would force it default and make you change 218 00:09:58,360 --> 00:10:00,560 Speaker 1: it exactly. No, no no, no, you started in present and 219 00:10:00,559 --> 00:10:02,360 Speaker 1: you go up from there. That's right. Yeah, we're not 220 00:10:02,360 --> 00:10:04,720 Speaker 1: gonna messing with that pitally three percent, and if you 221 00:10:04,840 --> 00:10:06,560 Speaker 1: want to take it, you know, take the burden in 222 00:10:06,559 --> 00:10:08,800 Speaker 1: your own hand and go change that setting and move 223 00:10:08,840 --> 00:10:11,080 Speaker 1: it back down to three, that's on you. Yeah, but 224 00:10:11,080 --> 00:10:13,439 Speaker 1: but we know that that's probably you know, not many 225 00:10:13,440 --> 00:10:15,360 Speaker 1: of the folks listening right now, they're on it. They're 226 00:10:15,400 --> 00:10:17,560 Speaker 1: saving for their own retirement. But let's say you mosey 227 00:10:17,600 --> 00:10:19,760 Speaker 1: on down the road to a new job. Your employer 228 00:10:19,840 --> 00:10:22,440 Speaker 1: is now going to be automatically in rolling you into 229 00:10:22,480 --> 00:10:24,200 Speaker 1: their four one K plan or four or three V 230 00:10:24,280 --> 00:10:26,680 Speaker 1: plan or whatever. And also employers are now able to 231 00:10:26,679 --> 00:10:29,240 Speaker 1: offer incentives for you to sign up and start contributing 232 00:10:29,240 --> 00:10:30,680 Speaker 1: to your four one K, which I thought was cool. 233 00:10:30,800 --> 00:10:33,520 Speaker 1: Maybe like a free water bottle or a small gift 234 00:10:33,520 --> 00:10:35,920 Speaker 1: card which shouldn't be what you need to get signed 235 00:10:35,960 --> 00:10:38,000 Speaker 1: up a free pizzas sort of like the old school 236 00:10:38,040 --> 00:10:39,760 Speaker 1: credit card signed up, right, except for this is a 237 00:10:39,840 --> 00:10:42,360 Speaker 1: much better thing they're signing up for. But now this 238 00:10:42,440 --> 00:10:45,559 Speaker 1: is a legal approach employers can take to encourage employees 239 00:10:45,559 --> 00:10:47,839 Speaker 1: to invest, which which I think is cool. Let's keep 240 00:10:47,840 --> 00:10:51,320 Speaker 1: talking about the different incentives that are being dangled in 241 00:10:51,360 --> 00:10:54,840 Speaker 1: front of us. Savers who have a wrath four oh 242 00:10:54,880 --> 00:10:57,560 Speaker 1: win K they can now choose to have their match 243 00:10:58,080 --> 00:11:00,960 Speaker 1: go into their wraths as well. Oh now, this is 244 00:11:01,040 --> 00:11:03,800 Speaker 1: especially advantageous for everyone out there who is just starting 245 00:11:03,800 --> 00:11:06,000 Speaker 1: out in the career and who is likely to earn 246 00:11:06,040 --> 00:11:08,120 Speaker 1: substantially more money down the road. You want to pay 247 00:11:08,120 --> 00:11:11,760 Speaker 1: those taxes now, not in future years decades down the road, 248 00:11:11,800 --> 00:11:14,400 Speaker 1: when you are likely going to be earning more money 249 00:11:14,440 --> 00:11:17,240 Speaker 1: where you'll be in a higher tax bracket. Before, if 250 00:11:17,280 --> 00:11:20,240 Speaker 1: your employer offered a ROTH four one K option, you 251 00:11:20,240 --> 00:11:22,959 Speaker 1: could definitely stock that money away into the ROTH four 252 00:11:22,960 --> 00:11:26,120 Speaker 1: o K, but then the match that your employer offered 253 00:11:26,440 --> 00:11:29,240 Speaker 1: that would go into a traditional four O one K, 254 00:11:29,640 --> 00:11:31,600 Speaker 1: which obviously is it's not the worst thing in the world. 255 00:11:31,640 --> 00:11:34,160 Speaker 1: You're still getting the free money, but for a lot 256 00:11:34,200 --> 00:11:35,920 Speaker 1: of folks, that makes sense to get all that money, 257 00:11:36,040 --> 00:11:38,719 Speaker 1: including the match in the form of RATH funds if 258 00:11:38,760 --> 00:11:40,960 Speaker 1: you could, and now you can, and so this is 259 00:11:40,960 --> 00:11:42,520 Speaker 1: definitely one that you want to keep on your radar. 260 00:11:42,559 --> 00:11:44,679 Speaker 1: You'll probably hear about this one at work, but if not, 261 00:11:45,160 --> 00:11:47,959 Speaker 1: make sure to ask around and see when that might 262 00:11:47,960 --> 00:11:50,720 Speaker 1: be available for you. Yeah, and then again, a lot 263 00:11:50,800 --> 00:11:52,440 Speaker 1: of these things this was past at the very end 264 00:11:52,440 --> 00:11:54,400 Speaker 1: of last year, and if you reach out to your 265 00:11:54,480 --> 00:11:57,679 Speaker 1: HR department right now, they might be like, sorry, just 266 00:11:57,679 --> 00:11:59,120 Speaker 1: just got back from a holiday trip. I have no 267 00:11:59,120 --> 00:12:01,760 Speaker 1: idea what you're talking about. It's gonna take a while. Well, 268 00:12:01,800 --> 00:12:03,319 Speaker 1: first off, some of these things aren't supposed to be 269 00:12:03,320 --> 00:12:05,160 Speaker 1: implemented for years down the road. Like we talked about 270 00:12:05,160 --> 00:12:07,720 Speaker 1: that employer match thing that starts in so it doesn't 271 00:12:07,720 --> 00:12:10,080 Speaker 1: start this year, they don't even start next year. Some 272 00:12:10,120 --> 00:12:12,600 Speaker 1: of these other things that the start date is different, 273 00:12:12,840 --> 00:12:15,280 Speaker 1: but when you reach out to HR, it might take 274 00:12:15,280 --> 00:12:17,400 Speaker 1: the time to implement some of these things. So just 275 00:12:18,000 --> 00:12:20,440 Speaker 1: understand that and be cognizant of that before you start 276 00:12:20,520 --> 00:12:22,880 Speaker 1: jumping down the throat right and start apparently on the 277 00:12:22,920 --> 00:12:25,440 Speaker 1: door demanding that they make those changes. Now want that? 278 00:12:25,600 --> 00:12:27,040 Speaker 1: I heard my Joe talking about it on the body. 279 00:12:27,480 --> 00:12:29,440 Speaker 1: What's your problem to get with it? Well? So, yeah, 280 00:12:29,600 --> 00:12:31,600 Speaker 1: and again, this is a four thousand page bill and 281 00:12:31,600 --> 00:12:33,680 Speaker 1: it's gonna take it's gonna take a while for the 282 00:12:33,679 --> 00:12:37,160 Speaker 1: implementation to to happen. But let's talk about one other 283 00:12:37,280 --> 00:12:39,679 Speaker 1: thing that's really interesting on the four oh one k front, 284 00:12:39,679 --> 00:12:42,840 Speaker 1: and a lot of organizations are are going to be 285 00:12:42,880 --> 00:12:45,760 Speaker 1: implementing this as well. Something else on that match front 286 00:12:45,800 --> 00:12:48,640 Speaker 1: is that's starting in four next year, if you're paying 287 00:12:48,679 --> 00:12:51,520 Speaker 1: down your student loans and you're therefore unable to invest 288 00:12:51,559 --> 00:12:53,640 Speaker 1: in your workplace retirement account because so much of your 289 00:12:53,640 --> 00:12:56,720 Speaker 1: income is going to pay off that that college debt, 290 00:12:56,960 --> 00:12:59,720 Speaker 1: you're not going to be eligible for the match that 291 00:12:59,800 --> 00:13:03,920 Speaker 1: you previously wouldn't have qualified for. So that match from 292 00:13:03,960 --> 00:13:06,439 Speaker 1: your employer is going to go into a retirement account, 293 00:13:06,600 --> 00:13:09,079 Speaker 1: so she'll still be investing even though you're not actually investing. 294 00:13:09,280 --> 00:13:11,240 Speaker 1: So yeah, even if you can't afford to put any 295 00:13:11,280 --> 00:13:14,839 Speaker 1: your paycheck towards like even three right towards that four 296 00:13:14,840 --> 00:13:18,280 Speaker 1: ohn K, because the student loan bill is so demanding, 297 00:13:18,720 --> 00:13:21,000 Speaker 1: your employer is going to be able to invest on 298 00:13:21,040 --> 00:13:23,040 Speaker 1: your behalf with the match. So I think that's kind 299 00:13:23,040 --> 00:13:25,640 Speaker 1: of cool because there are people in that sort of scenario, Matt, 300 00:13:25,640 --> 00:13:28,880 Speaker 1: and they want to be investing. But student loans obviously 301 00:13:28,920 --> 00:13:30,720 Speaker 1: a massive burden for a whole lot of people. So 302 00:13:30,880 --> 00:13:32,960 Speaker 1: and and student loan forgiveness still up in the air. 303 00:13:33,160 --> 00:13:35,679 Speaker 1: But I think this is a really interesting change. Is 304 00:13:35,679 --> 00:13:37,280 Speaker 1: going to help a lot of a lot of people 305 00:13:37,520 --> 00:13:40,640 Speaker 1: who otherwise wouldn't be investing anything at least be investing 306 00:13:40,880 --> 00:13:44,199 Speaker 1: something thanks to their employer. And this new law change exactly, 307 00:13:44,200 --> 00:13:46,880 Speaker 1: it's basically treating the student loan payments as if you 308 00:13:46,920 --> 00:13:49,480 Speaker 1: were contributing that money into your four o K. Your 309 00:13:49,480 --> 00:13:52,600 Speaker 1: employer is viewing it like, essentially, you're giving getting the 310 00:13:52,600 --> 00:13:55,360 Speaker 1: same benefit that somebody who's investing their money. You would 311 00:13:55,400 --> 00:13:58,560 Speaker 1: also receive that benefit, but you are paying down debt instead. 312 00:13:58,640 --> 00:14:00,839 Speaker 1: And how's this going to play out in the specifics 313 00:14:00,880 --> 00:14:03,160 Speaker 1: in actuality. I don't know, but we have time to 314 00:14:03,240 --> 00:14:05,760 Speaker 1: kind of see how because this this one again doesn't 315 00:14:05,800 --> 00:14:08,959 Speaker 1: start until next year. But I'm sure there's gonna be 316 00:14:09,000 --> 00:14:10,720 Speaker 1: a way that you report your loan payments to your 317 00:14:10,720 --> 00:14:13,079 Speaker 1: employer so they can then you know, make that match happen. 318 00:14:13,360 --> 00:14:16,000 Speaker 1: But um, yeah, what does it look like on the ground. 319 00:14:16,120 --> 00:14:18,160 Speaker 1: Not sure yet exactly. Yeah, so we've kind of talked 320 00:14:18,160 --> 00:14:21,480 Speaker 1: about some matches from your employer. There's some news on 321 00:14:21,720 --> 00:14:25,520 Speaker 1: the essentially matches from the government as well. There are 322 00:14:25,600 --> 00:14:29,000 Speaker 1: now expanded tax credits available a match from the federal 323 00:14:29,000 --> 00:14:31,040 Speaker 1: government on at least a portion of the money that 324 00:14:31,080 --> 00:14:33,600 Speaker 1: you invest in. This is for folks who have an 325 00:14:33,600 --> 00:14:37,640 Speaker 1: adjusted gross income of less than seventy three tho dollars. Interestingly, 326 00:14:37,680 --> 00:14:41,560 Speaker 1: this one doesn't start until start dates of all this stuff. 327 00:14:41,560 --> 00:14:43,840 Speaker 1: It's just kind of it's kind of annoying that kind 328 00:14:43,840 --> 00:14:45,560 Speaker 1: of all over this one. This one starts now, this 329 00:14:45,600 --> 00:14:50,080 Speaker 1: one starts, but the the Savers tax credit will a 330 00:14:50,120 --> 00:14:53,200 Speaker 1: few years from now it will become the Savers Match, 331 00:14:53,600 --> 00:14:56,840 Speaker 1: And so there's some semantic change they're going on. But 332 00:14:56,880 --> 00:14:59,600 Speaker 1: that's gonna allow more individuals, it's gonna allow more families 333 00:14:59,800 --> 00:15:03,120 Speaker 1: who aren't making bank to get an additional government match 334 00:15:03,680 --> 00:15:06,080 Speaker 1: so's they're no longer cutting your tax bill. It will 335 00:15:06,080 --> 00:15:09,520 Speaker 1: now actually be the government literally making a matching deposit 336 00:15:09,600 --> 00:15:12,040 Speaker 1: to a traditional IRA for you. Uh. And it's going 337 00:15:12,120 --> 00:15:14,840 Speaker 1: to be up to one thousand dollars for individuals, it's 338 00:15:14,840 --> 00:15:17,560 Speaker 1: gonna be two thousand dollars for married folks, and the 339 00:15:17,640 --> 00:15:20,640 Speaker 1: specific amounts and it's actually based on how much you 340 00:15:20,640 --> 00:15:24,640 Speaker 1: are able to contribute to that ira a yourself. And man, 341 00:15:24,680 --> 00:15:26,600 Speaker 1: this is just another one of those incentives for young 342 00:15:26,640 --> 00:15:28,760 Speaker 1: folks who are just at the beginning of their career 343 00:15:29,280 --> 00:15:33,000 Speaker 1: and for folks who perpetually just make less. It's gonna 344 00:15:33,000 --> 00:15:34,760 Speaker 1: allow them to find a way to start investing even 345 00:15:34,800 --> 00:15:36,920 Speaker 1: if they're not making a ton of money. Now. I 346 00:15:36,920 --> 00:15:39,000 Speaker 1: I kind of like that the government, even though I 347 00:15:39,360 --> 00:15:41,840 Speaker 1: hate that is so complicated. I hate that all the 348 00:15:41,920 --> 00:15:46,560 Speaker 1: laws governing these different tax advantage work sponsored retirement accounts, 349 00:15:46,560 --> 00:15:49,920 Speaker 1: individual tax advantage retirement accounts, it can all be so 350 00:15:50,040 --> 00:15:52,440 Speaker 1: stinking confusing. I hate that part of it, But I 351 00:15:52,480 --> 00:15:55,680 Speaker 1: do like that the government is essentially pushing some of 352 00:15:55,720 --> 00:15:58,840 Speaker 1: the responsibility on us as individuals, right like we're gonna 353 00:15:58,880 --> 00:16:00,520 Speaker 1: be We're gonna be your buddy and help you out. 354 00:16:00,560 --> 00:16:03,240 Speaker 1: We're gonna come alongside you, exactly. I love like. I 355 00:16:03,320 --> 00:16:06,360 Speaker 1: love that as opposed to like Social Security, where it's 356 00:16:06,400 --> 00:16:10,240 Speaker 1: just six percent of your paycheckto automatically getting siphoned off 357 00:16:10,240 --> 00:16:12,120 Speaker 1: and you don't even think about that money. You're not 358 00:16:12,160 --> 00:16:15,000 Speaker 1: thinking about how that money is gonna necessarily grow for you. 359 00:16:15,040 --> 00:16:17,600 Speaker 1: There is an active step that's taking place here, as 360 00:16:17,720 --> 00:16:19,880 Speaker 1: individuals are setting that money aside there, like you said, 361 00:16:19,880 --> 00:16:22,600 Speaker 1: they're kind of coming alongside you. We're buddies, We're partnering 362 00:16:22,560 --> 00:16:25,120 Speaker 1: in this together. Because this is exactly how like when 363 00:16:25,160 --> 00:16:27,720 Speaker 1: my kids get old enough to purchase a car, Like, 364 00:16:27,760 --> 00:16:29,800 Speaker 1: cars are really expensive, but that doesn't mean I'm going 365 00:16:29,840 --> 00:16:33,080 Speaker 1: to just buy a car for my kid. I'm gonna say, hey, 366 00:16:33,240 --> 00:16:35,640 Speaker 1: cars are expensive, you should start saving now. And for 367 00:16:35,680 --> 00:16:37,920 Speaker 1: every dollar you set aside for that car, guess what 368 00:16:38,360 --> 00:16:40,280 Speaker 1: that like, I'm gonna pitch in. I'm gonna meet you, 369 00:16:40,280 --> 00:16:42,000 Speaker 1: I'm gonna come alongside you. This is something that we 370 00:16:42,040 --> 00:16:45,400 Speaker 1: can do together. I love that some of the Yeah, 371 00:16:45,520 --> 00:16:48,480 Speaker 1: just more the responsibility is being placed on us as individuals. 372 00:16:48,480 --> 00:16:50,840 Speaker 1: I want to see more of that and less dependence 373 00:16:50,920 --> 00:16:52,960 Speaker 1: on the government. And by then used rivians are going 374 00:16:52,960 --> 00:16:55,360 Speaker 1: to cost all that much. Oh my gosh. But but 375 00:16:55,440 --> 00:16:58,680 Speaker 1: will they still carry the charge? That's you know, I 376 00:16:58,760 --> 00:17:00,680 Speaker 1: need a new battery at that point. But yeah, no, 377 00:17:00,760 --> 00:17:02,680 Speaker 1: I I like this one too. I think it's a 378 00:17:02,680 --> 00:17:05,040 Speaker 1: good one. And again it starts in seven. But it's 379 00:17:05,040 --> 00:17:07,480 Speaker 1: gonna help a lot of people. It's gonna incentivize a 380 00:17:07,520 --> 00:17:09,439 Speaker 1: lot of people, to say, for retirement, who otherwise wouldn't 381 00:17:09,440 --> 00:17:11,560 Speaker 1: because it's like I'm getting a percent match on my dollars. 382 00:17:11,680 --> 00:17:14,960 Speaker 1: Depending on your income level, that might be the case 383 00:17:15,000 --> 00:17:17,280 Speaker 1: for you. All right, but let's talk about in just 384 00:17:17,320 --> 00:17:20,080 Speaker 1: a second one of my favorite changes to this, and 385 00:17:20,119 --> 00:17:22,760 Speaker 1: it's very nuanced. There, so much that goes into how 386 00:17:22,840 --> 00:17:26,280 Speaker 1: much better five plans have become thanks to the passage 387 00:17:26,280 --> 00:17:28,080 Speaker 1: of the Secure Act two point oh. We'll get to 388 00:17:28,200 --> 00:17:30,560 Speaker 1: our thoughts on that. We'll talk about the intricacies and 389 00:17:30,600 --> 00:17:33,720 Speaker 1: how it can actually benefit your child's financial future in 390 00:17:33,760 --> 00:17:36,440 Speaker 1: a much bigger way than used to be possible. We 391 00:17:36,520 --> 00:17:47,480 Speaker 1: get to that right after this. All right, man, let's 392 00:17:47,520 --> 00:17:51,640 Speaker 1: keep on trucking, and specifically we're talking about five nine accounts. 393 00:17:51,680 --> 00:17:55,080 Speaker 1: This is the aspects of the Secure Act that we 394 00:17:55,119 --> 00:17:58,200 Speaker 1: are Secure Act two point oh got got to mention 395 00:17:58,320 --> 00:18:01,000 Speaker 1: that we're most excited about I mean mostly because you 396 00:18:01,040 --> 00:18:02,959 Speaker 1: and I both have You've got three kids, I got 397 00:18:02,960 --> 00:18:05,520 Speaker 1: four kids. These are all kids who may or may 398 00:18:05,560 --> 00:18:08,199 Speaker 1: not go to college, and the may not part of 399 00:18:08,240 --> 00:18:11,160 Speaker 1: it is why these changes are so important. Exactly, Yeah, 400 00:18:11,240 --> 00:18:14,280 Speaker 1: this is the This is actually in section of the 401 00:18:14,320 --> 00:18:17,480 Speaker 1: secure actor, your favorite part. You read it with with 402 00:18:17,640 --> 00:18:20,360 Speaker 1: bated breath. I will say the sections they start at 403 00:18:20,359 --> 00:18:21,679 Speaker 1: like I think it started at one on one, so 404 00:18:21,680 --> 00:18:24,040 Speaker 1: it's not like, you know, they make it seem way bigger, 405 00:18:24,119 --> 00:18:26,160 Speaker 1: like a much bigger deal than it is. So really 406 00:18:26,160 --> 00:18:29,200 Speaker 1: this is just section six um And when you say 407 00:18:29,200 --> 00:18:31,359 Speaker 1: it that way actually sounds super boring. So we're not 408 00:18:31,400 --> 00:18:34,959 Speaker 1: gonna do that. But we've always said that five nine 409 00:18:35,000 --> 00:18:37,760 Speaker 1: accounts they can be a solid place to say for 410 00:18:37,800 --> 00:18:42,560 Speaker 1: your child's future, but not until you've invested significantly for 411 00:18:42,600 --> 00:18:46,240 Speaker 1: your own retirement, because there are a lot more ways 412 00:18:46,280 --> 00:18:49,000 Speaker 1: to pay for college than there are to pay for retirement. 413 00:18:49,520 --> 00:18:51,200 Speaker 1: But the bill you know, that passed up the tail 414 00:18:51,280 --> 00:18:53,520 Speaker 1: end of last year, it has made five twenty nine 415 00:18:53,520 --> 00:18:57,840 Speaker 1: plans significantly more attractive. You can now roll funds from 416 00:18:57,880 --> 00:19:02,120 Speaker 1: a five nine account into a roth ira, a penalty free, 417 00:19:02,440 --> 00:19:05,600 Speaker 1: and uh, honestly, that's that's the biggest reason why we 418 00:19:05,600 --> 00:19:08,320 Speaker 1: were why we just didn't like five account so that much. 419 00:19:08,359 --> 00:19:11,800 Speaker 1: You were essentially siloing that money into a five account 420 00:19:11,880 --> 00:19:13,760 Speaker 1: only to be used for higher education, and if you 421 00:19:13,760 --> 00:19:15,320 Speaker 1: wanted to take that money out, you're gonna get hit 422 00:19:15,440 --> 00:19:17,240 Speaker 1: with a ten percent penalty. Makes me think of one 423 00:19:17,280 --> 00:19:19,160 Speaker 1: of those home renovation shows Matt and how you might 424 00:19:19,200 --> 00:19:22,400 Speaker 1: find a house with good bones and then you clean 425 00:19:22,480 --> 00:19:24,200 Speaker 1: it up and you you put in a new kitchen 426 00:19:24,240 --> 00:19:26,320 Speaker 1: and you're like, man, this thing is really attractive. And 427 00:19:26,359 --> 00:19:28,280 Speaker 1: that's exactly what happened to five nine counts. They had 428 00:19:28,320 --> 00:19:30,600 Speaker 1: some good bones, there were there were some good there 429 00:19:30,640 --> 00:19:33,280 Speaker 1: was for a lot of people. Five twenty nine accounts 430 00:19:33,320 --> 00:19:35,680 Speaker 1: made sense, but they're also they also didn't make sense 431 00:19:35,680 --> 00:19:37,960 Speaker 1: for a whole super people. But now those good bones 432 00:19:38,080 --> 00:19:41,280 Speaker 1: been brought to life and five accounts make more sense 433 00:19:41,320 --> 00:19:43,680 Speaker 1: for a lot of folks. Bad analogy out it, Maybe 434 00:19:43,720 --> 00:19:45,800 Speaker 1: it works. Yeah, we just found a way to blow 435 00:19:45,800 --> 00:19:47,639 Speaker 1: out a wall in the five account and all of 436 00:19:47,680 --> 00:19:50,160 Speaker 1: a sudden, now we've linked the dining and the entertainment space. 437 00:19:50,560 --> 00:19:52,399 Speaker 1: All of a sudden, this is gonna be my modern 438 00:19:52,480 --> 00:19:54,480 Speaker 1: day family needs. So maybe it's more like that Thai 439 00:19:54,560 --> 00:19:56,160 Speaker 1: Penning can show back in the day where they added 440 00:19:56,160 --> 00:19:57,600 Speaker 1: on like a whole wing to the house and it's like, 441 00:19:57,640 --> 00:20:02,520 Speaker 1: now now this has moved my bus. It's like okay, yeah, 442 00:20:03,119 --> 00:20:05,639 Speaker 1: and that's kind of what happened, my fun because it 443 00:20:05,720 --> 00:20:09,760 Speaker 1: made this account just doubly effective. It changed your ability 444 00:20:09,800 --> 00:20:11,879 Speaker 1: for how you use but you know, wild if I's 445 00:20:11,880 --> 00:20:14,119 Speaker 1: went an account like it's still is not sexier than 446 00:20:14,119 --> 00:20:17,119 Speaker 1: your roth ira A. The added flexibility you know that 447 00:20:17,200 --> 00:20:19,000 Speaker 1: they now have they allow you to not just pay 448 00:20:19,040 --> 00:20:22,080 Speaker 1: for a private school right or college from this account, 449 00:20:22,080 --> 00:20:24,359 Speaker 1: but it can help your child start to invest for 450 00:20:24,440 --> 00:20:27,159 Speaker 1: their own future in a meaningful way. It allows them 451 00:20:27,200 --> 00:20:29,040 Speaker 1: to start, you know, building up their own wealth to say, 452 00:20:29,080 --> 00:20:31,560 Speaker 1: for their own retirement, which is sort of a nice 453 00:20:31,560 --> 00:20:34,719 Speaker 1: side effect and a nice additional benefit that comes with 454 00:20:34,760 --> 00:20:36,960 Speaker 1: these changes. And if you and I we've been kind 455 00:20:36,960 --> 00:20:38,959 Speaker 1: of giddy on this one. We've been talking about this 456 00:20:39,040 --> 00:20:41,840 Speaker 1: change because a lot of money nerds certainly have tease 457 00:20:41,880 --> 00:20:44,040 Speaker 1: to this one the most over the past. Well because 458 00:20:44,119 --> 00:20:45,879 Speaker 1: I'm most excited about this because I think that this 459 00:20:45,920 --> 00:20:47,760 Speaker 1: impacts a whole lot of how to money listeners who 460 00:20:47,760 --> 00:20:51,720 Speaker 1: want to get the next generation of personal finance nerds 461 00:20:51,720 --> 00:20:54,119 Speaker 1: started out on the right path. And we're not the 462 00:20:54,119 --> 00:20:55,679 Speaker 1: only one with kids. No, we're not the only ones 463 00:20:55,720 --> 00:20:58,040 Speaker 1: with kids, and we're not the only ones who are like, 464 00:20:58,359 --> 00:21:01,200 Speaker 1: I don't know if I makes sense for me, because 465 00:21:01,480 --> 00:21:03,120 Speaker 1: you know, they're not sure if their kids are gonna 466 00:21:03,119 --> 00:21:07,240 Speaker 1: go to college, or even if they do, there's scholarship opportunities, 467 00:21:07,280 --> 00:21:09,200 Speaker 1: and so they just it's it's hard to know whether 468 00:21:09,280 --> 00:21:12,800 Speaker 1: or not to prioritize that account, and these changes make 469 00:21:12,840 --> 00:21:15,880 Speaker 1: it easier to stock money away into one of those accounts, 470 00:21:16,000 --> 00:21:17,960 Speaker 1: even if you're not sure about what the particulars of 471 00:21:17,960 --> 00:21:19,960 Speaker 1: college are going to look like for your Kiddoh, but 472 00:21:20,000 --> 00:21:23,120 Speaker 1: I also want to Yeah, like you said that, your 473 00:21:23,119 --> 00:21:26,280 Speaker 1: own retirement accounts still take priority. Here here's how we're 474 00:21:26,280 --> 00:21:29,240 Speaker 1: thinking about it. If you're already doing a fantastic job 475 00:21:29,480 --> 00:21:32,120 Speaker 1: saving for your own future and you want to help 476 00:21:32,119 --> 00:21:34,760 Speaker 1: your kids get started off on the right foot for 477 00:21:34,800 --> 00:21:37,520 Speaker 1: there's two, then this provision is going to help you 478 00:21:37,520 --> 00:21:39,960 Speaker 1: do just that. But we want to make sure that 479 00:21:40,000 --> 00:21:42,680 Speaker 1: you're maxing a ROTH, you're contributing a significant amount of 480 00:21:42,720 --> 00:21:45,840 Speaker 1: your workplace retirement account before you start to help your 481 00:21:45,920 --> 00:21:49,600 Speaker 1: child a crew of retirement dollars. And again, now with 482 00:21:49,640 --> 00:21:53,320 Speaker 1: these changes, that is what account can do for them. 483 00:21:53,600 --> 00:21:56,840 Speaker 1: It can turn into retirement dollars, which is really cool 484 00:21:56,880 --> 00:21:59,359 Speaker 1: because before it was like use it or lose it, 485 00:21:59,520 --> 00:22:01,719 Speaker 1: pay the don'tee if it doesn't get spent on college. 486 00:22:01,880 --> 00:22:04,600 Speaker 1: And now there's another uh, use case scenario for these 487 00:22:04,600 --> 00:22:07,880 Speaker 1: five nine funds. But it still doesn't mean that they're 488 00:22:07,880 --> 00:22:11,280 Speaker 1: more important than saving for your own retirement first, that's right. 489 00:22:11,359 --> 00:22:13,880 Speaker 1: The purpose of these changes is to make sure that 490 00:22:14,440 --> 00:22:17,119 Speaker 1: essentially they're alleviating stress that you might have for putting 491 00:22:17,119 --> 00:22:19,080 Speaker 1: money into a five twenty nine account that may not 492 00:22:19,119 --> 00:22:21,480 Speaker 1: be used for higher education. And there are a lot 493 00:22:21,520 --> 00:22:23,360 Speaker 1: of people who already have money stocked into a five 494 00:22:23,359 --> 00:22:25,679 Speaker 1: twenty nine account and their their their kids are graduated, 495 00:22:25,760 --> 00:22:27,200 Speaker 1: and I don't know what to do with this money. 496 00:22:27,280 --> 00:22:29,360 Speaker 1: And so now there's like something to do with this money, 497 00:22:29,359 --> 00:22:31,160 Speaker 1: which is great. Hopefully they didn't pull it out last 498 00:22:31,200 --> 00:22:37,160 Speaker 1: year and percent penalty. But let's talk about the stipulations 499 00:22:36,960 --> 00:22:39,600 Speaker 1: associated with these changes and how you might be able 500 00:22:39,600 --> 00:22:42,240 Speaker 1: to take full advantage um. A couple of things to know. 501 00:22:42,960 --> 00:22:46,879 Speaker 1: First of all, you can only transfer thirty dollars total 502 00:22:47,400 --> 00:22:50,399 Speaker 1: into a raw fire a for your kids from the 503 00:22:50,440 --> 00:22:53,600 Speaker 1: five twenty nine account with their name on it over 504 00:22:53,640 --> 00:22:56,320 Speaker 1: the years. And that's for each kid, right each and 505 00:22:56,320 --> 00:22:58,320 Speaker 1: so the kid has to be listed as the beneficiary. 506 00:22:58,320 --> 00:23:00,720 Speaker 1: You own the account, but the money can be transferred 507 00:23:00,720 --> 00:23:03,160 Speaker 1: out of that account into a roth ira in their name. 508 00:23:03,640 --> 00:23:06,359 Speaker 1: And so, for instance, let's say you have a hundred 509 00:23:06,359 --> 00:23:10,000 Speaker 1: thousand dollars in one of those five accounts over two decades, 510 00:23:10,000 --> 00:23:12,320 Speaker 1: that's something you've saved up. Well, know that this means 511 00:23:12,320 --> 00:23:14,720 Speaker 1: that basically only about a third of that money would 512 00:23:14,720 --> 00:23:18,800 Speaker 1: ever be eligible for wrath transfers. The rest would need 513 00:23:18,840 --> 00:23:21,520 Speaker 1: to be spent for education or you pull that out 514 00:23:21,560 --> 00:23:23,879 Speaker 1: and get hit with that timbercent penalty. And again, this 515 00:23:23,960 --> 00:23:26,679 Speaker 1: is what five nine accounts were designed for. They were 516 00:23:26,720 --> 00:23:29,480 Speaker 1: meant for higher education. This is probably fine. This is 517 00:23:29,520 --> 00:23:32,639 Speaker 1: probably the major reason why you likely open the account, 518 00:23:32,840 --> 00:23:35,000 Speaker 1: or that you plan on opening one in the future. 519 00:23:35,600 --> 00:23:39,000 Speaker 1: That's still a good reason and honestly the primary reason 520 00:23:39,280 --> 00:23:43,000 Speaker 1: to use the five pan It's like that, it's just 521 00:23:43,040 --> 00:23:45,840 Speaker 1: a backup, right, It's sort of like going skydiving and 522 00:23:46,560 --> 00:23:50,640 Speaker 1: counting on using your second shoot, like like your emergency parachute, 523 00:23:50,640 --> 00:23:52,320 Speaker 1: like don't they have. I think they have to U 524 00:23:52,440 --> 00:23:55,159 Speaker 1: two parachutes. I probably want three if I went. But 525 00:23:55,240 --> 00:23:57,600 Speaker 1: it's basically saying, hey, I'm gonna jump out of this 526 00:23:57,640 --> 00:24:00,959 Speaker 1: plane and I'm looking forward to using that second second 527 00:24:00,960 --> 00:24:02,800 Speaker 1: para shotes like no, no, no, that's not really what 528 00:24:02,840 --> 00:24:06,040 Speaker 1: it was intended for. You can do that, but hopefully 529 00:24:06,520 --> 00:24:09,800 Speaker 1: you are using it for its primary purpose first. But 530 00:24:09,880 --> 00:24:12,240 Speaker 1: now you just know that you've got that secondary justin camps. 531 00:24:12,480 --> 00:24:14,560 Speaker 1: I kind of like though the secondary shoot on this one. 532 00:24:14,600 --> 00:24:17,200 Speaker 1: I think it's for people who are really with it. 533 00:24:17,200 --> 00:24:19,440 Speaker 1: It's a very nice secondary shoe. Yeah, and they want 534 00:24:19,480 --> 00:24:21,760 Speaker 1: their kids to be millionaires, let's say by the time 535 00:24:21,800 --> 00:24:25,080 Speaker 1: they reach retirementas without having to do anything on their own. Granted, 536 00:24:25,280 --> 00:24:27,000 Speaker 1: I want to teach my kids how to do the 537 00:24:27,080 --> 00:24:28,919 Speaker 1: right things and how to invest in their future and 538 00:24:28,920 --> 00:24:32,440 Speaker 1: to be and to care about investing from a personal standpoint, 539 00:24:32,560 --> 00:24:33,760 Speaker 1: but if you want to get them started on the 540 00:24:33,840 --> 00:24:36,040 Speaker 1: right path, this account you don't even have to think about. 541 00:24:36,080 --> 00:24:38,240 Speaker 1: You can now think about it purely as a retirement 542 00:24:38,240 --> 00:24:40,719 Speaker 1: account if you wanted to for your kids future, although 543 00:24:41,119 --> 00:24:43,400 Speaker 1: I think you still want to think about it primarily 544 00:24:43,720 --> 00:24:46,840 Speaker 1: as an education funding tool. But let's talk about I've 545 00:24:46,880 --> 00:24:49,640 Speaker 1: got mixed feelings about saving for your kids retirement because 546 00:24:49,680 --> 00:24:53,240 Speaker 1: like it's one thing to save on. Yeah, yeah, exactly. 547 00:24:53,280 --> 00:24:58,119 Speaker 1: I think funding different experiences or extracurriculars are just different 548 00:24:58,119 --> 00:25:00,159 Speaker 1: things that you can do together as a family. But 549 00:25:00,400 --> 00:25:04,000 Speaker 1: I'm still super just I'm mixed essentially on whether or 550 00:25:04,040 --> 00:25:07,639 Speaker 1: not I feel comfortable setting aside retirement dollars for my 551 00:25:07,680 --> 00:25:09,800 Speaker 1: kids because I feel like it just does something mentally 552 00:25:09,960 --> 00:25:11,520 Speaker 1: you almost don't want to tell them about it, like 553 00:25:11,560 --> 00:25:13,399 Speaker 1: if you are doing it, except that you're talking. We're 554 00:25:13,440 --> 00:25:15,280 Speaker 1: talking about it right now on a podcast that everyone 555 00:25:15,680 --> 00:25:17,600 Speaker 1: turn this podcast off right now if you're listening, they're 556 00:25:17,640 --> 00:25:20,560 Speaker 1: gonna go dig in dy account that has to do 557 00:25:20,600 --> 00:25:22,959 Speaker 1: with kids accounts or five nine, and like, all right, 558 00:25:22,960 --> 00:25:25,320 Speaker 1: what did what did Mr Joel? What did Daddy do? 559 00:25:25,359 --> 00:25:26,960 Speaker 1: What did Joel do? What did I do? Like, I 560 00:25:27,000 --> 00:25:29,159 Speaker 1: guess I'm more interested in the fact that you can 561 00:25:29,160 --> 00:25:31,720 Speaker 1: then transfer that account into your own name and note 562 00:25:31,760 --> 00:25:34,600 Speaker 1: me knowing that I can then with that five nine, 563 00:25:34,920 --> 00:25:38,160 Speaker 1: with me being named as the beneficiary, can then transfer 564 00:25:38,200 --> 00:25:40,760 Speaker 1: that into a roth eyra that is also in my name. 565 00:25:40,960 --> 00:25:42,879 Speaker 1: That is something that you can also do it for me. 566 00:25:43,000 --> 00:25:45,520 Speaker 1: That feels more like the backstop. That's the to me, 567 00:25:45,560 --> 00:25:48,480 Speaker 1: that's the secondary. Shoot. Yeah, well, interestingly enough on that front, 568 00:25:48,480 --> 00:25:50,399 Speaker 1: like we don't really have the details on how it 569 00:25:50,440 --> 00:25:52,880 Speaker 1: works when you change beneficiaries. That's one of those things 570 00:25:52,960 --> 00:25:56,000 Speaker 1: that that hasn't been completely spelled out. And so I'm 571 00:25:56,000 --> 00:25:57,800 Speaker 1: actually gonna talk about this right now. Let's talk about 572 00:25:57,800 --> 00:26:00,840 Speaker 1: seasoning the account. If you rename the ben a fishery, 573 00:26:01,000 --> 00:26:03,720 Speaker 1: that might mean that you have to season the account again, 574 00:26:04,080 --> 00:26:07,240 Speaker 1: which could make it really hard for for the person 575 00:26:07,320 --> 00:26:09,879 Speaker 1: who becomes the new beneficiary to actually get that money 576 00:26:09,960 --> 00:26:12,680 Speaker 1: or at least prolonging the timeline. But there's this fifteen 577 00:26:12,760 --> 00:26:15,120 Speaker 1: year rule that's massively important to understand if you want 578 00:26:15,160 --> 00:26:20,760 Speaker 1: to utilize the new abilities of plans, And basically, this 579 00:26:21,840 --> 00:26:24,080 Speaker 1: plan needs to be open for at least fifteen years 580 00:26:24,240 --> 00:26:27,240 Speaker 1: in order to reach the age of eligibility to where 581 00:26:27,240 --> 00:26:29,000 Speaker 1: you're allowed to roll over some of those funds into 582 00:26:29,000 --> 00:26:31,600 Speaker 1: a roth. And that makes me that that makes I 583 00:26:31,640 --> 00:26:35,440 Speaker 1: would say, opening that five plan early a really critical step. 584 00:26:35,680 --> 00:26:37,800 Speaker 1: So even if you're you're not sure that you'll want 585 00:26:37,800 --> 00:26:39,880 Speaker 1: the fund to retirement account like a wroth for your kid, 586 00:26:40,280 --> 00:26:42,320 Speaker 1: or that you're gonna have enough money to contribute like 587 00:26:42,359 --> 00:26:44,440 Speaker 1: you'd like to. You might say like, yeah, this is 588 00:26:44,440 --> 00:26:47,200 Speaker 1: pie in the sky, but I don't make enough money 589 00:26:47,200 --> 00:26:50,720 Speaker 1: to even consider a maneuver like this. Well, that might 590 00:26:50,720 --> 00:26:52,760 Speaker 1: be true right now, but it might not always be true. 591 00:26:52,840 --> 00:26:54,879 Speaker 1: Your income mike skyrocket in the coming years, and you 592 00:26:54,920 --> 00:26:56,760 Speaker 1: might say you might be a ball I wish I 593 00:26:56,760 --> 00:26:59,360 Speaker 1: had done something at least started the ball rolling on that. 594 00:27:00,040 --> 00:27:03,119 Speaker 1: And so we would say it's worth opening up a 595 00:27:03,119 --> 00:27:06,800 Speaker 1: account in each of your kiddo's names, even just with 596 00:27:06,840 --> 00:27:09,280 Speaker 1: the bare minimum. Let's say it's twenty five a minimum 597 00:27:09,480 --> 00:27:12,600 Speaker 1: to open the account. Do that and get that clock 598 00:27:12,800 --> 00:27:15,480 Speaker 1: taking your your income and your goals might change, like 599 00:27:15,560 --> 00:27:17,639 Speaker 1: we said, And and it would be nice to have 600 00:27:17,680 --> 00:27:20,399 Speaker 1: the option to contribute more into funnel money into your 601 00:27:20,440 --> 00:27:23,280 Speaker 1: child's rath down the road. Let's say you don't use 602 00:27:23,320 --> 00:27:25,240 Speaker 1: that money for education, and then you can start to 603 00:27:25,320 --> 00:27:27,360 Speaker 1: jump start their retirement with it. But there's just more 604 00:27:27,400 --> 00:27:30,120 Speaker 1: opportunity if you open the account in their first year 605 00:27:30,240 --> 00:27:32,119 Speaker 1: or two of life. So I would say, like, you 606 00:27:32,160 --> 00:27:34,040 Speaker 1: have a kid, you get their social Security number, open 607 00:27:34,160 --> 00:27:36,320 Speaker 1: up a five account now, boom, even if it's with 608 00:27:36,480 --> 00:27:40,040 Speaker 1: ten twenty bucks, and yeah, get that clock taking, because 609 00:27:40,119 --> 00:27:43,120 Speaker 1: that is one of these one of these major sticking 610 00:27:43,119 --> 00:27:45,480 Speaker 1: points in this new bill exactly. And if you think 611 00:27:45,520 --> 00:27:47,600 Speaker 1: you might be transferring that money again into your own 612 00:27:47,680 --> 00:27:50,000 Speaker 1: name and naming yourself as the beneficiary, maybe it wouldn't 613 00:27:50,040 --> 00:27:52,520 Speaker 1: hurt to open a five nine account and your own 614 00:27:52,600 --> 00:27:54,480 Speaker 1: name and even your partner's name as well, to be 615 00:27:54,520 --> 00:27:57,119 Speaker 1: able to potentially again we don't know the specifics and 616 00:27:57,160 --> 00:27:58,280 Speaker 1: how this is all going to play out, but to 617 00:27:58,320 --> 00:28:00,720 Speaker 1: potentially spread that money out, I mean you might have 618 00:28:00,760 --> 00:28:03,720 Speaker 1: the assuming it stays at dude, I mean, that's a 619 00:28:03,760 --> 00:28:06,240 Speaker 1: total of thirteen thousand dollars that you might be able 620 00:28:06,280 --> 00:28:09,879 Speaker 1: to essentially funnel back into your own roth iras well. 621 00:28:09,880 --> 00:28:12,120 Speaker 1: We've had a fount for my wife for a couple 622 00:28:12,119 --> 00:28:14,000 Speaker 1: of years now because she's in graduates, she's already got 623 00:28:14,160 --> 00:28:16,920 Speaker 1: We're funny that you've got both of those and in 624 00:28:16,960 --> 00:28:20,080 Speaker 1: fifteen years, even if even if the clock does reset 625 00:28:20,160 --> 00:28:24,400 Speaker 1: and the seasoning of the account is beneficiary specific than 626 00:28:24,480 --> 00:28:27,120 Speaker 1: just like having opened your your kids five and accounts 627 00:28:27,119 --> 00:28:29,920 Speaker 1: that clock would have been taking fifteen years ago as well. 628 00:28:30,200 --> 00:28:31,719 Speaker 1: But not only do you need a season the account, 629 00:28:31,760 --> 00:28:34,639 Speaker 1: you have to season the money that goes into the 630 00:28:34,640 --> 00:28:37,920 Speaker 1: account as well. This is the five year rules, So 631 00:28:37,920 --> 00:28:39,560 Speaker 1: there's a fifteen year rule. In the five year uld, 632 00:28:39,560 --> 00:28:41,560 Speaker 1: the account has to been open for more than fifteen years, 633 00:28:41,600 --> 00:28:43,720 Speaker 1: but tell us about the money. It has to have 634 00:28:43,760 --> 00:28:46,000 Speaker 1: been in that account for at least five years. And 635 00:28:46,040 --> 00:28:48,000 Speaker 1: so that means that you you can't roll over five 636 00:28:48,040 --> 00:28:50,880 Speaker 1: twenty nine dollars that you've stalked away within the most 637 00:28:50,920 --> 00:28:55,080 Speaker 1: recent five years. So say if you're fourteen years in 638 00:28:55,600 --> 00:28:57,480 Speaker 1: and you still just got that twenty five dollars hanging 639 00:28:57,480 --> 00:28:59,760 Speaker 1: out in an account and then you decide to max 640 00:28:59,800 --> 00:29:04,080 Speaker 1: out your contribution right before you're fifteen, well, those funds 641 00:29:04,240 --> 00:29:07,120 Speaker 1: will need to then season four an additional five years 642 00:29:07,160 --> 00:29:11,840 Speaker 1: before being able to be eligible for RATH conversions. And 643 00:29:11,920 --> 00:29:14,280 Speaker 1: so yeah, keep that in mind as well. Essentially, just 644 00:29:14,640 --> 00:29:16,640 Speaker 1: like if I feel we might be getting into the 645 00:29:16,680 --> 00:29:18,360 Speaker 1: weeks here, but just like if you're doing a backdoor 646 00:29:18,560 --> 00:29:20,640 Speaker 1: rath I r A, that money has to season for 647 00:29:20,680 --> 00:29:23,480 Speaker 1: five years. I'm assuming this is exactly where they got 648 00:29:23,480 --> 00:29:26,680 Speaker 1: this information from, so that it mirrors that backdoor wrath. 649 00:29:26,960 --> 00:29:28,640 Speaker 1: I can't imagine that that there's gonna be you know, 650 00:29:28,640 --> 00:29:30,360 Speaker 1: millions of folks out there who are gonna need to 651 00:29:30,400 --> 00:29:32,880 Speaker 1: be able to maximize this new rule, you know, funnel 652 00:29:32,880 --> 00:29:35,880 Speaker 1: a full thirty five dollars into a wrath for their child. 653 00:29:36,320 --> 00:29:39,880 Speaker 1: But if that's your goal, you're gonna need to plan accordingly, 654 00:29:39,920 --> 00:29:42,960 Speaker 1: which for most folks this means regular contributions in those 655 00:29:42,960 --> 00:29:45,600 Speaker 1: early years in order to grow that balance. Yeah, and 656 00:29:45,640 --> 00:29:48,120 Speaker 1: I think that is where some folks might get hung up. 657 00:29:48,120 --> 00:29:50,480 Speaker 1: They might be so excited about the if they're like talking, 658 00:29:50,320 --> 00:29:53,360 Speaker 1: if they care about generational wealth building, and they say, 659 00:29:53,440 --> 00:29:57,040 Speaker 1: unlike Matt and Joel, and I am funding my five 660 00:29:57,320 --> 00:30:00,360 Speaker 1: nine accounts with more bigger now because of this law change, 661 00:30:00,440 --> 00:30:02,960 Speaker 1: because there's more ability for me to pass that money 662 00:30:02,960 --> 00:30:06,480 Speaker 1: down to my kids in an awesome retirement account for 663 00:30:06,520 --> 00:30:09,360 Speaker 1: their future, and of course not telling them about it. 664 00:30:09,400 --> 00:30:11,600 Speaker 1: But it's it's it's one of those things where some 665 00:30:11,640 --> 00:30:13,680 Speaker 1: people might get so excited about this and creating this 666 00:30:13,760 --> 00:30:17,320 Speaker 1: generational wealth opportunity that they might fail, or at least 667 00:30:17,360 --> 00:30:20,760 Speaker 1: not to the same degree, invest for their own future 668 00:30:21,120 --> 00:30:24,040 Speaker 1: or like you said, Matt too, even invest in things 669 00:30:24,120 --> 00:30:28,160 Speaker 1: that help grow your family dynamic and and trips that 670 00:30:28,240 --> 00:30:32,000 Speaker 1: might pay off from a cultural standpoint or from just 671 00:30:32,040 --> 00:30:34,680 Speaker 1: a knowledge standpoint. I think those things are massively important. 672 00:30:34,760 --> 00:30:37,680 Speaker 1: And if you're funding a five plan but you're skipping 673 00:30:37,680 --> 00:30:40,080 Speaker 1: out on those other things, that's not I wouldn't say 674 00:30:40,120 --> 00:30:42,160 Speaker 1: that smart. I wouldn't say that is creating a well 675 00:30:42,240 --> 00:30:46,240 Speaker 1: rounded family and well rounded kids. So yeah, food and analogy. 676 00:30:46,280 --> 00:30:48,080 Speaker 1: It makes me think that you're serving up the perfect 677 00:30:48,120 --> 00:30:51,880 Speaker 1: amount of vegetables, protein, dairy, whatever for for each meal, 678 00:30:52,240 --> 00:30:54,200 Speaker 1: but you're like, you're not adding any seasoning to it 679 00:30:54,200 --> 00:30:56,360 Speaker 1: at all, and you're just like, well, no, no, these 680 00:30:56,480 --> 00:31:01,400 Speaker 1: are the building blocks to uh healthy, fully balanced diet. 681 00:31:01,640 --> 00:31:04,640 Speaker 1: Who cares about flavor well, flavor is really important. That's 682 00:31:04,680 --> 00:31:06,160 Speaker 1: what actually gets you to do the thing. And if 683 00:31:06,160 --> 00:31:09,000 Speaker 1: you've lost sight as to why it is that you 684 00:31:09,040 --> 00:31:12,680 Speaker 1: are funding these accounts, it's to and enrich the lives 685 00:31:12,720 --> 00:31:14,320 Speaker 1: of you know, your of your kids in the future. 686 00:31:14,360 --> 00:31:15,680 Speaker 1: It's important to keep that in mind as well. You 687 00:31:15,680 --> 00:31:17,600 Speaker 1: don't want to lose sight. You don't want to focus 688 00:31:17,640 --> 00:31:19,320 Speaker 1: so much on the long term that you lose sight 689 00:31:19,360 --> 00:31:21,880 Speaker 1: of what's here right now, right in front of you. 690 00:31:21,880 --> 00:31:24,040 Speaker 1: You gotta have that both and approach for sure. And 691 00:31:24,040 --> 00:31:26,120 Speaker 1: and one more thing that it's important to mention when 692 00:31:26,160 --> 00:31:28,280 Speaker 1: it comes to the changes to five plans, in this 693 00:31:28,360 --> 00:31:32,720 Speaker 1: Secure Act two point oh section, annual contribution limits still apply. 694 00:31:32,800 --> 00:31:35,040 Speaker 1: And so those contribution limits they're going to go up 695 00:31:35,040 --> 00:31:37,640 Speaker 1: over time. They just went up this year from six 696 00:31:37,680 --> 00:31:40,280 Speaker 1: thousand dollars last year to sixty. What you can stock 697 00:31:40,320 --> 00:31:42,840 Speaker 1: away in in IRA at this point, I can't predict 698 00:31:42,880 --> 00:31:45,320 Speaker 1: what they're going to be in let's say nine, But 699 00:31:45,800 --> 00:31:47,600 Speaker 1: let's just say the annual limit is still at six, 700 00:31:48,320 --> 00:31:51,200 Speaker 1: even though it won't be at that point. The account 701 00:31:51,240 --> 00:31:54,280 Speaker 1: in question has been open for at least five fifteen years, Matt, 702 00:31:54,320 --> 00:31:57,480 Speaker 1: like you just discussed, with at least sixty dollars of 703 00:31:57,520 --> 00:32:00,000 Speaker 1: those having been stocked away at least five years ago. 704 00:32:00,480 --> 00:32:03,680 Speaker 1: You can then roll over that's sixty from the five 705 00:32:04,040 --> 00:32:06,320 Speaker 1: nine account into a roth I array that is in 706 00:32:06,720 --> 00:32:08,680 Speaker 1: your kiddo's name, and you can do the same thing 707 00:32:08,720 --> 00:32:11,280 Speaker 1: in the following years. To one. Thing you you can't 708 00:32:11,320 --> 00:32:14,040 Speaker 1: do is roll over sixty five hundred and then contribute 709 00:32:14,040 --> 00:32:18,040 Speaker 1: sixty additional dollars like the traditional way. In the normal way, 710 00:32:18,160 --> 00:32:20,840 Speaker 1: you can't say you can't fund thirteen dollars into a 711 00:32:20,920 --> 00:32:23,760 Speaker 1: ROTH in one year, half from the half from just 712 00:32:23,920 --> 00:32:27,960 Speaker 1: other earned income. The total annual max of six still applies. 713 00:32:28,160 --> 00:32:29,400 Speaker 1: You can do half and a half. You could do 714 00:32:29,400 --> 00:32:32,160 Speaker 1: three thousand, two hundred and fifty dollars from as a 715 00:32:32,240 --> 00:32:35,760 Speaker 1: rollover and then the same amount as a traditional contribution. 716 00:32:35,760 --> 00:32:38,760 Speaker 1: But yeah, you can't double up those limits. Those contribution 717 00:32:38,800 --> 00:32:41,880 Speaker 1: limits still apply. And okay, so that's a lot of 718 00:32:41,880 --> 00:32:45,720 Speaker 1: new information on how five plans have changed. Hopefully we 719 00:32:45,760 --> 00:32:48,520 Speaker 1: didn't bore you with too many details. But how parents 720 00:32:48,520 --> 00:32:50,840 Speaker 1: can best take advantage of this for their kids, This 721 00:32:50,880 --> 00:32:53,480 Speaker 1: gets a bit complicated and the reality, honestly, it's it's 722 00:32:53,480 --> 00:32:56,360 Speaker 1: that most folks will have something to do now with 723 00:32:56,480 --> 00:32:58,480 Speaker 1: those unused fights one and nine funds that that don't 724 00:32:58,480 --> 00:33:01,200 Speaker 1: involve a penalty. That is the great news here. But 725 00:33:01,240 --> 00:33:02,960 Speaker 1: if you are inclined to take advantage of this, if 726 00:33:03,000 --> 00:33:05,840 Speaker 1: you want to prime the pump for your child's future retirement, 727 00:33:05,880 --> 00:33:07,840 Speaker 1: then we want to make sure that you do it properly, 728 00:33:07,880 --> 00:33:09,760 Speaker 1: that you're thinking about it the right way. Again, even 729 00:33:09,800 --> 00:33:13,080 Speaker 1: though five nine plans they're they're way cooler, they're way 730 00:33:13,080 --> 00:33:15,600 Speaker 1: more flexible than they were, that still doesn't mean that 731 00:33:15,680 --> 00:33:19,080 Speaker 1: it takes priority over the other retirement accounts that you 732 00:33:19,080 --> 00:33:22,200 Speaker 1: have access to. But if you're willing, if you're able 733 00:33:22,240 --> 00:33:25,440 Speaker 1: to do both more power to you. And that being said, 734 00:33:25,440 --> 00:33:27,640 Speaker 1: we've covered a lot of details. If you have questions, 735 00:33:28,000 --> 00:33:30,400 Speaker 1: this is an excellent time for us to bring this up. 736 00:33:30,800 --> 00:33:33,880 Speaker 1: Submit a question to how the Money dot Com forward 737 00:33:33,880 --> 00:33:36,440 Speaker 1: slash ask. You can send us a voice memo if 738 00:33:36,440 --> 00:33:40,000 Speaker 1: you have a particular situation. If you have if you've 739 00:33:40,000 --> 00:33:42,760 Speaker 1: come across a nuance of the law that you want 740 00:33:42,800 --> 00:33:44,680 Speaker 1: us to talk about, you can ask a question so 741 00:33:44,720 --> 00:33:47,320 Speaker 1: that you're just like, Man, I in my specifics, should 742 00:33:47,360 --> 00:33:49,440 Speaker 1: I be contributing to a five nine plan for my kids? 743 00:33:49,440 --> 00:33:51,800 Speaker 1: Like we love to throw out a few of your particulars. 744 00:33:51,800 --> 00:33:53,480 Speaker 1: We love to tackle it. Yeah. Or if you've got 745 00:33:53,560 --> 00:33:55,520 Speaker 1: a frugal or cheap and you're like, is it cheap 746 00:33:55,600 --> 00:33:57,680 Speaker 1: to think that I will designate this money for my 747 00:33:57,760 --> 00:34:00,320 Speaker 1: kids for their college only, but I am not link 748 00:34:00,560 --> 00:34:03,160 Speaker 1: to give it to them within the retirement account. That's 749 00:34:03,160 --> 00:34:07,160 Speaker 1: something I'm personally wrestling with as we speak into your question. Man. 750 00:34:08,160 --> 00:34:10,760 Speaker 1: But all right, we've we've got more changes to retirement 751 00:34:10,800 --> 00:34:14,200 Speaker 1: accounts that we need to discuss, including new RATH four 752 00:34:14,200 --> 00:34:16,879 Speaker 1: owen K rules, and we'll get to all that right 753 00:34:16,920 --> 00:34:28,200 Speaker 1: after this. All right, let's keep going. Let's keep talking 754 00:34:28,200 --> 00:34:31,439 Speaker 1: about retirement account changes thanks to the new Secure Act 755 00:34:31,480 --> 00:34:34,319 Speaker 1: two point oh, which was past basically the very end 756 00:34:34,360 --> 00:34:37,359 Speaker 1: of last year. I can't wait for the upgrade, the 757 00:34:37,400 --> 00:34:40,799 Speaker 1: Secure Act two point two point one update. Yeah, well, 758 00:34:40,800 --> 00:34:42,600 Speaker 1: that's the thing is, like, we do need clarification on 759 00:34:42,640 --> 00:34:44,600 Speaker 1: a lot of the changes that are that are happening. 760 00:34:44,760 --> 00:34:46,680 Speaker 1: Hopefully we'll get those in the coming weeks and months, 761 00:34:46,719 --> 00:34:49,640 Speaker 1: and we will share as new information comes along. But 762 00:34:49,680 --> 00:34:51,839 Speaker 1: there's just a lot worth covering. In specifically, we wanted 763 00:34:51,840 --> 00:34:54,640 Speaker 1: to dedicate a whole section of five plans because there's 764 00:34:54,719 --> 00:34:56,440 Speaker 1: massive changes there, like we said, kind of like a 765 00:34:56,480 --> 00:34:58,800 Speaker 1: new wing being added onto the house, and it's worth 766 00:34:59,080 --> 00:35:02,040 Speaker 1: covering and discussing in depth how that impacts folks who 767 00:35:02,040 --> 00:35:03,759 Speaker 1: are saving for the kids college, or folks who hadn't 768 00:35:03,760 --> 00:35:06,640 Speaker 1: considered saving for their their kids college but who do 769 00:35:06,719 --> 00:35:10,240 Speaker 1: want to invest for their child's future. This now gives 770 00:35:10,280 --> 00:35:14,399 Speaker 1: them another account to consider and that secondary Shoot, yeah, 771 00:35:14,480 --> 00:35:16,680 Speaker 1: you can always, you can always. There's always money in 772 00:35:16,680 --> 00:35:18,600 Speaker 1: the banana send exactly what I was thinking when you 773 00:35:18,640 --> 00:35:21,360 Speaker 1: said that. And if any of you don't watch Arrested Development, 774 00:35:21,440 --> 00:35:22,880 Speaker 1: go back and watch it tonight because it's one of 775 00:35:22,920 --> 00:35:26,480 Speaker 1: the greatest shows on television. Or yeah on streaming. But 776 00:35:26,840 --> 00:35:31,800 Speaker 1: now let's talk about some other changing elements of retirement accounts. 777 00:35:31,840 --> 00:35:34,440 Speaker 1: Thanks to what the Secure Act two point has brought about, 778 00:35:34,800 --> 00:35:36,440 Speaker 1: and we've got a few more things we want to 779 00:35:36,480 --> 00:35:39,520 Speaker 1: get to. Four own K hardship savings are now a reality, 780 00:35:39,719 --> 00:35:42,120 Speaker 1: and so a good chunk of folks are not gonna 781 00:35:42,120 --> 00:35:44,080 Speaker 1: be able to save for a rainy day inside of 782 00:35:44,120 --> 00:35:46,600 Speaker 1: their workplace retirement account, whether it's their four or three 783 00:35:46,640 --> 00:35:49,120 Speaker 1: B four oh one K, which whichever workplace retirement account 784 00:35:49,120 --> 00:35:51,279 Speaker 1: they have access to, if they have access to one. 785 00:35:51,440 --> 00:35:54,440 Speaker 1: And the goal here is so that employers can basically 786 00:35:54,440 --> 00:35:57,680 Speaker 1: help lower income workers out by allowing them to also 787 00:35:57,800 --> 00:36:01,120 Speaker 1: qualify for the company match, but just on savings, at 788 00:36:01,200 --> 00:36:03,480 Speaker 1: least until a certain point when the account achieves a 789 00:36:03,600 --> 00:36:06,920 Speaker 1: sum of two thousand dollars, which is early close to 790 00:36:06,960 --> 00:36:09,400 Speaker 1: our two thousand, four hundred and sixty seven dollar recommendation 791 00:36:09,760 --> 00:36:11,799 Speaker 1: of what folks should hapen an emergency fund. The right 792 00:36:11,880 --> 00:36:14,840 Speaker 1: read the same report by the same economists that we 793 00:36:14,920 --> 00:36:17,920 Speaker 1: got our number form exactly so to our listeners, they 794 00:36:18,000 --> 00:36:20,080 Speaker 1: might see an hr email hit their inbox at some 795 00:36:20,080 --> 00:36:23,040 Speaker 1: point this spring outlining their new ability to save for 796 00:36:23,160 --> 00:36:26,759 Speaker 1: a rainy day inside of their retirement account. And this 797 00:36:26,800 --> 00:36:29,760 Speaker 1: is kind of this just isn't terribly exciting in our books, 798 00:36:29,760 --> 00:36:32,240 Speaker 1: because yet saving that much money in a savings account 799 00:36:32,320 --> 00:36:34,160 Speaker 1: is literally our first money gear, Like that's what we 800 00:36:34,160 --> 00:36:36,480 Speaker 1: want people to do from the outset, when it's like, 801 00:36:36,520 --> 00:36:38,320 Speaker 1: what's what'sh your My my first goal with money be 802 00:36:38,800 --> 00:36:40,920 Speaker 1: get that much money set aside in the same mus 803 00:36:40,920 --> 00:36:43,720 Speaker 1: account that you have. So but if you've had trouble 804 00:36:43,760 --> 00:36:46,160 Speaker 1: just getting to that point, this new provision it might 805 00:36:46,200 --> 00:36:48,319 Speaker 1: do a bit of good helping more folks to get there, 806 00:36:48,600 --> 00:36:50,400 Speaker 1: which which is going to be, let's be honest, a 807 00:36:50,400 --> 00:36:51,840 Speaker 1: massive step for a whole lot of folks who are 808 00:36:51,840 --> 00:36:53,880 Speaker 1: living paycheck to paycheck. If you have that much money 809 00:36:54,160 --> 00:36:57,160 Speaker 1: in savings, whether it's inside of this new hardship savings 810 00:36:57,160 --> 00:36:59,040 Speaker 1: inside of a four one K or four or three B, 811 00:36:59,480 --> 00:37:01,879 Speaker 1: this will probabably lead to a lot of folks who 812 00:37:01,920 --> 00:37:04,600 Speaker 1: needed the most to achieve a greater level of financial 813 00:37:04,640 --> 00:37:08,439 Speaker 1: security to get established lay that foundation. Yeah, this does 814 00:37:08,520 --> 00:37:13,000 Speaker 1: not apply though to all employees. There are some stipulations, 815 00:37:13,040 --> 00:37:15,480 Speaker 1: the main one being that you can't take advantage of 816 00:37:15,520 --> 00:37:20,040 Speaker 1: this if your income is over five thousand dollars which 817 00:37:20,280 --> 00:37:22,640 Speaker 1: it kind of makes sense because high income earners, they 818 00:37:22,640 --> 00:37:25,480 Speaker 1: should at least be able to find a little bit 819 00:37:25,480 --> 00:37:27,200 Speaker 1: of wiggle room in their budget to be able to 820 00:37:27,239 --> 00:37:30,760 Speaker 1: fund that emergency fund without this additional boost. And because 821 00:37:30,760 --> 00:37:32,720 Speaker 1: of that new option rule that we talked about earlier, 822 00:37:32,960 --> 00:37:35,960 Speaker 1: if an employee doesn't opt out, they actually actually might 823 00:37:35,960 --> 00:37:38,640 Speaker 1: be saving up money, uh, without having to do anything 824 00:37:38,640 --> 00:37:42,480 Speaker 1: at all, because employers can also auto enroll employees into 825 00:37:42,520 --> 00:37:46,680 Speaker 1: one of these emergency savings accounts and establish a contribution 826 00:37:46,760 --> 00:37:50,560 Speaker 1: percentage of up to three on their behalf. So that's 827 00:37:50,600 --> 00:37:53,000 Speaker 1: kind of important to keep in mind. Uh. Something else, 828 00:37:53,040 --> 00:37:57,360 Speaker 1: what happens when they reach that threshold, Well, then the 829 00:37:57,360 --> 00:38:01,040 Speaker 1: employer could just either stop those contributions altogether, or they 830 00:38:01,040 --> 00:38:03,520 Speaker 1: could deviate those dollars. They can fundel them towards the 831 00:38:03,560 --> 00:38:06,960 Speaker 1: workplace retirement account instead. So know that that's an option 832 00:38:07,280 --> 00:38:10,560 Speaker 1: that your employer now has the ability to do that 833 00:38:10,800 --> 00:38:13,399 Speaker 1: on your behalf. And we've talked about over the years, Matt, 834 00:38:13,480 --> 00:38:18,439 Speaker 1: the different psychological things that money is so in our brain, 835 00:38:18,719 --> 00:38:20,279 Speaker 1: and often we don't take the actions that we want 836 00:38:20,280 --> 00:38:21,680 Speaker 1: to that we know are in our best interests. And 837 00:38:21,719 --> 00:38:25,800 Speaker 1: so some of these automatic contributions from employers, not like 838 00:38:25,840 --> 00:38:27,520 Speaker 1: that's just gonna help people do the right thing without 839 00:38:27,560 --> 00:38:30,520 Speaker 1: having to think about it, without even choosing to do it. 840 00:38:30,719 --> 00:38:33,120 Speaker 1: Some might say that's like nanny state, big brother or 841 00:38:33,120 --> 00:38:35,880 Speaker 1: something like that. But you can you can always change it, 842 00:38:36,160 --> 00:38:38,200 Speaker 1: you know, as long as you still have the option, 843 00:38:38,239 --> 00:38:40,160 Speaker 1: which you do. There's nothing wrong with a little notes. 844 00:38:40,200 --> 00:38:41,600 Speaker 1: You go back in there the very next day and 845 00:38:41,640 --> 00:38:44,920 Speaker 1: be like, psych, thanks for thanks for trying. I want 846 00:38:44,960 --> 00:38:46,600 Speaker 1: to spend all the dollars that I that I that 847 00:38:46,640 --> 00:38:48,440 Speaker 1: I make. I don't want to say anything for my future. 848 00:38:48,640 --> 00:38:51,120 Speaker 1: You still have that choice. But let's talk about some 849 00:38:51,160 --> 00:38:53,480 Speaker 1: other changes that The rm D pushback is another one 850 00:38:53,840 --> 00:38:56,360 Speaker 1: that happened in this bill. This one applies to fewer 851 00:38:56,480 --> 00:38:59,320 Speaker 1: how the money listeners because we have a younger audience. 852 00:38:59,360 --> 00:39:02,160 Speaker 1: But here's the scoot for individuals who turned seventy two. 853 00:39:03,120 --> 00:39:05,080 Speaker 1: This might have ramplications for your parents. By the way, 854 00:39:05,360 --> 00:39:06,960 Speaker 1: r m d s will be pushed back by one 855 00:39:07,040 --> 00:39:09,680 Speaker 1: year compared to the current rules, and they're gonna begin 856 00:39:09,719 --> 00:39:12,600 Speaker 1: at age seventy three. Age seventy three will continue to 857 00:39:12,640 --> 00:39:14,719 Speaker 1: be the age at which rm ds need to be 858 00:39:14,760 --> 00:39:18,000 Speaker 1: taken for the next decade through two. Then beginning in 859 00:39:18,040 --> 00:39:20,479 Speaker 1: twenty three, r m D s are gonna be pushed 860 00:39:20,520 --> 00:39:23,799 Speaker 1: back even further to age seventy five. So for most 861 00:39:23,840 --> 00:39:26,719 Speaker 1: of our listeners who are still decades from retirement, there's 862 00:39:26,719 --> 00:39:28,719 Speaker 1: still a long ways off. This means that you won't 863 00:39:28,760 --> 00:39:31,160 Speaker 1: be forced to take money out of your four one 864 00:39:31,239 --> 00:39:34,239 Speaker 1: K or traditional I array until you turn seventy five, 865 00:39:34,360 --> 00:39:36,600 Speaker 1: that's right, which is good news, Like you have more 866 00:39:37,000 --> 00:39:40,680 Speaker 1: choice over when you take those funds out, and nobody's 867 00:39:40,760 --> 00:39:42,960 Speaker 1: telling you earlier on in your retirement years that you 868 00:39:42,960 --> 00:39:45,400 Speaker 1: have to you have to grab those that money and 869 00:39:45,440 --> 00:39:48,320 Speaker 1: pay the tax piper. You you can let it continue 870 00:39:48,320 --> 00:39:50,320 Speaker 1: to grow, that's right. Yeah, I mean, and with folks 871 00:39:50,400 --> 00:39:53,799 Speaker 1: living longer and with a desire to continue to want 872 00:39:53,800 --> 00:39:56,440 Speaker 1: to work at a job some somehow, maybe it's not 873 00:39:56,480 --> 00:39:58,120 Speaker 1: maybe you're not making nearly as much as you used 874 00:39:58,160 --> 00:40:00,279 Speaker 1: to make. But what that means is you often times 875 00:40:00,280 --> 00:40:01,960 Speaker 1: don't need to take that money out of the account 876 00:40:01,960 --> 00:40:04,080 Speaker 1: and you can let it grow. But some other good 877 00:40:04,080 --> 00:40:06,200 Speaker 1: news on this front though, is that RATH four ohwen 878 00:40:06,280 --> 00:40:08,680 Speaker 1: K accounts, which by the way, there are favorite choice 879 00:40:08,680 --> 00:40:10,840 Speaker 1: for most folks because most folks are going to be 880 00:40:10,840 --> 00:40:14,040 Speaker 1: earning more money in the future, and tax rates are 881 00:40:14,120 --> 00:40:15,719 Speaker 1: likely to go up to they're likely gonna go up 882 00:40:15,719 --> 00:40:17,960 Speaker 1: after five. But if you have a RATH four W 883 00:40:18,400 --> 00:40:21,160 Speaker 1: four oh one K account, this also means that you 884 00:40:21,160 --> 00:40:23,279 Speaker 1: won't have any R and D s attached to them 885 00:40:23,760 --> 00:40:27,600 Speaker 1: starting in and moving forward either. So in our minds, 886 00:40:27,600 --> 00:40:31,000 Speaker 1: this makes a ton of sense because RATH accounts, regardless, 887 00:40:31,000 --> 00:40:34,120 Speaker 1: they are funded with after tax dollars, whether we're talking 888 00:40:34,120 --> 00:40:37,680 Speaker 1: about roth iras or RATH four own case, but roth 889 00:40:37,719 --> 00:40:42,200 Speaker 1: iras they already had no mandatory required minimum distributions and 890 00:40:42,239 --> 00:40:45,200 Speaker 1: so now they're sister accounts, they won't have any forced 891 00:40:45,200 --> 00:40:48,040 Speaker 1: withdrawals associated with them either. It makes sense. I mean, 892 00:40:48,080 --> 00:40:51,400 Speaker 1: more of the the language in this bill is pushing 893 00:40:51,800 --> 00:40:55,239 Speaker 1: folks towards the expansion of what some writers have called 894 00:40:55,239 --> 00:40:59,520 Speaker 1: like the rathification of retirement accounts. More accounts now have 895 00:40:59,600 --> 00:41:02,759 Speaker 1: the option and to not only pay the taxes up 896 00:41:02,760 --> 00:41:04,960 Speaker 1: front and let that money grow tax free, but also 897 00:41:05,080 --> 00:41:07,759 Speaker 1: to avoid those R m D s. Yeah. One of 898 00:41:07,800 --> 00:41:10,359 Speaker 1: the thing on the WRATH front too, is that it's 899 00:41:10,680 --> 00:41:13,360 Speaker 1: good news really for self employed folks out there. Starting 900 00:41:13,400 --> 00:41:15,239 Speaker 1: this year, you're gonna be able to contribute to a 901 00:41:15,360 --> 00:41:19,520 Speaker 1: WRATH simple IRA and a Wrath set IRA. Those accounts 902 00:41:19,520 --> 00:41:23,160 Speaker 1: previously only allowed for pre tax contributions, but that changes 903 00:41:23,360 --> 00:41:26,439 Speaker 1: in this year, and so it might take a minute 904 00:41:26,480 --> 00:41:28,680 Speaker 1: for the brokerage company you work with to get everything 905 00:41:28,960 --> 00:41:30,480 Speaker 1: up and running on their end, but look for that 906 00:41:30,560 --> 00:41:34,680 Speaker 1: option soon. And for again, given kind of where things 907 00:41:34,680 --> 00:41:37,920 Speaker 1: stand from attack standpoint in this country, and depending on 908 00:41:37,960 --> 00:41:40,880 Speaker 1: your income, depending on your goals, depending on you know, 909 00:41:41,080 --> 00:41:43,160 Speaker 1: what you're likely income is going to be in the future. 910 00:41:43,200 --> 00:41:45,120 Speaker 1: It's it's hard to give a blanket statement for every 911 00:41:45,120 --> 00:41:48,440 Speaker 1: single person, but Rath Rath accounts makes sense for a 912 00:41:48,480 --> 00:41:51,319 Speaker 1: lot of folks. And yeah, that the fact that Rath 913 00:41:51,440 --> 00:41:55,040 Speaker 1: simples and Roth steps are going to be available now 914 00:41:55,320 --> 00:41:57,879 Speaker 1: starting this year is a good thing, that's right. But 915 00:41:58,160 --> 00:42:00,920 Speaker 1: before we wrap this thing up, some additional news and 916 00:42:00,960 --> 00:42:05,640 Speaker 1: information for our older listeners. Catch up contribution amounts are 917 00:42:05,719 --> 00:42:08,000 Speaker 1: going up for folks who are in their early sixties, 918 00:42:08,440 --> 00:42:10,960 Speaker 1: and that catch up amount is going to be indexed 919 00:42:11,040 --> 00:42:16,319 Speaker 1: to inflation. What about the mustard amount? Such a nerd, no, sir, 920 00:42:16,960 --> 00:42:18,680 Speaker 1: But what this means is that since it's going to 921 00:42:18,719 --> 00:42:22,080 Speaker 1: be indexed inflation, is gonna gonna be essentially pegged to inflation. 922 00:42:22,080 --> 00:42:24,560 Speaker 1: That it means it's going to automatically change over the years. 923 00:42:24,600 --> 00:42:27,799 Speaker 1: But for folks who are getting closer to retirement age 924 00:42:28,000 --> 00:42:30,160 Speaker 1: and they haven't been able to sock as much as 925 00:42:30,160 --> 00:42:33,360 Speaker 1: they'd like to away into the retirement accounts of the decades, 926 00:42:33,800 --> 00:42:36,839 Speaker 1: they will now have a greater ability to put more 927 00:42:36,880 --> 00:42:39,920 Speaker 1: into those accounts, at least for a few years, specifically 928 00:42:39,920 --> 00:42:43,200 Speaker 1: between the ages of sixty and sixty three. And believe 929 00:42:43,200 --> 00:42:45,120 Speaker 1: it or not, there's even more in the Secure Act 930 00:42:45,160 --> 00:42:47,560 Speaker 1: two point o that passed. Much of it is arcane 931 00:42:47,840 --> 00:42:50,080 Speaker 1: and gets even more into the weeds than we've done 932 00:42:50,080 --> 00:42:52,960 Speaker 1: on this episode. So we're going to um try to 933 00:42:53,320 --> 00:42:57,560 Speaker 1: maintain listeners and not be just completely boring and uh 934 00:42:57,600 --> 00:42:59,160 Speaker 1: and and tell you stuff that you don't care about. 935 00:42:59,360 --> 00:43:02,000 Speaker 1: But for instance, you can now offer your cleaning person 936 00:43:02,160 --> 00:43:04,000 Speaker 1: or your nanny a step by array. Let's say you're 937 00:43:04,000 --> 00:43:05,839 Speaker 1: in that boat and you're like, you want to give 938 00:43:05,880 --> 00:43:08,280 Speaker 1: them a retirement account. You're trying to steal your neighbors, 939 00:43:08,600 --> 00:43:13,160 Speaker 1: your friends. You're like, I offer retirement benefits. Right, Well, 940 00:43:13,320 --> 00:43:15,880 Speaker 1: that's kind of interesting, but it's not necessarily applicable to 941 00:43:15,920 --> 00:43:19,560 Speaker 1: a bunch of folks there as right. There also changes 942 00:43:19,600 --> 00:43:22,560 Speaker 1: to able accounts for disabled folks, which which are going 943 00:43:22,600 --> 00:43:25,000 Speaker 1: to be helpful, but those don't go into effect. Until 944 00:43:26,360 --> 00:43:27,879 Speaker 1: that being said, we'll link to some of the best 945 00:43:27,920 --> 00:43:30,360 Speaker 1: resources to help you understand the full scope of changes 946 00:43:30,600 --> 00:43:32,399 Speaker 1: that this law creates in the show notes. If you're 947 00:43:32,400 --> 00:43:35,520 Speaker 1: like listen, I want to read like dozens and dozens 948 00:43:35,520 --> 00:43:40,280 Speaker 1: and dozens of pages of arcane legislative language, then boom 949 00:43:40,360 --> 00:43:42,120 Speaker 1: if that's your If that's your jam, will link to 950 00:43:42,160 --> 00:43:43,400 Speaker 1: some of that stuff in the show notes so you 951 00:43:43,400 --> 00:43:45,480 Speaker 1: can dig into the details yourself. Well, we'll link to 952 00:43:45,520 --> 00:43:49,239 Speaker 1: the actual omnibus bill and tell you what pages to 953 00:43:49,320 --> 00:43:51,040 Speaker 1: start on if you want to read all four pages 954 00:43:51,040 --> 00:43:53,399 Speaker 1: of the Secure Act, if you really want to dive 955 00:43:53,440 --> 00:43:55,279 Speaker 1: into a dozen pairs of how the money stocks for 956 00:43:55,360 --> 00:43:58,440 Speaker 1: the first listener that reads the entire bill, we want 957 00:43:58,440 --> 00:44:01,359 Speaker 1: a book report in two weeks. Obviously, we would still 958 00:44:01,360 --> 00:44:03,399 Speaker 1: like to see more simplicity, right, like when it comes 959 00:44:03,400 --> 00:44:06,200 Speaker 1: to retirement accounts, they're still massively confusing to a slew 960 00:44:06,280 --> 00:44:09,080 Speaker 1: of folks. We we totally get that there's like an 961 00:44:09,080 --> 00:44:12,560 Speaker 1: alphabet soup of different account names, the income limits and 962 00:44:12,560 --> 00:44:15,920 Speaker 1: the slighting scales time periods like in different years that 963 00:44:15,920 --> 00:44:18,920 Speaker 1: they're getting implemented all of these they put h they 964 00:44:18,960 --> 00:44:20,600 Speaker 1: put up a bit of a wall for a lot 965 00:44:20,600 --> 00:44:24,080 Speaker 1: of folks who would otherwise be interested in investing. But still, 966 00:44:24,440 --> 00:44:26,800 Speaker 1: even though it might feel like you're you're cramming, cramming 967 00:44:26,800 --> 00:44:29,680 Speaker 1: for an exam, if you learn how these accounts work, 968 00:44:29,719 --> 00:44:31,560 Speaker 1: if you use them to your advantage, we think that 969 00:44:31,640 --> 00:44:34,560 Speaker 1: you're going to be able to change your financial future 970 00:44:34,560 --> 00:44:36,600 Speaker 1: in a massive way. And of course we know that 971 00:44:36,640 --> 00:44:38,920 Speaker 1: financial futures lead to your actual futures. And it's not 972 00:44:38,960 --> 00:44:40,879 Speaker 1: just about money, it's about what you can then do 973 00:44:41,000 --> 00:44:44,480 Speaker 1: without money. These changes will quite literally allow you to 974 00:44:44,719 --> 00:44:46,960 Speaker 1: make some serious changes to your life in the future. Yeah, 975 00:44:46,960 --> 00:44:48,880 Speaker 1: we talked about at the very beginning of this episode, 976 00:44:48,880 --> 00:44:51,920 Speaker 1: we talked about incentives and incentives drive us, like whether 977 00:44:51,960 --> 00:44:53,880 Speaker 1: we know it or not, Like why do we get 978 00:44:53,920 --> 00:44:56,320 Speaker 1: up and go to work every morning? It's it's typically 979 00:44:56,320 --> 00:44:59,600 Speaker 1: not because we'd rather be there than sleeping in our 980 00:44:59,600 --> 00:45:01,359 Speaker 1: bed or hanging out with our kids or or there 981 00:45:01,360 --> 00:45:06,880 Speaker 1: signific another like extrasophosmory. Yeah, it's it's for other reasons, right, 982 00:45:06,920 --> 00:45:09,240 Speaker 1: And it's the incentives that matter. And so it's because 983 00:45:09,280 --> 00:45:12,240 Speaker 1: we get health care and we will like maybe hopefully 984 00:45:12,239 --> 00:45:14,080 Speaker 1: we like what we do, but it's because we we 985 00:45:14,239 --> 00:45:18,319 Speaker 1: get a paycheck from that job, and incentives drive what 986 00:45:18,360 --> 00:45:21,920 Speaker 1: we do every single day. And the incentive changes inside 987 00:45:21,920 --> 00:45:23,640 Speaker 1: of this Secure Act two point oh which was passed 988 00:45:23,680 --> 00:45:26,680 Speaker 1: in this omnious spending bill, are going to impact our 989 00:45:26,680 --> 00:45:29,640 Speaker 1: decisions moving forward. And so hopefully, yeah, you know a 990 00:45:29,640 --> 00:45:31,120 Speaker 1: little bit of the lay of the land, some of 991 00:45:31,160 --> 00:45:33,799 Speaker 1: the major changes that occurred in this in this bill, 992 00:45:33,960 --> 00:45:38,000 Speaker 1: and how you can use so changes to your advantage 993 00:45:38,040 --> 00:45:40,959 Speaker 1: in the future as you're saving investing in your building wealth. 994 00:45:41,000 --> 00:45:42,600 Speaker 1: That's right. And again, if there is a part of 995 00:45:42,640 --> 00:45:44,640 Speaker 1: the Secure Act that passed that you did not hear 996 00:45:44,719 --> 00:45:46,160 Speaker 1: us talk about, or you want us to talk about, 997 00:45:46,480 --> 00:45:48,920 Speaker 1: talk about it in a specific way, send us a question. 998 00:45:48,960 --> 00:45:51,359 Speaker 1: Go to how do money dot Com forward slash ask Joel. 999 00:45:51,360 --> 00:45:53,000 Speaker 1: Speaking of incentive is one of the reasons that you 1000 00:45:53,040 --> 00:45:54,680 Speaker 1: and I that we come to work is that we're 1001 00:45:54,680 --> 00:45:58,400 Speaker 1: able to sip a craft beer while we record these episodes. 1002 00:45:58,800 --> 00:46:02,520 Speaker 1: So during this episode, enjoyed an Imperial Strawberry White ale. 1003 00:46:02,600 --> 00:46:06,879 Speaker 1: That's the only reason I showed up tonight for this beer. Uh. 1004 00:46:06,920 --> 00:46:08,560 Speaker 1: It is like a nice little park, you know. The 1005 00:46:08,560 --> 00:46:12,800 Speaker 1: ability for us to I mean literally, we don't repeat beers, 1006 00:46:12,800 --> 00:46:15,480 Speaker 1: and so part of it is a mission to explore 1007 00:46:15,560 --> 00:46:18,279 Speaker 1: all the many different breweries and different awesome beers that 1008 00:46:18,320 --> 00:46:20,680 Speaker 1: are out there. This is why Tennessee brew Works out 1009 00:46:20,719 --> 00:46:24,640 Speaker 1: of Nashville in collaboration. I guess with Cascade Moon, I 1010 00:46:24,680 --> 00:46:27,720 Speaker 1: think they were a distiller. They used their their whiskey barrels. 1011 00:46:27,920 --> 00:46:29,759 Speaker 1: But yeah, what your thoughts on this one? Yeah, so 1012 00:46:29,880 --> 00:46:32,080 Speaker 1: because they were in this beer was Asian and whiskey barrels. 1013 00:46:32,120 --> 00:46:33,839 Speaker 1: It was a little boozy. You had a little bit 1014 00:46:33,840 --> 00:46:36,440 Speaker 1: of strawberry all on that white ale base. So to me, 1015 00:46:36,480 --> 00:46:39,120 Speaker 1: this is crazy. This was unique and interesting. Like it was, 1016 00:46:39,520 --> 00:46:42,160 Speaker 1: it was different than any other beer have had, and 1017 00:46:42,200 --> 00:46:44,359 Speaker 1: I love a good beer agent and whiskey barrels. Like 1018 00:46:44,600 --> 00:46:46,680 Speaker 1: I'm hoping in Secure Act three point out they actually 1019 00:46:46,719 --> 00:46:49,680 Speaker 1: mandate all beers be Agian whiskey barrels, because that would 1020 00:46:49,680 --> 00:46:52,319 Speaker 1: make my day. But I thought this one was was fun, 1021 00:46:52,360 --> 00:46:55,400 Speaker 1: It was different, and it wasn't necessarily one of my favorites, 1022 00:46:55,440 --> 00:46:57,719 Speaker 1: but it was also it was also really tasty. Did 1023 00:46:57,719 --> 00:47:00,120 Speaker 1: you not like the had like a Belgian aspect to 1024 00:47:00,200 --> 00:47:02,160 Speaker 1: it more so than I mean it's we should have 1025 00:47:02,239 --> 00:47:04,239 Speaker 1: known that it's a white ale, so it's like some 1026 00:47:04,320 --> 00:47:07,359 Speaker 1: of the spice Belgian white in white ales aren't. They're 1027 00:47:07,360 --> 00:47:09,640 Speaker 1: not always my favorite, although we had one recently from 1028 00:47:09,960 --> 00:47:13,000 Speaker 1: Sapernartists that was delicious that I love, but this one 1029 00:47:13,080 --> 00:47:15,799 Speaker 1: has because it had fewer of those spies exactly. Yeah, yeah, 1030 00:47:15,840 --> 00:47:18,160 Speaker 1: but I I still I still really like yeah it definitely. 1031 00:47:18,280 --> 00:47:20,040 Speaker 1: It kind of had immediately you taste like the fruity 1032 00:47:20,040 --> 00:47:23,279 Speaker 1: floral action going on, but I obviously it had notes 1033 00:47:23,320 --> 00:47:25,960 Speaker 1: of strawberry, um, but it also had like a peachy 1034 00:47:26,000 --> 00:47:29,680 Speaker 1: mango sort of fruitiness going on, like a very kind 1035 00:47:29,680 --> 00:47:36,879 Speaker 1: of white, light colored fruit or or strawberry that it's like, yes, yes, 1036 00:47:36,960 --> 00:47:40,040 Speaker 1: it's like a strawberry that has maybe more white and 1037 00:47:40,120 --> 00:47:43,680 Speaker 1: green on it than actual deep red. Kind of had 1038 00:47:43,680 --> 00:47:45,719 Speaker 1: some of that tartness going on, which I enjoyed. It 1039 00:47:45,760 --> 00:47:47,680 Speaker 1: was a way to balance out some of the deeper 1040 00:47:47,719 --> 00:47:50,239 Speaker 1: notes that you get when you ate something in some 1041 00:47:50,280 --> 00:47:52,480 Speaker 1: oak barrels. But I agree with you, any beer that 1042 00:47:52,560 --> 00:47:55,480 Speaker 1: has aged in oak just takes it up another notch. 1043 00:47:55,680 --> 00:47:57,000 Speaker 1: And I'm glad this is one that you and I 1044 00:47:57,080 --> 00:47:59,080 Speaker 1: could enjoy today, buddy, But that's gonna be it for 1045 00:47:59,120 --> 00:48:01,080 Speaker 1: this episode. This was. This was a little more of 1046 00:48:01,080 --> 00:48:05,520 Speaker 1: an academic, nerdy, sit down textbook kind of episode. Uh. 1047 00:48:05,960 --> 00:48:08,560 Speaker 1: Often times we're talking maybe a little bit more about lifestyle, 1048 00:48:08,760 --> 00:48:12,800 Speaker 1: or we're talking about things in a slightly more fun manner, 1049 00:48:12,840 --> 00:48:16,840 Speaker 1: but this one was. This one deserves the seriousness. You know. 1050 00:48:16,920 --> 00:48:20,120 Speaker 1: This was like a stoic type of financial episode. And 1051 00:48:20,160 --> 00:48:22,080 Speaker 1: now you can look forward to Matt spinoff podcast where 1052 00:48:22,080 --> 00:48:25,040 Speaker 1: he reads the Encyclopedia Britannica each and every week. Not 1053 00:48:25,040 --> 00:48:27,520 Speaker 1: gonna do it, but we hope that you did enjoy 1054 00:48:27,600 --> 00:48:29,520 Speaker 1: this episode though, and that you're able to glean a 1055 00:48:29,560 --> 00:48:31,520 Speaker 1: bunch of value out of it. If you liked it 1056 00:48:31,560 --> 00:48:33,160 Speaker 1: and you haven't left us of review, head over to 1057 00:48:33,200 --> 00:48:36,479 Speaker 1: Apple Podcasts or wherever you listen to your podcast. But Joel, 1058 00:48:36,480 --> 00:48:38,160 Speaker 1: that's gonna be it. It It takes two seconds, just five 1059 00:48:38,200 --> 00:48:41,240 Speaker 1: stars for this episode. It made me feel good until 1060 00:48:41,280 --> 00:48:43,839 Speaker 1: next time. Best Friends Out, Best Friends Out,