WEBVTT - The Massive Retirement Account Changes That Impact You! #617 0:00:00.120 --> 0:00:02.640 Welcome to How the Money. I'm Joel on Matt and 0:00:02.680 --> 0:00:06.480 today we're discussing the massive retirement account changes that impact you. 0:00:26.280 --> 0:00:30.680 That's right, Joel, the massive changes, the specific changes that 0:00:30.720 --> 0:00:33.520 took place at the end of last year and lots 0:00:33.520 --> 0:00:36.680 of them, well not the changes. What it's kind of 0:00:36.680 --> 0:00:39.760 like caval cascading arrangement of changes. So we're gonna talk 0:00:39.760 --> 0:00:41.720 about this like when they're going to be implemented, how 0:00:41.760 --> 0:00:44.120 they're going to be implemented past, but it may not 0:00:44.240 --> 0:00:48.599 actually be implemented for years, even a decade, uh from now. 0:00:48.760 --> 0:00:52.040 Some started beginning of this year someone until seven's We 0:00:52.360 --> 0:00:55.360 thought about calling this episode working Towards a more Secure 0:00:55.440 --> 0:01:00.160 retirement because it's the secure two point oh secure active point. Yeah, 0:01:00.200 --> 0:01:02.120 but we feel like we're burying the topic a little 0:01:02.120 --> 0:01:04.679 bit because this truly is, it's really important. It actually 0:01:04.880 --> 0:01:07.000 so it kind of makes me think of instruction manuals. 0:01:07.200 --> 0:01:09.440 A lot of folks may have gotten some electronics or 0:01:09.480 --> 0:01:11.280 like a new toy. In my case, I got a 0:01:11.319 --> 0:01:13.560 trigger grill for Christmas and it comes with with like 0:01:13.600 --> 0:01:17.280 this fat instruction manual, And essentially what we're doing is 0:01:17.280 --> 0:01:20.440 we're sitting down and we are reading that instruction manual, 0:01:20.440 --> 0:01:23.320 and we're making sure that you know how to properly 0:01:23.400 --> 0:01:25.280 run your retirement accounts. A lot of times you can 0:01:25.360 --> 0:01:27.120 kind of throw that instruction manual to the side and think, 0:01:27.240 --> 0:01:28.640 I just kind of figure this out, but we think 0:01:28.640 --> 0:01:30.920 this is truly important. We're the kind of nerds who 0:01:30.920 --> 0:01:34.200 sit down and uh read page after page and make 0:01:34.240 --> 0:01:36.520 sure that that you are going to be able to 0:01:36.520 --> 0:01:38.760 say for retirement in correct way. And the truth is 0:01:38.800 --> 0:01:41.120 there there are a lot of changes, some of which 0:01:41.280 --> 0:01:43.800 might not impact you, but we're gonna kind of highlight 0:01:43.840 --> 0:01:45.960 the most important ones, the ones that we think are 0:01:46.000 --> 0:01:48.960 going to impact the biggest swath of our listeners, and 0:01:48.960 --> 0:01:50.280 a lot of them will. I mean we're talking, we're 0:01:50.280 --> 0:01:53.760 gonna talk a lot about RATH accounts, but also accounts. 0:01:53.880 --> 0:01:56.600 There are new retirement accounts out there for the self employed. 0:01:56.920 --> 0:01:59.760 There's quite an array of changes that took place, and 0:02:00.000 --> 0:02:02.040 sure we're going to cover all of those today. Before 0:02:02.080 --> 0:02:04.160 we get to that, I wanted to mention one other account, 0:02:05.080 --> 0:02:06.800 just to money the waters a little more, and that 0:02:07.000 --> 0:02:09.560 is donor advice funds. And we've talked about those. We 0:02:09.639 --> 0:02:11.680 talked about those in November when we talked about giving, 0:02:11.680 --> 0:02:13.959 and we think giving your money away is really important. 0:02:13.960 --> 0:02:16.560 But if you're the kind of money nerd who wants 0:02:16.600 --> 0:02:19.840 to suck money aside and give it in future years, 0:02:20.080 --> 0:02:21.840 a donor avice fund can can help you do that, 0:02:21.840 --> 0:02:24.040 and it can actually help you grow the dollars that 0:02:24.080 --> 0:02:26.840 you want to give. And we've talked about how Daffy 0:02:27.000 --> 0:02:29.680 is a really cool website daffy dot org to do that. 0:02:29.840 --> 0:02:32.600 D a f f y and listener Jared apparently heard 0:02:32.639 --> 0:02:33.960 us talk about a couple of years ago and he 0:02:34.000 --> 0:02:36.400 opened up an account with Daffy. But he he emailed 0:02:36.440 --> 0:02:38.760 us Matt and this is so cool. I thought this 0:02:38.840 --> 0:02:42.240 was awesome because he won a ten thousand dollar prize 0:02:42.280 --> 0:02:44.959 that Daffy was giving away dollars so that he could 0:02:44.960 --> 0:02:47.600 then give that money away, so that he has extra 0:02:47.680 --> 0:02:51.720 ammunition now in his giving arsenal, all because he participated 0:02:51.720 --> 0:02:53.840 in this, in this Daffy giveaway to give away the 0:02:53.919 --> 0:02:56.520 charity is and nonprofits of his choice of this designation. 0:02:56.560 --> 0:02:58.440 And on top of that, on top of that, Daffy 0:02:58.480 --> 0:03:01.480 has uh this way that you can allow other people 0:03:01.520 --> 0:03:03.600 to give your money away too. So he gave some 0:03:03.680 --> 0:03:05.520 of his money away that he are that he won 0:03:05.600 --> 0:03:07.680 in this ship stakes to his co workers. He said, 0:03:07.680 --> 0:03:09.359 he listen, you've got a hunter Bucks. You've got a 0:03:09.440 --> 0:03:11.239 hunter Bucks. You've got a hunter Bucks. Where do you 0:03:11.280 --> 0:03:12.920 want it to go to? And they were able to 0:03:12.960 --> 0:03:16.280 decide which nonprofits to donate that money too. So that's 0:03:16.360 --> 0:03:17.960 kind of fun, Like, that's a really cool way to 0:03:18.000 --> 0:03:21.040 incorporate people around you into the giving mindset too. But 0:03:21.360 --> 0:03:24.240 just how that was fun to highlight love donor advised funds, 0:03:24.320 --> 0:03:27.400 love Daffy and the fact that Jared won ten thousand 0:03:27.440 --> 0:03:30.799 bucks because he so that's a lot of money, a 0:03:30.840 --> 0:03:32.640 lot of money, and real quick, it's worth mentioning that 0:03:32.720 --> 0:03:34.920 donor advice funds they're not just for those out there 0:03:34.920 --> 0:03:38.320 who are completely crushing it. It's not for the ultra rich. 0:03:38.480 --> 0:03:41.160 And so there are ways that you clump your donations 0:03:41.160 --> 0:03:43.680 so that way you get the tax credit for those 0:03:44.040 --> 0:03:47.360 the tax deduction for those donations as opposed to just 0:03:47.440 --> 0:03:50.240 taking the standard deduction. And so this truly is something 0:03:50.280 --> 0:03:52.200 for for everyone out there who is giving them money. 0:03:52.200 --> 0:03:53.960 Should we should ride about that in an upcoming How 0:03:53.960 --> 0:03:55.440 the Money newsletter, which, by the way, if you're not 0:03:55.520 --> 0:03:57.800 signed up how to Money dot Com slash newsletter, and 0:03:58.040 --> 0:04:00.280 Matt just one other cool thing about Daffy. I love 0:04:00.360 --> 0:04:02.120 that you can donate with a credit card and not 0:04:02.120 --> 0:04:05.640 pay any fees. That's a cool way to like. Obviously, 0:04:05.960 --> 0:04:07.360 we don't want you to go in debt to give, 0:04:07.680 --> 0:04:10.280 but if you're using a credit card strategically to meet 0:04:10.280 --> 0:04:13.680 a sign up bonus or something like that, then I 0:04:13.680 --> 0:04:16.600 think that's really I love that Daffy allows users the 0:04:16.640 --> 0:04:19.239 ability to do that. And if you're wondering which credit 0:04:19.240 --> 0:04:21.120 card has the best sign up bonuses, how to money 0:04:21.160 --> 0:04:23.719 dot com slash credit cards. That's right, man. Let's mention 0:04:23.800 --> 0:04:26.120 the beer we're having on this episode. It's an Imperial 0:04:26.200 --> 0:04:29.599 Strawberry White Ale by Tennessee Brewerks. We'll give our thoughts 0:04:29.600 --> 0:04:31.240 on it at the end of the episode, but let's 0:04:31.240 --> 0:04:33.120 get onto the subject in hand. We are talking about 0:04:33.800 --> 0:04:37.080 the massive retirement account changes that impact you. And we've 0:04:37.160 --> 0:04:41.080 always said that the basics of personal finance aren't terribly 0:04:41.080 --> 0:04:44.279 difficult to comprehend. They're not impossible to wrap your mind around, 0:04:44.279 --> 0:04:47.080 and in fact, most people understand them quite clearly. Even 0:04:47.080 --> 0:04:49.440 my three year old she don't understand some of the 0:04:49.440 --> 0:04:52.719 basics right. The general principles are fairly easy to understand, 0:04:52.760 --> 0:04:55.120 like don't spend more than you make like that. It 0:04:55.120 --> 0:04:58.279 doesn't take a rocket scientist really understand that. But incentives 0:04:58.720 --> 0:05:01.159 change everything and might even get you to do something 0:05:01.160 --> 0:05:03.400 that you're not terribly keen on doing. It makes me 0:05:03.440 --> 0:05:05.960 think of Matt You remember the TV show Fear Factor? 0:05:06.360 --> 0:05:08.480 I do. Okay, I never watched it. Okay, Well, I 0:05:08.520 --> 0:05:10.600 remember people used to eat really weird stuff. They used 0:05:10.600 --> 0:05:14.719 to lie down in glass coffins with spiders crawling over them. Ystian. Yeah, 0:05:15.040 --> 0:05:16.400 you had to overcome your fears. You had to do 0:05:16.400 --> 0:05:19.600 crazy stuff. And the fact is most of us wouldn't 0:05:19.640 --> 0:05:22.640 choose to do any of those stunts if it weren't 0:05:22.640 --> 0:05:24.760 connected to the possibility of winning a lot of money, right, 0:05:24.800 --> 0:05:27.240 But people were like, listen, okay, I'm gonna win thousands 0:05:27.320 --> 0:05:30.920 of dollars or potentially million dollars for letting spiders crawl 0:05:31.040 --> 0:05:33.200 over me. All right, I guess I'm in right. So 0:05:33.240 --> 0:05:38.080 then incentive kind of changes someone's mindset and their decision making. 0:05:38.839 --> 0:05:40.040 You know what, I'm going to go on that show 0:05:40.080 --> 0:05:41.920 and I'm gonna do that crazy stunt because I might 0:05:41.920 --> 0:05:43.640 make some money at the end. Of the day. And 0:05:43.640 --> 0:05:45.720 and that's true. For like, if you asked me to 0:05:45.760 --> 0:05:47.920 get into a coffin of spiders or something, I would 0:05:47.920 --> 0:05:49.760 say no, Like I wouldn't do it unless there was 0:05:49.800 --> 0:05:51.240 like a million bucks at the end of the rainbow. 0:05:51.440 --> 0:05:53.120 But these are the kind of things like that. There 0:05:53.120 --> 0:05:55.880 are things in this bill that are going to change 0:05:55.920 --> 0:05:58.600 the incentives for how and where you invest in the future. 0:05:58.600 --> 0:06:00.800 We're gonna discuss that. We're talking about some of our 0:06:00.839 --> 0:06:02.920 favorite changes in this bill. We're gonna talk about how 0:06:03.160 --> 0:06:05.840 you should react to these changes based on your situation 0:06:05.960 --> 0:06:08.919 in today's episode. That's right, man, When the rules of 0:06:08.920 --> 0:06:12.120 the game have changed, we need to adjust our behavior accordingly. 0:06:12.480 --> 0:06:15.960 And at the end of last year, the Consolidated Appropriations 0:06:15.960 --> 0:06:19.400 Act of three that was as signed into law, all 0:06:21.160 --> 0:06:23.680 of it. Would you write every single page it's I 0:06:23.760 --> 0:06:26.159 will I will say. Folks were only talking about how 0:06:26.279 --> 0:06:28.480 you know how big it was, But like it's definitely 0:06:28.920 --> 0:06:31.719 the margin, the margins are pretty are pretty fat, and 0:06:31.760 --> 0:06:34.720 it's like there's definitely double spacing going on. It's kind 0:06:34.720 --> 0:06:35.960 of like what you used to do in high school 0:06:36.080 --> 0:06:38.920 just to get that page paper up the length exactly. Yeah, 0:06:39.040 --> 0:06:41.039 but you know, Luckily, we're we're mostly concerned with just 0:06:41.120 --> 0:06:44.719 a portion of it, the Secure Act two point oh, 0:06:44.720 --> 0:06:47.559 which is it's all about saving for retirement. But even 0:06:47.680 --> 0:06:50.480 just that portion, it's nearly four pages long. But yeah, 0:06:50.640 --> 0:06:52.599 lucky for you, we are into this kind of stuff. 0:06:52.600 --> 0:06:54.320 So let's let's parse out what you need to pay 0:06:54.360 --> 0:06:57.200 attention to. And one of the changes that will affect 0:06:57.240 --> 0:06:59.359 a ton of folks, most folks out there, is that 0:06:59.400 --> 0:07:02.760 the bill al allows you to withdraw one tho dollars 0:07:02.800 --> 0:07:07.040 for quote unquote family and personal emergency expenses from retirement 0:07:07.040 --> 0:07:09.400 accounts like a like a four win K or an 0:07:09.400 --> 0:07:13.800 IRA without incurring a ten percent penalty. There are other 0:07:13.840 --> 0:07:16.240 stipulations as well, other rules, but here's the thing, We're 0:07:16.280 --> 0:07:18.800 not even gonna cover those because we don't want you 0:07:18.920 --> 0:07:22.640 touching your retirement accounts. That is what your emergency fund 0:07:22.680 --> 0:07:24.600 is for. So if you hear folks that work, if 0:07:24.600 --> 0:07:28.080 you hear you know, water cooler talk being discussed, how 0:07:28.240 --> 0:07:31.240 hey you can talk tap a thousand bucks of that 0:07:31.240 --> 0:07:33.920 that pesky money that keeps getting siphon out of your paycheck, 0:07:34.160 --> 0:07:35.800 that is something to bring it back into your own 0:07:36.080 --> 0:07:38.320 know how to think about that is not money? That 0:07:38.360 --> 0:07:41.600 we want you touching, even though Congress has has left 0:07:41.600 --> 0:07:45.040 a pretty broad I mean literally it's just family and 0:07:45.080 --> 0:07:48.480 personal emergency expenses. So it seems like a very wide 0:07:48.480 --> 0:07:51.679 swath of explanations that you could give for tapping that money. 0:07:51.680 --> 0:07:53.840 That is not money that we want you tapping. That 0:07:53.920 --> 0:07:56.040 is money that we want you to leave in your accounts. 0:07:56.040 --> 0:08:00.000 That way it can continue to grow into even more 0:08:00.000 --> 0:08:02.320 are future dollars for your future self. Yeah, it's it's 0:08:02.320 --> 0:08:04.320 one of those things where it seems like a benefit, 0:08:04.360 --> 0:08:06.280 it seems like a nice thing. It's like, hey, yeah, 0:08:06.320 --> 0:08:08.360 if you need this money for any reason, go ahead, 0:08:08.360 --> 0:08:10.400 tap it, pull it out, and guess what, We're not 0:08:10.400 --> 0:08:12.320 going to charge you that penalty on top. And it 0:08:12.360 --> 0:08:15.880 seems like great. Not makes this money more accessible, But 0:08:15.920 --> 0:08:18.000 that's exactly what we don't want is this money to 0:08:18.000 --> 0:08:20.120 be more accessible. This is money we want you to 0:08:20.160 --> 0:08:22.560 lock away for your future. And there are some extreme 0:08:22.600 --> 0:08:25.360 circumstances where it makes sense to take money out of 0:08:25.520 --> 0:08:28.720 a retirement account, but that's what emergency savings is for, 0:08:28.760 --> 0:08:30.880 and that's what building up that de fund and having 0:08:30.880 --> 0:08:33.080 more money on hand in your savings account is for. 0:08:33.400 --> 0:08:35.080 We we don't want you to have to ever pull 0:08:35.080 --> 0:08:37.319 out money from a retirement account. That's not the goal. 0:08:37.400 --> 0:08:39.680 But if it comes down to, like you selling a 0:08:39.760 --> 0:08:44.080 kidney or or tapping kid you know, well, go ahead 0:08:44.120 --> 0:08:46.360 and kidney, go into the thousand bucks, hang on to 0:08:46.400 --> 0:08:48.520 the kidney. Yeah, I mean exactly that, And that's what 0:08:48.679 --> 0:08:51.280 that's what I think Congress is trying to say people 0:08:51.559 --> 0:08:53.640 kidneys if they don't, they don't want a black market 0:08:53.640 --> 0:08:55.520 for that. They don't want you on Craigslist selling your 0:08:55.520 --> 0:08:58.560 body parts. But it's one of those things where I 0:08:58.640 --> 0:09:00.640 get why they're going in this direction, and but how 0:09:00.640 --> 0:09:03.080 the money listeners like that. Hopefully this this is going 0:09:03.120 --> 0:09:04.559 to apply to you don't care about that part of 0:09:04.600 --> 0:09:06.480 it exactly, But let's talk about a bunch of other stuff, 0:09:06.520 --> 0:09:08.800 Matt that does is going to impact a lot of 0:09:08.840 --> 0:09:12.840 our listeners, and automatic enrollment into employee retirement plans is 0:09:12.840 --> 0:09:14.839 one of them. It's one of the major changes from 0:09:14.840 --> 0:09:18.680 this bill, and it's a money psychology move that's going 0:09:18.760 --> 0:09:21.559 to impact millions of folks positively who aren't currently saving 0:09:21.559 --> 0:09:23.440 for their own retirement. Again, though that might not be 0:09:23.440 --> 0:09:25.960 a whole lot of our listeners, most of our of 0:09:26.080 --> 0:09:28.680 the how the money community is putting money in a 0:09:28.679 --> 0:09:31.160 workplace retirement account if they have access. I hope so. Yeah, 0:09:31.200 --> 0:09:34.000 But starting five, a bunch of employers who have at 0:09:34.080 --> 0:09:37.839 least ten employees. Churches and nonprofits are exempt from this rule. 0:09:38.040 --> 0:09:41.120 They're now required, though, to automatically opt in employees by 0:09:41.120 --> 0:09:44.240 stashing away at least three percent and up to ten percent. 0:09:44.320 --> 0:09:46.600 Like if you had like an employer who was like, no, 0:09:46.760 --> 0:09:50.520 we want and investing so much, they could automatically enroll 0:09:50.559 --> 0:09:52.800 you at ten percent of your your paycheck into that 0:09:52.840 --> 0:09:55.199 workplace retirement account. That's what we would do. Yeah, that's 0:09:55.240 --> 0:09:58.360 probably we would force it default and make you change 0:09:58.360 --> 0:10:00.560 it exactly. No, no no, no, you started in present and 0:10:00.559 --> 0:10:02.360 you go up from there. That's right. Yeah, we're not 0:10:02.360 --> 0:10:04.720 gonna messing with that pitally three percent, and if you 0:10:04.840 --> 0:10:06.560 want to take it, you know, take the burden in 0:10:06.559 --> 0:10:08.800 your own hand and go change that setting and move 0:10:08.840 --> 0:10:11.080 it back down to three, that's on you. Yeah, but 0:10:11.080 --> 0:10:13.439 but we know that that's probably you know, not many 0:10:13.440 --> 0:10:15.360 of the folks listening right now, they're on it. They're 0:10:15.400 --> 0:10:17.560 saving for their own retirement. But let's say you mosey 0:10:17.600 --> 0:10:19.760 on down the road to a new job. Your employer 0:10:19.840 --> 0:10:22.440 is now going to be automatically in rolling you into 0:10:22.480 --> 0:10:24.200 their four one K plan or four or three V 0:10:24.280 --> 0:10:26.680 plan or whatever. And also employers are now able to 0:10:26.679 --> 0:10:29.240 offer incentives for you to sign up and start contributing 0:10:29.240 --> 0:10:30.680 to your four one K, which I thought was cool. 0:10:30.800 --> 0:10:33.520 Maybe like a free water bottle or a small gift 0:10:33.520 --> 0:10:35.920 card which shouldn't be what you need to get signed 0:10:35.960 --> 0:10:38.000 up a free pizzas sort of like the old school 0:10:38.040 --> 0:10:39.760 credit card signed up, right, except for this is a 0:10:39.840 --> 0:10:42.360 much better thing they're signing up for. But now this 0:10:42.440 --> 0:10:45.559 is a legal approach employers can take to encourage employees 0:10:45.559 --> 0:10:47.839 to invest, which which I think is cool. Let's keep 0:10:47.840 --> 0:10:51.320 talking about the different incentives that are being dangled in 0:10:51.360 --> 0:10:54.840 front of us. Savers who have a wrath four oh 0:10:54.880 --> 0:10:57.560 win K they can now choose to have their match 0:10:58.080 --> 0:11:00.960 go into their wraths as well. Oh now, this is 0:11:01.040 --> 0:11:03.800 especially advantageous for everyone out there who is just starting 0:11:03.800 --> 0:11:06.000 out in the career and who is likely to earn 0:11:06.040 --> 0:11:08.120 substantially more money down the road. You want to pay 0:11:08.120 --> 0:11:11.760 those taxes now, not in future years decades down the road, 0:11:11.800 --> 0:11:14.400 when you are likely going to be earning more money 0:11:14.440 --> 0:11:17.240 where you'll be in a higher tax bracket. Before, if 0:11:17.280 --> 0:11:20.240 your employer offered a ROTH four one K option, you 0:11:20.240 --> 0:11:22.959 could definitely stock that money away into the ROTH four 0:11:22.960 --> 0:11:26.120 o K, but then the match that your employer offered 0:11:26.440 --> 0:11:29.240 that would go into a traditional four O one K, 0:11:29.640 --> 0:11:31.600 which obviously is it's not the worst thing in the world. 0:11:31.640 --> 0:11:34.160 You're still getting the free money, but for a lot 0:11:34.200 --> 0:11:35.920 of folks, that makes sense to get all that money, 0:11:36.040 --> 0:11:38.719 including the match in the form of RATH funds if 0:11:38.760 --> 0:11:40.960 you could, and now you can, and so this is 0:11:40.960 --> 0:11:42.520 definitely one that you want to keep on your radar. 0:11:42.559 --> 0:11:44.679 You'll probably hear about this one at work, but if not, 0:11:45.160 --> 0:11:47.959 make sure to ask around and see when that might 0:11:47.960 --> 0:11:50.720 be available for you. Yeah, and then again, a lot 0:11:50.800 --> 0:11:52.440 of these things this was past at the very end 0:11:52.440 --> 0:11:54.400 of last year, and if you reach out to your 0:11:54.480 --> 0:11:57.679 HR department right now, they might be like, sorry, just 0:11:57.679 --> 0:11:59.120 just got back from a holiday trip. I have no 0:11:59.120 --> 0:12:01.760 idea what you're talking about. It's gonna take a while. Well, 0:12:01.800 --> 0:12:03.319 first off, some of these things aren't supposed to be 0:12:03.320 --> 0:12:05.160 implemented for years down the road. Like we talked about 0:12:05.160 --> 0:12:07.720 that employer match thing that starts in so it doesn't 0:12:07.720 --> 0:12:10.080 start this year, they don't even start next year. Some 0:12:10.120 --> 0:12:12.600 of these other things that the start date is different, 0:12:12.840 --> 0:12:15.280 but when you reach out to HR, it might take 0:12:15.280 --> 0:12:17.400 the time to implement some of these things. So just 0:12:18.000 --> 0:12:20.440 understand that and be cognizant of that before you start 0:12:20.520 --> 0:12:22.880 jumping down the throat right and start apparently on the 0:12:22.920 --> 0:12:25.440 door demanding that they make those changes. Now want that? 0:12:25.600 --> 0:12:27.040 I heard my Joe talking about it on the body. 0:12:27.480 --> 0:12:29.440 What's your problem to get with it? Well? So, yeah, 0:12:29.600 --> 0:12:31.600 and again, this is a four thousand page bill and 0:12:31.600 --> 0:12:33.680 it's gonna take it's gonna take a while for the 0:12:33.679 --> 0:12:37.160 implementation to to happen. But let's talk about one other 0:12:37.280 --> 0:12:39.679 thing that's really interesting on the four oh one k front, 0:12:39.679 --> 0:12:42.840 and a lot of organizations are are going to be 0:12:42.880 --> 0:12:45.760 implementing this as well. Something else on that match front 0:12:45.800 --> 0:12:48.640 is that's starting in four next year, if you're paying 0:12:48.679 --> 0:12:51.520 down your student loans and you're therefore unable to invest 0:12:51.559 --> 0:12:53.640 in your workplace retirement account because so much of your 0:12:53.640 --> 0:12:56.720 income is going to pay off that that college debt, 0:12:56.960 --> 0:12:59.720 you're not going to be eligible for the match that 0:12:59.800 --> 0:13:03.920 you previously wouldn't have qualified for. So that match from 0:13:03.960 --> 0:13:06.439 your employer is going to go into a retirement account, 0:13:06.600 --> 0:13:09.079 so she'll still be investing even though you're not actually investing. 0:13:09.280 --> 0:13:11.240 So yeah, even if you can't afford to put any 0:13:11.280 --> 0:13:14.839 your paycheck towards like even three right towards that four 0:13:14.840 --> 0:13:18.280 ohn K, because the student loan bill is so demanding, 0:13:18.720 --> 0:13:21.000 your employer is going to be able to invest on 0:13:21.040 --> 0:13:23.040 your behalf with the match. So I think that's kind 0:13:23.040 --> 0:13:25.640 of cool because there are people in that sort of scenario, Matt, 0:13:25.640 --> 0:13:28.880 and they want to be investing. But student loans obviously 0:13:28.920 --> 0:13:30.720 a massive burden for a whole lot of people. So 0:13:30.880 --> 0:13:32.960 and and student loan forgiveness still up in the air. 0:13:33.160 --> 0:13:35.679 But I think this is a really interesting change. Is 0:13:35.679 --> 0:13:37.280 going to help a lot of a lot of people 0:13:37.520 --> 0:13:40.640 who otherwise wouldn't be investing anything at least be investing 0:13:40.880 --> 0:13:44.199 something thanks to their employer. And this new law change exactly, 0:13:44.200 --> 0:13:46.880 it's basically treating the student loan payments as if you 0:13:46.920 --> 0:13:49.480 were contributing that money into your four o K. Your 0:13:49.480 --> 0:13:52.600 employer is viewing it like, essentially, you're giving getting the 0:13:52.600 --> 0:13:55.360 same benefit that somebody who's investing their money. You would 0:13:55.400 --> 0:13:58.560 also receive that benefit, but you are paying down debt instead. 0:13:58.640 --> 0:14:00.839 And how's this going to play out in the specifics 0:14:00.880 --> 0:14:03.160 in actuality. I don't know, but we have time to 0:14:03.240 --> 0:14:05.760 kind of see how because this this one again doesn't 0:14:05.800 --> 0:14:08.959 start until next year. But I'm sure there's gonna be 0:14:09.000 --> 0:14:10.720 a way that you report your loan payments to your 0:14:10.720 --> 0:14:13.079 employer so they can then you know, make that match happen. 0:14:13.360 --> 0:14:16.000 But um, yeah, what does it look like on the ground. 0:14:16.120 --> 0:14:18.160 Not sure yet exactly. Yeah, so we've kind of talked 0:14:18.160 --> 0:14:21.480 about some matches from your employer. There's some news on 0:14:21.720 --> 0:14:25.520 the essentially matches from the government as well. There are 0:14:25.600 --> 0:14:29.000 now expanded tax credits available a match from the federal 0:14:29.000 --> 0:14:31.040 government on at least a portion of the money that 0:14:31.080 --> 0:14:33.600 you invest in. This is for folks who have an 0:14:33.600 --> 0:14:37.640 adjusted gross income of less than seventy three tho dollars. Interestingly, 0:14:37.680 --> 0:14:41.560 this one doesn't start until start dates of all this stuff. 0:14:41.560 --> 0:14:43.840 It's just kind of it's kind of annoying that kind 0:14:43.840 --> 0:14:45.560 of all over this one. This one starts now, this 0:14:45.600 --> 0:14:50.080 one starts, but the the Savers tax credit will a 0:14:50.120 --> 0:14:53.200 few years from now it will become the Savers Match, 0:14:53.600 --> 0:14:56.840 And so there's some semantic change they're going on. But 0:14:56.880 --> 0:14:59.600 that's gonna allow more individuals, it's gonna allow more families 0:14:59.800 --> 0:15:03.120 who aren't making bank to get an additional government match 0:15:03.680 --> 0:15:06.080 so's they're no longer cutting your tax bill. It will 0:15:06.080 --> 0:15:09.520 now actually be the government literally making a matching deposit 0:15:09.600 --> 0:15:12.040 to a traditional IRA for you. Uh. And it's going 0:15:12.120 --> 0:15:14.840 to be up to one thousand dollars for individuals, it's 0:15:14.840 --> 0:15:17.560 gonna be two thousand dollars for married folks, and the 0:15:17.640 --> 0:15:20.640 specific amounts and it's actually based on how much you 0:15:20.640 --> 0:15:24.640 are able to contribute to that ira a yourself. And man, 0:15:24.680 --> 0:15:26.600 this is just another one of those incentives for young 0:15:26.640 --> 0:15:28.760 folks who are just at the beginning of their career 0:15:29.280 --> 0:15:33.000 and for folks who perpetually just make less. It's gonna 0:15:33.000 --> 0:15:34.760 allow them to find a way to start investing even 0:15:34.800 --> 0:15:36.920 if they're not making a ton of money. Now. I 0:15:36.920 --> 0:15:39.000 I kind of like that the government, even though I 0:15:39.360 --> 0:15:41.840 hate that is so complicated. I hate that all the 0:15:41.920 --> 0:15:46.560 laws governing these different tax advantage work sponsored retirement accounts, 0:15:46.560 --> 0:15:49.920 individual tax advantage retirement accounts, it can all be so 0:15:50.040 --> 0:15:52.440 stinking confusing. I hate that part of it, But I 0:15:52.480 --> 0:15:55.680 do like that the government is essentially pushing some of 0:15:55.720 --> 0:15:58.840 the responsibility on us as individuals, right like we're gonna 0:15:58.880 --> 0:16:00.520 be We're gonna be your buddy and help you out. 0:16:00.560 --> 0:16:03.240 We're gonna come alongside you, exactly. I love like. I 0:16:03.320 --> 0:16:06.360 love that as opposed to like Social Security, where it's 0:16:06.400 --> 0:16:10.240 just six percent of your paycheckto automatically getting siphoned off 0:16:10.240 --> 0:16:12.120 and you don't even think about that money. You're not 0:16:12.160 --> 0:16:15.000 thinking about how that money is gonna necessarily grow for you. 0:16:15.040 --> 0:16:17.600 There is an active step that's taking place here, as 0:16:17.720 --> 0:16:19.880 individuals are setting that money aside there, like you said, 0:16:19.880 --> 0:16:22.600 they're kind of coming alongside you. We're buddies, We're partnering 0:16:22.560 --> 0:16:25.120 in this together. Because this is exactly how like when 0:16:25.160 --> 0:16:27.720 my kids get old enough to purchase a car, Like, 0:16:27.760 --> 0:16:29.800 cars are really expensive, but that doesn't mean I'm going 0:16:29.840 --> 0:16:33.080 to just buy a car for my kid. I'm gonna say, hey, 0:16:33.240 --> 0:16:35.640 cars are expensive, you should start saving now. And for 0:16:35.680 --> 0:16:37.920 every dollar you set aside for that car, guess what 0:16:38.360 --> 0:16:40.280 that like, I'm gonna pitch in. I'm gonna meet you, 0:16:40.280 --> 0:16:42.000 I'm gonna come alongside you. This is something that we 0:16:42.040 --> 0:16:45.400 can do together. I love that some of the Yeah, 0:16:45.520 --> 0:16:48.480 just more the responsibility is being placed on us as individuals. 0:16:48.480 --> 0:16:50.840 I want to see more of that and less dependence 0:16:50.920 --> 0:16:52.960 on the government. And by then used rivians are going 0:16:52.960 --> 0:16:55.360 to cost all that much. Oh my gosh. But but 0:16:55.440 --> 0:16:58.680 will they still carry the charge? That's you know, I 0:16:58.760 --> 0:17:00.680 need a new battery at that point. But yeah, no, 0:17:00.760 --> 0:17:02.680 I I like this one too. I think it's a 0:17:02.680 --> 0:17:05.040 good one. And again it starts in seven. But it's 0:17:05.040 --> 0:17:07.480 gonna help a lot of people. It's gonna incentivize a 0:17:07.520 --> 0:17:09.439 lot of people, to say, for retirement, who otherwise wouldn't 0:17:09.440 --> 0:17:11.560 because it's like I'm getting a percent match on my dollars. 0:17:11.680 --> 0:17:14.960 Depending on your income level, that might be the case 0:17:15.000 --> 0:17:17.280 for you. All right, but let's talk about in just 0:17:17.320 --> 0:17:20.080 a second one of my favorite changes to this, and 0:17:20.119 --> 0:17:22.760 it's very nuanced. There, so much that goes into how 0:17:22.840 --> 0:17:26.280 much better five plans have become thanks to the passage 0:17:26.280 --> 0:17:28.080 of the Secure Act two point oh. We'll get to 0:17:28.200 --> 0:17:30.560 our thoughts on that. We'll talk about the intricacies and 0:17:30.600 --> 0:17:33.720 how it can actually benefit your child's financial future in 0:17:33.760 --> 0:17:36.440 a much bigger way than used to be possible. We 0:17:36.520 --> 0:17:47.480 get to that right after this. All right, man, let's 0:17:47.520 --> 0:17:51.640 keep on trucking, and specifically we're talking about five nine accounts. 0:17:51.680 --> 0:17:55.080 This is the aspects of the Secure Act that we 0:17:55.119 --> 0:17:58.200 are Secure Act two point oh got got to mention 0:17:58.320 --> 0:18:01.000 that we're most excited about I mean mostly because you 0:18:01.040 --> 0:18:02.959 and I both have You've got three kids, I got 0:18:02.960 --> 0:18:05.520 four kids. These are all kids who may or may 0:18:05.560 --> 0:18:08.199 not go to college, and the may not part of 0:18:08.240 --> 0:18:11.160 it is why these changes are so important. Exactly, Yeah, 0:18:11.240 --> 0:18:14.280 this is the This is actually in section of the 0:18:14.320 --> 0:18:17.480