WEBVTT - Retirement Investing is Simpler than You Think #009 0:00:00.040 --> 0:00:02.680 Welcome to How to Money. I'm Joel and I'm not 0:00:02.960 --> 0:00:06.320 and today we're talking about how retirement investing is simpler 0:00:06.360 --> 0:00:21.200 than you think. Joel. How's it gone, good Man, I 0:00:21.200 --> 0:00:23.520 gotta fill you in on something before we get in 0:00:23.640 --> 0:00:25.480 any further. If we get started. Yes, So there's this 0:00:25.480 --> 0:00:28.560 funny story. We're eating dinner tonight as a family with 0:00:28.600 --> 0:00:30.440 my wife and my two girls, four and a half 0:00:30.440 --> 0:00:31.960 and two and a half. And my four and a 0:00:32.000 --> 0:00:35.480 half year old said, I want a tattoo. Mommy, when 0:00:35.479 --> 0:00:40.680 can I get a tattoo? And mommy responded, when you're eighteen? Uh, 0:00:40.920 --> 0:00:43.400 but what if? Good answering, what would you want to 0:00:43.440 --> 0:00:45.480 get if you get a tattoo now? And my two 0:00:45.520 --> 0:00:49.680 and a half year old guess what she said, No clue, poop. 0:00:52.560 --> 0:00:55.000 This is pretty awesome. And she was like, that reinforces 0:00:55.040 --> 0:00:57.480 the fact that you do not have the decision making 0:00:57.480 --> 0:01:00.080 skills to get a tattoo. Oh, it's about that. That 0:01:00.080 --> 0:01:02.200 was pretty funny, man. Just let her do it. See 0:01:02.200 --> 0:01:04.520 what happens. Then the poop emoji on her arm through 0:01:04.560 --> 0:01:07.119 the rest of her life. So all of a sudden, 0:01:07.120 --> 0:01:10.160 he got way cute in my mind, Like it's got 0:01:10.160 --> 0:01:12.280 like a little smiley face on it. Yeah, that's that's 0:01:12.319 --> 0:01:13.920 way better. This wouldn't be all that bad. Maybe I'll 0:01:13.920 --> 0:01:16.760 take her out this weekend. We'll get tatted up. People 0:01:16.760 --> 0:01:18.800 say tatted up still, I don't know, but I get 0:01:18.840 --> 0:01:22.039 tatted it up. So Joel are buddy? Tim texted you 0:01:22.080 --> 0:01:26.600 and I and said, stop whatever you're doing and listen 0:01:26.600 --> 0:01:29.600 to your podcast at halftime. So I took my hands 0:01:29.640 --> 0:01:31.039 off the wheel and I slammed into the car in 0:01:31.040 --> 0:01:35.280 front of me, and I immediately took his followed his directions. 0:01:35.680 --> 0:01:37.800 So he said, listen to our last episode that we 0:01:37.920 --> 0:01:40.479 launched about how to get a deal on craft beer. 0:01:40.760 --> 0:01:43.160 He said, listen to it at half speed. I'll be 0:01:43.200 --> 0:01:44.679 honest when he as soon as I saw that text, 0:01:44.720 --> 0:01:46.360 I was kind of like freaking out, like, oh my gosh, 0:01:46.440 --> 0:01:48.800 what did we say accidentally that you can only hear, 0:01:49.120 --> 0:01:50.640 you know, in slow motion. It's like one of those 0:01:50.640 --> 0:01:53.240 Disney movie things can play backwards and sink it up 0:01:53.280 --> 0:01:56.080 to like Wizard of Us or like there's falic symbols 0:01:56.160 --> 0:01:59.280 or something and the Little Mermaids and the flowers like, 0:01:59.600 --> 0:02:01.360 but we had to play this for everyone, So here 0:02:01.400 --> 0:02:04.000 goes here's what we sound like at half speed, and 0:02:04.400 --> 0:02:07.680 especially considering we were talking about getting a deal on 0:02:07.760 --> 0:02:10.360 craft beer last week, it makes it sound even funnier. 0:02:10.400 --> 0:02:13.840 So take a listen. Yeah, I am glad that we 0:02:13.840 --> 0:02:17.720 were talking about listening. Man. Beer is a key part 0:02:17.760 --> 0:02:21.160 of what we do, so I think it's about time 0:02:21.280 --> 0:02:27.560 that we dedicate an entire episode to craft beer. I agree. 0:02:28.320 --> 0:02:32.079 So most episodes you don't have to be a craft 0:02:32.400 --> 0:02:40.680 Beernato to enjoy this podcast, and most episodes will be 0:02:40.720 --> 0:02:46.520 talking about money in some way. Former fashion and today's 0:02:46.600 --> 0:02:49.840 note different. So I feel like we could listen to 0:02:49.880 --> 0:02:52.960 the whole thing and we probably want to go back 0:02:52.960 --> 0:02:54.519 to Honestly, I want to go back and listen to 0:02:54.600 --> 0:02:56.639 all of them at has speed now if only had 0:02:56.639 --> 0:02:58.799 the time. Yeah, I know this good stuff. So it 0:02:58.840 --> 0:03:03.760 sounds like we're drunk and uh drunk slash high. I 0:03:03.800 --> 0:03:06.000 don't know which which is worse. Like that that seventy 0:03:06.040 --> 0:03:07.960 showed the little circle that they used to do, you know, 0:03:08.040 --> 0:03:09.839 and the camera will go around the circle and film 0:03:09.919 --> 0:03:11.640 them that. It's kind of what it feels like listening 0:03:11.680 --> 0:03:13.760 to us on half speed. Did you ever watch that, Sonny? 0:03:13.800 --> 0:03:15.359 I mean I guess you did. You watched Yeah, dude, 0:03:15.400 --> 0:03:16.839 that was one of the best comedies of all time. 0:03:16.880 --> 0:03:18.880 I think. Yeah, Kit was really into that. I never 0:03:18.919 --> 0:03:20.680 I never got into it. All right, So let's get 0:03:20.720 --> 0:03:25.239 to today's beer. We are drinking not one, but two 0:03:25.280 --> 0:03:30.800 beers tonight. So Ironmonger Brewing out of Marietta, George just 0:03:30.840 --> 0:03:32.799 they're just up the street from where we live. Um 0:03:32.880 --> 0:03:34.600 they kindly. I stopped in there the other day on 0:03:34.639 --> 0:03:37.240 my way to my parents house, like sid heard awesome things, 0:03:37.240 --> 0:03:39.160 and my brother in law had actually, um let me 0:03:39.200 --> 0:03:40.640 have a little bit of taste of one of their 0:03:40.680 --> 0:03:44.240 I pas and it was so ridiculously delicious. So I 0:03:44.280 --> 0:03:45.720 was stopping by to get some and I ended up 0:03:45.760 --> 0:03:49.240 talking to the owner there and the super cool guy, 0:03:49.560 --> 0:03:53.720 and he said, dude, have some and drinking on the podcast. 0:03:54.120 --> 0:03:58.280 So we are featuring the Ironmonger Anville double I P 0:03:58.400 --> 0:04:02.680 A and their Damascus single I PA tonight. Nice. Oh man. 0:04:02.720 --> 0:04:05.080 I love doing the uh like kind of a sidewy 0:04:05.120 --> 0:04:07.600 side comparison like that, you know, kind of a B 0:04:08.040 --> 0:04:10.080 A B testing, So we're gonna a B test the 0:04:10.120 --> 0:04:13.760 Ironmonger I P A s. I've had them both the 0:04:13.840 --> 0:04:16.200 four They're absolutely delicious, So I can't wait to have 0:04:16.240 --> 0:04:17.880 them again and and for you to have them for 0:04:17.880 --> 0:04:20.760 the first time. Yeah, and these are packaged by the 0:04:20.760 --> 0:04:22.719 way in crowlers, So if you don't know what a 0:04:22.720 --> 0:04:26.560 crowler is like. For a while, uh, growlers were really cool, 0:04:26.680 --> 0:04:28.800 and I mean they're still around. You need a sixty 0:04:28.800 --> 0:04:33.240 four rounds essentially um glass bottle and fill it up 0:04:33.279 --> 0:04:37.240 with beer. Crowlers are kind of the new thing. And 0:04:37.279 --> 0:04:41.240 you can get these two of beer in one can 0:04:41.360 --> 0:04:43.880 that they fill up with fresh beer. Fill it on 0:04:43.920 --> 0:04:45.520 the spot right in front of you, and then they 0:04:45.600 --> 0:04:48.440 got their little canning machine and seals, i mean steals 0:04:48.440 --> 0:04:50.320 that litter right on there right, so this beer is 0:04:50.680 --> 0:04:53.520 fresh as a baby's bottom. So and and when you 0:04:53.560 --> 0:04:55.360 have the giant can, it's kind of nice. It makes 0:04:55.360 --> 0:04:57.800 you feel like a little like a little kid in 0:04:57.839 --> 0:04:59.359 a ball or two. At the same time, you have 0:04:59.400 --> 0:05:01.440 a hold of this hand and it's like fills up 0:05:01.480 --> 0:05:04.640 my whole hand and pretty awesome. Actually, yeah, for you, 0:05:04.720 --> 0:05:06.880 it's probably like to size. For me, it feels a 0:05:06.920 --> 0:05:09.159 giant because I've got like tiny hands. Oh, this feels 0:05:09.160 --> 0:05:11.120 like what a twelve months can feels like to everyone else. 0:05:12.600 --> 0:05:18.680 All right, so we'll crack this. You can tell like 0:05:18.760 --> 0:05:21.359 the crawler has a distinct distinct sound as well. You know, 0:05:21.440 --> 0:05:24.120 it doesn't havend like that light high pitched can. It 0:05:24.120 --> 0:05:27.480 sounds like you're opening a like a barrel, a barrel 0:05:27.520 --> 0:05:32.119 of beer. I will say, beautiful hoper roma just filled 0:05:32.120 --> 0:05:36.920 the freaking room. Two different IPAs, but already just distinctly 0:05:36.920 --> 0:05:39.520 different colors. But yeah, the yeah, the single i PA 0:05:39.560 --> 0:05:42.760 is definitely darker. The double i PA, which is the anvil, 0:05:43.600 --> 0:05:48.800 is lighter. So the Damascus pretty good. Yeah, it's like 0:05:49.200 --> 0:05:52.040 creamy and smooth. It's yeah, someone's got like it's got 0:05:52.120 --> 0:05:55.280 a like a lactose Like a lot of folks are 0:05:55.320 --> 0:05:58.039 doing some like lactose sugar in there for an I PA. 0:05:58.040 --> 0:06:03.239 It's just like really rich, creamy mouth fields a legit 0:06:03.680 --> 0:06:08.200 tasty I P A Damascus from Ironmonger Brewing. Awesome beer. 0:06:09.240 --> 0:06:11.279 Uh you get to do side by side now with 0:06:11.400 --> 0:06:14.080 the anvil. But cheers, yeah, cheers on the anvil. Oh 0:06:14.160 --> 0:06:19.320 my goodness. M Yeah, the anvils like kind of one 0:06:19.360 --> 0:06:22.000 of those juice bombs almost pretty much juicy, Yeah, juicy 0:06:22.040 --> 0:06:25.320 are brighter, still got a little bit of that like 0:06:25.960 --> 0:06:28.280 bitter through the center and on the back end of 0:06:28.320 --> 0:06:31.800 the beer. Uh, but it also retains that juic nous, 0:06:31.800 --> 0:06:35.120 so it doesn't have finished like Brillo pad bitter or 0:06:35.120 --> 0:06:37.320 anything like that. Right. Yeah, it doesn't drink like a 0:06:37.360 --> 0:06:39.880 West Coast I PA where it just finishes really dry 0:06:40.080 --> 0:06:42.480 and kind of dries up in your mouth. Yeah. I 0:06:42.560 --> 0:06:44.640 kind of like how consistent it is the whole way 0:06:44.680 --> 0:06:47.159 through from sip to the way it rolls off the 0:06:47.160 --> 0:06:50.320 back of your tongue. Yeah. I'm a huge fan of 0:06:50.320 --> 0:06:54.120 this Anvil double I P a from Ironmonger. I feel 0:06:54.160 --> 0:06:56.479 like they're ruining one of the best I pas in 0:06:56.480 --> 0:07:00.040 the Southeast. Uh, this one right here, And I like 0:07:00.080 --> 0:07:01.960 they're already starting to kind of kind of see that 0:07:02.040 --> 0:07:05.560 in the orders ticking up. Uh. And it's just a 0:07:05.640 --> 0:07:08.320 really popular beer and I don't know why. After drinking 0:07:08.320 --> 0:07:12.040 a couple of them. It's just really really tasty. And 0:07:12.080 --> 0:07:14.240 this is man a Diamond and the Rough right here, 0:07:14.960 --> 0:07:19.200 just outside of of town, out of Atlanta, and man, 0:07:19.240 --> 0:07:21.440 they're crushing it, dude. I really like the spear. It's 0:07:21.440 --> 0:07:24.360 that's really small space, but real cute space. Definitely worth 0:07:24.360 --> 0:07:26.360 a visit to Ironmonger to get the speer. Yeah, is 0:07:26.400 --> 0:07:28.000 that there is the other logo I guess right there. Yeah, 0:07:28.000 --> 0:07:31.000 it's got the guy with like a like a blacksmith 0:07:31.040 --> 0:07:34.880 blacksmith hammer, right, so like lay down the law on 0:07:35.000 --> 0:07:38.240 some iron. I guess that's like one of the roles 0:07:38.240 --> 0:07:40.160 that you can play on when you're when you're ultra 0:07:40.320 --> 0:07:42.120 nerdy board game. So that's probably true, right, Yeah. I 0:07:42.160 --> 0:07:44.320 guess in a Gurricola or something that there's gotta be 0:07:44.320 --> 0:07:46.559 an ironmonger at some point too. To put the shoes 0:07:46.600 --> 0:07:48.400 on the horse man all the choices, you gotta have 0:07:48.400 --> 0:07:52.240 somebody doing that, all right, Matt to the topic in hand, 0:07:52.360 --> 0:07:57.120 retirement investing is simpler than you think. Ultimately, when it 0:07:57.120 --> 0:08:01.000 comes down to it, people want to make retirement investing 0:08:01.040 --> 0:08:04.000 hard and I don't think necessarily they like, oh please, 0:08:04.080 --> 0:08:06.680 let's make this arduous, but they make it harder than 0:08:06.720 --> 0:08:09.280 it should be. And so we want to give kind 0:08:09.280 --> 0:08:13.120 of an overview to help people understand that it is 0:08:13.200 --> 0:08:15.320 simpler than you think it is. So we want to 0:08:15.360 --> 0:08:18.240 kind of give people some of the tools to go 0:08:18.320 --> 0:08:21.680 out there and invest with confidence knowing that you're doing 0:08:21.680 --> 0:08:25.200 it properly. Yeah, And the biggest thing that makes it 0:08:25.240 --> 0:08:28.640 so complicated are the tax implications, right, Like the actual 0:08:28.680 --> 0:08:31.400 investing it's not hard. You just you open it. You 0:08:31.440 --> 0:08:33.360 open an account, and then you decide what to buy 0:08:33.360 --> 0:08:36.679 and you buy it and that's it. Like that's literally boom, 0:08:36.679 --> 0:08:39.880 You've invested, right There's it really can be that easy. 0:08:39.920 --> 0:08:42.200 It's just when you start taking into account and start 0:08:42.280 --> 0:08:44.839 trying to figure out the you know, like the absolute 0:08:44.920 --> 0:08:49.040 best way to work work the tax system, like in 0:08:49.040 --> 0:08:52.160 your favor as far as when you get a tax deduction. Um. 0:08:52.240 --> 0:08:53.840 And we'll get more into that, you know, as we 0:08:54.040 --> 0:08:56.600 as we uh get further into this episode. But that 0:08:56.720 --> 0:09:01.119 is the biggest difference between some of these different retirement accounts, 0:09:01.400 --> 0:09:03.800 which tends to make it a little more complicated. We're 0:09:03.800 --> 0:09:05.280 not gonna spend a ton of time on that because 0:09:05.320 --> 0:09:06.720 we don't want to get bogged down with all the 0:09:06.800 --> 0:09:09.760 details of every single retirement account. But we're gonna hit 0:09:09.760 --> 0:09:12.360 the high points and hopefully yeah, I point you guys 0:09:12.400 --> 0:09:15.640 in the right direction to I mean literally get investing 0:09:15.720 --> 0:09:19.360 tomorrow right like and and it's really I think this 0:09:19.440 --> 0:09:23.880 is probably a show that's investing for the ten percent 0:09:23.920 --> 0:09:26.000 of people out there that are either uber wealthy or 0:09:26.080 --> 0:09:28.679 just have nothing to invest right now. Um. And so 0:09:28.800 --> 0:09:31.920 those people probably won't find a lot of use out 0:09:31.920 --> 0:09:34.920 of this podcast, but for the out there, for most 0:09:35.400 --> 0:09:39.000 people in America, we think that this episode will help 0:09:39.040 --> 0:09:41.200 you kind of sort through things, because I know, sometimes 0:09:41.240 --> 0:09:44.080 just looking at what these accounts are called can feel 0:09:44.120 --> 0:09:47.199 like vegetable stew, like oh my goodness, like it was 0:09:47.360 --> 0:09:51.080 a lot of different letters, letters and numbers any and 0:09:51.120 --> 0:09:54.120 so when you have like the letters, it can be confusing. Yeah, 0:09:54.120 --> 0:09:56.720 and four oh one K, which is literally named after 0:09:56.840 --> 0:09:59.640 the section of the lavirus tax law. Yeah, and so 0:09:59.800 --> 0:10:01.400 you you would think like we could name it something 0:10:01.440 --> 0:10:03.520 that's like just as simple as hey, this is your 0:10:03.520 --> 0:10:06.280 pretax account and this is your post tax account. Something 0:10:06.320 --> 0:10:08.959 that kind of way too easy too simplifies it for people. 0:10:09.280 --> 0:10:11.680 But because that doesn't exist, that's why we're here to 0:10:11.840 --> 0:10:14.120 try to help it you sort through things. And I 0:10:14.120 --> 0:10:17.480 wanted to touch on the fact that there are some 0:10:17.559 --> 0:10:20.559 assumptions before you kind of open a retirement account and 0:10:20.559 --> 0:10:22.960 started investing in your retirement, which is you want to 0:10:23.000 --> 0:10:25.040 have some margin. And we touched on this before back 0:10:25.080 --> 0:10:26.840 when we talk you know, when we touched on budgets 0:10:26.880 --> 0:10:29.720 as well, right, that you want to make sure you 0:10:29.760 --> 0:10:32.040 kind of have some money set aside for like a 0:10:32.080 --> 0:10:34.960 little emergency fund because you don't want to end up 0:10:34.960 --> 0:10:38.960 like me. Uh, twelve years ago. I think it was 0:10:39.000 --> 0:10:42.600 maybe when you know, I learned about the different retirement 0:10:42.640 --> 0:10:45.040 accounts and I was told that like, oh, you gotta 0:10:45.080 --> 0:10:47.160 do it now because every year earlier that you can 0:10:47.200 --> 0:10:49.480 do it, you know, it's just more exponential growth or 0:10:49.559 --> 0:10:51.800 more compounding growth, you know, down the road. So I 0:10:51.880 --> 0:10:55.439 was like, all right, let's do this without knowing anything. 0:10:55.640 --> 0:10:58.720 And I opened a roth Ira and started buying some stuff. 0:10:58.720 --> 0:11:00.280 And I didn't know what I was doing. Dude, were 0:11:00.320 --> 0:11:03.560 you buying individual stocks? No? Okay, yeah, so thank goodness 0:11:03.600 --> 0:11:05.840 I wasn't. But the next worst thing, what's what's what 0:11:05.880 --> 0:11:07.959 do you think would be the next worst thing? Probably 0:11:08.679 --> 0:11:12.280 you went somewhere that had ridiculously high fees. You got it. 0:11:13.760 --> 0:11:16.440 So yeah, And I don't know if things were different, 0:11:16.480 --> 0:11:19.720 you know, it's in fifteen years ago. But the word 0:11:19.840 --> 0:11:22.160 was like, all right, it's a little bit more expensive. 0:11:22.160 --> 0:11:25.400 But if you've got this rock star fund manager managing 0:11:25.559 --> 0:11:28.160 that fund, the mutual fund, well, man, he might get 0:11:28.200 --> 0:11:30.320 like anywhere between two and five pc better than like 0:11:30.360 --> 0:11:32.240 what the you know, general market might might do or 0:11:32.280 --> 0:11:34.240 what just kind of a standard index fund would do, 0:11:34.280 --> 0:11:36.920 which is, you know, a fund that's just representative of 0:11:36.960 --> 0:11:39.679 the entire market. So I say all that because I 0:11:39.920 --> 0:11:42.440 kind of learned that the hard way, which is that 0:11:43.280 --> 0:11:47.000 I got started too early, too soon, you know, and 0:11:47.120 --> 0:11:49.600 before I knew anything with what I was doing, and 0:11:49.640 --> 0:11:52.600 I was putting money into this account that I should 0:11:52.640 --> 0:11:55.240 have left alone. But because I was young and it 0:11:55.320 --> 0:11:58.440 wasn't didn't have a stable financial footing, I had to 0:11:58.520 --> 0:12:01.720 kind of dip back into that and deplete it before 0:12:01.720 --> 0:12:04.040 it was able to do anything. So I say all 0:12:04.040 --> 0:12:07.839 that to say, this is great information once you kind 0:12:07.840 --> 0:12:09.560 of have an emergency fund set up and you're looking 0:12:09.559 --> 0:12:12.000 to basically figure out what to do next with your money, 0:12:12.040 --> 0:12:14.600 which is a great problem to have. So Matt, let's 0:12:14.600 --> 0:12:19.120 explain what some of these retirement accounts are and how 0:12:19.160 --> 0:12:24.160 people can know which one they should be choosing as 0:12:24.160 --> 0:12:27.040 they begin they're investing. Yeah, so maybe like just broadly, 0:12:27.720 --> 0:12:29.319 like what what's like how would you define just a 0:12:29.400 --> 0:12:31.760 retirement account? Because I think people sometimes are like, well, 0:12:31.760 --> 0:12:33.600 how does a retirement is that? Like when you open 0:12:33.720 --> 0:12:35.640 up an account with like each trade, is that a 0:12:35.760 --> 0:12:38.720 retirement account? Or how would how would you define like 0:12:38.720 --> 0:12:41.320 a retirement account in general. Sure, Yeah, I would say 0:12:41.400 --> 0:12:46.040 that it is putting money in the stock market for 0:12:46.240 --> 0:12:49.800 the long haul that you will not touch until you retire. 0:12:50.720 --> 0:12:52.920 And so I think like sometimes along the way people 0:12:53.200 --> 0:12:55.800 a lot of people want to tap their retirement accounts 0:12:56.080 --> 0:12:58.160 um and there are a lot of consequences with that too. 0:12:58.440 --> 0:13:01.760 So if you're going to best make sure that it 0:13:01.880 --> 0:13:05.240 is invested broadly in the stock market for a long, 0:13:05.600 --> 0:13:08.040 long period of time, that you're willing to not touch it. 0:13:08.040 --> 0:13:10.319 And that goes back to what you just mentioned being 0:13:10.320 --> 0:13:13.600 financially prepared. And so if if you're not ready to 0:13:13.640 --> 0:13:16.600 put this money away for the next twenty to thirty years, 0:13:16.720 --> 0:13:19.240 I'll do it right, it should be in your savings 0:13:19.280 --> 0:13:21.720 account right now. Yeah. Yeah, if you're looking for something 0:13:21.720 --> 0:13:23.679 that's a little more liquid and you want to be 0:13:23.760 --> 0:13:26.240 able to say, you something for maybe a down payment 0:13:26.240 --> 0:13:30.560 on the house soon or for like renovation or just whatever, 0:13:30.640 --> 0:13:33.040 something that's going to cost some money, you want to 0:13:33.080 --> 0:13:34.800 have that. Yeah, like you said, in a like a 0:13:34.880 --> 0:13:38.040 higher yield savings account or checking account in general, not 0:13:38.160 --> 0:13:40.560 in the stock market. Okay, So we we just talked 0:13:40.600 --> 0:13:42.840 about what retirement accounts are, and you want to talk 0:13:42.880 --> 0:13:46.520 about some specific accounts, then, yeah, specific retirement accounts. There 0:13:46.520 --> 0:13:49.839 are two main types of retirement accounts that you will 0:13:49.880 --> 0:13:53.360 hear about all over the place, and you have access 0:13:53.640 --> 0:13:57.199 to I will at least one of these, because everyone 0:13:57.240 --> 0:14:00.400 has access to to some of these. So the IRA 0:14:00.720 --> 0:14:03.640 is one that you'll hear. There's a regular IRA, and 0:14:03.720 --> 0:14:06.000 there's a ROTH IRA and yeah, and the IRA and 0:14:06.040 --> 0:14:09.520 I mean that's individual retirement account I RA. Yep. So 0:14:10.440 --> 0:14:13.280 this is one that literally no matter what you are, 0:14:13.280 --> 0:14:15.520 if you're self employed, if you work for a large 0:14:15.520 --> 0:14:17.720 employer or a small employer, you have access to this 0:14:18.520 --> 0:14:21.600 on your own, outside of any sort of employer relationship. 0:14:21.640 --> 0:14:24.760 You can open up your own IRA. Uh, and we'll 0:14:24.760 --> 0:14:27.920 get into the differences between the WRATH and the regular UM. 0:14:28.000 --> 0:14:30.640 And then the other main retirement account that you can 0:14:30.720 --> 0:14:34.400 choose is employer based and that's the four oh one 0:14:34.480 --> 0:14:37.640 K and a lot of people that's the easiest thing 0:14:37.640 --> 0:14:41.080 to get into because sometimes your employer even automatically enrolls 0:14:41.160 --> 0:14:42.960 you in your four oh one K at work, which 0:14:42.960 --> 0:14:46.440 I think is brilliant. Yeah, that's awesome. I wish I 0:14:46.480 --> 0:14:49.880 could remember the story. But yeah, basically, employers started doing 0:14:49.960 --> 0:14:51.840 that they started switching it to where you had to 0:14:52.000 --> 0:14:56.000 instead of opt in two contribute to your four O 0:14:56.040 --> 0:14:58.680 one K, you had to opt out. Different companies were 0:14:58.680 --> 0:15:01.760 trying to find ways to pay basically incentivized their employees 0:15:02.120 --> 0:15:03.760 to save more because they're like, dang it, like why 0:15:03.800 --> 0:15:06.840 aren't they saying why are they saving money? Because you know, 0:15:06.920 --> 0:15:11.600 the future of social security isn't that great and it's 0:15:11.680 --> 0:15:13.760 up to us. You know, it's up to us as individuals. 0:15:13.800 --> 0:15:16.840 Employers can provide can kind of dangle that carrot, but 0:15:16.880 --> 0:15:20.120 employees weren't actually signing up and they, yeah, they made 0:15:20.160 --> 0:15:22.240 that switch to where you had to opt out of 0:15:22.280 --> 0:15:25.720 saving for your form and K, and nobody did. Yeah, 0:15:26.120 --> 0:15:28.640 is that they're like enrolled saving money for you know, 0:15:28.960 --> 0:15:31.840 for the future and all because they kind of did 0:15:31.840 --> 0:15:34.560 a little flip flop there, which I think is brilliant. 0:15:34.840 --> 0:15:38.560 It turns out money is incredibly psychological, and so whatever 0:15:38.600 --> 0:15:41.800 you can do to force yourself into savings, to trick 0:15:41.880 --> 0:15:45.560 your brain into making it less painful, and that's the 0:15:45.600 --> 0:15:48.160 way that your employer kind of tricks you into doing it. Right, 0:15:48.440 --> 0:15:52.560 But money for me even is incredibly psychological and sometimes 0:15:53.160 --> 0:15:57.080 a forced method of forgetting that I'm making income over 0:15:57.120 --> 0:16:00.240 here or over there can be really helpful. And at 0:16:00.240 --> 0:16:02.000 some point we'll do a whole episode just on the 0:16:02.040 --> 0:16:05.080 psychology of money, because that's an interesting topic. I like 0:16:05.120 --> 0:16:07.680 how you separated the two main accounts that we're gonna 0:16:07.680 --> 0:16:10.000 talk about though, Like basically, like you said, four o 0:16:10.080 --> 0:16:13.520 one K and IRA A four ow K being employer 0:16:13.600 --> 0:16:18.160 based retirement account because it's offered through your employer or 0:16:18.240 --> 0:16:21.760 your IRA A which anybody can have, Like like you said, yeah, 0:16:21.800 --> 0:16:24.160 and so let's start with a four own K. Roughly 0:16:24.200 --> 0:16:26.840 half of Americans have access to a four oh one 0:16:26.920 --> 0:16:31.760 K at work. So and most employers offer a match 0:16:32.440 --> 0:16:36.120 on your contributions, and your four oh one K contributions 0:16:36.160 --> 0:16:39.480 come directly out of your paycheck before you even see it. So, 0:16:39.480 --> 0:16:43.440 speaking of psychology, that's not You don't have to do 0:16:43.480 --> 0:16:47.520 a thing except for allocate the percentage. And in my mind, psychologically, 0:16:47.800 --> 0:16:49.920 there's a big difference between checking the percentage amount that's 0:16:49.920 --> 0:16:52.840 gonna come out of your paycheck and then actually taking 0:16:52.920 --> 0:16:56.480 money from your account that you've already received and putting 0:16:56.480 --> 0:16:58.880 it somewhere. There's a huge difference. It's like, oh, I 0:16:58.920 --> 0:17:00.720 never really got it in the first plays. Let's just 0:17:00.920 --> 0:17:02.840 you know, stash this way for the future. Yeah. So 0:17:02.880 --> 0:17:04.560 I think there's a couple of reasons if you have 0:17:04.600 --> 0:17:06.400 access to a four oh one K to take advantage 0:17:06.840 --> 0:17:10.760 that is one, the company match, it's free money. The 0:17:10.840 --> 0:17:14.720 typical company match is if you contribute six percent, your 0:17:14.720 --> 0:17:18.840 company contributes so and there's all sorts. There's some employers 0:17:18.840 --> 0:17:21.200 are even more generous, and if you put in six percent, 0:17:21.240 --> 0:17:23.800 they put in six percent. And some employers offer no 0:17:23.880 --> 0:17:27.200 match at all. If your employer offers a match, take 0:17:27.480 --> 0:17:31.440 advantage of it, and if you don't, you're leaving free 0:17:31.440 --> 0:17:33.200 money on the table. It's like a bonus they want 0:17:33.200 --> 0:17:35.240 to pay you every year that you're just saying, no, 0:17:35.240 --> 0:17:38.000 no thanks, I'm good. Just hearing that, man, like, I've 0:17:38.040 --> 0:17:39.720 never had a four o one K my entire life, 0:17:40.320 --> 0:17:43.119 and especially when that matched. And to hear you know, 0:17:43.320 --> 0:17:45.879 you and other friends that I have who you know 0:17:45.920 --> 0:17:48.520 have four one k is with a match, Oh my gosh, man, 0:17:48.560 --> 0:17:50.639 that is like you said, it's free money. It's a 0:17:50.640 --> 0:17:54.000 guaranteed return. That's the number one thing you do, right, 0:17:54.240 --> 0:17:57.080 That's the number one first thing. If you have access 0:17:57.520 --> 0:18:00.159 to a four oh one K with a match do it, 0:18:00.520 --> 0:18:03.760 take advantage of it, do it now and take advantage 0:18:03.800 --> 0:18:06.120 of the full match. And let's say right now you're 0:18:06.280 --> 0:18:09.680 saving three percent and your employers only contributing one and 0:18:09.720 --> 0:18:11.840 a half percent because you just haven't gotten it up there. 0:18:12.200 --> 0:18:14.520 That should be your main focus. Get up to the match. 0:18:14.800 --> 0:18:17.560 Get up to a six percent UH savings rate so 0:18:17.600 --> 0:18:20.679 that you can take full advantage of that match. And 0:18:20.680 --> 0:18:22.760 when you say like six percent, what like what you're 0:18:22.760 --> 0:18:25.920 talking like six percent of your salary so that your 0:18:25.920 --> 0:18:28.680 pay Yes, So it's yeah. And and like I said, 0:18:28.680 --> 0:18:32.159 employers do it differently, but most employers do offer usually 0:18:32.200 --> 0:18:35.080 a fifty percent match on the first six percent that 0:18:35.119 --> 0:18:37.879 you put in, So if you invest six percent of 0:18:38.000 --> 0:18:40.919 your salary, then they'll invest three percent of your salary 0:18:41.200 --> 0:18:43.159 like on top of it. And you're getting nine percent 0:18:43.320 --> 0:18:45.880 exactly right off the bat, exactly, And you're getting close 0:18:45.920 --> 0:18:48.760 to that ten percent savings right which is unreal, which 0:18:48.760 --> 0:18:50.560 is essentially I think a basic savings rate that you 0:18:50.600 --> 0:18:53.080 should not go below. And the other great thing about 0:18:53.119 --> 0:18:56.720 the four oh one K is that it's essentially on autopilot. 0:18:57.040 --> 0:19:00.400 You put that money in every month and you get 0:19:00.480 --> 0:19:02.239 about it. It just kind of comes out you're used 0:19:02.280 --> 0:19:04.760 to get in a paycheck that's a certain amount, and 0:19:05.040 --> 0:19:07.080 you begin to live on that and you forget that 0:19:07.119 --> 0:19:09.520 you even have this money. It never enters your bank 0:19:09.560 --> 0:19:13.120 account at home, so you never even have to as 0:19:13.160 --> 0:19:16.840 being your money in your possession. It's automatically dispersed for 0:19:16.920 --> 0:19:20.399 you for your future. Okay, Joel, So my question for 0:19:20.440 --> 0:19:22.359 you is what can you do with that money? Like 0:19:22.440 --> 0:19:24.199 within the four one k is it? Like? Do you 0:19:24.200 --> 0:19:25.879 have the same options that I have with like my 0:19:25.920 --> 0:19:29.600 account with Vanguard. Well, so it's gonna differ depending on 0:19:29.640 --> 0:19:31.520 the employer that you have. I'm really lucky and my 0:19:31.560 --> 0:19:35.080 employer gives me access to Vanguard funds. As you'll here 0:19:35.160 --> 0:19:39.280 later on, we're both pretty big fans of Vand I mean, yeah, 0:19:39.359 --> 0:19:43.000 I don't have a employer sponsored retirement account, and that's 0:19:43.000 --> 0:19:45.399 who I've chosen as well, like on my own. So 0:19:45.440 --> 0:19:49.679 whoever set up your company's retirement account basically knew what 0:19:49.720 --> 0:19:52.800 they're doing. Yeah, and it's but essentially it's gonna depend 0:19:52.840 --> 0:19:55.240 on your company and everyone out there listening. You're going 0:19:55.320 --> 0:19:58.080 to have access to different funds than I do, and 0:19:58.119 --> 0:19:59.919 you're probably gonna be with a different company that I am. 0:20:00.119 --> 0:20:01.639