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Retire Rich The Ultimate Guide to IRAs, 401(k)s, & HSAs! · Earn Your Leisure

• 0:00
  Speaker 1: Iras and retirement accounts. What are the options, guys? These
• 0:05
  Speaker 1: are things Rasha alluded to this. You have some of
• 0:09
  Speaker 1: these already. Some of you have been investing blindly and
• 0:13
  Speaker 1: passively just through your job and dollar cost averaging. So
• 0:17
  Speaker 1: some of the things we talked about in our lesson
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  Speaker 1: today you have been doing just by happenstance. Traditional roth
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  Speaker 1: ira roth ira are some investment in retirement accounts. You
• 0:32
  Speaker 1: have your four to one K. You guys all may
• 0:34
  Speaker 1: be familiar with that. If you have a W two
• 0:39
  Speaker 1: type of job, your four to three B. Myself and Troy,
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  Speaker 1: we are former educators, and so we know about the
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  Speaker 1: four fifty seven. You got your health savings account. You
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  Speaker 1: have various IRA and retirement vehicles to investing. Let me
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  Speaker 1: break down this traditional roth ira okay, and the roth ira.
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  Speaker 1: These two vehicles, okay, not that there is a knock,
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  Speaker 1: there's never no knock to investing. But they have caps,
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  Speaker 1: they have limitations, They have income limits, okay, and so
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  Speaker 1: if you make a certain amount over a certain threshold,
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  Speaker 1: then this might not be readily available to you. You
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  Speaker 1: might have to do a roth conversion. Okay, you have
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  Speaker 1: to do something different. But a wroth IRA is after
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  Speaker 1: tax dollars that you guys will be investing. So after
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  Speaker 1: your money has went into your work for one ca
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  Speaker 1: that they automatically debited out of your account into your retirement.
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  Speaker 1: Hopefully you got that at least seven percent or fifteen percent.
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  Speaker 1: We got to do better with our allocation. Okay, after
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  Speaker 1: tax dollars would then go into your roth IRA. Similar
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  Speaker 1: to what Rashard told you guys earlier with you need
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  Speaker 1: to get your own brokerage account. You got to have
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  Speaker 1: inside that brokerage account a roth IRA as well, so
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  Speaker 1: that you can put up to the limit, which this
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  Speaker 1: year is seven thousand dollars into that and if you're
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  Speaker 1: over fifty, you can put up another thousand which will
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  Speaker 1: get you up to eight thousand dollars on a year.
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  Speaker 2: And so these are.
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  Speaker 1: Other things you can do in addition to your stocks,
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  Speaker 1: in addition to your ETFs, in addition to trading options,
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  Speaker 1: in addition to your money markets. These are things you
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  Speaker 1: can do as well on the wealth building journey, even
• 2:37
  Speaker 1: as a beginner.
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  Speaker 3: Yeah, the HSA thing is something that people don't talk
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  Speaker 3: about a lot either because they don't that's's.
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  Speaker 4: Important to know.
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  Speaker 2: That's the game changer.
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  Speaker 1: For me, the HSA Health Savings Account gods just so
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  Speaker 1: you know, the acronym health savings account. So whether you're
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  Speaker 1: married and or single, if your insurance has a HS,
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  Speaker 1: say a health savings plan, you can use the money
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  Speaker 1: to take care of doctor bills, appointments, co pays. But
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  Speaker 1: whatever money isn't used, the HSA invest in it invested
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  Speaker 1: for you inside some of their allocations. They have mutual
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  Speaker 1: funds that you can pick from growth tech some of
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  Speaker 1: the things you shot told you guys about earlier. Growth tech,
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  Speaker 1: you can do energy. They have it all inside the HSA.
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  Speaker 1: Just type health savings account, okay, and you will see
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  Speaker 1: health equity dot com will come up. You will see
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  Speaker 1: certain things come up. And if you invest inside that
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  Speaker 1: I know, being married, we can put up to seven
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  Speaker 1: a little over seven thousand, maybe seventy eight hundred a
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  Speaker 1: year into this and guess what, guys, it reduces your
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  Speaker 1: taxable income. Okay, So there's another way for on that
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  Speaker 1: front for you guys, to also be doing the right
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  Speaker 1: thing by your money, doing right by your money, but
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  Speaker 1: also reducing your taxable income. And that money, if not
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  Speaker 1: used for a copay, simply is there growing on your
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  Speaker 1: behalf and that can stow pile pretty big for those
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  Speaker 1: of you that stay on top of your health and wealth.
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  Speaker 3: You can use it you get sixty five. So if
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  Speaker 3: that's gonna be a question people like, well, if I
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  Speaker 3: don't use you're supposed to use it for medical expenses.
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  Speaker 3: If you don't use it for medical expenses, if you
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  Speaker 3: can use it after sixty five without getting penalized. Yeah,
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  Speaker 3: it's like it's another form of retirement, right, another form
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  Speaker 3: saving money that you have to pay like a deductibles
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  Speaker 3: or like you said, out of the pocket medical expenses,
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  Speaker 3: but it's invested in the market. But as that's growing,
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  Speaker 3: if the money that you don't spend, so if you're
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  Speaker 3: sixty five years old, you have one hundred thousand dollars
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  Speaker 3: in HSA. Now that effectively is like another IRA for
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  Speaker 3: you because you can use that for your retirement without
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  Speaker 3: getting penalized. So if you use it before that for
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  Speaker 3: anything in the medical expenses, you get penalized. But if
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  Speaker 3: you use it after sixty five, that's important for people
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  Speaker 3: to fully understand. So it's a way to definitely, you know,
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  Speaker 3: kind of hedge with the medical aspect of it, but
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  Speaker 3: also it's like a double edged sword when you save
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  Speaker 3: before retirement. Also if you don't use it.
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  Speaker 4: Chris, you brought something in terms of education.
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  Speaker 5: I was both being in education about maximizing these allocations.
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  Speaker 5: Now at twenty five, I'm fresh into the game. I'm
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  Speaker 5: about to make sixty five thousand dollars for the year
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  Speaker 5: seventy doin You're not thinking, hey, I should take the
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  Speaker 5: largest percentage, just like, all right, what's the LOWDS?
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  Speaker 4: I could put three percent? I'm gonna do that.
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  Speaker 5: Talk about the mindset and the ship because people are
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  Speaker 5: looking like what can I do right now? Like this
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  Speaker 5: is something that you can go to your HR department
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  Speaker 5: like on Monday right and say, hey, I want to
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  Speaker 5: actually max out.
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  Speaker 4: My four or three B.
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  Speaker 5: Talk about the importance of that, because I don't think
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  Speaker 5: people really understand it. This is that one guy that
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  Speaker 5: comes once a year to talk to you about it
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  Speaker 5: at lunch and you never see him and then you
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  Speaker 5: just forget about it.
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  Speaker 4: Talk about the importance.
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  Speaker 1: It's so important because time is our greatest asset, and
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  Speaker 1: so the earlier you can do these things, take advantage
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  Speaker 1: of all these vehicles, the bigger your pot will be,
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  Speaker 1: the bigger your nest egg will be.
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  Speaker 2: When it's all said and done. So listen to this.
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  Speaker 2: You can't miss what you never had. You can miss
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  Speaker 2: what you never seen.
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  Speaker 1: If you take that allocation that they're going to buy default,
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  Speaker 1: have it at between one and three percent. If you
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  Speaker 1: move it to seven percent or fifteen percent, and you
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  Speaker 1: get used to living your lifestyle around what your check
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  Speaker 1: will then be, when that comes to you every two
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  Speaker 1: weeks or how often you get paid, you won't miss
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  Speaker 1: it because you didn't see it. It's only when you see,
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  Speaker 1: oh man, my check three thousand dollars, you think you
• 6:48
  Speaker 1: got three thousand dollars to spend. Okay, But if you
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  Speaker 1: never seen three thousand or whatever your check may be,
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  Speaker 1: because it is going to something that's going to your
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  Speaker 1: future self is going to thank you for.
• 7:00
  Speaker 2: That's how you get ahead of the game. And so the.
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  Speaker 1: Earlier, if you're twenty four years old and you're seeing this,
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  Speaker 1: the earlier you can go into your employer, your place
• 7:08
  Speaker 1: of employment and tell them, if I'm receiving a four
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  Speaker 1: to one K contribution, can you make sure my allocation
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  Speaker 1: is at least seven to twelve percent. Fifteen percent is
• 7:19
  Speaker 1: on the higher end, but that will even be good
• 7:21
  Speaker 1: if you can make that shake if you're still living
• 7:23
  Speaker 1: at home and you don't have and your mom is
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  Speaker 1: letting you do your thing, and you not having a
• 7:27
  Speaker 1: whole bunch of responsibility. Put it at fifteen percent into
• 7:30
  Speaker 1: you get your own place, and then scale it back
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  Speaker 1: down to seven. But you can't miss what you never had, okay,
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  Speaker 1: And so if you get that mindset early, you're off
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  Speaker 1: into the races.
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  Speaker 2: Okay.
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  Speaker 1: For me, it kind of clicked when I was around
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  Speaker 1: twenty seven. Between that twenty seven and twenty nine year
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  Speaker 1: range for me, you know what I'm saying, But listen
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  Speaker 1: to how it happened. Though my wife, I saw her
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  Speaker 1: for a one k killing mine. I'm looking like, what
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  Speaker 1: am I doing? My allocation was poor, My allocation wasn't
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  Speaker 1: where it needed to be. I'm looking like, man, I've
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  Speaker 1: been I was the administrator in higher education for ten years.
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  Speaker 1: I'm what am I doing? My investments because of what
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  Speaker 1: I was controlling blew my higher education job, which was
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  Speaker 1: good benefits, It blew those in They blew that four
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  Speaker 1: one came out the water.
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  Speaker 2: That showed me the importance of man.
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  Speaker 1: My wife retirement was way higher than mine, simply because
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  Speaker 1: hers was like at twelve or fifteen, the whole ten
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  Speaker 1: years she was in the health field, and so Troy
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  Speaker 1: brought it up. But it's need to be said, do
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  Speaker 1: it as early as you can. Your future self will
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  Speaker 1: thank you later.
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  Speaker 3: And then also before we leave this topic, it's impot
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  Speaker 3: people don't understand the full one came forth to be
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  Speaker 3: four fifty seven. Like they'll give you a bunch of
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  Speaker 3: different options. A lot of time people don't invest because
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  Speaker 3: they don't know how to go about and the intimidated.
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  Speaker 3: One of the easiest ways is to pick a target
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  Speaker 3: date fund. So a target date fund is that it
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  Speaker 3: calculates your age and the age that you would be
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  Speaker 3: like around sixty year culstal retirement, so it might be
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  Speaker 3: twenty thirty, twenty forty, twenty fifty, depends on how old
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  Speaker 3: you are. And the whole theory with retirement plan is
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  Speaker 3: that you got to be aggressive when you're young and
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  Speaker 3: conservative when you get older, so it automatically changes over
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  Speaker 3: the course of time. So that's a very cookie cutter
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  Speaker 3: easy approach to take you. If you are like unsure
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  Speaker 3: of like twenty different options that you have available to you,
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  Speaker 3: the target date is something that is recommendable. I used
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  Speaker 3: to recommend it when I was in a visor, It's like,
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  Speaker 3: that's something that is kind of does the work for
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  Speaker 3: you and you don't have to worry about changing in
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  Speaker 3: every five years and switching the allocations and then sometimes
• 9:48
  Speaker 3: you have a rough fall one kke uponent two in
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  Speaker 3: your job. That's important to acts because the row. The
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  Speaker 3: difference between the row and the traditional is that one
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  Speaker 3: takes money you save money today which is a traditional,
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  Speaker 3: when you save money later, which is the row. So
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  Speaker 3: it depends on your situation. But if you have let's
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  Speaker 3: say a million dollars in retirement, and you took out
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  Speaker 3: that whole million dollars at one time from your four
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  Speaker 3: one K, you you would get like six hundred thousand
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  Speaker 3: net because that is fully taxable. So that's important for
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  Speaker 3: people to fully understand. Especially when you think about your retirement.
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  Speaker 3: You think that you got a certain amount of money,
• 10:24
  Speaker 3: but you don't you don't realize that that's taxable state
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  Speaker 3: and federal tax. That's why a lot of people moved
• 10:28
  Speaker 3: to Florida when they retire because there's no there's no
• 10:31
  Speaker 3: state tax, but regardless the way you look, you still
• 10:33
  Speaker 3: gotta pay federal tax. But if you have the row.
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  Speaker 3: If you have a million dollars hypothetically and you took
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  Speaker 3: out all a million dollars at one time, you would
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  Speaker 3: get one million dollars because it's not taxable, but you
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  Speaker 3: didn't you didn't get a tax benefit when you put
• 10:47
  Speaker 3: the money in today. So that's important for people to
• 10:51
  Speaker 3: understand as far as a tax because we don't talk
• 10:53
  Speaker 3: about taxes at all, but even like.
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  Speaker 4: Capital gains short term long term, that's.
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  Speaker 3: Important for people because it's like you do a lot
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  Speaker 3: of like trading or selling stocks, and you don't realize
• 11:03
  Speaker 3: that you're racking up a tax bill, and then at
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  Speaker 3: the end of the year you're like, damn, I got
• 11:08
  Speaker 3: to pay taxes. I didn't even know I had to
• 11:10
  Speaker 3: pay taxes on this, Like I kept it in my
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  Speaker 3: broken account and I didn't put it in my bank account.
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  Speaker 3: But if you sell a stock, you pay capital gains
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  Speaker 3: tax on that stock. You don't pay capital gains tax
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  Speaker 3: on your retirement, but you do pay federal and state
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  Speaker 3: tax if it's not a rough. So understanding that is
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  Speaker 3: important because you don't want to get like twenty years
• 11:32
  Speaker 3: down the line and it's like, damn, I wish I
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  Speaker 3: had a rough because now I gotta pay hundreds of
• 11:37
  Speaker 3: thousands of dollars because I have millions of dollars in
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  Speaker 3: my four to one ke.
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  Speaker 5: Yeah, and you don't want to put the profits if
• 11:42
  Speaker 5: you're talking about stocks into your account and say, oh,
• 11:44
  Speaker 5: this is all profit.
• 11:45
  Speaker 4: Now, there's a percentage of that that's going to be
• 11:47
  Speaker 4: for taxes.
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  Speaker 5: If it's been if you sold it within a year
• 11:51
  Speaker 5: and a day, that's going to be short term capital gains.
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  Speaker 5: And depending on your tax threshold, that's the allocation that
• 11:57
  Speaker 5: you're gonna have to pay for it. If it's over
• 12:00
  Speaker 5: a year in the day is long term. And again
• 12:02
  Speaker 5: there's a cap on that things like fifteen percent for
• 12:04
  Speaker 5: the most part.
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  Speaker 4: Sometimes it does go up to twenty. But that's a
• 12:07
  Speaker 4: big percentage, right.
• 12:08
  Speaker 5: I know in the short terms it can get up
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  Speaker 5: to thirty seven to thirty nine percent, So you're talking
• 12:11
  Speaker 5: about a twenty percent difference if you just hold long term.
• 12:15
  Speaker 4: That's why we always stress it