I'm loving the financial investment advice. It makes want to start working on getting back into the workforce. As a disabled person, that's easier said than done. I'm lucky to have positive people like Paula and Joe working to help us learn how to build better a financial future for ourselves 🤩
Sorry, but I disagree with your opinion that a person needs to worry about taxes in their 'brokerage' account ahead of 401k or Traditional IRA. I think once you have received the tax deduction for the 401k and Traditional-IRA, their usefulness is over. You should make your other accounts growth focused and put all your conservative investments (e.g. bonds) into 401k and Traditional-IRA. The reasoning is simple - When you withdraw from 401k or Traditional-IRA you will pay marginal (top) tax rate. However, you have a much favorable tax treatment in your brokerage account for Long Term capital gains. Also, you won't have to deal with the pesky RMDs in your brokerage account. For estate planning purposes, your brokerage account will provide a step-up basis for your heirs but 401k and Traditional-IRA won't. Unquestionably, the HSA is the best because you get the triple tax advantage, but the next best thing is Roth (for long term) and Brokerage (for shorter term but greater than one year). Your portfolio allocation may dictate that some growth stocks do end up in 401k and Traditional IRA, but that should be your last option.
Great analysis and advice. Spot on. Since bonds have been moving in the same direction as stocks, I doubt I'll ever invest in bonds. IMHO the stocks gains will weather any huge market crash and be ahead of a conservative strategy. So I've always stayed high risk stocks and I'll likely stay there even in retirement.
In after tax accounts or a brokerage account, what is a way to have cash and be tax friendly. For example, savings account or CD are not tax friendly. T- bills would have interest each year too. How to postpone income like if we invested in a stock or ETF? I feel like I have enough in the stock market. Instead of everyone else’s 60/40 stock/bonds, I want more of a 50/25/25 stock/bonds/cash.
Thanks for your helpful videos! Love them and your energy, Paula! Regarding Jackie’s question, one other question that comes to mind is more in the logistical weeds than you two went, but probably important info for her to know. Won’t she have to sell out of her current shares, and *wait* for those sold shares to settle before she can buy shares of the 4 funds in her newly diversified portfolio accounts? I think there may be a bit of a lag time between selling shares and their settling into her cash account and becoming available for buying.
Not for me. I prefer a 2 fund approach. 1- 100% in an ETF that mirrors the USA economy. 2- a MM account. Time is your best friend. Reinvest those dividends. No need to rebalance, you are always balanced. In this type of USA ETF, at low cost 3 basis points, is about 20% international business. Expect a bumpy valuation (the Bears must have their fun), but also a juicy 10% return.
I’m with you. The only question I have is how many years for the cash/MM to have. It seems to me that there has only been two times when the S&P 500 has been down over any 5 year period. So as long as I have cash for 5 years of expenses I’m fine. Anyone disagree?
@Paula, you reference your podcast IDs a lot in your content. It might be useful to create a similar id system for your UA-cam content that is easily searchable (either in title or some other location). Also your editor should provide links to content referenced in the podcast, either directly in the UA-cam video frame or the viewers should be made aware of it in the video description. Thanks for the interesting content.
I agree -- We need to implement a system for adding both UA-cam Cards (midroll) and End Cards into our videos. We'll be hiring someone in the coming months who can assist with these types of tasks. Thanks for your feedback -- I look forward to implementing it in 2025!
I would not sell anything in the brokerage and just buy new funds moving forward. She may not have the right options in her 401k. My 403b had no small cap vale options. In fact we have a great s and p 500 with a super low expense ratio because they are institutional versions of the funds. We have no specific large cap value options in my 403 either. So I bought my other finds in my Roth IRA. The thrift savings plan has limited options too. The life cycle funds are nice in that they have much lower expense ratios than most target date funds. Before they figure out this they need to look at the options in the company plan.
There is a gaping hole in the advice here. What about life insurance? What if you don't live into your 70s.? What if you don't live till retirement? If you live until your 70s and have to take RMDs from your retirement accounts and get hit by 40% taxes those accts don't look good anymore. Cash value life insurance gives you huge retirement and tax advantages. These people are a bunch of stock brokers in disguise. Don't take advice from stock brokers.!!
I'm loving the financial investment advice. It makes want to start working on getting back into the workforce. As a disabled person, that's easier said than done. I'm lucky to have positive people like Paula and Joe working to help us learn how to build better a financial future for ourselves 🤩
I’m honored to hear that I can be a positive influence! I’m cheering you on!
Sorry, but I disagree with your opinion that a person needs to worry about taxes in their 'brokerage' account ahead of 401k or Traditional IRA.
I think once you have received the tax deduction for the 401k and Traditional-IRA, their usefulness is over. You should make your other accounts growth focused and put all your conservative investments (e.g. bonds) into 401k and Traditional-IRA.
The reasoning is simple - When you withdraw from 401k or Traditional-IRA you will pay marginal (top) tax rate. However, you have a much favorable tax treatment in your brokerage account for Long Term capital gains. Also, you won't have to deal with the pesky RMDs in your brokerage account. For estate planning purposes, your brokerage account will provide a step-up basis for your heirs but 401k and Traditional-IRA won't.
Unquestionably, the HSA is the best because you get the triple tax advantage, but the next best thing is Roth (for long term) and Brokerage (for shorter term but greater than one year). Your portfolio allocation may dictate that some growth stocks do end up in 401k and Traditional IRA, but that should be your last option.
Great analysis and advice. Spot on.
Since bonds have been moving in the same direction as stocks, I doubt I'll ever invest in bonds.
IMHO the stocks gains will weather any huge market crash and be ahead of a conservative strategy. So I've always stayed high risk stocks and I'll likely stay there even in retirement.
Sick outfit! Paula is very stylish and manages to continue to be an approachable presence in the financial education space🤩
Paul merriman is the best.
Ur new studio looks great!
Thank you! ☺️☺️ we’ll be adding to it and enhancing it in the coming months, as well!
In after tax accounts or a brokerage account, what is a way to have cash and be tax friendly. For example, savings account or CD are not tax friendly. T- bills would have interest each year too. How to postpone income like if we invested in a stock or ETF? I feel like I have enough in the stock market. Instead of everyone else’s 60/40 stock/bonds, I want more of a 50/25/25 stock/bonds/cash.
Thanks for your helpful videos! Love them and your energy, Paula! Regarding Jackie’s question, one other question that comes to mind is more in the logistical weeds than you two went, but probably important info for her to know. Won’t she have to sell out of her current shares, and *wait* for those sold shares to settle before she can buy shares of the 4 funds in her newly diversified portfolio accounts? I think there may be a bit of a lag time between selling shares and their settling into her cash account and becoming available for buying.
Not for me. I prefer a 2 fund approach. 1- 100% in an ETF that mirrors the USA economy. 2- a MM account. Time is your best friend. Reinvest those dividends. No need to rebalance, you are always balanced. In this type of USA ETF, at low cost 3 basis points, is about 20% international business. Expect a bumpy valuation (the Bears must have their fun), but also a juicy 10% return.
I’m with you. The only question I have is how many years for the cash/MM to have. It seems to me that there has only been two times when the S&P 500 has been down over any 5 year period. So as long as I have cash for 5 years of expenses I’m fine. Anyone disagree?
@Paula, you reference your podcast IDs a lot in your content. It might be useful to create a similar id system for your UA-cam content that is easily searchable (either in title or some other location).
Also your editor should provide links to content referenced in the podcast, either directly in the UA-cam video frame or the viewers should be made aware of it in the video description.
Thanks for the interesting content.
I agree -- We need to implement a system for adding both UA-cam Cards (midroll) and End Cards into our videos. We'll be hiring someone in the coming months who can assist with these types of tasks. Thanks for your feedback -- I look forward to implementing it in 2025!
45:57
Excuse me?!
Paula is just 😍
I would not sell anything in the brokerage and just buy new funds moving forward. She may not have the right options in her 401k. My 403b had no small cap vale options. In fact we have a great s and p 500 with a super low expense ratio because they are institutional versions of the funds. We have no specific large cap value options in my 403 either. So I bought my other finds in my Roth IRA. The thrift savings plan has limited options too. The life cycle funds are nice in that they have much lower expense ratios than most target date funds. Before they figure out this they need to look at the options in the company plan.
I enjoy your program but they are way too long. Could you transfer the same information in half the time?
There is a gaping hole in the advice here. What about life insurance? What if you don't live into your 70s.? What if you don't live till retirement? If you live until your 70s and have to take RMDs from your retirement accounts and get hit by 40% taxes those accts don't look good anymore. Cash value life insurance gives you huge retirement and tax advantages. These people are a bunch of stock brokers in disguise. Don't take advice from stock brokers.!!