Hello, Hello, Hello and Welcome to the BiggerPockets Money Newsletter!!!
This week, we'll jump into: |
- 💰Money Goals with THE Virginia Trench! I was super excited to sit down and chat with Virginia and her husband about their relationship with their finances.
- 🔄 The Financial Order of Operations: Which retirement accounts should you contribute to first?
- 🤔 Index Fund Shake-Up: Scott selling 40% of his index funds sparked a great conversation between Carl and me.
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—Mindy Jensen, host of the BiggerPockets Money podcast
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🎯 The RIGHT Order for Your Retirement Contributions |
There's a lot of discussion surrounding the order in which you contribute to your retirement savings. If you can't max out every account, here's the order that I recommend—and also what I'm seeing most finance experts recommend: |
- 401(k) up to the full match. This one can be a bit tricky, because some company match programs will actually penalize you for putting all your money into the account at the beginning of the year. Check with your HR department to see if you need to spread this out over the course of the year to get the full match.
- After you've gotten your match (or have contributed the amount necessary to get the full match for the month, if you need to contribute the whole year) contribute to your Roth IRA. Another tricky one, the Roth IRA has income limits in order to be able to contribute. If you don't qualify, consider a back door Roth or mega back door Roth.
- Next up is your HSA, if you have a high-deductible healthcare plan. You CANNOT contribute if you don't have one.
- After you've maxed all these, look at your investment diversification, income, and potential tax burden. If the bulk of your investments are in pre-tax retirement accounts, consider opening an after-tax brokerage account to give yourself more flexibility in retirement spending. If you're well diversified, look at your income to see if it makes sense to reduce your taxable income.
- If you are aged 60, 61, 62, or 63, you have SPECIAL OPTIONS this year. Check out this IRS page to learn about the INCREASED contribution limits for these four ages ONLY.
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A Purple Life was featured on Episode 110 of the BiggerPockets Money Podcast, which aired just over five years ago. On that episode, we talked about how she job-hopped to increase her income.
(She also casually mentioned that her mother was FI before FI was a thing, and we featured her MOM on Episode 111!)
Check out her blog, www.apurplelife.com, where she shares her finances from the last four years of retirement. What a great peek into early-retirement spending habits! |
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We were joined by a very exciting VIP guest this week! VIRGINIA TRENCH came on the podcast! Yep, Scott's wife shares some great stories about Scott with us. And yeah, we also talk about money...🤩
Watch the full episode here! |
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In this week's episode, Carl and I unpack our candid reactions to Scott's decision to sell 40% of his index funds. While many in the FIRE community stick to buy and hold, Scott's decision challenges conventional wisdom. We dive into the emotional and logical aspects of this choice, sharing our different perspectives on market timing and when (if ever) it makes sense to deviate from your investment strategy.
Catch the full episode here! |
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Oh what fun it is to build your very own dream house! We submitted our demo permit, and I was mistaken when I thought that we had permission to demo the house. Nope. My city takes its sweet time with approvals, and we will have to wait 6 to 8 weeks. We ARE trying to finalize the heating system for the house so we can submit the building plans for approval.
We (let's be honest here, it's just Carl) are going back and forth between radiant heat (heated floors) and mini-splits for the basement. If we do heated floors, we can't use LVP. If we do mini splits, we need to hire an HVAC contractor to come in and run ducting.
Would love to hear from you if you have a novel, green way to heat your basement. |
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| Rent to Retirement offers fully Turnkey, New Construction properties in the BEST markets w/CRAZY buying incentives like:
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Click below or Text REI to 33777 |
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