Show Notes

• (00:49) How Much Will I Need to Retire in Future (Inflated) Dollars? (Jared, Clifton Park, NY)
• (05:51) Can We Retire Early With $400K Savings and $80K Pensions? That Depends on the Inflation Factor (Marcus, Queens, NYC – from episode 373)
• (15:22) How to Calculate Tax on Roth Conversions & the Benefits of Converting in Down Markets (Robin)
• (20:00) Should I Save Half Pre-Tax and Half-Post Tax for Retirement? (John Brown, NV)
• (28:26) Hollywood Stunt Training Camp vs. Saving to 529 Plan (Mike, Utica, NY)
• (33:40) The Derails

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Transcription

How much money will you need in retirement, adjusted for inflation? Today on Your Money, Your Wealth® podcast 431 Joe and Big Al spitball on your future dollars, how to calculate the tax on Roth conversions, and the benefits of converting in down markets. Plus, should retirement savings contributions be half pre-tax and half post tax? And finally, saving to a 529 plan for your kids, or sending them to Hollywood stunt training camp – which would you do!? If you’ve got money questions, comments, suggestions or stories, visit YourMoneyYourWealth.com and click Ask Joe & Al On Air to send ‘em in. I’m producer Andi Last, and here are the hosts of Your Money, Your Wealth®, Joe Anderson, CFP® and Big Al Clopine, CPA.

How Much Will I Need to Retire in Future (Inflated) Dollars? (Jared, Clifton Park, NY)

Joe: I got Jared from Clifton Park, New York. “Hey gang, love the podcast. Been listening for 6 months.” All right, new listener. “I estimate I need $40,000 per year to maintain my current lifestyle. Would like to bag work in about 15 years.” What’s that- you’d like to bag work? I haven’t heard that-

Al: Yeah, that’s a good one. i.e., that means quit.

Joe: I can’t wait to bag work. “What would your portfolio value need to be in future inflated dollars? Okay. Currently- so $40,000 a year- he wants to bag work in 15 years. So how much money does he need? Is that what he is asking?

Al: Yep. I already did the math. So, so Joe, the- if you take a 3% inflation, $40,000 is in 15 years, is $62,000. At 3.5%, $67,000. So let’s just say $65,000 is your spin. And we don’t know how old he is, so that makes it a little bit more difficult. But I’m gonna just say 3.5% distribution rate, because I think-

Joe: $2,500,000.

Al: Well, I got $1,900,000. Because I think he’s gonna be close to 60 based upon his wife’s age. So I’m kind of reading between the lines. You haven’t got there yet, Joe, but that’s what I’m thinking.

Joe: Got it.

Al: So, yeah. Yeah. Okay. So let’s just say between $2,000,000 and $2,500,000. But that doesn’t consider any other kind of fixed income, like pensions, Social Security. There’s a lot more that we don’t really know.

Joe: All right, I’ll continue on. “Currently have $357,000 in a 401(k), $175,000 in a Roth, $27,000 in a brokerage account. I max out my Roth each year, defer 23% of my wages that vary from year to year. Will make about $70,000 this year.” 23%. That’s a pretty high number.

A: That’s very high.

Joe: “I have $100,000 left on my mortgage, rate is 3.25%. I contribute $2500 a year to my 13-year old’s 529 plan.” So if this was my scenario, I would be like 75.

Andi: Wow. You’re really spending a lot of time thinking about that age as a father thing, aren’t you?

Joe: Yeah. Man, it’s a two-year-old. It’s like, my God, I didn’t know it- “Wife has pension and maxes out her Roth. She’ll be eligible to bag work at 55, but I’ll keep her working longer for health insurance, hopefully.”

Andi: Oh, Jared.

Joe: Okay. “We drive a 2015 Ford F150. Have a 9-year-old terrier mixed mutt rescue. Drink of choices a German hefeweizen. Enjoy pronouncing that.” How about that? Right? Surprised you. “Would love to hear a number that you guys come up with.” All right, well you need $2,500,000. Let’s call it on the high side. Probably real high side because he probably has Social Security and if he’s only wanting to spend $40,000, he makes roughly $70,000 to whatever. Say, you know, his Social Security’s gonna at least cover half that.

Al: I would think so. But his wife is working. We don’t know her salary. She has a pension. We don’t know what that is. We don’t know what the Social Security is. We don’t know how old you are. So it makes it a little bit hard of a question to ask. But I would agree with you, Joe $2,500,000 is probably on the high side. It’s probably lower when you consider wife’s pension. When you consider Social Security.

Joe: He’s got $560,000. He saves $16,000 a year. That’s 20% of his income.

Al: What’s that come out to be in 15 years?

Joe: I got- there. Then we got $16,000 there. We got 15 years. What do you wanna do? 7%. 6%.

Al: Do 7%.

Joe: 7% growth rate. Future value. There’s $1,975,000.

Al: There you go. You’re kind of on track based upon the assumptions we’re making.

Joe: Yeah. Given the numbers that we got. And this is total hypothetical, but yeah, if you get 7%, you keep saving 23% of your income or $16,000 a year with the amount of money that you saved over the next 15 years, you should have close to $2,000,000. And yeah, back of the envelope, it looks like you’re in pretty good shape, Jared. Yeah.

Al: Yeah. I guess another factor, Joe, it looks like maybe he and his wife have separate money cuz he’s saying he needs $40,000 per year to maintain his lifestyle. So we’re assuming his wife is covered for her lifestyle with her pension. And her savings. So I guess we make that assumption too.

Joe: Well he is gonna make her work longer and get that health insurance.

Al: Yeah. Yeah. Yeah.

Joe: Well you could bag it. Put it in the bag, Jared. Put that retirement right in that bag.

Can We Retire Early With $400K Savings and $80K Pensions? That Depends on the Inflation Factor (Marcus, Queens, NYC)

Joe: “Hello, YMYW family. Marcus from Queens, New York City. Long time listener, first time emailer. First, I love the show. I listen to it daily, driving my Mini Cooper. Married couple 27, 28, asking for some spitball on how to maximize our financial situation. We have a 3 year old mini Poodle and wifey drives a Tesla Model Y. I just got her on the YMYW podcast and she loves it.” Killing it. Way to go, Big Al.

Al: And Mr. Joe.

Joe: “Here’s our situation. W2 income, $300,000 evenly split. I have a 1099 job that brings in about $60,000. Currently, we are both maxing out our 403(b) contributions plan to the max. We both don’t have the you-know-what, and I always felt like it would be too much of a hassle given the fact that we needed to do the back door traditional to Roth. After listening to your podcast, now I feel like such an idiot for never opening up a Roth IRA and doing the yearly backdoor.” Got to do the yearly backdoor, Big Al.

Al: If you qualify. Yes. And you’re in your 20s, it’s not too late.

Joe: “We own our home in NYC with about $800,000 in equity and $400,000 mortgage, 3.65% fixed, 25 years, no other debt. We plan to live here for the next 5 to 10 years. After all, mortgage, cars, living expenses, we all are saving on an average of $10,000 and are basically funding it into our Vanguard brokerage account. Current brokerage account is $300,000; 403(b) has around $100,000 together. The 403(b) plan at doesn’t have great options- The 403(b) plans that they have do not have great options. So ours are in a simple tax deferred 2060.” So that’s a-

Andi: Target date fund.

Joe: -target date. Thanks Andi. “We plan on continuing to max our 403(b) and beginning to realize the account will have some serious taxes upon withdrawals, RMD age.” He’s worried about RMD age-

Al: In his 20s. Yeah, well, you got to think ahead.

Joe: He’s a planner.

Al: Because by age 75 they’re going to be high.

Joe: “For my 1099 job, I’ve been contributing to the SEP IRA to around 25% of my net. Wife would like to retire at around age 45.” Wifey’s a little FIRE girl. “We expect our yearly expenses at retirement to be about $150,000 to $200,000. Both jobs will have a pension that will likely add at least $40,000 of fixed income at retirement each. I plan to work on to 55 and hopefully retire on the sunny island of Maui.”

Al: Wow, you were just there.

Joe: I was just there. I was on the sunny island of Maui. “I understand we are in a very privileged situation and would like to take the most of our finances. Is there anything we are missing? And do you have friendly conversations on what else we should be doing? Thank you guys for amazing podcasts and Andi’s random comments. It’s hilarious. I have learned so much and will continue to listen for as long as you guys are hosting. Thanks again with love from NYC.”

Andi: Awww.

Al: Wow. That’s very sweet.

Joe: It’s just made my heart go pitter pat.

Andi: Thanks, Marcus.

Joe: He’s got $300,000 of W2 income. So they’re making $360,000 a year. They’re maxing out the 403(b) plans. They got $100,000 in 403(b) plans together, $300,000 in the brokerage account. So they got $400,000 all day. Does that make sense?

Al: That makes sense, yes.

Joe: Okay. And then they’re 27, 28, and she wants to retire at 44, and he’s going to retire at 55. So he’s got about 30 years and she’s got around-

Al: Got about 20-

Joe: – ish-

Al: Something like that.

Joe: But they want to live off $150,000 to $200,000 a year. They’re going to have some pensions at $40,000 but I don’t think a pension is going to pay out at45 years old.

Al: I don’t think so either. So I think what their plan- So she’s going to retire before him, so he’s going to work that extra 10 years, which presumably would cover their living expenses, but perhaps they wouldn’t be saving as much. So basically, they have little less than 20 years to save a bunch.

Joe: So, Marcus, you’re leaving out a couple of things that we need here to have a little friendly conversation or a little spitball. We need to know how much you’re spending, bud. Because that kind of drives how you back in the numbers. For instance, if you’re spending $60,000 a year and you want to retire at- she wants to retire at 44, but you’re making $150,000 W2 and $60,000, the only thing that’s really going to be adjusted is probably how much money that you’re saving in your brokerage account. So whatever dollar that you’re saving or spending, you just index that with inflation. So at age 44, okay, you’re still good, but your savings rate is going to go down. Or you go to age 55, that $60,000 in 20 years from now is like more or less $100,000. But you want to spend $150,000 to $200,000 in retirement. So does that mean at your retirement or does that mean her retirement? Because then that’s going to dictate how much that you can actually save. Because-

Al: Right. And is that in current dollars or is that in 20 years from now or 30 years from now?

Joe: Because let’s just say he wants to spend $150,000 and they want that $150,000 at his retirement. So that’s what 30 years from now?

Al: Yeah, almost.

Joe: So if I’m looking at that, 30 years, and let’s just assume 3.5% inflation. So that’s $421,000 and he’s at 55 and you don’t want to take on any more than 3% out of the portfolio-

Al: – at that age.

Joe: – at that age. So you need $14,000,000. That’s a big, big number.

Al: Right. Because you’re probably not going to- well, maybe they will be getting some pensions by then, but still, it’s minimal compared to what the need is.

Joe: Right. Because $200,000, given inflation in 30 years is $400,000. And you take 3%, you divide that into $400,000. It’s a huge number.

Al: Now that’s if this is in current day dollars. If it’s in future dollars, then it’s not quite as big.

Joe: Yes. So if you want $150,000 in future dollars, so now you need $5,000,000. You already have $400,000 saved. And then you have 30 years and let’s say you get 7% on your money and you save $50,000 a year. Now that’s $8 million. You could run the numbers any way that you want. You’re very fortunate because you have huge resources in regards to how much money that they make. So I don’t even know what the hell the question is.

Andi: He just wants to know if he’s on track, if there’s anything that they’re missing, anything else they should be doing.

Al: I think the answer is you’re saving a ton, which is going to allow you flexibility in the future. And in terms of- it’s just a matter of really kind of dialing this in. Because we don’t know if the $150,000 or $200,000 is in today’s dollars or future dollars, because that makes a huge difference. Because as Joe just said, $200,000 in 30 years from now is going to be like $425,000 or whatever number you came up with going to be double.

Joe: It’s a big number. So then the amount of money that you have to save to get there is going to change significantly. Unless you’re like, hey, I want $150,000 future dollars is fine, too.

Al: Now they are saving 403(b) as well as about $120,000- they’re saving about $10,000 a month. Or is that $10,000 a year, in their brokerage account? Must be $10,000 a month because they already have $300,000 in it.

Joe: Yeah. So if they’re saving $200,000 a year. Sounds right?

Al: I’d say $150,000. Good number.

Joe: All right. So they’re saving $150,000 a year. They already have $400,000 saved. Let’s say you got 20 years for wifey to retire. So that’s $8 million in 20 years. You take 3% of that. It’s $250,000 of income that can be produced if he’s still going to work for another 10 years. You don’t take the income from that.

Al: You let it grow.

Joe: That’s going to continue for another 10 years and you don’t save anymore. Maybe you don’t even have to save anymore. Because you got $8,000,000 growing. That’s going to turn into $16,000,000 in 10 years. Potentially it could double, right? So yeah. I think, Marcus, you’re on track.

Dial in exactly much you need in future inflated dollars in retirement, and what your shortfall is, just by following the simple steps in Big Al’s Quick Retirement Calculation Guide, which you can download from the podcast show notes. It does require you to do a little math, so we’ll understand if you’d prefer to just click Ask Joe and Big Al On Air in the show notes and let them spitball it for you. Make sure to tell the fellas how much you make and save and spend, and how much you’ll need to spend in retirement, for a more accurate spitball. By the way, Marcus’ question originally aired in episode 373 and if you’d like to go listen to the whole thing, including the related Derails, it’s also linked in the podcast show notes. Click the link in the description of today’s episode in your favorite podcast app.

How to Calculate Tax on Roth Conversions and the Benefits of Converting in Down Markets (Robin)

Joe: Talking money, finance, wealth, booze.

Al: Yeah. Dogs, cars. Yep. We get a little bit of everything.

Andi: And Hawaii.

Al: Yes. Hawaii. And you know what? We love your questions and the colors, cuz it sort of puts us in the right frame of mind as to where you live, kinda what you’re all about, where you’re listening to our show. That’s why we ask you what you drink, because some people like to listen to us while they’re drinking, so that’s why that originally came up.

Joe: Yeah. Myself-

Andi: Joe likes to do the show while he is drinking.

Al: Although we do enjoy drinking as well, I will throw that out.

Joe: We got Robin. She emailed Andi. Is this a personal friend?

Andi: No, she’s not. She actually had originally replied to one of our newsletters and said, can you just answer a general Roth conversion question for me? And I said, go ahead and send it to me, and then I will get it in front of the guys. And then this is how she replied.

Joe: Okay. “We all know that there is tax for Roth conversions. I was looking for how to calculate it. I think I figured it out. I thought I could get away with no tax if stocks were losers, but I think the dollar amount transferred is still counted as income to be taxed. Is that correct?” That is correct, Robin. Ding, ding, ding. So if, if there’s losers in stocks, Al, that’s a capital loss.

Al: Yeah and capital losses only offset capital gains. Capital gain being, like if you sell a stock or mutual fund at a gain. If you have capital losses, you can offset those against them. You could also use it against real estate. If you sold real estate for a gain, that’s a capital gain. You can use your stock losses against that. But that’s only one category. That’s capital. Most items are ordinary income. Which this is. A Roth conversion is considered ordinary income, same as salary, right? Same as dividends, interest, pension. All those are ordinary income and they are- they stand on their own. In other words, you can’t deduct your capital losses against ordinary income. And I would say the way that you calculate- the best way, maybe the most difficult, is get yourself a tax projection software and put your tax return in best that you think it will be. And then put the Roth in- conversion and take it out and see what the difference is. But a quicker way is to take a look at your marginal tax bracket which you have to go to your tax return, taxable income line. Look at what that is. Go to the tax table, look at your marginal rate. And then that’s the rate most likely that you’ll multiply that Roth conversion by to get what your tax will be. You have to do that for federal and state.

Joe: Okay. So yeah, hopefully she can figure that out. A couple things though. You know, we talk about doing conversions when stocks are losers or stocks are down because you want the recovery of the overall stock market to happen in the Roth. So let’s say you have an account and it’s down 20% hypothetically, and you might want to consider converting those dollars because they’re down in value. Maybe it’s a mutual fund, maybe it’s an ETF. If it’s a falling knife, if you have some high flyer stock that could go to zero, maybe not the best choice. But if the market is overall down and you do a conversion and the market recovers well, you’ve got 20% more, or you got a 20% discount, if you will, on tax by converting when the market’s down. And so maybe she got it confused by saying, well, if you said, if there’s stocks that are down or losers, and I did a conversion that might offset. You still wanna do conversions when the market’s down, it’s the best time to do a conversion. Because all the recovered of the overall market will grow into the Roth IRA, which will be 100% tax-free. Most people get paralyzed when the markets are down. But there’s a ton of tax strategy that they should be looking at in regards to volatile markets, I guess.

Al: Yeah that’s well said, Joe, because that’s actually the best time is when the market’s lower. Because when the market’s lower, then it’s got a higher expected return in the future. In other words, you’re buying stocks while they’re cheaper or buying mutual funds better yet, or ETFs, index funds while they’re cheaper. You still have to pay the tax though, but the tax won’t seem as bad. If you buy, let’s just say you do $80,000 of Roth conversion, and within a year or two it’s up to $100,000. It kind of takes a little bit of the sting out of the tax in that you’ve got now $20,000 extra in a Roth IRA, which will be forever tax-free.

Joe: You got it.

Should I Save Half Pre-Tax and Half-Post Tax for Retirement? (John Brown, NV)

Joe: Alright, we got John Brown. He writes in from Nevada. “Hey, please use the name John Brown or some other made up name. My question is in regards to Roth versus traditional contributions. Wife and I in our late 30s. She makes $100,000 and my income fluctuates between $250,000 and $350,000. Our current assets are $240,000 in a Roth, $150,000 in a traditional, $500,000 in company stock and after-tax brokerage accounts, $230,000 in equity in a rental property and $50,000 in cash. My 401(k) offers a Roth option, which I was contributing to, but changed last year in an effort to try to get to a 50/50 Roth and traditional balance and reduce how much we are paying in taxes. Is it a good idea to aim for a 50/50 split? We both max out our 401(k)s each year and have the extra income to pay the taxes now. Everyone always leaves out some crucial information that you need, but hopefully I’ve covered most of it.” Well, besides your name, John Brown. Okay. “I drive a Jeep Grand Cherokee and listen to your show as I drive around making sales calls.” Hopefully he gets a good deal after listening to this.

Al: Yeah, right?

Joe: He’s sitting right in front of the house. I wonder if he’s like door-to-door sales guy? Or do you think he’s going to companies? Probably B-to-B.

Al: Oh, I think, yeah, I think he’s B-to-B. I think that’s how most sales people are.

Andi: Sells shower curtain rings.

Joe: Yeah. Shower curtain rings. I dunno. Maybe a vacuum or something.

Al: No, I don’t think so.

Joe: In his little Jeep Cherokee?

Al: It’s gotta be B-to-B.

Joe: He’s like, he’s getting pumped up for this big sales call coming up here. “Depending on the occasion, I could be sipping on a little Maker’s 46, neat.” All right, I kinda like that. “Nice red wine or Gray Goose martini, straight up with blue cheese olives. Martini snobs frown on this type of olive in drink because it creates an oily sheen on the top. They can go pound sand. I’m drinking it, not you.” That’s right. John Brown. I’ll have one with you. “I’ve learned a lot and always look forward to the next episode. Thanks in advance for your spitball.” All right. 50/50 split, Big Al. What do you think?

Al: Yeah, I think that’s fine. Here’s a couple thoughts off the top of my head. So, depending upon whether John Brown’s salary is $250,000 or $350,000 plus his wife’s salary. He’s- they’re gonna either be in the 24% bracket or 33% bracket. So, but at age late 30s, yeah, I would say chances are income’s only going up, I would be probably inclined that I would go all Roth because I probably will be in the 24% bracket. And I think my- I’m guessing that my income’s only gonna go up and I’d wanna get the Roth in now, particularly because the compounding effect on Roth IRA is tax-free. That’s probably what I would do.

Joe: So, there’s no right percentage in my opinion. I think there’s percentages that- just back of the envelope, rule of thumbs you can kind of throw out there- but tax diversification is really depending on what John Brown’s income is going to be in the future, right? Because he’s in a fairly high tax bracket today. But let’s say in 20 years from now, he wants to retire and we don’t know how much John Brown is spending. We just know that he makes a lot of money and he saves a lot of money. So again, yes, John you’ve left out some crucial information here for us to kind of do a proper spit ball, but it depends on how much that he’s making, right? Because tax diversification gives you optionality in a withdrawal strategy. So a lot of times people have most of their income or most of their assets in a retirement account that is always gonna be subject to ordinary income. And so depending on if they have a fairly modest lifestyle, well then that money compounds in the overall retirement account. And then once they hit the required minimum distribution age, then they’re forced to pull a lot of that money out, that might kick ’em into higher tax brackets. On the other hand, if someone’s spending a ton of money, then it’s like, well here, yeah, I want IRA money, but then I also want Roth money to keep me out of those higher tax brackets. So there’s a little bit more sophistication, I think, to go along with how you wanna look at this. But I think if you want a real simple answer, I don’t think it’s 50/50. You look at your tax bracket. If you’re in the 24% tax bracket, go 100% Roth. Because you’re 30 and you make good money and you’re saving a ton of money. You already said you had the money to pay the tax. So I wouldn’t worry about 50/50. I’d go 100% contributions into my Roth.

Al: Yeah, same here. And I think it- it’s hard to know exactly what tax bracket you’re gonna be in because his- his salary’s variable. And I would answer this differently if John Brand was 60. But John Brown’s 39, so I would tend 100% Roth too. Because chances are most, or all of that deduction that you would’ve gotten is in the 24% bracket, which is- it’s not nothing but it compared to the 37% bracket and 33%, 35% bracket, it’s a low bracket, so I’d wanna get the money in right now. 2026, the rates go up. You’ll probably be in the 28% bracket or even subject to alternative minimum tax. Which could be as high as 35%. I just think at least for the next two, 3 years, I would go all Roth and then reevaluate. That’s what I would do.

Joe: Yeah, because he’s 24%, 32% bracket wise, the top of the 24% tax bracket is $364,000 of taxable income. So it depends on if he’s on the $350,000 or $250,000 range. If he’s on the $250,000 range, plus his wife’s income, plus you know, the standard deduction and so on, he’d be in the 24%. I’d go Roth.

Al: Right. That’s right.

Joe: If he’s got a higher earning year, then you kind of play with it. Maybe you do a little bit of pre-tax and then maybe the rest Roth.

Al: The other factor too is he’s already got a lot of money in Roth, so he is already got a great start, right? So it’s not like he has to go extreme, like he’s got nothing in it. Now, for example, if the income’s gonna be $350,000 for the next 3 years, you might think about that a little bit differently. Maybe you want the tax deduction or maybe you wanna do some Roth, just a smaller amount. And it’s- I agree with you, Joe, there’s no particular percentage, per se. It’s kind of your ability and willingness to pay the tax. Some people can do it. The people that can look longer term have an easier time of paying it. The people that cringe over the dollars going out at that exact moment have a lot harder time with that.

Joe: You know, I got a buddy. Let’s call him Jay Brown.

Al: Okay. Jacob.

Joe: He’s in a fairly high tax bracket. A little bit older than John Brown. But would go 100% Roth IRA. Let’s say they’re in 37%. Tax bracket goes 100% Roth IRA. Because the tax deduction today that you’re getting, the amount of compounding of tax-free growth- you’re gonna forget about the tax deduction anyway. And you’re not gonna save the money that you’ve saved in tax. So, I mean, for me, people in their 20s and 30s and even 40s, I think it makes a lot more sense to have 100% tax-free growth. It takes the uncertainty of where tax rates are gonna go totally off the table. So I know scientifically you wanna look at things, but I think emotionally and at the end of the day, they’re gonna be a lot happier when they look at their account balance and they got millions in a Roth versus millions in a retirement account.

Al: Particularly if you’re the type of person that by the time you get your net pay, you spend it. So if you get that tax deduction, you’re just gonna spend it. You might as well go Roth for savings. You’ll be in a much better spot later on.

You can download 10 Steps to Improve Investing Success for free from the podcast show notes right now, for guidance on how to invest those Roth contributions wisely. Following the key investing principles in this guide will broaden your investment universe and help control your emotions and your risk – which can lead to higher returns in your portfolio, and retiring with more wealth. Take your investing skills to the next level. Click the link in the description of today’s episode in your favorite podcast app, go to the show notes, and download 10 Steps to Improve Investing Success for free – you’ll find it right before the episode transcript.

Hollywood Stunt Training Camp vs. Saving to 529 Plan (Mike, Utica, NY)

Joe: Got Mike from Utica, New York. Lot of New Yorkers this week.

Al: Yeah.

Joe: That’s where we’re getting all the one stars. “Hey there everyone. My family and I are on our way to America’s Credit Union Museum in New Hampshire. It was the first credit union in the US.” That sounds like a great trip.

Al: You know, if I were Mike’s kids, I would just be jumping up and down.

Joe: I think I gotta go. “My kids are 13 and 10 and both of them came with us on this exciting family vacation. Currently playing a couple of your older episodes in the car for everyone to listen on our way there.”

Al: So between our episodes and the destination, ‘kids, we got a great trip planned’.

Joe: God, feel sorry for those kids. Oh man, that’s funny. “Now to my question. I currently make about $150,000 a year. My wife is a stay-at-home homeschool teacher for our children. I’m trying to figure out if sending them to this Hollywood stunt training camp for kids is the best thing to do. I currently have-“

Andi: Yes, that’s just the answer.

Joe: “-I currently have about $10,000 in a 529 plan for both children. But they have both told me they wanna be actors or entertainers when they grow up and they don’t see themselves wanting to go to college. The camp costs $7000 per child for the entire Summer. I’m just not sure if I should send them to this camp or just continue to saving for their future education in the 529. I should add that I do have the money to do it if you think it would be beneficial in some way. Thank you guys for your thoughts and I look forward to hearing them. I also wanna say I drive a 2012 Honda Odyssey as the family car. No pets, highly allergic. Drink of choice is Red Bull mixed with some ice cold bourbon. Love me some extra energy.” All right, Kung Fu camp.

Al: Yeah. What do you think? You’re a new dad, is that- what would you do that?

Joe: I’m definitely sending my kids to Kung Fu camp.

Andi: Can you use 529 plan for going to stunt training?

Joe: I don’t think you can use a 529 plan for the camp of being a stunt double of some sort.

Al: No. Yeah. You cannot.

Joe: I don’t know. I think that sounds like fun.

Al: So me personally I would not do it. I would get them enrolled in youth theater locally and put the money in a 529 plan. They’re only 10 and 13. Things change by the time they get to college age. That’s what I would do. Trying to be the sensible dad. You would be the cool dad though. You would send them and you would say, you know what? You can go every Summer.

Joe: I would try to enroll myself. Looking at- what, community theater. Oh, that just sounds so boring.

Al: No youth. It’s a youth- it’s for kids- youth theater. They have ’em in San Diego. They have ’em in every town.

Joe: Really? Did you send yours there?

Al: No, because they weren’t interested. However, my two nieces, Todd’s kids, they both were in youth theater for a decade.

Joe: Really? Did they make it- ?

Al: No. However, the oldest daughter is gonna try out for a adult play, now that she’s just finished college.

Joe: Okay. An adult play. I thought that was-

Al: No. Oh, I see what you- yeah, I said that- I didn’t say that well.

Joe: It was like, oh boy. The wheels really came off there.

Al: Yeah, that’s a little slippery.

Joe: That’s what happens when you go to community theater.

Al: Yeah, for sure. Then you have no filter.

Joe: Alright. Anything else?

Andi: Nope, that’s it.

Joe: Alright we’ll see you next week. The show is called Your Money, Your Wealth®.

Andi: Speculating on John Brown, Hefeweizen, America’s Credit Union Museum, and Wall Drug in the Derails, so stick around. Help new listeners find YMYW by leaving your honest reviews and ratings for Your Money, Your Wealth in Apple Podcasts, and any other podcast app that accepts them – for example, Amazon, Audible, Castbox, Goodpods, Pandora PlayerFM, Podcast Addict, Podchaser, Podknife, Spotify, and Stitcher. If I missed any, email me and let me know.

Your Money, Your Wealth® is presented by Pure Financial Advisors. Click the “Get An Assessment” button in the podcast show notes at YourMoneyYourWealth.com or call 888-994-6257 and schedule your free financial assessment, in person at one of our seven offices around the country or online, either way, a time and date convenient for you. Chances are, one of the experienced financial professionals at Pure will be able to identify strategies to help you create a more successful retirement.

Pure Financial Advisors is a registered investment advisor. This show does not intend to provide personalized investment advice through this broadcast and does not represent that the securities or services discussed are suitable for any investor. Investors are advised not to rely on any information contained in the broadcast in the process of making a full and informed investment decision.

The Derails

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