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Today we’re talking about financial questions we have received and how they might help you. You might find yourself in a similar situation so hopefully some of this guidance can benefit you or someone you know.

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Show Notes

On today’s episode, we’re answering questions we often receive. The answers could help you and your financial situation.

Should I max out my 401k and Roth IRA before opening a taxable brokerage account? Or is there a benefit to opening a separate brokerage account to provide more flexibility?

This is a really good question about tax diversification. There are three accounts Bradley mentioned. So, where should you save your money? What are your thoughts on future tax rates and your future tax rate and taxable income?

If you think your taxes will be lower in the future, it makes the most sense to put your money in the 401k bucket. If you think taxes will be higher in the future, put it in the Roth bucket. A brokerage account could allow you to pay some taxes now and some later, and it will also give you more flexibility to take it out before age 59.5.

It’s ok to split the money between the three, because that helps with tax diversification. We have no idea where taxes will go in the future.

If I retire at age 62 and collect Social Security, will it adjust once I reach full retirement age?

Full retirement age is different for everyone and it is based on what year you were born. If you collect Social Security at age 62, you’ll get a reduced amount from full retirement age.

For example, if you were born in 1960 and make $100,000 a year, at full retirement age that person would get an estimated $2,535 a month in Social Security. If they took it as early as age 62, they would only get $1,677 a month.

I’m planning to retire in two years. A close family member is out of work due to the pandemic and they need help with credit card bills that have piled up after they burned through their savings. What is the best way to use my savings to help them?

We would need to know how much money is needed. Is it hundreds or thousands of dollars? It’s a tough scenario when you’re dealing with family, money and being out of work. There’s an emotional and a logical part to this. We’ll explain more on the podcast.

Listen to the entire episode or click on the timestamps below to skip ahead to a particular question.

[5:54] – Max out 401k and Roth IRA?

[15:59] – Social Security

[22:16] – Family needs help

[29:09] – Market crash

Thanks for checking out this episode. We’ll talk to you again soon.

“When you try to time the market, you’ve got to make two right decisions – when to get out and when to get back in.”

-Scott Sierens