Your personal finance questions answered by CFP® professionals
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James
Scott
Scott and James discuss how to balance a home purchase with saving for retirement.
Listener Question:
We want to stay in manhattan and want to be home owners but can’t make the math work. Our current rental 2 bed 2 bath just went up to $4400/mo. A comparable condo would sell around $1.3-$1.5m. That would put the mortgage at around $7,000 with another $2,000-$3,000 in maintainable and taxes a month. Rent does keep increasing and I don’t want to keep getting squeezed but does buying in Manhattan just not make sense?
Planning Points Discussed
Timestamps:
2:30 - Priorities
5:25 - Various Goals
8:12 - Life & Math Don't Always Match
11:15 - Investment Concerns
12:30 - How Much Home Can You Afford?
16:05 - Aligning Your Financial Goals
LET'S CONNECT!
James
Scott
Scott and James discuss what to do if you make too much to contribute to a Roth IRA.
Listener Question:
I am currently 33 years old, single, and am nearing a $129,000 annual salary. I have been investing in a Roth IRA and realize the phaseout limits for single taxpayers are from $129k - $144k. My question is, how do I lower my income, besides contributing to my traditional 401k, so I can keep contributing the max $6000/year into my Roth IRA as my income rises over the years?
Planning Points Discussed:
Timestamps:
2:30 - Introduction
6:17 - Phaseouts
8:13 - Roth IRAs
11:05 - Aligning Your Financial Goals
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James
Scott
Scott and James discuss whether or not an MBA is worth it.
Planning Points Discussed
Timestamps:
2:30 - Listener Quesiton
5:30 - Why MBA?
7:46 - Pros/Cons of MBAs
8:30 - Debt v. Investing
16:05 - Aligning Your Financial Goals
LET'S CONNECT!
James
Scott
Scott and James discuss the tax implications of withdrawing income from various accounts in retirement.
Listener Question:
Can you talk about how some of the main retirement accounts are taxed upon withdrawal?
Example topic: Are withdrawals just subject to Federal taxes, or FICA taxes as well? And how / if withdrawing from retirement accounts affects eligibility / taxes you have to pay on social security?
Can you talk about how after tax brokerage accounts are taxed both while investing and when you start to withdraw? And what withdrawals from that look like when you are retired (whether or not you are at ‘retirement age’ or not).
Planning Points Discussed
Timestamps:
2:30 - Introduction
6:17 - Accounts Aren't Equal
11:15 - Tax Overview
14:46 - Maximizing Your Finances
16:05 - Aligning Your Financial Goals
LET'S CONNECT!
James
Scott
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Scott and James discuss how to reduce costs inside of your company's 401(k).
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Listener Question:
What is a good expense ratio for a retirement account? Is this something you can control with an employer sponsored plan? I want to make sure my money is working for me and I am maximizing my returns
Planning Points Discussed
Timestamps:
2:30 - We're on YouTube HERE!
6:17 - Expense Overview
11:15 - Planning Options
14:46 - Individual Choices
16:55 - Business Size
21:05 - Aligning Your Financial Goals
LET'S CONNECT!
James
Scott
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Scott and James discuss how real estate should factor into your retirement plan.
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Listener Question:
Me and my wife enjoy doing live and flip rentals and are planning on the cash flow to be part of our retirement funds. We are planning to move in a year and would like to pick up a third house to add to our portfolio when we do. How would you run the numbers to see if this is a safe investment for us. Ensure we are not taking on too much risk to expand.
Planning Points Discussed
Timestamps:
2:30 - We're on YouTube HERE!
6:17 - Rental Overview
11:15 - Understanding Real Estate
14:46 - Income Understanding
16:46 - Customization is Key
19:00 - Aligning Your Financial Goals
LET'S CONNECT!
James
Scott
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Scott and James discuss how to best diversify a concentrated stock holding.
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We're on YouTube here!
Listener Question:
How do I exit a concentrated stock position?
I’m an employee at a large tech company and I’ve vested RSUs over the last 4 years. Some of my stock has appreciated 4x since I was granted it. My non-company stock brokerage account value is around $700k, and on top of that my vested company stock (APPL) is worth $250k at the moment. I expect to continue to accumulate more company stock through ESPP and RSU grants over time. My current gross income is around $325k ($200k salary + $125k annual RSU stock grants). I would like to take action to diversify this position into other equities (equity index funds). The reason I would like to diversify is to reduce my portfolio risk. Having just seen some other companies like Meta take a 70% stock hit, it feels like a responsible action to take. As I’ve heard in your podcast, I should not have too much of my net worth in one stock, and the only free lunch is diversification. I can sell all $250,000 vested shares tomorrow, but then I believe I would get hit with a large tax bill for all of the gains, which seems like it could be a burden. I am thinking I could start by selling the shares that I’ve held for over a year to make sure to get the long-term gains tax rate instead of the short term tax rate. And then next year, I could sell the stock I got this year, etc. I am thinking of starting a DAF in the next couple years and gifting $10k of appreciated stock to charity (apple does 2:1 promotions where they match up to $10k, meaning I could initiate the DAF with $30k), but the rest I would like to re-invest in a more diverse way to meet my short and long-term financial goals.
Planning Points Discussed
Timestamps:
2:30 - We're on YouTube HERE!
5:58 - Tax Consequences
9:16 - Stock Vesting
13:45 - Minimize Your Taxes
16:56 - Best Stocks
25:30 - Aligning Your Financial Goals
LET'S CONNECT!
James
Scott
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Scott and James discuss how 5 things to start the new year right with your finances.
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Planning Points Discussed
Timestamps:
2:30 - We're on YouTube HERE!
6:17 - Financial Goals
11:15 - Priorities in Money
24:46 - Individual Choices
30:46 - Customization is Key
33:00 - Aligning Your Financial Goals
LET'S CONNECT!
James
Scott
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Scott and James discuss how you should choose your survivor benefits options for your pension.
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Listener Question:
I'm not sure if this can be a whole show but I was wondering if you guys can go over how to think about choosing between the Survivor Benefit Plan (SBP) and whole or term insurance. I'm in the military and will be retiring soon. I work with a lot of members that are retiring and this choice seems like a coin flip or they simple go off of what someone else did. I know this decision is different for everyone so I was hoping you guys could go over a framework of how to compare the two. I would love to be able to point people to a podcast that walks them through the process of comparing the two.
Planning Points Discussed
Timestamps:
2:30 - We're on YouTube HERE!
6:17 - Pension Overview
11:15 - Understanding Your Options
14:46 - Individual Choices
16:46 - Customization is Key
19:00 - Aligning Your Financial Goals
LET'S CONNECT!
James
Scott
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Scott and James discuss misleading financial rules to avoid.
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Listener Question:
How do you both think about the common wisdom that you should have a certain multiple of your income saved by a specific age (e.g. save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67)?
I am in a situation where my income has tripled between ages 30 and 35. As an example, let's say I had 100K saved at age 30 (1x my salary), but I'm 35 and my salary is now 300K. I don't have 900K saved in retirement, in fact, it's about half that. Am I in trouble?
Planning Points Discussed
Timestamps:
2:30 - We're on YouTube HERE!
6:17 - How Much Do I Need To Save?
8:52 - How Much Money Do I Need?
12:54 - Portfolio Changes
14:45 - Income Diversification
18:21 - Aligning Your Financial Goals
LET'S CONNECT!
James
Scott
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