In short
The hosts critique an Economic Policy Institute study estimating how much income Americans need to “feel comfortable” in 2026, arguing the numbers are inflated by assumptions and can discourage people. They then pivot to personal finance guidance: define “comfortable” for your life, focus on controllable levers (income and expenses), and use their “financial order of operations.”
Guests
No guests are interviewed in the provided transcript. Hosts include Beau (speaking as “Beau/Reeves” in places) and Caleb (mentioned directly), plus Brian and Ruby referenced as co-hosts/regulars.
Key claims
A single adult needs about $106,745/year; two adults (no kids) about $138k+; one child about $194k; three kids about $278k; California single adult up to ~$163k and a three-child household up to ~$480k. The hosts argue these thresholds don’t match most Americans’ lived reality and that the study assumes high ongoing transportation costs (over $1,000/month) and discretionary spending (~$2,600/month).
Notable examples
Median household income cited around $84,000; California family of five needing “half a million” to be comfortable; they recommend car/home affordability rules (23-8, 20% down, 36 months, ≤8% income; 3-5-25 rule) and “bedazzle your basic life” with low-cost experiences.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOAnalyzing Income Needs for Comfort
0:56 to 2:51
Discussion on income requirements for living comfortably in America.
“Reeves, I am so excited to talk about this because I thought that the numbers that we got, the information that was put out by the Economic Policy Institute was absolutely asinine.”
Income Thresholds and Living Comfortably
2:51 to 3:18
Conflicting views on what it takes to live comfortably in America.
“We're going to talk about this in a moment, but we know what the average income or the median income for most Americans are.”
Geographical Income Variances
3:18 to 4:49
Exploration of how income needs vary by geography in the U.S.
“Now, I'm not minimizing the fact that, yes, inflation is a real thing.”
Dissecting Comfort Definitions
4:49 to 6:15
Debate on what constitutes 'comfortable' living and associated costs.
“In California, a single adult to live comfortably needs as high as$163 ,000 of income.”
Personal Finance is Personal
6:15 to 8:13
Advice on defining personal financial comfort and making informed decisions.
“For instance, there is some hope hidden in this data.”
The Two Financial Levers
8:13 to 11:16
Discussion on controlling finances through income and expense management.
“But we know that personal finance is exactly that.”
Seasonality of Financial Comfort
11:16 to 13:59
Understanding that financial circumstances can change over time, impacting comfort.
“because every other Monday we release a brand new Making a Millionaire episode where Brian and I get to sit down from a real financial mutant just like you and do a deep dive into their personal finances.”
Understanding Financial Comfort
14:14 to 15:08
Learn about the importance of feeling financially comfortable and the role of emergency reserves.
“And one of the things I love is a lot of Americans are arriving at this conclusion, hey, I don't feel comfortable.”
Reevaluating Finances for the New Year
15:08 to 15:47
Discover the key financial questions to ask as the new year approaches.
“As we go into a new year, this is a great time to reevaluate.”
Retirement Planning at a Young Age
15:47 to 18:22
Understand why young people don't need to focus on their retirement number yet.
“Well, on that note, this is a live stream day, so we're going to be answering a lot of your questions.”
Show all 25 chapters
The Importance of Direction in Savings
18:22 to 19:16
Learn why saving a consistent percentage of income is crucial for financial security.
“I know how often I'm going to change automobiles.”
Tracking Your Net Worth
19:16 to 22:42
Explore the significance of tracking net worth and how to do it effectively.
“So long as you've been directionally doing the thing you're supposed to be doing, saving 25%, saving 25%, saving 25%.”
Understanding 529 Plans and Net Worth
22:42 to 25:11
Learn how to treat 529 plans and other accounts in your net worth statement.
“This is a wonderful time to start doing that.”
Deciding Between Paying Off Debt and Investing
25:11 to 28:00
Analyze the decision-making process for paying off low-interest debt versus investing.
“Katrine Craft, thank you for the question.”
Step Eight: Define Your Financial Adventure
28:00 to 29:39
Learn how to prioritize your financial decisions based on your personal goals.
“When you're in step eight, you get to do what you want to do.”
Roth IRA Contribution Timing
29:40 to 31:04
Understand the implications of contributing to a Roth IRA and deadlines.
“And if you would like one, just email winner at moneyguy.com and we'll send that out to you.”
Finding Love as a Financial Mutant
33:11 to 39:49
Explore the challenges of dating as someone passionate about finance and sharing values.
“Stop waiting around for the perfect candidate.”
Setting Up a Roth IRA for Kids
39:50 to 42:01
Learn the steps for setting up a Roth IRA for a child and the importance of financial education.
“My 11 year old is making between 50 to a hundred dollars a week working for the neighbor.”
Teaching Kids Financial Responsibility
42:01 to 45:59
Learn about instilling financial responsibility in children through real-life experiences.
“is you can start the behavior of doing that without having to have it inside the Roth structure.”
Making Smart Financial Choices
46:00 to 48:11
Understand the importance of balancing saving for children's education and teaching them wealth-building skills.
“That's amazing because that resourcefulness will go with her everywhere, you know, like for the rest of her life.”
Investing Basics for the Future
48:12 to 55:05
Discover how to simplify investing and the ease of using target retirement index funds.
“And then once I get that three months, four months, six months, whatever it is for you, once I get my emergency fund fully funded, then boom, I go invest those dollars.”
Understanding Target Retirement Funds
56:01 to 56:56
Learn how target retirement index funds simplify investing decisions.
“Investing in and of itself doesn't need to be intimidating because the world has made it so easy.”
Contributing to Roth IRAs and Spousal IRAs
56:57 to 57:58
Discover how to maximize contributions to Roth IRAs for yourself and your spouse.
“Now, when it comes to the Roth and spousal Roth, let me make it easy for you.”
The Backdoor Roth Strategy Explained
57:59 to 59:15
Understand the backdoor Roth IRA process and its complexities.
“called the backdoor Roth, where you can open a traditional IRA.”
Resources for Financial Confidence
59:16 to 1:00:35
Explore online resources and ebooks to boost your financial knowledge.
“Don't let lack of desire to do a smidge of research be the thing to miss out on a great opportunity.”
Transcript
Automatic transcript. May contain errors.0:28Every soda's got something to say. There's always something new. Join the Nordy Club to unlock exclusive discounts, shop new arrivals first, and more. Plus, buy online and pick up at your favorite rack store for free. Great brands, great prices. That's why you rack. How much does the average American need to feel comfortable in 2026? The answer surprised me. You be the judge. We're going to share the numbers and break down what you need to take away. Reeves, I am so excited to talk about this because I thought that the numbers that we got, the information that was put out by the Economic Policy Institute was absolutely asinine.
1:08It blew my mind. We've had a lot of folks over these past couple years talking about inflation, inflation, inflation, inflation, inflation. We've heard this. The costs of the things that we buy on a daily basis are getting more expensive and more expensive and more expensive. And so I think a lot of people are feeling that sort of strain. They're feeling that it's tightening up. But when it comes to, okay, what is actually required? What does it take to actually feel comfortable? What does it take to be able to make ends meet? Some of the numbers that we found in our research, I just thought, in my opinion, absolutely bonkers.
1:43Yeah, this is a specific study based on data from the Economic Policy Institute. And obviously, like Beau said, this is on everybody's mind. We are interested to see what they came up with. But the conclusion that they came to, so here's the first number, is that a single adult needs an income of$106 ,745 per year. So I'll say that again. If you are a single individual with no dependents, in order for you to live comfortably on average in America, the income required to do that is$107 ,000. But wait, the numbers get bigger. So if you add two adults like a couple in a household with no kids, the number goes up to above one hundred thirty eight thousand dollars.
2:30And then if you add a kid to the mix, we are at one hundred ninety four thousand dollars of income to live comfortably. Three kids, they say two hundred seventy eight thousand dollars. So we are almost to three hundred thousand dollars for a typical American family to, quote unquote, live comfortably. according to this study. What do you think? We're going to talk about this in a moment, but we know what the average income or the median income for most Americans are. So what this is suggesting is that if this is what it takes for one adult to live comfortably, or this is what it takes for a household with a child or two children or three children to live comfortably, then that must mean that the vast majority of Americans are not living comfortably because the vast majority of Americans fall below these income thresholds.
3:17And I just refuse to believe that. Now, I'm not minimizing the fact that, yes, inflation is a real thing. And yes, the cost of the things that we use on a daily basis have gotten more and more expensive. But the idea that in order for you to be comfortable, in order for you to live the life that you want to live, in order for you to have a beautiful today and a great big beautiful tomorrow, you have to hit these income numbers, I think is just out there. I think it's totally wonky. Now, when they did the study, they did acknowledge there was some variance by geography. We know that all the time.
3:51If you live in one of the higher cost of living areas part of the country, obviously what's needed from an income standpoint would likely be higher. But what they found is that for a single individual, again, single individual, no dependents, the average income needed was about$107 ,000. But when you look at lower cost of living areas, the average income needed was as low as about$87 ,000. So that's what,$20 ,000 less, notably in like states like Mississippi and of course Ohio. No, I'm not doing it. I'm not doing it. I'm a bulldog. You think I'm going to do that on air? Not a chance. Caleb responded.
4:31Not a chance. But then there are other. Yes, of course, everyone's going to say like, what about big cities in California? And And yes, cost of living there is much higher. We get that. But the numbers here, they get outrageous, just to be really frank, in my opinion. In California, a single adult to live comfortably needs as high as$163 ,000 of income. And then if you add in the kids, like a three-child household, according to the study, allegedly needs$480 ,000 in California to live comfortably. So if you are a family of five in the state of California, you need half a million dollars in order to live comfortably.
5:15And what I think is so frustrating is that I think that this could be very discouraging. Yes, I think that's why I'm getting a little heated about it. What percentage of people is making$500 ,000? It's not that. Even in California. We did a show a number of years ago, and it was, hey, what do you think, you know, what percentage of the population makes X dollars? And if I remember the numbers right, the average American thinks that one in four people make half a million dollars a year,$500 ,000 a year. And in reality, it is like a fraction of 1%. It's so much lower than that. Like it is so, so, so much lower than that.
5:51And so I think that these numbers become discouraging. So what we said in true money guy fashions, let's dive in. Let's actually see. Why did they come up with these numbers? Yeah, like how are they quantifying? What are they calling comfortable? And when we actually dug into the numbers, I think it got interesting. And I think what the Economic Policy Institute defines as comfortable is different than what I would define as comfortable. Same. For instance, there is some hope hidden in this data. The estimated costs were high. Like, for example, transportation costs alone for a single adult were over$1 ,000 a month.
6:29So you can see how that automatically just inflates all of these numbers. It's assuming you're spending a lot on, like, car payments and gas and, like, public transport. That's a lot, especially, like, in perpetuity, like, for a significant amount of time. And there might be a season where you might spend$1 ,000 a month. But in order to be comfortable, you have to spend$1 ,000 every single month on car payments, every single month on gas, every single month on utilities. That just seemed high, but I didn't think that was even the most remarkable number. There was another little nugget that they put in there, and again, this is what they are defining as living comfortably.
7:09they said that the discretionary spending for a single adult would need to be somewhere around $2 ,600 a month. $2 ,600 a month in discretionary spending. Just whatever you want. Just fun money. And I think that for a lot of Americans, that would be a big fun money budget. Yes. And listen, if you have that, if that's your goal, awesome. That would be great. But to say that that's what you need to be comfortable, that's a bridge too far for me. That is a giant discretionary spending income for a single individual, like just for one person, just on whatever they want, in my opinion. And so what I would encourage you guys to recognize is that maybe you're not at one of these incomes.
7:56It doesn't mean that you're behind. Remember, the median household income is about$84 ,000. So what this is saying is on the median, there are very few households in America that are actually living comfortably, and I just don't think that that's the case. But we know that personal finance is exactly that. It is personal, and so you have to define for you and your life what does comfortable mean. So what are some of the things that you can do? How can you take this information, and what can you do when you think about creating a comfortable lifestyle for yourself? Well, I think that you have to focus on the things that you can control.
8:35What stays inside of your onus of control? And the very first of those is just simply living within your means. If you don't have a large income, if you don't have a lot of discretionary cash flow, maybe spending$1 ,000 a month on transportation would not be inside your means. Maybe having a$2 ,600 a month slush fund or fun money fund is not inside your means. So you have to figure out what that means for you. It's important to note that that not being in your means is very, very normal. Like that is the vast majority of Americans are not able to spend$1 ,000 a month on a car payment. Yep. Very often.
9:15Nope. And so, yeah, like living within your means isn't always super popular, but it's powerful. Powerful stuff if you just make those decisions when you make those big purchases like a car can make all the difference. Well, and that's why we have rules that you can use. is if you buy a car, we want you to follow 23-8, 20 % down, don't finance for any more than 36 months, and don't let your car, your transportation costs, your car payment, be more than 8 % of your income. You can do the same thing for houses. We have our 3-5-25 rule, because a lot of times, it's not the latte decision. It's not the$5 a day that cause people to live outside their means.
9:53It's these big decisions. It's the automobiles. It's the homes. So make sure you understand, And for you, where do your means end and what does it mean to live inside of those? Yeah, you can check out moneyguy.com slash resources if you want more information on those car buying and home buying rules. Another thing that you ought to think about as well is that when it comes to personal finance, and Ruby, we talk about this all the time, when it comes to making financial decisions and trying to impact your financial life, there are really only two levers that you ever get to pull. Oh, yeah. I thought you were going to say it.
10:25Do you know what those levers are? I do. I think that sometimes people don't like this answer, but it's so simple. It's actually great news, in my opinion. You can pull the lever of you can make more income. That's it. You can rise up in your career. You can side hustle. You can use your opportunities and resources to get more income. Or you always have the option to lower your expenses. You can see where you can cut, how you can get creative, how you can adjust. And so those are really your two options. And you have a lot of control over those options. Sometimes it may take a while to figure that out.
10:58I understand it may take some time to pull those levers fully, but they're there for you. And that is something that you can control. So definitely evaluate your levers before getting discouraged about, you know, where you are or your financial journey. You know, there's a wonderful couple that we recently sat down with on Making a Millionaire. If you've not had a chance, make sure you subscribe to the channel right now because every other Monday we release a brand new Making a Millionaire episode where Brian and I get to sit down from a real financial mutant just like you and do a deep dive into their personal finances.
11:29And what I think is really interesting is recently we sat down with a young couple and man, they were not doing stuff wrong. They weren't, uh, overspending. They didn't have crazy housing. They didn't have crazy automobile, but they had literally cut their expenses down so low. They had cut it down to the bone. The conversation we finally had to have with them is, Hey, you have exhausted the lever of expenses. You have to figure out how do you control that income lever? How do you go out, figure out a side hustle. Maybe one of the individuals, maybe you need to go back to work. You have a highly sought after skill set.
12:02Maybe there's some way you could figure out how to monetize that. It was a great conversation for them because no matter whether you have$10 or $10 million, those are the two levers that you have to operate with. So recognizing that and recognizing again, what's inside your control can be unbelievably valuable. Because sometimes just a little bit can go a long way. And that brings us to our third point. Be sure you're bedazzling your basic life. As Brian would say, since he's not here today, we will definitely say his phrase because it's so true. Take advantage of the low cost experiences, especially if you're in a season where your expenses can't go too much lower or your income hasn't gone up to what you want just yet.
12:41I think that there's a lot of opportunity to make memories with your community, with your family that aren't super expensive. We've talked all the time. You've said how when you went to Disney World, it was like this big milestone. Your kids loved the pool almost more than the park. You know, and it's just kind of one of those reality checks where like it's wonderful to go to Disney. And if you get to do that and plan for that, amazing. But you don't have to do that to enjoy your life or dare I say to live comfortably, which is what this is all about. Right. I think the reason I took such issue with this is because I think the study kind of erases the seasonality of your life.
13:20Like there might be a time where you do have that discretionary income. There's going to be a time where you do not. And it doesn't have to be. Neither one of those has to be forever or is promised to be forever. And so I think that there's a lot of freedom when you see like, OK, maybe I do have to buckle down for a year or two to pay off this debt, to build up this emergency fund, to invest even though I'm in the messy middle. But then there's going to be another season where, oh, we do have a little more income as a household. Somebody went back to work. I got a raise. We got a bonus. Like, I think that's why I didn't like the study.
13:54So that's my opinion. I am excited to hear what you guys think about these numbers. And we hope that we were able to dig into why they were reported the way that they are and really take it back to what you can control about your own personal financial situation and your own levers that you can pull, income and expenses. And one of the things I love is a lot of Americans are arriving at this conclusion, hey, I don't feel comfortable. I don't know if I'm doing the things that I'm supposed to be doing. I don't know if I'm doing them the ways that I'm supposed to be doing. That's one of the very reasons why we came up with the financial order of operations.
14:30We wanted you to have a guide to help you know exactly what you ought to be doing with your next dollar. Hey, maybe one of the reasons that I don't feel comfortable right now is I never actually got my fully funded emergency reserve. Man, I bet if I finished step four and I had that in place, that would allow me to feel more comfortable in other areas of my life. Or maybe I don't know if I'm saving enough. Okay, well, financial order of operations, I get to 25%. Okay, now I can spend freely. I don't have to worry. Am I doing the things that I should be doing? So if you want your free copy, you can go to moneyguide.com slash resources and check that out.
15:08As we go into a new year, this is a great time to reevaluate. Hey, where am I? What is my highest deductible? Do I have it covered? How much are my monthly living expenses? Do I have a fully funded? Am I maxing out my employer benefits? Am I putting money in my Roth IRA? Am I doing the HSA? We've already done an episode of this. A lot of the numbers are changing in 2026. So if you were just because you were set to max out in 2025 does not mean that you're automatically set to max out in 2026. So let the financial order of operations be your guide so that you can start living both a comfortable today as well as a great, big, beautiful tomorrow.
15:47Love it. Well, on that note, this is a live stream day, so we're going to be answering a lot of your questions. If you have a personal finance question, make sure you drop it in the chat below and we are going to answer them. Awesome. So we're going to kick it off with Silas's question. He says, is there an age or a net worth level where I must know my number? He's referring to his retirement number. I'm 30 and everything seems speculative this far out from retirement. I feel like I should just save a bunch and that's all he says but I'm feeling like maybe he's feeling he's flying blind a little bit uh what would you say to Silas Silas you're 100 % right and and this is going to be a hot take cold water whatever you want to call it but I think so many young people they love personal finance and they love the details and they love the spreadsheets and they love the Monte Carlo and they love all of those parts and pieces but when you are 30 years old And let me just speak from my experience.
16:46My 30-year-old self and what my preferences were, what my thoughts were, what my future looked like is very different than what my 35-year-old self was. And just having a five-year spread, a five-year change, there were so many variables that were different. That same thing is true exponentially so when it comes to thinking about a 30-year-old who's looking at retiring at 60, 65, 70. That's why we tell folks early on in your journey, you don't have to know your number. It's okay to play horseshoes. You just want to be directionally right. That's why we tell you that the earlier you can start saving 25 % of your gross income, the earlier you will be able to give yourself options to figure out, okay, what is my number and where do I need to be?
17:33So early on in the journey, don't focus on the finish line. Focus on the pacing. Focus on 25%, 25%, 25%. We have a great deliverable. If you go to moneyguide.com slash resources called what can 25 % do for you? Nope. It's called how much should you save? Once you go see this, it will tell you, okay, am I saving what I should be saving? Well, if you're doing that and you're moving directionally in the right place, you don't have to have all the answers. So, but your question Silas was, is there a specific age or a specific net worth where I do need to know my number? Yes, but it's not a specific age and it's not a it's not a specific net worth.
18:15It is at that point where you are seriously considering financial independence. You want to know that before you put in that resignation, before you decide to tell your boss what he can do with a job, whatever that thing is for you, you want to make sure that you know your number, that you've stress tested your plan, and you've factored in all the variables. I know how often I'm going to change automobiles. I know in this crazy healthcare marketplace that we work, I know how I'm going to have health insurance. I know how much I want to spend on travel. I know what I'm going to account for later in life.
18:47I know if I've got to cover the cost of college or weddings or any gifting. I know if I want to relive. Whatever those things are in your situation, you have not only defined your number, but you've also stress tested that number to make sure that the future that you hope for, the future that you're dreaming about is actually realistic and is actually attainable. So for us, a lot of folks begin to have those conversations when they're five, seven, eight years out from actually making that decision. So long as you've been directionally doing the thing you're supposed to be doing, saving 25%, saving 25%, saving 25%.
19:23But if you are someone and you like to have a goal and you like to have an idea of the destination, that's why we did the Know Your Number course. You can go to learn.moneyguy.com. And Brian and I, we used to call this, because we'd sit down with prospects who were thinking about hiring us. We'd be like, okay, well, what do you want your money to do? Like, what's the goal, right? And we'd pull out our calculators and our pens, because we're nerds, and we'd just do some quick back-of-the-napkin math. What we were doing is, on the fly, we were doing the Know Your Number course to give them a loose idea of what the destination looks like, and then helping them paint a path of how to get from where they are today to that destination.
20:01direction that know your number is supposed to be a directional indicator of am i moving in the right direction and so silas for you you'll be able to define okay when do i need that when do i need to know that but if you don't know it and and you don't care about it today that's totally okay try to get to 25 and the rest will take care of yeah silas i'm in a similar boat like i'm in that age range i use the know your number tool and it at least helped me see like okay i know i want more than this or like if I'm saving this much how much am I going to have it still gives you like a ballpark I recognize that number may change or like I don't know exactly when I will need to be financially independent and that's fine but it still gives me a benchmark to shoot for and kind of confirmation that like okay if I'm saving this 25 % of or if I'm saving this x amount um I should have enough to do something, be dangerous, retire in some way.
21:00And that is really helpful. So go to moneyguy.com if you have not checked out the Know Your Number course if you're interested in doing that. I told myself that I was going to answer the question really quickly. I was like, oh, I'm going to show them how fast I can do this. Why? I didn't. Just because, you know, speedrunner, I don't know. It's like developing a skill set that maybe is not natural. but I didn't do it fast. That's all right. That's all right. It was a good answer. It's the end of the year. I appreciate it. Hey, by the way, it's end of the year. You know what that means. Network statement time.
21:33It's net worth day is almost here. Have you done yours yet? No. You're the 31st. I never cheat. I never, ever cheat. It's so silly. I purposely for the past, I don't know, like I haven't even logged in to look at my accounts because I don't even want to have an idea. I don't even want to. I like to be surprised. But here in two days, I will go in and start, you know, it takes a while to put it all together, but start putting together all the numbers. And it's so exciting. If you're someone who's never done your net worth before, you've never tracked it, you've never looked at it, this is an amazing time to start right at the end of one year, beginning of the next year, because it lets you know where you are.
22:12Because how can you know if you are on track, ahead of the curve, behind the curve, maybe you don't even know where the curve is, if you don't know where you're starting at today. And a net worth statement can bring that to light. So if you want a free template, we have one at moneyguy.com slash resources. Or if you want to use the exact same tool that I use, that Brian uses, that Ruby uses, you can go to learn.moneyguy.com and check out our tool that we built ourselves and has a dashboard with all kinds of fun, interesting information. This is a wonderful time to start doing that. Absolutely.
22:45I have a question about net worth statements up next from Katrine Craft, I believe it is. It says, hi, Money Guy team. Longtime listener, first time caller. That's always fun. Nice to hear from you. My husband and I filled out the net worth tool for the first time yesterday, which is very exciting. Do we include the kids 529s anywhere? So let's talk about some of these like extra investments and accounts around. How do you put those on the net worth statement or do you at all? Yeah, so what is a net worth statement? It is simply a listing of all the things that you own beside all the money that you owe, and then you net those two and you come up with what your net worth is.
23:27And so when we think about things that we own, we're thinking about assets. We're thinking about cash, checking accounts, savings accounts, investment accounts, Roth IRAs, 401ks, primary residents, business interests, real estate, those types of things. Liabilities, we think about all the money that we owe. 529s, while they do seem like they're an asset because they are an investment account, we consider 529s to sort of be like a prepaid future expense. It's this future expense that I'm going to incur and I'm kind of, you know, it's like a glorified sinking fund. I'm going to have this thing that's going to happen in the future, so I'm going to fund this sinking fund today to be able to satisfy that.
24:07Because of that, because those dollars aren't actually part of our true financial independence journey, they're more of a income statement item than a balance sheet item for all you accountants out there, we like to consider 529s on the footnotes. They're not actually your assets. They're an expense that you're likely going to pay. You're going to help your kid pay at some point in the future. So if you use our net worth tool, you'll notice there's a footnotes page. Well, on the footnotes is where we want you to list that kind of stuff. We want you to list all of your insurance policies, your life insurance, your disability insurance, maybe your property and casualty stuff if that's important to you.
24:41We want you to list the important people, your accountants, your attorneys, your insurance agents, your financial advisors. And we also want you to list all of the other outside assets. This could be 529 accounts, custodial accounts, UTMAs, UGMAs, other types of assets that aren't necessarily in the net worth statement, but you still want to have an accounting for it. You still want to keep track of. So for For us, me and Brian, I know Ruby does the same, 529s are a footnote item, not an actual net worth sheet item. That was a great answer. Katrine Craft, thank you for the question. I was thinking, I think I'm going to make today a Tumblr day.
25:17Whoa! I'm going to do it. Out of nowhere. Look at that. So Silas and Katrine Craft, if you would like a MoneyGuy Tumblr, just email winner at moneyguy.com and we will send one to you. Beau is modeling the Tumblr for me today. It can also be a koozie if you would like to put a can in and keep your beverage cold as well. Did you see what else I'm modeling today? He's modeling his new Christmas present. It's my favorite. It was my favorite Christmas present this year. Yeah, for our listeners, it's a mug with the pictures. Adorable faces of his children on it. All three of my folks on there. Very good, messy middle Christmas present.
25:50That was a win right there. Nice job, Hanson household. You know what else I got for my, what else I got for Christmas? What? Oh, I never thought you'd ask. probably two weeks ago Jenna said Jenna said hey we need to switch cars tomorrow and you can't ask me any questions and I'm like I'm like oh yeah that okay sure well I drive a truck and so I was like okay well a few things are happening right she's gonna do something maybe she's gonna get it clean I don't know she's gonna do something to it and I was like oh well no maybe she just bought something and she doesn't want me to know what she bought and she needs to have the truck to be able to like haul it but then my mind started like spinning.
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26:29And I was like, oh my goodness. What if, what if in my wife's genius, she was like, you know what? I'm tired of this minivan. I'm not doing it anymore. I'm not going to have it. And she took my truck and she would have gone and traded it in and got her new car and told me, hey, the minivan's yours now. She didn't do that. But for a moment, I thought that that was going to be my present, but it was not. She got, she got my, uh, my truck completely detailed and cleaned and it is that is a great christine it was awesome yeah super awesome that's really cool very good job all right i've got another question queued up for you it's from nww in nursing 6068 i believe that's a complicated username but the question is i have 23 000 left on my mortgage with a low interest rate of 2.375 percent should i pay it off should i pay it off.
27:25I'm in step eight of the FU and have$35 ,000 cash on hand. No other debt or should I invest the cash I have? It's a little unfair that I'm asking this when Brian is not here. So maybe we can speak a little bit for him because this sounds like a question that Brian himself had. I mean, Brian was in this exact spot. He had a low balance mortgage. It was at a low interest rate and he had cash available to pay it off. Now, here's what you said, NW, that I thought was great. Hey, I'm in step eight. And this is a little bit of a hot take. Not a hot take. This is on the people forget. When you're in step eight, you get to do what you want to do.
28:04You get to choose, right? Like, if you want to pay off your low interest debt, by all means, do it. It's really fine, too. If you want to go buy a nicer car or you want to go on a trip or you want to pick up some new hobby, In step eight, you get to define what you do with your dollars. So is it okay? Should you do it? You totally can if you want to. It depends on what your goals are. What I'd love to know about your overall financial situation is how far along in the wealth building journey are you? If you've got a couple million bucks saved and invested working for you, then likely $23 ,000 of capital going to extinguish that mortgage is going to be immaterial to your financial life.
28:45If, however, you've been a debt crusader and you've got$50 ,000 of investment saved up and you have this because you've been prioritizing paying off the mortgage and you got$23 ,000 left on it, I'm going to argue that$23 ,000, depending on your age, could potentially work harder for you than if you go satisfy and extinguish that debt. So I'd want to know a little bit more about your situation. But my leaning is this is fairly immaterial for you. And if it's fairly immaterial for you, and it's, you know, like Forrest Gump said, this is just one less thing. There's no problem with you paying it off.
29:22Even though there's probably an arbitrage, you can invest that in cash and make more. At some point, you just don't want to have any more. You don't want to deal with a mortgage statement. You don't want to deal with a mortgage company. And that's okay. Step eight, you get to choose. You get to create your own adventure. I like that. Create your own adventure. Sure. Well, NWW in nursing 6068, you get a Money Guy Tumblr since we answered your question. And if you would like one, just email winner at moneyguy.com and we'll send that out to you. Next question is from Madison Blanchard. It says, my husband didn't contribute to a Roth IRA in 2024.
30:02Is it too late to move the money now before the end of the year? You think she meant 2024 or you think she meant 2025? You know, I think she meant 2025. Madison, if you're still watching and in the chat, let us know. Because those are two different things. Yeah, this would be a quick one. If he did not put money in a Roth in 2024, unfortunately, it is too late. You have missed the window to be able to fund a Roth IRA contribution for 2024. If, however, you meant to type in 2025, one of the beautiful things about Roth IRAs or IRAs in general is they're kind of like little time machines. You can get into the next year and say, oh, I didn't fund.
30:47I didn't put my money in there. You have up until the tax filing deadline, up until April, to be able to fund your Roth for the prior year. So even though you didn't fund it by 1231, you could still go put money in your husband's Roth or he could go put money in his Roth in January, February, March of next year. No harm, no foul. There are a number of accounts that will allow you to do this. You can do this for HSAs. You can do this for solo 401ks. You can do it for SEP IRAs. You can do it for profit sharing if you're an employer and you have an employer-sponsored plan. So it is not too late to fund for 2025.
31:21It is too late to fund for 2024. Good answer. Honestly, when I was scanning, I was thinking she meant 2025. I would assume so. Those are two very different answers. You're really behind on that 24 contribution. Yeah, 24 or too late, 25. Yes, do it now. That's the answer. Brian, do you remember when we decided to go all in on our YouTube channel, but we just didn't know if all the hard work was actually going to pay off? Oh yeah, it was a little scary at first because you have all the what ifs. What if nobody watches our videos? What if this doesn't work? What if we're just talking to ourselves?
31:55But thankfully, we took the leap, and honestly, it's been one of the best decisions we've ever made. And if you're thinking about starting a business or launching a side hustle, let me tell you, having the right tools makes all the difference. And that's where Shopify comes in. Shopify powers 10 % of all e-commerce in the U.S., from startups to even popular brands like Allbirds and Untuckit. And they make it simple. You can build a professional online store with ready-to-use templates, plus AI tools that help write product descriptions and even improve your photos. It's basically like having a marketing team in your pocket.
32:29Email campaigns, social posts, all designed to help you find your customers. And with Shopify, you can handle everything from inventory to payments to analytics, so you don't need to manage a bunch of tools on different platforms. Everything is all in one place, making your life easier and your business run smoother. Look, you don't want to miss out on what's next because you're so worried about a bunch of what-ifs. It's time to turn those what-ifs into with Shopify today. Sign up for your$1 per month trial at shopify.com slash money guy. Go to shopify.com slash money guy. That's shopify.com slash money guy.
33:10This episode is brought to you by Indeed. Stop waiting around for the perfect candidate. Instead, use Indeed Sponsored Jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate C. According to Indeed data, Sponsored Jobs have four times more applicants than non-sponsored jobs. So go build your dream team today with Indeed. Get a$75 sponsored job credit at indeed.com slash podcast. Terms and conditions apply. All right, I'm going to ask you a ridiculous question. But somebody asked it and I kind of want to know what your response is going to be.
33:45Brandon Leonard 377 says, good morning Money Guy team. I'm 26, single and at around 340k net worth, which sounds like he's doing amazing. So shout out to you. Finding a partner who shares mutant values is proving to be difficult. Have you considered making a spot for single mutants to meet? how does he find love bo how do mutants find other mutants or do you have to what do you think uh matt i'm gonna need you to work on let's start snowballing names of our dating app i don't know what it's gonna be but i need you to come up with a really good one uh we'll have we'll have that ready for you in q2 um here's what's really interesting uh i think a lot of financial mutants, depending on your level of mutation, find it hard to find other people that are the same as them.
34:41I will use my wife and I as an example. I'm a big time financial mutant. I like live and breathe this stuff. I do this for a living. I talk to you guys about it all the time. I just love talking about it. People all the time say, man, how'd you and Brian come up with the idea? I do the podcast. I was like, honestly, the podcast is nothing more than you guys seeing conversations me and Brian were having either way. Even if the cameras weren't on, this is the stuff that we talk about. These are the kind of things that we go through. And so trying to find someone who has that same level of desire and attention and affinity for personal finance might be difficult.
35:19And my wife, she's not watching right now because I know her and the kids are in a movie right now. But if she were watching, she would not be offended by saying this. She's not exactly a financial mutant. I mean, she understands how to make wise financial decisions. She understands the basics about live on lesson you make and save and invest for the future. But if I was like, hey, babe, talk about how to execute a backdoor Roth, then she'll say, what? She could tell you what a Roth is, but she's not going to know the intricate nuances. And that's okay. Because what matters in our relationship, Brandon, is that we have the same goals.
35:58Meaning that, hey, we know we want to be able to do this for our kids and create this kind of life and have this sort of freedom and use our money to accomplish these sorts of things. So long as you can be on the same page about the goals, you don't necessarily have to be the exact same type of mutant. Now, what happens though, is when you do meet that person and when you first start interacting, there's a little bit of friction, right? You know what? Our search function on the website is so good now. Yes. If you go to moneyguy.com and you search, don't do this now, stay in the live stream, but after the live stream, go search love, marriage, dot, dot, dot, and finances.
36:37It was an episode that we did right before I got married where basically we walked through, me as a financial mutant, all the things that I was going to just absolutely convince my non-financial mutant wife of. And it's hilarious going through how we're going to spend money and what's the budget and all this kind of stuff. And then I tracked every single dollar for an entire year meticulously. And we did a revamp to see how close I was. And boy, was the first year of marriage for us in education. And it was way more of an education for me than it was for her. So I would tell you, where do you meet other financial mutants?
37:15Well, our Reddit thread is really good. You know what I mean? I don't know about that. It's pretty popular. If you don't follow us on socials, you can go follow any of our socials. That is where other financial mutants hang out. But we wouldn't do this. To be really frank with you, we would not do this in order to have people meet in a romantic way. But if there was a community that was just for mutants, would somebody like this use it? That's what I'm saying. other friends. That's kind of where I'm going with this. I'd be curious to know, actually. Please tell us in the chat. I'm not suggesting that you begin propositioning in the Reddit thread.
37:52What I am saying, though, is that that is where financial mutants hang out. That's what financial mutants do. They like to hang out on the Facebook page. They like to interact with folks. So I think that's where they hang out. What matters more is when you're searching for this person, does this person value the same stuff that you value? Does this person care about, hey, one day, hey, I really want to travel one day. I don't ever want to leave my house. It's going to be some sticky stuff. And more difficult beyond finances. I think that's the thing. Are you aligned, generally speaking, in life?
38:25And do you respect each other enough? Are you looking for someone to just go along with you no matter what? That's going to be difficult. Or is your partner wanting nothing to do with money and just wants to spend all the time and doesn't want to listen to you? That's a bigger problem, right? That's exactly right. And Brandon, let me just go ahead and give you a heads up At 26 with a$340 ,000 net worth You're crushing it You're absolutely crushing it Objectively, take away all the love stuff You're in a fantastic spot I don't think that in order for you to be happy You have to find another 26-year-old That also has a$340 ,000 net worth And is doing the exact same stuff that you're doing Also, you're giving yourselves more options That's right Like now So if you did get married And you do decide you want to do something like with the kids later.
39:12You're setting yourself up really well to be able to do that. You're setting yourself up really, really well. So I think that's great. Some names for our dating app have come up. We've got Metworth. Oh, that's good. Because it's not net, Matt. That's good. Mutual Mutants. That sounds like an insurance company. Mutants Mingle. That's the winner. Bo's like done and done. We're launching it. Hey, can you go buy that URL real quick? Let's make sure we get that logged down. somebody said where is it they had a tagline mutants mingle they said dating app tagline your love can grow 88 times over hey look at that I had to read it anyway anyway mutants mingle fun question thanks for playing along in the chat there with us mutant mingle alright oh tumblr if Brandon wants a tumblr we'd love to send you one Just email winner at money guy.com since we answered your question.
40:12All right. Next question is from chaos medicine. My 11 year old is making between 50 to a hundred dollars a week working for the neighbor. He hears you guys in the car, which I love that. I love it. And we wants to do a Roth IRA. Would it really be as simple as filing a tax return and starting with fidelity? He's 11 years old. Yeah. I mean, I think he has earned income. What else do they need to know? Yeah, so to answer your question, Chaos, yes, it is as simple. If you file a tax return, you claim the income that he's receiving, then yeah, you can contribute up to 100 % of his compensation or the IRA max, whichever is lower.
40:53So if he makes, you know, 100 bucks a week, 52 weeks in a year, can't do the math in my head, but if he makes like five grand, then he could put five grand into a Roth IRA, which is great up to the earned income. So I tell parents this a lot, though, because you have to answer the question, is it worth it? And I don't mean like, is it worth it? Like, obviously saving in a Roth and compounding interest, you know, from age 11 till 65 is obviously worth it from like a mathematical standpoint. But what you really care about with your son is that you want the behavior there. So I tell a lot of my clients, hey, I know that you want to do this.
41:34how about instead of doing this, one, have you taught them the basics of finance? They have a bank account. They understand how saving works. Like, hey, I want to take my money and put it in there. They got that. Okay, great. Well, next, once you get past that, you can absolutely do the Roth IRA. You can absolutely set that up. But a real easy thing you could do is you could set up a custodial account. And you could say, hey, let's have a custodial account. You make 100 bucks a week. You put 50 bucks in here. Your dad's going to match at 50. And what you can do is you can start the behavior of doing that without having to have it inside the Roth structure.
42:07Again, I love the Roth structure. Don't mishear me that I'm saying don't do the Roth structure, but there is more nuance to it. There are some steps required to make that happen. There are other lower step ways to get them involved. So what I tell a lot of, again, these are like friends or clients, is, hey, why don't we do the UpMyCostola account until your kid gets their first actual tax form until they get an actual W-2, an actual 1099. So that way you're not like having to think about consolidating the like income from the neighbor for raking leaves or whatever. You have an actual tax form that's going to substantiate filing the tax return.
42:46It's just something to think about. But yes, if you want to claim the income on a tax return, file the tax return, boom, your son is off to the races. Yeah. I love that he's listening and I love that he wants to do that. So keep up the great work, parenting work. That's awesome. And hopefully that gives you some options that can get, keep him excited and hopefully set him up well for the future. You know, I've got my, got my 10 year old doing this. Did I tell you about this? Have I told you about this? I don't think you have. What is it? My 10 year old, Barrett. There she is. I told her, I told her, I was like, hey babe, you got a, you're 10.
43:27It's almost car time, right? Now it's not really almost. is car time because 16 is car time. I don't like that. I was like, hey, here's what mom and I are probably going to do. We're probably going to do a third, a third, a third with you. You save up a chunk of money. That'll be a third of your car. Mom and dad will throw in a third and then mom and dad will loan you the other third because I want you to have a payment. I want you to understand what it's like to have to make a payment and we'll be the bank. So a third, a third, a third. I was like, so you need to start making some money. She came with this great idea.
44:00for a trash can valet service. So what she does is that for, this is so great, and I'm going to brag a little bit because I can. And she came up with this idea? Yeah, she came up with it. Well, we have some friends who do it, and so she'd like, so we put our trash out on Thursday nights because it runs on Friday. So one Thursday night, she just went for everybody on our street, and she marked down all the people whose trash cans were out. So she knows that they're Friday morning delivery folks. Right? Well, I helped her put together this little pitch where she'd knock on the door, And she'd say, hey, can I ask you a quick question?
44:35Question number one, does your trash service run on Friday? And they'd say yes because we had already done that, right? I'd say, hey, question number two, have you ever forgotten to take it out before it ran? And then if they said, if they say, and I gave her like this, if they say no, do this, they say. And if they say, oh, yeah, but she was, oh, yeah, my dad has too. And boy, does he get frustrated in that. But guess what? I have a solution for you. I'm starting a trash can valet service where every Thursday at 7 p.m. I'll take your trash out. It was awesome. She knocked on so many doors and she got so many no's.
45:11She loved it. It was such a wonderful experience to see her have the resilience to go not do her pitch, ask, get a no. Not do her pitch, ask, get a no. I am so thankful that she had the experience of getting all those. She did get some yeses. So she's making like, you know, tens of dollars a week. Which is great though. Yeah, but she has like five or six clients. And what's great is she now has a response, but I don't have to tell her. And like this week, she was like, hey, dad, because of Christmas or New Year's, like are the trash day? And I was like, yeah, I got an email. Everything's bumped back one day.
45:49So you got to bump back your service. And it's just been really, really fun to see that kind of take hold. and now to get the bank account opened and get her to deposit. It's just a super fun thing. And if we can instill those types of behaviors in our kids at 10 years old, 11 years old, I just think that's awesome. That's amazing because that resourcefulness will go with her everywhere, you know, like for the rest of her life. I love that so much. Are you a customer? Of course I am. Of course I am. I was like, you better go sign up right now. I do get super annoyed when I forget. Yeah, it's a real problem.
46:22There's nothing more frustrating than not taking the trash out because we go through some trash. Right, right, right. Oh, that's amazing. All right, let's see. We got another question. It's from DavidLinsmeyer7797. He says, is this a foo hack? My employer contributes$4 ,500 to an HSA. Should I invest that even if my wife and I are still building our three-month emergency fund? Because in the Foo, I will hold up the sheet in honor of Ryan. You can get this for yourself for free at moneyguy.com slash resources. Step four is emergency reserves. And then you kind of get going with HSA and Roth investments.
47:10Yeah, but you know what? This one, I'm going to, I'll see you, but I'm kind of going to raise. Step two. like it's step two employer match it is employer related it's unclear to me if it's required that you put money in or they put money in it says my employer contributes so if i were sitting here this is the way i would think about this and by the way forty five hundred dollars into your hsa it's great i don't know that i've i don't know that i've heard of that uh aggressive of a contribution from an employer before so that's incredible everyone in the chat's gonna ask who you work for um but here's the way that i might think about it if i don't have a fully funded emergency fund.
47:46I get the$4 ,500 into the HSA. What I might do is in the interim, I might have it sit in cash. And I might think of that as part of my fully funded emergency fund as I'm building up cash, because a lot of the emergencies that we have when life comes our way are medical emergencies. Well, if you have money inside an HSA, you then have that money to be able to use. So what I would do is I would leave that in cash until I got to the point to where I had a fully funded emergency fund. And then once I get that three months, four months, six months, whatever it is for you, once I get my emergency fund fully funded, then boom, I go invest those dollars.
48:29So I let the dollars stay in there. I still get one of the tax – no, it's not a tax advantage because your employer put it in there. but I still have the money there ready and primed for future growth once I've completed step four. That's probably the way that I would think about it if my employer was putting that money in there. $4 ,500. I know. If that's truly just the employer putting it in, that's awesome. That's wild. Do you have to put anything in yourself? Is it a match? Or they're just loaded up? Yeah, you can let us know in the chat. Just load it up. Be interested. Well, David, if you would like a MoneyGuy Tumblr, just email winner at moneyguy.com.
49:04and just in case I don't know if I gave Chaos Medicine Tumblr for his question you can email winner at moneyguy.com in case I forgot to say that thanks for the questions I have it on good authority I haven't been as dialed into the chat today but apparently there were singles in the chat exchanging info. No there was not
49:27Connecting on LinkedIn that is so official. What if like two What if two or three years from now, we sit down with a Making a Millionaire guest, and their story was, it was the Money Guy show. In the Money Guy chat. Do you realize if Brian ever was able to have a Hallmark movie made after something that happened with the Money Guy show? Honestly. He would be happy just to imagine the Hallmark story, just to hear your story. It doesn't even have to be a movie. That's wild. He would love that. That's wild. no pressure, but fall in love and get married. Okay. Thank you. Awesome. Want to do another question?
50:07Yes, ma 'am. We've got one from Aaron Gray, 2660. It says, Hey, money guy, first baby coming in February. Okay. We've had several people in the chat say their first baby is coming soon. So congrats to everybody and congrats to Aaron. It says, if trying to do step five, how do we balance saving for our kids' intermediate goals, like for 529 versus gifting them the tools to make their own wealth like a car test prep etc so i think they're talking about like we have some money to save for our kids we say 529s a lot we talk about those what about saving for a car what about saving for bigger expenses test prep is interesting i've never heard that before yeah if you're one we hold the FOO up for me real quick?
50:54Yes. If you're in step five, that's like the Roth and HSA step. That's the step where you are building towards future financial independence and you're saving up tax-free dollars. So your question like, okay, where do 529s fall? Nowhere near there. 529s are like a step eight. So like you got to get through step five, through step six, into step seven, onto step eight before you start funding 529s. But then you threw in some other stuff there like, Like, hey, what about cars, test prep? What about giving them the tools to be able to build their own wealth? And I love the language that you use there.
51:28What I hope for all three of my kids is that I am able to instill in them, not this idea that mom and I have done well and mom and I have been able to build up to a certain level of wealth, but I want to instill in them, hey, these are the behaviors necessary so that I can build my own wealth and I can stand on my own two feet. I care a lot more about that than like, all right, let me put money in account for them and let me fund their 529. Let me do the, I mean, all those are wonderful things, but I want them to have those tools. And so I do think it's one of those things. You're going to have to know your own financial situation.
52:07I have a number of like friends that I grew up with. And the deal was, Hey, if you want a car, you got to go out and get it. And I have some that the parents said, hey, we'll get your car. And I have some, it was like a joint effort. So like you'll have to determine what's available and appropriate for your financial situation, for your family situation. I think there's short-term goals like test prep, cars. I don't remember what the other one was. I think that test prep, cars, etc. That's all they said. Yeah. I think that those are more like current expenditures that by all means, you want to set your kids up for success.
52:47I mean, it's so funny. When I was coming, you know, I've got a fairly unique background. I didn't know about test prep. Like no one ever told me that you could like study for the SAT. I don't even took the ACT, right? That wasn't popular where I came from, I guess. But I didn't know that was like something you could like prep for and do all this stuff. man it would have been awesome if I'd have known that right and so if you can like instill in your kids I found out I was 10 points on the SAT off of like unlocking tons of scholars well it doesn't matter I was 10 points off but you're I get it like you're saying like now there's so much information like people are so aware of that or depending on where you are economically and so if you have the if you have a mechanism to set your kid up for success in those there's absolutely you should do those.
53:35I do not think that those are in conflict with step five. Step five should be something you're already doing, putting money in the HSA, putting money in the Roth IRA, building up those tax-free accounts, and also figuring out how can I set my kid up with the tools and skills necessary to be able to make great decisions later on in life. Yeah. And I think it is interesting, like with cars, like you just mentioned, not to just repeat, but how you're getting creative with your oldest daughter about potentially doing like a third, a third, a third. So she has the experience of having a car payment, has to save up a little bit of money.
54:08So there are other, I don't know, there is some creativity that could go into these two and you could do a little of all, if you will. So I don't know. I thought that was an interesting question and good answer from you. The other thing I love about this third, a third, a third thing, because I've spent a lot of time thinking about this. I'm going to charge 0 % interest because I don't need to collect interest on her, but she's going to have a fixed payment and I'll probably be for three years because I want her to follow the my guy rules. 23.8. But I'm going to like, I want her to know she doesn't babysit now.
54:37She's too young for that. But imagine one day babysitting a wife. I want her to think, holy cow, if I want my car this month, I got to go work so that I can pay mom and dad so that I can keep my keys. And I want to like instill in her that like, yeah, there's a, there's a necessity for us to work, to be able to do the things that we want to do. Money is not a goal. It's a tool that allows us to achieve our goals. And for most 16 year olds, one of their goals is having a car and being able to keep their keys. And so I'm just really excited about getting to like navigate that. And what's awesome about having multiple kids is once I screw this up with the first kid, by the time it gets to two or three, I'll know the right way to do it all.
55:15As a middle child, I do feel like my older sister got the run of the deal sometimes. That's right. That's really funny. All right. Aaron Gray, Okay, 2660. If you would like a MoneyGuy Tumblr, just email winner at moneyguy.com. Thanks for the question. We appreciate it. All right, next question is from Dr. Bode07. He says, I'm 36 years old, single income family of four. I only have 401ks. How do I get past the fear of messing up getting a Roth IRA or a spousal Roth IRA? I think he means getting it wrong. Investing is very intimidating to me. Well, okay, let me answer the second part of the question first.
56:05Investing in and of itself doesn't need to be intimidating because the world has made it so easy. This is one of the reasons why we love target retirement index funds. If you can answer two questions, how much can I save? When do I need the money? You've answered everything you need to know when it comes to investing. So if you're 36 years old, let's say that you want to work for another 30 years, 2025 plus 30 is 2055, right? I'm always so nervous about doing that math. That's 2055. Go look up a target retirement index fund. You could do Fidelity, Vanguard, Charles Schwab, fill in the blank. Target retirement index fund, 2055, and you just put the money in there, right?
56:44That's an easy way. You're going to have an allocation right now. It's 30 years out. It's going to be more aggressive. And then as it gets closer and closer, it'll get more and more conservative. So don't let that be the hindrance. Like investing is intimidating. Don't let it be intimidating. If you can answer those two questions, then you can invest. Now, when it comes to the Roth and spousal Roth, let me make it easy for you. If your income is under a certain threshold, well, here's your single income household, only you work. A lot of people don't recognize that even if your spouse does not work, you can contribute to an IRA, not only for yourself, but also for your non-working spouse, so long as the total income you make is high enough to max both amounts.
57:25So, you know, if the limits are$7 ,000 a year for Roth, so long as you make more than$14 ,000, you could put$7 ,000 in your Roth and you can put$7 ,000 in your spouse Roth. It's not any harder than that. So like if you're under the income thresholds to be able to contribute directly to a Roth and it's like, I don't know,$250 ,000, the numbers change. It's you make under that amount, then you can just put money directly in a Roth. Go open a Roth, go open a Roth for your spouse and dump the money in. If you make more than that, that is where it gets a little more nuanced. It is where it gets a little more complicated and you can do what's called the backdoor Roth, where you can open a traditional IRA.
58:05You can make a non-deductible contribution, which means you put money in there and you just don't take a deduction on your tax return, and then you can convert that to Roth. And it will be a tax-free conversion, assuming you don't have any other IRAs, no SEP IRA, no simple IRA, no traditional IRA, no IRA rollover. So long as you do not have those, then you can do a tax-free Roth conversion. If you do have those, well, then it gets a little more messy. But you've already said to me, Dr. Bode, that you only have 401ks and assuming that you didn't roll over those old 401ks in an IRA and they're still in the 401k structure, then doing backdoor Roth is not something incredibly difficult for you.
58:49I understand the apprehension. That's why if you go to our website, go to moneyguy.com and just type in backdoor Roth, just type that in on our search function. You'll be amazed at the articles, at the videos, at the tutorials, at all the stuff that will come your way that will help walk you through the right and accurate way to do it without running afoul. It does not have to be difficult. Don't let lack of desire to do a smidge of research be the thing to miss out on a great opportunity. I had to call the prospect yesterday. I was considering hiring the firm. And I was like, man, here's what I'm so nervous about if you don't hire us.
59:31I just told you that you were prime cancer doing Backdoor Roth and you haven't done it for this many years, I'm nervous if you don't hire us, you're not going to do it. You might need to hire us just so that we can continue to like prod you forward to go take advantage of this planning opportunity. It sounds like Dr. Bo, you might be in that same exact position. Yeah. Some resources for you. Like Bo said, go search Backdoor Roth or Roth on our website, moneyguy.com. We also do have an ebook all about Roth IRAs, if you just wanted to like read up and feel more confident, go to learn.moneyguy.com.
1:00:04And then like Bo said, if you truly are getting to that complexity point where you feel like you should just explore and maybe talk to somebody, see if you need that extra set of eyes, that extra help, you can click on become a client at moneyguy.com. So basically go to moneyguy.com, have all your problems solved. No, that's not actually true. But there is a lot of amazing resources there that really can point you in the right direction and hopefully make this a little bit less intimidating because there is just such opportunity here that we would hate for you to miss if it's available to you.
1:00:35Man, this was a fantastic 2025. We could not do this without you guys. If you guys didn't show up, if you didn't watch the show, if you didn't tune in, if you didn't subscribe, we wouldn't be able to do it. We'd still do it. Just not as many people would know about it. And so we're so eternally thankful that you guys allow us to be part of your financial journey. Our commitment to you is if you keep showing up, we will keep delivering information so that you can do money better. I hope you all have a wonderful close to 2025 and an amazing start to 2026. For Brian, for me, for Rebe, for the entire MoneyGuy team, Happy New Year.
1:01:17MoneyGuy team out. The MoneyGuy show is hosted by Brian Presson and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities laws and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through The Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice.
1:01:48All investments involve a degree of risk, including the risk of loss.
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