Retire Rich The Ultimate Guide to IRAs, 401(k)s, & HSAs!

Summary

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Podcast Summary: Earn Your Leisure

Episode: Retire Rich: The Ultimate Guide to IRAs, 401(k)s, & HSAs!
Hosts: Rashad Bilal, Troy Millings
Release Date: May 26, 2026
Produced by: iHeartPodcasts

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Episode Overview

This episode is a comprehensive masterclass on retirement planning, focusing on understanding and maximizing IRAs (Traditional and Roth), 401(k)s, HSAs (Health Savings Accounts), and related retirement vehicles. The hosts break down key concepts, explain tax implications, and provide actionable advice to help listeners build wealth and avoid crucial pitfalls on their journey to financial independence.

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Key Discussion Points & Insights

1. Retirement Account Options: IRAs, 401(k)s, and Beyond

[02:14 – 04:56]

• Types of Accounts:
  • Traditional IRA & Roth IRA: Explained differences, eligibility, and contribution limits.
  • 401(k), 403(b), 457: Catered to different employment types (W-2 jobs, educators, public sector).
  • Health Savings Account (HSA): Underutilized but powerful for both healthcare and retirement saving.
• Contribution Limits:
  • For Roth IRA in 2026, $7,000/year; additional $1,000 “catch-up” if over 50.
• Investment Vehicles:
  • Beyond stocks and ETFs, listeners should have both standard brokerage and Roth IRA accounts.

“There’s never no knock to investing, but [IRAs] have caps, they have limitations, they have income limits…” – Chris [02:34]

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2. The Power and Strategy of HSAs

[04:56 – 07:35]

• HSA Benefits:
  • Tax-deductible contributions lower taxable income.
  • Invest unused HSA funds in mutual funds—potential for significant growth.
  • Dual benefit: pay for health expenses now; if untouched, grows like a retirement account.
• Withdrawal Rules:
  • Funds used for non-medical expenses before age 65 incur penalties.
  • After 65, funds can be withdrawn penalty-free for any use (taxed like a traditional IRA if not used for health), effectively acting as a backup IRA.

“That’s a game changer for me… If you invest inside that HSA, it reduces your taxable income. That money, if not used, is there growing on your behalf.” – Chris [05:02]
“If you don’t use [your HSA] for medical expenses, you can use it after 65 without getting penalized… it’s another form of retirement.” – Rashad [06:36]

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3. The Power of Early and Aggressive Retirement Contributions

[07:35 – 11:03]

• Mindset Shift:
  • Don’t default to the minimum contribution; start as high as feasible, especially when young.
  • “You can’t miss what you never had”: Increase retirement allocation before you get used to your take-home pay.
• Real Stories:
  • Chris shares how he realized his wife’s aggressive allocation gave her a bigger nest egg, stressing the importance of early, intentional planning.
• Practical Advice:
  • Adjusting contributions is as easy as contacting HR—do it as soon as possible.
  • Start high (12–15%), scale back if needed later due to life changes.

“The earlier you can do these things, take advantage of all these vehicles, the bigger your pot will be, the bigger your nest egg will be…” – Chris [08:19]
“Do it as early as you can. Your future self will thank you later.” – Chris [10:58]

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4. Making Investing Simple: Target Date Funds & Tax Implications

[11:03 – 13:35]

• Target Date Funds:
  • Easy option for beginners—automatically adjusts from aggressive to conservative as the target retirement date approaches.
• Roth vs. Traditional Accounts:
  • Traditional: Tax benefits now, you pay taxes at withdrawal.
  • Roth: No tax break now, but withdrawals (including earnings) are tax-free in retirement.
  • Huge tax impact: $1 million 401(k) withdrawal may only yield ~$600,000 after taxes vs. full $1 million with a Roth.
• State vs. Federal Taxes:
  • Many retirees move to tax-friendly states like Florida, but federal tax still applies.

“If you have a million dollars in retirement [401(k)] and you took out that whole million at one time… you would get like $600,000 net because that is fully taxable…” – Rashad [12:41]
“If you have the Roth… you would get $1 million because it’s not taxable.” – Rashad [12:56]

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5. Capital Gains & Tax Awareness for Investors

[13:35 – 14:35]

• Selling Investments:
  • If you sell within a year, you pay short-term capital gains (taxed like income).
  • Hold longer than a year: Lower long-term capital gains rates (typically 15%–20%).
• Critical Tax Knowledge:
  • Many new investors are surprised by large tax bills if they actively trade or don’t plan for taxes.
  • Big difference between gross profit and post-tax profit.

“You don’t want to put the profits… into your account and say, ‘Oh, this is all profit.’ No, there’s a percentage of that that’s going to be for taxes.” – Emanuel [13:57]

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Notable Quotes & Memorable Moments

• On Mindset:
  “You can’t miss what you never had… If you get that mindset early, you’re off into the races.” – Chris [08:52]
• On HSAs as Retirement Vehicles:
  “It’s like a double-edged sword where you save for retirement also if you don’t use it.” – Rashad [07:05]
• On Tax Surprises:
  “You do a lot of like trading or selling stocks and you don’t realize that you’re racking up a tax bill and then at the end of the year you like, ‘Damn, I got to pay taxes. I didn’t even know I had to pay taxes on this.’” – Rashad [13:25]

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Key Takeaways (Quick Reference)

• Start retirement contributions early; increase percentages while you have low expenses.
• Explore all available retirement vehicles: don’t overlook HSAs and their tax benefits.
• Use target date funds if overwhelmed by options.
• Understand the big difference in tax outcomes between Roth and traditional accounts.
• Track capital gains, and remember that taxes impact real investment returns.

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Timestamps for Important Segments

| Topic | Timestamp | |--------------------------------------------|------------------| | Types of Retirement Accounts | 02:14 – 04:56 | | HSA Strategy & Benefits | 04:56 – 07:35 | | Early Contribution Mindset | 07:35 – 11:03 | | Target Date Funds & Roth vs. Traditional | 11:03 – 13:35 | | Capital Gains & Tax Considerations | 13:35 – 14:35 |

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By blending in-depth financial lessons with practical, real-life applications and memorable stories, this episode offers a valuable playbook for anyone hoping to maximize their retirement future.

Transcript

[Chris]

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[Chris]

just got less painful IRAs and retirement accounts. What are the options? Guys, these are things. Rashad alluded to this. You have some of these already. Some of you have been investing blindly and passively just through your job and dollar cost averaging. So some of the things we talked about in our lesson today you have been doing just by Happenstance. Traditional Roth IRA. Roth IRA are some investment and retirement accounts. You have your 401k. You guys all may be familiar with that. If you have a W2 type of job, your 403B, myself and Troy, we were former educators and so we know about the 457. You got, your health savings account. You have various IRA and retirement vehicles to invest in. Let me break down this traditional Roth ira, okay? And the Roth ira, these two vehicles, okay? The. Not that there is a knock, there's never no knock to investing. But they have caps, they have limitations, they have income limits, okay? And so if you make a certain amount over a certain threshold, then this might not be readily available to you. You might have to do a Roth conversion, okay? You have to do something different. But a Roth IRA is after tax dollars that you guys will be investing. So after your money has went into your work 401k that they automatically debited out of your account into your retirement. Hopefully you got that at least 7% or 15%. We got to do better with our allocation, okay? After tax dollars would then go into your Roth ira, similar to what Rashad told you guys earlier with. With you need to get your own brokerage account. You gotta have inside that brokerage account a Roth IRA as well. So that you can put up to the limit, which this year, $7,000 into that. And if you're over 50, you can put up another thousand which would get you up to $8,000 on a year. And so these are other things you can do in addition to your stocks, in addition to your ETFs, in addition to trading options, in addition to your money markets. These are things you can do as well on the wealth building journey even as a beginner.

[Rashad]

Yeah. And the HSA thing is something that people don't talk about a lot either.

[Chris]

Because they don't.

[Rashad]

That's important to know.

[Chris]

That's a game changer for me. The HSA Health Savings account guys, just so you know the acronym Health Savings Account. So whether you're married and or single, if your insurance has a hsa, a health savings plan, you can use the money to take care of doctor bills, appointments, co pays. But whatever money isn't used, the HSA invest in it invested for you. Inside some of their allocations, they have mutual funds that you can pick from Growth tech. Some of the things Rashad told you guys about earlier, Growth tech, you can do energy, you, they, they have it all inside the hsa. Just type Health Savings account, okay? And you will see like healthequity.com will come up. You will see certain things come up. And if you Invest inside that. I know being married, we can put up to seven, a little over 7,000, maybe 7,800 a year into this. And guess what guys? It reduces your taxable income. Okay? So that's, there's another way for on that front for you guys to also be doing the right thing by your money. Doing right by your money, but also reducing your taxable income. And that money, if not used for a copay, simply is there growing on your behalf. And that can snowpile pretty big for those of you that, that stay on top of your health and wealth.

[Rashad]

You can use it. You can 65. So if a lot. That's gonna be a question people like, well, if I don't use. You're supposed to use it for medical expenses. If you don't use it for medical expenses, if you can use it after 65 without getting penalized, yeah, it's like it's another form of retirement, right?

[Chris]

Another. Another form.

[Rashad]

It's saving money that you have to pay like a deductibles or like you said, out of the pocket medical expenses. But it's invested in the market. But as that's growing, if the money that you don't spend. So if you're 65 years old and you have a hundred thousand dollars in your HSA now, that effectively is like another IRA for you because you can use that for your retirement without getting penalized. So if you use it before that for anything other than medical expenses, you get penalized. But if you use it after 65, that's important for people to fully understand. So it's a way to definitely kind of hedge with the medical aspect of it. But also it's like a double edged sword where you save it for retirement also if you don't use it.

[Emanuel]

Chris, you brought up something in terms of education. I was both being education about maximizing these allocations. Now at 25, I'm fresh into the game. I'm about to make 65, 000 for the year. 70 at the. You're not thinking, hey, I should take the largest percentage. It's like, all right, what's the lowest I could put 3%. I'm gonna do that. Talk about the mindset and the shift because people are looking like, what can I do right now? Like this is something that you can go to your HR department like on Monday, right, And say, hey, I want to actually max out my 403B. Talk about the importance of that. Because I don't think people really understand it. There's that one guy that Comes once a year to talk to you about it at lunch and you never see him. And then you just forget about it. Talk about the importance.

[Chris]

It's so important because time is our greatest asset. And so the earlier you can do these things, take advantage of all these vehicles, the bigger your pot will be, the bigger your nest egg will be when it's all said and done. So listen to this. You can't miss what you never had. You can't miss what you never seen. If you take that allocation that they're going to by default have it at between 1 and 3%, if you move it to 7% or 15% and you get used to living your lifestyle around what your check will then be, when that comes to you every two weeks or however you get paid, you won't miss it because you didn't see it. It's only when you see, oh man, my check, $3,000, you think you got $3,000 to spend, okay? But if you never seen 3000 or whatever your check may be, because it is going to something that's going, your future self is going to thank you for, that's how you get ahead of the game. And so the earlier, if you're 24 years old and you're seeing this, the earlier you can go into your employer, your place of employment and tell them, if I'm receiving a 401k contribution, can you make sure my allocation Is at least 7 to 12%? 15% is on the higher end, but that would even be good if you can make that shake. If you're still living at home and you don't have your mom is letting you do your thing, you not having a whole bunch of responsibility, put it at 15 until you get your own place and then scale it back down to seven. But you can't miss what you never had, okay? And so if you get that mindset early, you're off into the races, okay? For me, it kind of clicked when I was around 27, between that 27 and 29 year range for me. Know what I'm saying? But listen to how it happened though. My wife, I saw her 401k killing mine. I'm looking like, what, what am I doing? My allocation was poor. My allocation wasn't where it needed to be. I'm looking like, man, I've been, I was an administrator in higher education for 10 years. I'm. What am I doing? My investments, because of what I was controlling, blew my edge. Higher education job, which was good benefits, it blew those and they blew that 401k and out the, out the water. That showed me the importance of man. My wife retirement was way higher than mine simply because hers was like at 12 or 15, the whole 10 years she was in the health field. And so Troy brought it up, but it's need to be said, do it as early as you can. Your future self will thank you later.

[Rashad]

And then also before we leave this topic, it's important people to understand the 401k, 430B457. Like they'll give you a bunch of different options. A lot of people don't invest because they, they don't know how to go about and they're intimidated. One of the easiest ways is to pick a target date fund. So a target date fund is, it calculates your age and the age that you would be like around 60 or close to retirement. So it might be 20, 30, 2040, 2050. Depends on how old you are. And the whole theory with retirement plan is that you got to be aggressive when you're young and conservative when you get older. So it automatically changes over the course of time. So that's a very cookie cutter easy approach to take. If you, if you are like unsure of like 20 different options that you have available to you, the target date is, is something that is recommendable. I rec. I used to recommend it when I was an advisor. It's like that's something that is kind of does the work for you and you don't have to like worry about changing it every five years and switching the allocations. And then sometimes you have a rough 401k component too. In your job that's important to ask because the raw, the difference between the rough and the traditional is that one takes money. You save money today, which is a traditional one, you save money later, which is the raw. So it depends on your situation. But if you have, let's say a million dollars in retirement and you took out that whole million dollars at one time from your 401k, you, you would get like 600000 net because that is fully taxable. So that's important for people to fully understand. Especially when you think about your retirement. You think that you got a certain amount of money, but you, you don't, you don't realize that that's taxable. State and federal tax. That's why a lot of people move to Florida when they retire, because, because there's no, there's no state tax. But regardless of where you live, you still gotta pay federal tax. But if you have the Roth, if you have a million dollars, hypothetically, and you took out all a million dollars at one time, you would get $1 million because it's not taxable. But you didn't, you didn't get a tax benefit when you put the money in today. So that's important for people to understand as far as the tax, because we didn't talk about taxes at all. But even like capital gains, short term, long term, that, that's important for people because it's like you do a lot of like trading or selling stocks and you don't realize that you, you're racking up a tax bill and then at the end of the year you like, damn, I got to pay taxes. I, I didn't even know I had to pay taxes on this. Like, I kept it in my brokerage account, I didn't put it in my bank account. But if you sell a stock, you pay capital gains tax on that stock.

[Emanuel]

Yeah.

[Rashad]

You don't pay capital gains tax on your retirement, but you do pay federal estate tax if it's not a Roth. So understanding that is important because you don't want to get like 20 years down the line and it's like, damn, I wish I had a Roth because now I gotta pay hundreds of thousands of dollars because I have millions of dollars in my 401k.

[Emanuel]

Yeah. Or, and you don't want to put the profits if you're talking about stocks into your account and say, oh, this is all profit. No, there's a percentage of that that's going to be for taxes. If it's been with, if you sold it within a year and a day, that's going to be short term capital gains. And, and depending on your tax threshold, that's the allocation that you're gonna have to pay for it. If it's over a year and a day, it's long term. And again, there's a cap on that. I think it's like 15% for the most part. But sometimes it does go up to 20. But that's a big percentage, Right? I know in the short terms it can get up to 30, 37 to 39%. So you're talking about a 20% difference if you just hold long term. That's why we always stress it.

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[Chris]

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