How to Money Podcast Episode #1042: Ask HTM – Break-Even Bank Switch, Doubling Down on a 457b, & Financing an ADU for Extra Cash

Date: September 29, 2025
Hosts: Joel & Matt (iHeartPodcasts)

Episode Overview

In this engaging listener Q&A episode, Joel and Matt tackle a variety of personal finance topics including:

• Optimizing Health Savings Accounts (HSAs) and high-yield savings for maximum returns
• Weighing the pros and cons of moving large sums between banks for better APY
• Navigating dual workplace retirement accounts (403b vs 457b) for public sector employees
• The ins and outs of early vs delayed Social Security claiming strategies (with new legislative updates)
• Financing accessory dwelling units (ADUs) to boost retirement income
• Affordable healthcare options for self-employed families
  The hallmark “frugal or cheap” debate opens the show, setting a friendly, conversational tone, and each listener scenario is handled with practical wisdom, nuance, and actionable tips.

Key Discussion Points & Insights

1. Frugal or Cheap: Transplanting Native Plants

• [05:01] Matt and Joel debate whether it’s “frugal or cheap” to transplant native seedlings from public land into your own yard.
• Matt sees saving native plants (destined to be destroyed by maintenance crews) as environmentally positive and cost-effective:

  “I’m not only saving myself money, but I am preserving the local plant scene. I don’t know what you would call it, maybe like Captain Planet, but for your neighborhood” – Matt [09:01]

• Consensus: Frugal – especially if it's not for commercial use. Mixed feelings about florists for-profit picking.

2. Listener Question: HSA Optimization & Bank Interest Rate Chasing

A. Should I Move HSA Assets to Fidelity for Lower Fees & Better Investments?

• [10:35] David from Virginia asks if he should transfer his HSA from a high-fee employer plan to a self-managed Fidelity HSA.
  • Both recommend the move. Most employer HSA plans are fee-heavy and offer poor investment options.
  • Fidelity is praised for being low-fee, with excellent investment selection:

    “Fidelity remains the best, I think, for many reasons.” – Matt [13:07]

  • Use a “trustee-to-trustee” transfer process. No limitation on frequency, but beware of recurring outgoing transfer fees; don’t move money too often if fees stack up.

B. Should I Chase Higher APY for Large Cash Balance?

• [11:16] David also asks if it’s worth moving $220k (from a recent property sale) from Ally (3.5% APY) to CIT (4% APY).
  • For six-figure balances, small APY differences are “worth sweating” and can yield thousands over a year.
  • For average savers ($10–20k), rates matter less.

  “If you’ve got 200 grand in savings, yeah, you probably do want to sweat those details.” – Joel [20:23]

  • Online banks like Ally are user-friendly; if you love their features, it might justify a slightly lower rate. Consider short-term CDs as a hedge against falling rates.
  • Taxes from the home sale should not be overlooked before committing all funds.

3. Listener Question: 403b vs 457b for Public Sector Retirement

[26:14] – Terri from California

• Career public sector worker with pension, Roth IRA; asks: invest in 403b or 457b (or both) through Fidelity?
  • Both accounts are great when offered by a low-cost provider like Fidelity.
  • Always prioritize the account with an employer match first—usually the 403b.
  • After maxing a match, the 457b becomes preferable for next-tier savings, because:
    • No early withdrawal penalty (unlike 403b/401k) – flexibility for early retirees
    • Unique “Three-Year Double” (special catch-up) provision lets late savers supercharge contributions before retirement

  “Being able to take money out of [the 457b] early without the IRS hassling you in any way...is a clutch feature.” – Joel [32:15]

• Both accounts can be used together for super-savers. But don’t let saving overtake living—balance present enjoyment with future security.

4. Listener Question: Early vs. Delayed Social Security (After Pension Offset Rule Change)

[37:05] – Ron from Ohio

• Early 60s, wife is a retired teacher; with the repeal of the government pension offset, is it better to claim Social Security early (let IRA keep growing) or wait for bigger checks?
  • The classic trade-off: Claim now (IRA grows, less time for higher SS payments) vs. Claim later (lock in 8% guaranteed annual increase to SS check).
  • If healthy and with a history of longevity, delaying Social Security gives larger survivor benefits.
  • For bequests: You can leave IRA money to heirs; SS ends with you.
  • New Social Security Fairness Act (2024): Teachers and other public workers no longer see SS checks reduced due to their pension—this is a big positive for Ron’s wife.
  • For complex cases, invest $50 in Maximize My Social Security (recommended by the hosts) for tailor-made strategy.

  “That fifty bucks is well spent; it could really be the difference between tens of thousands of dollars in your pocket...” – Joel [48:08]

5. Listener Question: Should I Use a HELOC to Build an ADU for Extra Income in Retirement?

[52:58] – Gail via Facebook Group

• Planning to retire, wants to tap home equity with a HELOC to build an Accessory Dwelling Unit (ADU) that will (hopefully) cover its own loan payments from rental income—expected payoff within 5 years.
  • Hosts approve of the strategy, emphasizing:
    • Get realistic cost and income numbers first (don’t use overly optimistic estimates).
    • Short-term rental (Airbnb) could boost returns but requires more work; long-term rental is lower maintenance.
    • Ensure sufficient project funding—unexpected costs can extend payback timelines.

  “If you take out a HELOC, paying it off in short order is ideal...get a firm number in hand before you sign off.” – Joel [56:44]

  • Extra income stream can be a “game changer” for retirees and aid with gradual transition out of the workforce.

6. Listener Question: How Are Self-Employed Families Affording Healthcare?

[57:58] – Anonymous via Facebook Group

• Family of four, one self-employed, considering leaving employer health insurance to become a one-income family.
  • Small business owners have few good options on the ACA marketplace—premiums can be “stratospheric.”
  • Health sharing ministries are a common choice among self-employed; Matt shares personal numbers:
    • Family of six, monthly “share” is $375 (like a premium), with a $12,000 annual “household share” (like a deductible).
    • Out-of-pocket expenses for the past decade averaged $289/month, including two childbirth years (which cost ~$9-$10k).
  • Key caveats:
    • Health sharing is not insurance and is not federally regulated.
    • Faith-based eligibility or, for non-religious families, look for a secular sharing program like Sedera.
  • The high cost of tying healthcare to employment is seen as a major obstacle to entrepreneurship and family flexibility.

  “It disincentivizes entrepreneurship in this country...it’s the biggest reason, Matt, that I hate that healthcare is tied to employment.” – Joel [62:41]

Notable Quotes & Memorable Moments

• On transplanting native seedlings:

  “I’m not only saving myself money, but I am preserving the local plant scene...maybe like Captain Planet, but for your neighborhood.” – Matt [09:01]

• On Social Security timing:

  “You could begin to tap some of your investments for income now in order to guarantee yourself a higher Social Security payment down the line.” – Matt [41:41]

• On 457b vs 403b flexibility:

  “Being able to take money out of that account early without the IRS hassling you in any way about those withdrawals is a clutch feature.” – Joel [32:15]

• On health sharing:

  “Some folks are literally paying $375 a month for a family of six...our family household share, which is code for deductible, is $12,000...” – Matt [60:03]

• On using Maximize My Social Security:

  “That fifty bucks is well spent; it could really be the difference between tens of thousands of dollars in your pocket over the decades to come.” – Joel [48:08]

• On entrepreneurship & healthcare:

  “It disincentivizes entrepreneurship in this country, so this is something we really need to figure out...” – Joel [62:41]

Timestamps for Key Segments

• Frugal or Cheap: Native Seedlings – [05:01]
• HSA Optimization & Bank APY Switching – [10:35]
• 403b vs 457b Strategy – [26:14]
• Social Security Claiming Strategies – [37:05]
• Financing an ADU w/ HELOC – [52:58]
• Affordable Healthcare for the Self-Employed – [57:58]

Tone & Style

Staying true to How to Money’s signature style, the conversation is accessible, friendly, and sometimes irreverent—packed with genuine encouragement and helpful, jargon-free advice. The hosts blend personal stories, banter, and solid expertise to create a practical, upbeat resource for listeners at all stages of their financial journey.

For more links, calculators, and resources from this episode, visit howtomoney.com.