How to Money — Episode #1078

"Ask HTM - Caring for Parents, Dreaming of Partial Retirement, and Paying Extra on the Mortgage"

Date: December 22, 2025
Hosts: Joel & Matt
Podcast: iHeartPodcasts

Episode Overview

In this listener Q&A episode, Joel and Matt tackle real-life money questions with practical, thoughtful advice. The main topics include financial strategies for supporting aging parents abroad, making smart retirement account choices in the "messy middle" of your career, optimizing mortgage payments, and navigating employer retirement plans after a job change. As always, the hosts root their answers in purposeful, jargon-free guidance—seasoned with relatable stories, conversational humor, and craft beer commentary.

Key Discussion Points & Insights

1. International Family Responsibilities and Financial Planning

Listener: Rajat (Denver, CO) [10:56]

• Situation: Rajat may need to move from the US to India soon to take care of aging parents. He wonders how this uncertainty should affect his investments, retirement, and savings strategies.
• Context:
  • Age: 30, married, no kids yet, plans to start a family soon
  • Income: ~$200,000/year
  • Adequate emergency savings, no credit card debt, wife has $13k student loan (low rate), planning to buy a home in India for parents

Advice & Insights:

• Build Further Flexibility
  • Matt: “Amassing more investments and having that liquid cash is going to give you… the ability to make the life changes you need to make…the ones you truly just want to make here.” [17:32]
  • Both advise strengthening cash reserves beyond the six-month emergency fund for maximum flexibility.
• Invest in Flexible Accounts
  • Joel: “On the investment side, that would also mean putting money into accounts that have more flexibility—Roth IRA, HSA.” [20:10]
  • After getting any 401k employer match, prioritize accounts with easier access to funds (Roth, HSA, then taxable brokerage).
• Cost-of-Living Advantage
  • Matt: Living expenses in India are often much lower; US dollars stretch further—factor this into decisions.
• Working Remotely
  • Both discuss the potential to maintain US-based remote work, especially if Rajat works in a global company or flexible field.
  • “You’re not gonna go from making $200k to zero. I’ve just got a feeling that you’re going to be able to provide yourself some sort of income…” — Matt [22:40]
• Minimizing Obligations
  • Joel: Working to “simplify your finances, having fewer monthly obligations,” such as paying off the home loan and student loans before moving, increases flexibility and lowers stress. [22:56]
• Relationship Consideration
  • Matt: “I just would be paying special attention to your wife and just y’alls relationship…so that you’re not just constantly preparing for something vague in the future.” [23:55]
• Big Picture:
  • The ability to care for family is a core financial goal—saving and investing buys not just ‘stuff’ or vacations, but real-life flexibility in moments that matter most.

2. Roth vs. Traditional: Retirement Account Optimization in the "Messy Middle"

Listener: Ethan (Denver, CO) [29:11]

• Situation: Married, filing jointly, 24% tax bracket, maxing Roth IRA (via backdoor), contributing to a Roth 401k. Unsure whether to continue paying upfront tax for Roth contributions or to switch to traditional as income rises; dreams of “partial retirement” one day.

Advice & Insights:

• Default Recommendation:
  • Matt: “A Roth IRA and a traditional 401k is what we typically recommend.” [29:58]
  • This combo gets the “bird in the hand” (Roth certainty—no future taxes) alongside pre-tax savings (401k).
• Why This Mix?
  • Joel: “The further along you get in your career…the more that your income goes up, the more traditional can make sense. For people who are incredible savers and investors, you might find that [your retirement] effective tax rate is higher…” [31:27]
• Account Flexibility & Tax Bracket Unknowns
  • The future is uncertain; the Roth/traditional blend gives options, especially for partial retirements, early retirements, or Roth conversions during lower-income years.
• Notable Quote:
  • “You don't have to nail it perfectly…you still can partially retire in the future.” — Matt [34:30]
• Other Points:
  • Having both types of accounts allows you to “choose your own tax bracket in retirement based on which account you draw from and when and how much.” — Joel [35:56]
  • Don’t over-optimize; focus on overall “lifetime tax reduction.”
  • Be aware of the difference between marginal and effective tax rates.
  • Maxing a Roth IRA actually means investing more post-tax dollars.

3. Donor-Advised Funds for Small Nonprofits/Churches

Listener: Mary (South Carolina) [39:54]

• Situation: Mary’s small church only takes cash/check donations, which feels risky and inconvenient. Can she donate through a donor-advised fund (DAF) instead?
• Advice & Insights:
  • Most DAFs (e.g., Daffy) can send physical checks on your behalf to any registered nonprofit, large or small.
  • Matt: “You just have to be a registered 501(c)(3), and they can by default accept donor-advised fund money.” [45:48]
  • If your organization isn’t listed with the DAF, most platforms let you submit the nonprofit’s EIN and info to add them.
  • DAFs make larger, lump-sum giving easy, and the church receives a check (their preferred method).
• On Modernizing Church Giving:
  • The hosts encourage small orgs to consider digital donations (Tithely, Givelify) but acknowledge that checks still work for many.
  • Notable moment: Matt laughs about Web 3.0 tech names for old-school church tithing (Tithely, Givelify) [42:01]

4. Should You Pay Extra on a 3.5% Mortgage?

Listener: Paul (Facebook group) [50:50]

• Situation: Fixed 3.5% mortgage; currently making one extra payment a year to pay off early. Considering instead putting extra money into retirement accounts.
• Advice:
  • Strongly recommend NOT paying extra. At a 3.5% rate, investing in Roth IRA or 401k will almost certainly outperform mortgage prepayment over time.
  • Joel: “I just don’t see any reason to accelerate mortgage payoff. Investing in the accounts that Paul mentioned is a far better option.” [52:30]
  • Even high-yield savings accounts currently outpace his mortgage interest with zero risk.
  • Matt: “You’re talking about a 3.5% mortgage I would consider even calling a gift at this point in time.” [54:04]

5. What To Do With Your 401k When You Leave Your Job

Listener: Ezra/ESRA (Facebook group) [54:19]

• Options:
  • Leave it with old employer
  • Roll to IRA
  • Roll to new employer’s 401k
• Guidance:
  • All are valid; main factors are provider investment options, fees, and personal preference.
  • If old/new plan is with a great provider (Fidelity, Vanguard, Schwab) and offers low-cost funds, keeping it there is fine.
  • IRA provides full control, but if you plan to do backdoor Roth contributions, having no IRA balance is preferable (to avoid pro-rata rule).
  • Don't ever cash out unless absolutely necessary (and Ezra already knows that!).
• Personal anecdote: Joel still keeps his 401k with a former employer because the plan is with Vanguard and offers excellent options.

Notable Quotes & Memorable Moments

• On Perks Tied to High-Cost Services:
  • Joel: “It’s like they can continue punching you in the stomach while they look at you lovingly in the face. That’s exactly what this offer feels like.” [04:53]
• On Loss Aversion & Interest Rates:
  • Matt: “Loss aversion…is when you feel a loss twice as hard as an equivalent gain. That’s what’s going on here.” [07:03]
• On Multi-Generational Households:
  • Matt: “For kids to grow up with their grandparents…for them to truly get to know the kids. I didn’t have that.” [15:42]
• On Money’s Ultimate Purpose:
  • Joel: “Money isn’t just to buy your own freedom, or to buy fancy vacations…but it can really facilitate the kind of life you want to live, especially with your family.” [18:48]
• On Over-Preparing for Uncertainty:
  • Matt: “I also can picture a very frustrated wife who’s like, ‘Hey, when are we gonna live our life?’…Only you know how to strike that balance.” [23:56]
• On Roth vs. Traditional Dilemma:
  • Matt: “You don’t have to nail it perfectly. It is very unlikely you’re going to hit it right on the nose, and you still can partially retire.” [34:30]
• On Young Saver Dilemmas:
  • Joel: “If you’re just starting out, income is meager, the Roth is the way to go…As you ramp up your income…traditional makes even more sense.” [35:56]
• On Modernizing Giving:
  • Matt: “You got these Web 3.0 names for these old traditional actions.” (re: online tithing platforms) [42:01]
• On Low-Rate Mortgages:
  • Matt: “This 3.5% mortgage…I would consider even calling a gift at this point in time.” [54:04]
• Running Jokes:
  • Dumb & Dumber references (twice); Joel’s affection for Jim Carrey [33:09, 33:22]
  • Hosting with craft beer (“This one…is a lager with spruce tips…what a perfect time of year!”) [09:34]
  • Matt did the "cinnamon challenge" as a high schooler (“…you spend the next day hacking your lungs out…”) [59:23]

Timestamps for Major Segments

• 10:56 — Caring for parents abroad & international moves (Rajat)
• 29:11 — Roth vs. Traditional (“Should I Roth?”) (Ethan)
• 39:54 — Donor-advised funds & giving to small churches (Mary)
• 50:50 — Should you pay extra on a 3.5% mortgage? (Paul)
• 54:19 — What to do with your 401k after leaving a job? (Ezra/ESRA, Facebook group)

Tone & Style

Friendly, practical, and approachable. Both hosts use humor, pop culture, and personal anecdotes for relatability, while still delivering actionable and clear financial advice.

For Further Info

• Show Notes & Links: howtomoney.com
• Submit Questions: record a voice memo and email to howtomoneypodmail.com, or visit howtomoney.com/ask

Best Friends Out!