Ask HTM - Caring for Parents, Dreaming of Partial Retirement, and Paying Extra on the Mortgage #1078

Summary

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!

Transcript

[Matt]

This is an iHeart podcast.

[Joel]

Guaranteed Human if you've ever hired for your small business, you know how important it is to find the right person. And get this employees hired through LinkedIn are 30% more likely to stick around for at least a year compared to those hired through the leading competitor. When you make the wrong hire, it's costing you time and money. And LinkedIn jobs AI assistant is stepping things up by filtering through applicants based on based on criteria you've set for your role.

[Matt]

That's right. Hire right the first time. Post your job for [e-mail] howtomoney then promote it to use LinkedIn jobs new AI assistant, making it easier and faster to find top candidates. That's LinkedIn.com howtomoney to post your job for free. Terms and conditions apply.

[Joel]

Where do you see your career in 10 years? What are you doing now to help you get there? The sooner you start enhancing your skills, the sooner you'll be ready. That's why AARP has reskilling courses in a variety of categories like marketing and management Management to help your income live as long as you do. That's right.

[Matt]

AARP has a bevy of free skill building courses for you to choose from because the steps that you choose to take today will help you to love what you do in the future. And that's why the younger you are, the more you need AARP. Learn more at aarp.org skills hey, it's.

[Joel]

Joel and Matt from how to Money. I was just in Seattle, Matt, and honestly, it's one of the greatest cities in the world, particularly in the summer. I went on this run by the water. We hopped a ferry across Puget Sound. Just an unforgettable.

[Matt]

That's what struck me. What seems normal to a homeowner, it can be the thing that makes a guest trip really special.

[Joel]

Which is why hosting your home on Airbnb makes sense, right? Travelers are looking for those authentic, memorable spaces. And if you don't have time to manage all that well, Airbnb's co host feature makes it easy. A local co host can help with everything from creating the listing to keeping your place running smooth.

[Matt]

Find a co [e-mail] host welcome to How2Money.

[Joel]

I'm Joel.

[Matt]

I am Matt.

[Joel]

Today we're answering your listener question.

[Matt]

You know what, buddy? Are you ready to help people? That's what we try to do here.

[Joel]

I was literally just responding to a listener email and she was just like, thank me for my demeanor and stuff.

[Matt]

And I was like, oh really? I thought you were talking about the other one that you had to get back to.

[Joel]

My email demeanor is awesome, Matt, in case you didn't. No, but I was just like, you.

[Matt]

Know, what about the complaint that was getting?

[Joel]

Oh, we got a complaint today, too, actually. We get those from time to time.

[Matt]

And you beat me to it because I welcome both. I took the one right before where the guy said that he wanted to hook us up with some beers from his brewery.

[Joel]

You always respond to those quicker.

[Matt]

Hey, I sit down. When I sit down and I tackle them all, I don't care what's in front of me. It's sort of like a workout. I don't look ahead to the workout. I just show up and I do the work. Speaking of people sending us stuff, as we're recording this, there's like a box of multiple. Multiple different types of popcorn from listener Bill. Shout out to Bill.

[Joel]

And Bill has been with us for.

[Matt]

Not only listening to us for forever.

[Joel]

For a long time, but also sending.

[Matt]

Us his favorite popcorn.

[Joel]

And he, Northern Neck also emails us regularly. One of our most regular listener emails that we get is from Bill. So, Bill, thank you for sending us popcorn.

[Matt]

Yes, thank you, Bill.

[Joel]

And we just. Man, I just appreciate our listeners. Even when we get the emails that are like, you guys suck, you're not doing it right. Honestly, I appreciate the feedback because we can always stand to do better, too.

[Matt]

Yeah. We are trying to help people. For the most part. I think that's what we do. But sometimes the way we say it maybe misses the mark.

[Joel]

Yeah.

[Matt]

So we'll try to be clearer in our communications and how we phrase things.

[Joel]

And truly that is at the heart of this show is to try to help people be better with their money. If, like, we're not doing that, then we're not doing our job.

[Matt]

That's true. But, Joe, we're going to hear from a listener who is looking to reduce the cost of taking care of family, specifically his parents. Another listener is dreaming of partial retirement, and he's got a really a tax question when it comes to socking away money for retirement. Another listener has been paying a little extra on the mortgage. He wants to know if that's a good idea or if he should stop doing that. We'll get to those questions, plus a couple others, most likely during this episode.

[Joel]

The email I was responding to where I told you she thanks me for my demeanor.

[Matt]

That's kind.

[Joel]

It is kind of. People don't do that much anymore. Matt, I appreciate your demeanor here on this podcast.

[Matt]

What's my demeanor it's awake, a little.

[Joel]

Stoic, professional, happy to be here to enjoy a beer. But one of the things she mentioned and she was asking me about was I show up for the beer. Yeah.

[Matt]

The craft beer.

[Joel]

Well, she was like, hey, I'm with one of the big cell phone companies, but what. One of the cool things that they're offering me right now is access to a bank that has a superior savings rate, 4.2%. And I was like, man, this environment, that is really, really good.

[Matt]

All right.

[Joel]

And then she told me what she pays every single month for her first. Yeah. And I was like, oh, you think they're doing you a service, but really this is one of those things that like, feels like a perk, but really it's only so they can continue, like punching you in the stomach while they look at you lovingly in the face. That's exactly what this offer feels like.

[Matt]

That's a twisted, messed up visual.

[Joel]

Right? I know, right?

[Matt]

What kind of twisted mind do you have over there? Well, that like, do you have experience with this kind of behavior?

[Joel]

Maybe it's happened once. Okay. Okay. So I think question these sorts of perks. Like, it's almost like when you shop on certain retailers, Matt, after you click buy. This happened when I bought concert tickets recently. They're like, oh, here's two free months of clear. Oh, here's three free deliveries of food service, whatever it's called.

[Matt]

Even on Is it Venmo that they're hitting you with like these offers, these coupons, it's feeling more like a value pack that showed up in my mailbox versus any actual benefit that's being delivered.

[Joel]

And sometimes, sometimes that's a helpful perk. But most of the time it's just an another way to advertise to you.

[Matt]

Yeah.

[Joel]

With this bank offer connected to your cell phone company, it's. I would say 4.2% is great, especially in today's environment. That's wonderful.

[Matt]

That is good.

[Joel]

But if you only get it by signing up for the really expensive cell phone service, it defeats the purpose and you're actually probably coming out behind. So maybe like go. This is what I suggest to her. Go find a better cell phone service. I mentioned a couple of our favorites that we talk about regularly here on the show.

[Matt]

Mint Mobile, US Mobile.

[Joel]

Yeah. And I'm like, go with one of those guys and then get it. Get your own high yield savings account with a bank that doesn't. And maybe it won't be quite 4.2%, but you're going to save. So much on your cell phone service that it's going to be worth the trade off.

[Matt]

Okay, so you know what's at the heart of this strategy? And I will say I wouldn't be surprised. What's the, what's the company?

[Joel]

The cell phone company? Yeah, Verizon.

[Matt]

Oh, of course. It's like the bank of America equivalent of cell phones.

[Joel]

Right.

[Matt]

I do think that they have a chance at succeeding with this strategy because what is at the heart of this is what is called loss aversion. And specifically, over the past few years, what have we all experienced when it comes to the interest rate that our banks were paying us? Really high rates. And then as we have seen inflation slowly but surely, I don't know, let's just say slowly tick down and interest rates follow. Oh, of course, we're seeing savings, interest rates drop as well. And we. Okay. And we've talked, we talk about loss aversion on the show before, but that's when you feel a loss twice as hard as an equivalent gain. Yeah, essentially. Right. And so people are seeing their savings rates tick down and it sucks. It sucks bad. And they hate it. And they know it. They're very, they're very much aware of it. Sort of like the price of gasoline is something that they see all the time.

[Joel]

Almost got nostalgia for those 5% ABR rates.

[Matt]

And if you were thinking about maybe hopping cell phone providers, but then all of a sudden they're sweetening the pot with this offer, you think, you know what, I'm actually going to stay because they do a good job, they've got funny commercials. And also I'm going to be able to maintain my high, my high rate of interest. I think that's what's going on here. And I agree with you. Ultimately, if you want to, the absolute best way is to go with you're saving money on the cell phone provider and you are going with an online bank that's paying a high rate. Right. Like you've got your cake and you're.

[Joel]

Eating it too, which are not far off, by the way, those highest rates from what this Verizon offers.

[Matt]

Yeah. But it does depend on how much money, how much you've got set aside. Because if you've got, let's say you've got a fully funded emergency fund, maybe you are extra cautious. You like to avoid risk. You like to have a high level of liquidity and you've got like six figures. You know, let's say you've got 150, maybe $200,000. Okay. You need to start running the numbers, because, I mean, I talked to somebody recently who's with Verizon, and I think they're. I mean, I think for both of them, they're paying like 140 or something like that. So it's hard to overcome a significant amount. But you start overcoming that monthly amount if you've got, let's say, six figures set aside.

[Joel]

Yeah.

[Matt]

And the savings got 1% on $100,000. You can start doing the math, and then it starts possibly making sense to stick around.

[Joel]

I will say just her switching cell phone service providers was going to save more than $800 a year for the two lines in her family. It's hard to overcome that with the interest from this account.

[Matt]

1% on $100,000 is 1,000 bucks a year, though. So that's when you need to start crunch.

[Joel]

But also 1%. Come on. We're not down to 3.2% yet.

[Matt]

Ally. Ally's a great bank, but we're talking mid, you know, mid to lower threes.

[Joel]

I don't.

[Matt]

I haven't checked it recently.

[Joel]

Yeah, not. Not quite as good as CIT as betterment right now, but it's. It still tops. And it's pretty good rate.

[Matt]

But I still like them.

[Joel]

Still. Don't be sucker punched Piper Eisen with that offer.

[Matt]

That's right. Hey, let's introduce the beer.

[Joel]

Okay. This one. I don't know how to pronounce this. Matt, this is Pope Polot Mavi is how I'm gonna pronounce it. Polot Mavi.

[Matt]

Oh, that's the actual name of the beer.

[Joel]

I think so. And it's a lager with spruce tips. And this is by Von Trapp and Bissell Brothers, a collaboration. Bissell. I've had from beer from before, but never had anything by Von Trapp, so.

[Matt]

So is this the same Von Trapp.

[Joel]

From the Sound of Music?

[Matt]

Were they a real family or was that purely fictional?

[Joel]

I think it was purely fictional.

[Matt]

Okay. That just happened to be their last name.

[Joel]

Yeah.

[Matt]

Okay. So I know of a Von Trapp, like, resort up in New England somewhere. And I bet it's like in that same little town. I've had friends who. They go up there and. Okay, I don't know. They do, like, maple syrup tapping and skiing and.

[Joel]

That sounds cool.

[Matt]

Very Von Trapp sounding things.

[Joel]

While you're up there.

[Matt]

I guess part of the reason New.

[Joel]

England I wanted to have this beer today is because it's got spruce tips. And I was like, what a perfect time of year to have a Beer with spruce tips.

[Matt]

It's Christmas week, baby. Let's do it.

[Joel]

Most def. Okay, so let's move on to listener questions. If you have a money question, we would love to hear from you. Just record it on the voice memo app of your phone, say your name at the beginning, email it on over to us howtomoneypodmail.com or go to howtomoney.com ask. You can see the full directions there if that felt too difficult for you. All right, Matt, let's get to the first question of the day. This question is from a listener who has a lot of things in flux right now.

[Rajat]

Hey Matt and Joel, I hope you guys are doing well. My name is Rajat and I live in Denver, Colorado with my wife and two pets, a dog and a cat. My questions today might be a little bit different and involve moving internationally. So my parents live in India. I'm originally from India. I've been in the States for the last eight years and my parents, they are in their mid-70s. So there's a high probability that my wife and I may need to move to India for a few years to take care of them. My sisters are in the same city as my parents and they care of them as needed. But you know, in our culture it's kind of like my responsibility to take care of them. So my questions are around what, if any, changes to future investments in savings. You guys would suggest I should start thinking about if. I know that we may have to move to India for a few years, but since we don't know when we'll move, how long we'll need to move for and whether or not we will work while in India and what income would look like when we are there. My wife and I just turned 30 this year. We don't have any kids, but we do plan on starting a family in the next year. Today we make around $200,000 a year and contribute to various retirement accounts, but we don't max them out. We have six months of emergency funds saved up and have no credit card debt. My wife has around 13,000 in student loan debt with interest rate around or under 4.3% that are currently in forbearance and we make monthly payments of around $500 for them or towards them and soon a new home loan of around $75,000 at an interest rate between 7.7 to 8.5% for a house in India that I'm aiming to purchase by the end of December for my parents, as there are quite a lot of unknowns and no Defined timeline. I would love to get your thoughts or advice on how I should start thinking about the possibility of moving to India and make changes to retirement accounts, investments, and savings. I love the show. If you guys are ever in Denver, hit me up. My wife and I would love to host you guys and prepare some street Indian street food. I mean, thank you for taking my question.

[Matt]

Ooh, Joel, do you like Indian street food?

[Joel]

I don't know. I'm not very cultured, so I don't know if I've ever had Indian street food.

[Matt]

I've never been to India. Me neither. And I have rarely had Indian food. But I'm down.

[Joel]

I've had some great.

[Matt]

I like me some curry.

[Joel]

Curry before, but yeah, I don't. What is, what is Indian street food? I'm getting. Do you get curry in a bowl as Indian street food? Or is it more like meat on a stick or something? I don't know, like kebab? I don't know. I need Rajat to enlighten me.

[Matt]

We need to come hang out. Hang out in Denver and have him whip some up for you.

[Joel]

You know what, maybe I should email this to Rajet too. He. He's got multiple pets, he said. And where's he gonna put the pets if he moves to India? Like, do you want me to volunteer your house as a place where he can.

[Matt]

We are currently a pet free zone. Okay.

[Joel]

We've.

[Matt]

We decided, Kate and I. Oh, my gosh. Did I tell you about this? Did we talk about this on the show? Some friends of ours, they have. What kind of dog do they have? I can't remember if they have the poodle or if they have the Burmese mountain dog, but they, they. When you mate it with another. And they create these.

[Joel]

You're making me think of Dumb and Dumber right now. What do you get when you made a bulldog in a shih Tzu?

[Matt]

I think they're like bermadoodles or something. I don't know. But they're just like the fluffiest, most hypoallergenic, cute little fluffy puppies. And some friends of ours, they had a litter and they always try to get a bunch of their friends to experience the delights of having this beautiful puppy. And Kate and I were just like, we can't even bring this up to the kids. This is a non. This is a non starter.

[Joel]

Not right now. Not gonna touch it someday later in life.

[Matt]

Unlike you, y' all gotta at least two cats, multiple chickens.

[Joel]

Sorry, I'm going to just go for one more second On a weird tangent, my cat, one of the cats, likes to hide in our bathroom vanity. Like, she'll open the drawer and, like, somehow shuffle her way back in there.

[Matt]

Gets up underneath.

[Joel]

Every once in a while, she can't get out. So I'm going to the bathroom last night, like, before I go to bed, and I hear, like, the cat basically being like, let me out.

[Matt]

It's really funny.

[Joel]

Okay, let's get to.

[Matt]

This is what you're missing out on if you don't have pets in your life, guys.

[Joel]

That's right. That's right. The cats are great, but no dog for us right now. And Rajette, like, this is a great question I love, too. I have so much respect for your culture and for the emphasis that seems to be placed on taking care of parents.

[Matt]

Totally.

[Joel]

That's something that I think is just less common here in the States, Matt.

[Matt]

It's less common? Yeah, it's less common. I do think I am hearing more families who are doing that, though.

[Joel]

Yeah. Return back to some of those traditional.

[Matt]

The multi generational household conversation is one that I've had more and more. And I love hearing that because I think it makes sense on so many. On so many friends. Obviously, from a financial standpoint, you're kind of pulling your resources to a certain extent, but from a relational standpoint, for kids to grow up with their grandparents, like, truly getting to know them and for them to truly get to know the kids. I didn't have that.

[Joel]

Yeah.

[Matt]

I mean, my grand. Yeah. Grandma and grandpa, man, they. They lived on the other side of the country.

[Joel]

Same with me.

[Matt]

Yeah.

[Joel]

And the. I think the book Being Mortal by an American Indian doctor really kind of helped cement that home for me too, a little bit, where I was like, oh, actually, like, I see the beauty in that. That' something that, like, feels culturally different than what I've experienced, but it's something I'm fond of, and family is.

[Matt]

It's a creative solution to a tough problem that a lot of people have.

[Joel]

Yeah.

[Matt]

Like, it truly does make sense on, like, almost all fronts.

[Joel]

I'm seeing my neighbors do it right now. Like my neighbor next door, she's 100 years old, her son lives across the street, and she's got to the point where she can't. Even though they live really close to each other, she can't live alone at all. And so somebody spends the night with her basically every night. And this is kind of like elder planning in American culture. It's gotten really, really expensive. And you almost have to think outside of the box and live your life a little differently so you can avoid some of those crazy long term care costs.

[Matt]

That's right, yeah. And Rajet, he also talked about how much money, he said he's got six months worth of emergency funds set aside and the ability for him to at some point go and help take care of his folks is I think one of the best uses of not only emergency fund, but with it being a potentially extended period of time of what you might call peace out money or just a degree of financial independence. It's not just for traveling the world and for ditching work for a sabbatical, but being able to take care of the people in your life. It's far less stressful if you have a strong financial buffer or if you can just reduce work, you know, take some time away. I think amassing more investments and having that liquid cash is going to give you, Rajet, the ability to make the life changes that you, that you need to make, but the ones that you truly just want to be able to make here. Giving you the flexibility to make some of these bigger changes if need be, depending on how long you're going to be over there. Like you said, so many unknowns. But if that was me, I would want to have more though than just the six months worth of living expenses I would want to have. I'd want to basically beef that, that up. I'd be living on a lot less in order to essentially build up like this war chest to just give you the options to stay over there maybe longer than you might normally feel comfortable. But by having more cash like this on hand, it just is going to decrease the level of stress that you and your family is going to experience. I will say based on he mentioned the house that he's it sounds like maybe purchasing for his parents. I know that the cost of living in India is substantially less than in America on average. So one benefit though is that you've got the ability to have your dollars go a whole lot further while you're over there. So. Yeah, just one of the factors to keep in mind.

[Joel]

Yeah. And I think what you're getting at too is that money isn't just to buy the smart saving and investing over a long period of time isn't just to buy your own freedom or to buy fancy vacations or anything like that, but it can really facilitate the kind of life you want to live, especially with your family and makes you think of like, you know, Matt, you know, I've talked a lot about this. My mom is not doing so Great right now. And I've had a lot more time, a lot more time. Flexibility, partly because over a lot of years, I've earned it. Over a lot of years of hard work with my money. And so I've been able to spend a lot of time with her, take her to a doctor's appointment, grab a random lunch or coffee or something like that. And that matters. Like what Richetta is doing here, I'm doing it on, like, a smaller scale.

[Matt]

Right.

[Joel]

I'm not moving across the country to be with her already literally close by.

[Matt]

But I think that's not Indiana, Joel. India.

[Joel]

I know. Yeah. Okay.

[Matt]

Just making sure.

[Joel]

So I just love that. I think I would love to see more people be able to experience that sort of flexibility that. That money can buy.

[Matt]

Yeah, yeah. And you would. It would be much harder to handle that situation if, let's say you didn't invest at all in your 20s or your 30s and you're like, okay, now's the time to buckle up and finally grow up and start setting money aside in my 401k.

[Joel]

Yeah.

[Matt]

You'd be like, well, no, we can't. Like, I can't not work. But you can say, no, no, no, I can not work for the things that matter the most in the here now.

[Joel]

Yeah. Today you mentioned liquid savings. I think that's really important. Buffering, building that up is one part of the equation. On the investment side, though, I think that that would also mean putting money into accounts that have more flexibility. Thinking Roth IRA, thinking HSA, 401ks are great. Get the match if you have one, but those aren't going to be as flexible. You're not going to be able to tap that money if need be, before you turn 59 and a half. I just say after that match, I would just prioritize accounts that allow you greater access. Even if maybe the tax break isn't quite as meaningful, which the tax break on the Roth IRA and HSA are still great if you have more money to invest. Beyond that, a taxable brokerage could make sense before putting more money in your 401k, because you might need that money before you reach full retirement age. I would be wanting to do both at the same time. Really?

[Matt]

Yeah. I want to address the income side of things, too, because he talked about not knowing whether or not he'd be able to work while he's over there. I'm just thinking of a buddy and he works for a global company and more than half of his team is in India. He's either waking up crazy early to get on call or he's, he's got a ton of flexibility during the day, goes for runs, but he's either up really early or up a little bit later to make sure that they're able to communicate well. I think there's, he didn't, did, did Rajet say what he does? He, he said income, but I don't think he said his profession. But if you do have a job or a company or profession that allows you to maintain the work that you're currently doing while abroad, there's totally a way of doing that from a technology and hopefully from the type of work that you're doing. Dude, like, then you've got the best of both worlds potentially. Right. Like you are still making like maybe you're not gonna get the same kind of raises because they're like, well, you're not here in the office. You're not able to show up to the team building Fridays or whatever. I don't know, whatever it is company might want to call it, but that's.

[Joel]

What we call ours, the team building Friday.

[Matt]

But because you, you've reduced your cost of living so significantly as well, that could honestly leave you in a, like a really, really strong position, assuming that you're there for an extended period of time. But, but even still, like, I can't imagine that you're gonna do nothing while you're over there. Even if it's tricky from a visas standpoint, work visas and you know, and as far as your wife and what she's gonna do, I don't know, I'm just optimistic that you're not gonna go over there and just completely sit around, hang out with your parents.

[Joel]

Like you're gonna go 200k to 0 of income.

[Matt]

Yeah. And going from zero assistance provided to your parents to like every second of the day where you're at their beck and call. Like, I can't imagine that they're going to need that, but then also that you would want that necessarily. So I just got a feeling that you're going to be able to provide yourself some sort of income at the very least on a part time basis.

[Joel]

While you're over there. Maybe part time might be the sweet spot based on how much time you want to give and the fact that you don't need to earn quite as much. I would also be working in the time being like right now to reduce debt. So if you can pay off the home loan before taking off to India, that would be huge. Right. Paying off the student loan in full I think it would be a tough thing to do in the time span that he's talking about, but that might be a goal of mine to try to work towards that. And the interest rate isn't all that bad on that student loan either. But still, I would spend time simplifying your finances, having fewer monthly obligations. Those are going to have a similar result as saving up more cash, just not having as much money that needs to go out every single month. You're going to require less income if you have fewer debt payments and. Or you have more cash in the bank. So I think that's just kind of a strategic way to approach this move to India.

[Matt]

Yeah. I think you do have to be careful, though. I think you gotta not overdo it because you could say, oh, this is gonna happen. I gotta prepare like crazy.

[Joel]

And then.

[Matt]

And I'm sure, Rajette, that your wife is loving and very supportive, but I also can picture a very frustrated wife who's like, hey, like, when are we gonna live our life? Like, when are we gonna do the things that we have set as goals for our family? And so only you know how to strike that balance. And the responsibilities from being the son, I don't know, maybe the firstborn or something. I'm just assuming the sort of duties, I guess, that are expected of you, but then also the duties that you signed up for. But when you married your wife, there's a man. I would just be paying special attention to your wife and just the Yalls relationship and making sure that y' all are communicating well, to make sure that everyone's on board. This is something that y' all are doing together and that you're not just constantly preparing for some, you know, something that's going to happen down the road.

[Joel]

And it sounds like you got the finger on the pulse of your finances. Just make sure. I think it could be tempting to go so hard to be like, I want to be so prepared. It made me think, Matt of the biblical story, Joseph in Egypt, right. And he gets the dream. And they're preparing for the famine to come. And in that case, they knew exactly what was coming down the pike or according to the dream. Right.

[Matt]

But seven years.

[Joel]

Seven years. Seven years of each. Right.

[Matt]

I just don't think Rajet has an idea that seven years from now we will, you know, this will all make sense. You know, like, that's one of the problems is exactly. It feels, it's very open ended.

[Joel]

And so you just have to be careful, like you said, to, to plan well, but also to realize that those plans are going to be somewhat shaky based on timeline and based on the specifics. And you also don't want to go so hard in the paint that you're unable to really enjoy these next couple years before you move to India. So you're preparing well, but also enjoy the time that you have.

[Matt]

That's that craft beer equivalent, dude. Finding that balance We've got more to get to. We're going to hear from a listener who's asking about one of our new favorite accounts, the Donor Advised Fund. We'll get to that. Plus we'll talk about some Roths. All that and more right after this. You probably think it's too soon to join aarp, right? Well, let's take a minute to talk about it. Where do you see yourself in 15 years? More specifically, your career, your health, your social life? What are you doing now to help you to get there? Well, there are tons of ways for you to start preparing today for your future with aarp.

[Joel]

What about that dream job you've dreamt about? Sign up for AARP reskilling courses to help make it a reality. How about that active lifestyle you've only spoken about from the couch? AARP has health tips and wellness tools to keep you moving for years to come, but none of these experiences are without making friends along the way. Connect with your community through AARP volunteer events.

[Matt]

So it's safe to say it's never too soon to join aarp. They're here to help your money, your health and happiness live as long as you do. That's why the younger you are, the More you need AARP. Learn more at aarp.org wisefriend this message is sponsored by Navy Federal Credit Union. As the holiday season rolls around, Navy Federal knows that you strive to do everything you can to bring cheer and joy to your loved ones. And as a credit union dedicated to serving all veterans, active duty and their families, they understand that every little bit counts.

[Joel]

That's why, for a limited time, you could earn a $250 cash bonus when you spend $2,500 with Navy Federal's cash rewards and cash rewards plus cards in the first 90 days. But the giving doesn't stop there. You could also earn up to 2% unlimited cash back with these cards. So saving up for whatever the season brings just got a little easier.

[Matt]

GiveJoy GetJoy. Join now at Navy Federal.org@Navy Federal Credit Union, the members are the mission. Navy Federal is insured by NCUA. Visit Navy federal.org cashrewards for details. Cash back. Terms and conditions apply. Offer ends January 1, 2026. Hey, y', all, it's Joel and Matt from how to Money. Joel, you were just out in Seattle recently, weren't you?

[Joel]

Yeah, man, it was amazing. I went for one of the most glorious runs of my life. Along the waterfront. It had everything you could ask for. Chris Bear Mountain views, fairies gliding across the water.

[Matt]

Beautiful. I love it, man. Yeah. For us, our road trip through Charlottesville was a highlight. We actually splurged on a custom built Airbnb and it was well worth it. The house had these unique touches, like a concrete counter there in the kitchen with a built in drying rack. Super functional. It even inspired some ideas for our house.

[Joel]

Plus, with a kitchen like that, you save money eating out.

[Matt]

Yes, exactly. That's what struck me. What seems normal to a homeowner, it can be the thing that makes a guest trip really special.

[Joel]

Which is why hosting makes sense, right? Travelers are looking for those authentic, memorable spaces. And if you don't have time to manage all that well, Airbnb's co host feature makes it easy. A local co host can help with everything from creating the listing to keeping your place running smooth.

[Matt]

Yeah. So while you are off making your travel memories, your home could be helping someone else make theirs. Find a co [e-mail] host.

[Joel]

All right, Matt, we're back. It's time to get to our next question. This one is kind of one of the most classic personal finance questions out there, but it's always fun to revisit.

[Ethan]

Hi, this is Ethan from Denver, and I am wondering if I should Roth or not Roth this upcoming year. I am in the 24% tax bracket, married, filing jointly with all W2 income. I normally max out a Roth IRA, and in the last few years I have been doing the backdoor Roth. I also contribute to a Roth 401k. I dream of a partial retirement someday, but it feels impossible to know for sure what tax bracket I'll be in when I want to start withdrawing contributions. So I can't decide if I should pay the 24% tax on the contributions now or if I should wait until I'm in the next tax bracket before switching to traditional. Even though I might be paying a higher percentage of taxes now, there is some comfort in knowing that I'll never pay taxes on this money again. Appreciate the advice. Thank you.

[Matt]

Man, it sounds like Ethan is in the messy middle. He's realizing that, oh, it used to make all the sense in the world to Roth, but he's probably yeah, he's talking about tax brackets, he's seeing his income increase, he's trying to figure out what is the most optimized move to make. So I'll just cut to the, I'll cut to the chase. A Roth IRA and a traditional 401k is what we typically recommend. We'll spend the rest of this time explaining why.

[Joel]

Yeah. Somebody in this situation in particular because he is in that middle spot. Right. Let's say you are really early on in your wealth building trajectory and your first job out of college or something and you're like, man, my salary's not awesome, but gosh, I'm being frugal and I'm attempting to do contributions, significant contributions to my IRA and to my 401k. What should I do? The answer is probably going to be Roth. Both of them. Right. But let's say then the further along you get in your career, you're crushing it. The more that your income goes up, the more traditional can make sense. And it's just impossible here to make a perfect decision because we're dealing with unknowns around future tax rates as a society, but we're also dealing with unknowns about our individual tax rates. Where will my individual effective tax rate be? It's hard to know. It's hard to specify. For people who are incredible savers and investors, you might find that it's higher in retirement, but what most people find is that especially if they're high earners now, the likelihood is strong that you're going to be in a lower tax bracket in retirement and that actually makes traditional contributions, especially in that 401, make more sense now.

[Matt]

Yeah, I hear what you're saying, which is that like, if you know you're making bank right now and that you are like, oh man, I am working really hard, I'm getting after it.

[Joel]

Yes.

[Matt]

Then you might know that you are unlikely to continue to generate an income like that. But it also depends on how much you invest.

[Joel]

Yeah.

[Matt]

Because if you are, I mean, making a ton of money right now, but then you're investing like crazy, there's a good chance that the money you have on hand later in down the road and the kind of lifestyle essentially that you are requiring of your money means that you have to withdraw more money, which means not necessarily a higher cost of living from the income that you're drawn up, but possibly a similar expenses to what you're experiencing today.

[Joel]

When you look at the vast majority of retirees though, I think you see that on average they end up paying a reasonably lower overall effective tax rate in their retirement years.

[Matt]

But what I'm saying is, I think a lot of times it has to do with the fact that they haven't set aside a ton of money, which means that they're drawing down less. So so much of the behavioral aspect of it. How much are you investing now and then how much are you going to draw on that? Yeah, you're pointing to, like, the. The lived reality of a lot of folks, which I totally agree with, but that's definitely true.

[Joel]

But you're right, like, if you. If you're an incredible saver and investor, there's a chance, there's a reasonable chance that you're going to end up just as high of an effective tax rate, if not higher. If you're, like, balling out and saving a massively high percentage of what you bring in.

[Matt]

I think there's a chance Ethan might fall into that category. Based on. That's two dumb and dumb.

[Joel]

Two dumb and dumber references in one episode.

[Matt]

The frequency in which Joel talks about Jim Carrey, folks, is just as high as you would expect.

[Joel]

He's still my hero. Yeah. When I was a kid, that's who I wanted to be more than anybody else.

[Matt]

You told me, but the listeners didn't.

[Joel]

Know that a couple days ago. Yeah. So the Roth IRA traditional 401k combo allows you, I would say, to take the burden of hand. That's taking some future tax exposure off the table while also getting a current tax break on another chunk of your retirement dollars. It also allows you to turn traditional dollars into Roth dollars down the road so you retain flexibility. For example, if you retire early, as is your goal, Ethan, the likelihood that you'll have a lower income is quite high. You can then do Roth conversions, likely in a latter form, to turn traditional dollars into Roth dollars at a far lower tax rate because you're not bringing money in anymore. So one of the things you can do is then turn those traditional dollars into Roth dollars via a conversion. Having more traditional dollars creates less certainty, which is one of the things that you mentioned in your question. You like the idea of that certainty, but it allows more of an ability to reduce your overall tax exposure.

[Matt]

Yeah. Yep. I will say so. You said something about retiring early. I heard him say partially retiring, which I guess is that technically the same thing, Retiring early.

[Joel]

Spectrum.

[Matt]

It's on a spectrum, but when I hear partial retirement, that tells me that he's still planning to work, he's still planning to generate an income, but I guess that's Also similar to coast fire, there's all varying degree, degrees here, which actually. So it makes me think one of the things he said, it almost sounded like that getting this problem, like striking it perfectly, was what was going to allow him to partially retire or to not partially retire. He called it. He was just like, I want to achieve the dream of partially retiring someday, but I don't know what my taxes are going to be. And Ethan, I'm just here to let you know that you don't have to nail it perfectly. Like, it is very unlikely that you are going to be able to hit it right on the nose and you still can partially retire off in the future. You still can coast fire at some point in time, you're not going to partially retire. I think there's a good chance you're going to fully retire. And so I just want you to take a little bit of pressure off this specific decision because there are so many other factors that play into whether or not you can partially or fully retire than nailing your tax rate here versus your tax rate later down the road, finding the right mix of which tax to pay.

[Joel]

Another perk by the way of having accounts that are post tax and pre tax, having both those to draw from, is that you can kind of create your own tax bracket in retirement based on which account you draw from and when and how much. It's like those choose your own adventure books, Matt. Remember those when we were kids?

[Matt]

Loved them.

[Joel]

That was pretty fun. And then you'd be like, oh, turn to page 62. And then you're like, you just got killed by pirates. You're like, my adventure's over. I guess. But hopefully that doesn't happen in Ethan's case. But like the. This allows you to kind of choose your own tax rate. In years where you've got less income coming in, you can tap those traditional accounts more heavily. When the opposite is true, you can lean more on your Roth accounts. And then ultimately, you know. For other how to money listeners, this question is far easier if you're in either the lowest or the highest tax bracket. If you're just starting out, income is meager. The Roth is the way to go. As you ramp up your income. If you're in that like 32, 35, 37% tax bracket, that's when the traditional makes even more. Is even more appealing.

[Matt]

Totally. Yeah. Okay. So while you're talking about tax brackets, it makes me think about the fact too that he's. It seems like he was also agonizing over, like, well, I'm in the 24%. Is that. That's what he said, right? 24%. And should I go ahead and take the break now by going with pre tax to avoid paying tax on that now? But I just, the way he was talking about it makes me think that there might be a slight chance that he's a little bit confused between marginal tax rate and effective tax rate. And you're only taxed at that 24% on dollars above that like $205,000 threshold. Everything below that is taxed at 22%. That's for couples jointly or less. And I don't know, going from 22 to 24, like, trust me, I don't like paying taxes. But that's not too bad. There's a much bigger difference, I would say, between jumping from that 24% bracket up to 32%. I would most definitely be looking to maybe optimize ways to not pay that jump in tax. But just keep that in mind too, that if you've got $230,000, like you're paying an additional 2% on maybe $25,000 as opposed to if, let's say you're earning 350k. Okay, I hear where you're coming from.

[Joel]

That's a lot.

[Matt]

That's a lot more. You're paying 2% more on many more dollars. But just wanted to highlight that and just point that out as well. I think your head's in the right place and get informed now. And I think that can continue to help you to make wise decisions, especially if you are expecting to continue to increase your earning where you are looking at potentially entering into that 32% bracket because that's when it really is going.

[Joel]

To start to hurt. And like friends of the show, Sean Mullaney, Cody Garrett say, Matt, they're all about reducing your overall lifetime taxation. And so that's really the way you want to think about this from a strategic perspective. And while it might be painful to pay 22, 24% marginal tax rate, you might also realize, well, when you step back and look at things, what is that in the spectrum of your likely tax rate for your entire life? That's kind of the question you want to ask the big picture so that you can maximize those decisions, not try to just save that little extra bit of tax now when it's going to set you up for a bigger tax bill in the future.

[Matt]

Yeah, that's right. One other. Okay, one final quick note. Keep in mind that you are effectively investing more dollars by putting money into a Roth as opposed to a traditional. Because on a traditional, you still have taxes to pay out of that. And with a Roth, you are essentially front loading that pain, that sacrifice. So when you are maxing out both accounts, you are effectively investing more dollars when the time comes for you to actually draw down on that. So there's this behavioral.

[Joel]

You're actually richer. Yes.

[Matt]

At the end of the day, you will be richer because traditional Ethan down the road is going to have to pay more in taxes, whereas Roth Ethan is just like, all that money is mine, baby.

[Joel]

Yeah. So it's weird, like, yeah. That kind of behavioral side effect of maxing out a Roth IRA versus a traditional ira. You're just going to come out ahead in the Roth IRA if you're a max saver.

[Matt]

That's right, Joel. Let's hear from a listener who is looking to use a sophisticated giving account to benefit an organization that is less interested in the technologies.

[Mary]

Hi, Matt and Joel. This is Mary from South Carolina. All of your talk about donor advised funds lately got me to thinking. We go to a very small church and the only way they take donations is cash and check. So I find myself in 2025 writing about 12 checks per year. I implicitly trust the people who handle the money, but occasionally I have to mail a check and that's pretty terrifying. Do you think that a donor advised fund would be able to distribute money to a really small organization like that or does it have to be a bigger charity? Thank you so much.

[Joel]

Oh, Matt. Using a check, I don't think. I can't tell you the last time I wrote a check. Do you remember yours? I. No. Yeah, it's hard, man.

[Matt]

I can think. I mean, I know I cut some checks when we were doing some work.

[Joel]

At the house for sure.

[Matt]

Because, yeah, not really Zelling large sums like that around.

[Joel]

Yeah.

[Matt]

Let me sell you $60,000 to a general contractor. Yeah. Less so in that case, I feel.

[Joel]

Like maybe five, six years ago, it used to be a little bit more necessary on occasion. But I feel like checks are mostly a blast from the past. And they're also becoming problematic. Right. In some ways from a, from a theft standpoint, I think they're going the way of the dodo burden. So if I. I don't know, they're kind of like the new version of the fax machine in my estimation. And I just get, I feel a little uncomfortable writing checks and so, yeah, I feel Mary's pain. Like, yeah, I don't want to be writing a check to my church either.

[Matt]

This is also A longtime listener, Mary, who we were talking about corresponding with listeners earlier on. And we correspond a good bit with Mary. Mary's got a great heart and does a lot for folks out there who are trying to better their personal finance situation. And Mary, I promise we'll get to donor advised funds specifically here in a second. But it's worth pointing out that there are some online donation platforms for churches now, like Tithely and givelify, which of.

[Joel]

Course such great names.

[Matt]

You got like these Web 3.0 names for these old traditional sounding actions. But I think these can be better options for a lot of smaller churches and organizations out there. Because the reason your church might be avoiding those is because they come with a payment fee. So that's the downside. Obviously, taking a check doesn't cost them a dime. But still, it's like it makes me think of Aldi, right. Where they used to not take credit cards, which used to drive me crazy because that's the only reason I had my ally check card in my wallet was for this one particular store.

[Joel]

But we all understood it because we were like, the reason all these is doing this, it's worth it. It's cause they're making sure we save the most money.

[Matt]

That's right. But that being said, they did start to take them. And I think it's because they saw that the like the pros of taking it outweighed the cons, which for them was the expense. They were seeing abandoned carts. They figured it was worth taking the payment method that most folks are gonna prefer. And it's, there's. It's a little awkward here too. Cause it's kind of weird to think that there might be people who won't give to their church for that reason. Right. Because it's not easy because it's not convenient. But not taking credit cards or not taking ACH could actually inhibit giving for an organization. Especially when younger folks in particular don't have or don't use checks at all. It's just, it's making the kinds of actions that you want to see more of easier. And retailers do this all the time when it comes to being parted with your dollars for goods that you may or may not need. Yeah. So it's just something for churches and organizations to keep in mind. Dude.

[Joel]

So it's like a cell phone to not take any form of payment beyond cash and checks at this point in time.

[Matt]

Yeah, it is. Yeah. So Christmas is later this week. Makes me think about. I found myself on my phone looking for a gift for Kate And I had already done the research so I kind of knew that like, okay, this is, this is, I'm gonna buy it from here. I didn't need to shop around anymore. I'm kind of old school. When I like to shop. I like being on the computer so I can click open tabs, search more easily, you know, do all the research. I had already done all that. And so I was just like, okay, it's just time to actually make this purchase. I could not believe how easy they make it to pay as it's not the retailer, it's not the website, but it's Apple Pay as well. It's the integration with Apple Pay. And I just selected that. Dude, I bought that thing before I even realized. I mean I knew I wanted it. But truly they, I mean, because it's Apple Pay, they already have your address there. They have the right card because I use that for other things. I just double click that thing and I was good to go. That sale happened because they made it easy for me. And I think if other churches and organizations can keep that in mind, I think they like, yeah, they might see increased levels of giving.

[Joel]

Agreed. Marty, let's talk about donor advice funds as well. That was the heart of Mary's question.

[Matt]

Actual question.

[Joel]

Yeah, they're not as common as folks wanting to pay from their bank account, I don't think, but it would still make sense for a church to welcome those too. It could lead to more donations rolling in. That's partly because people with donor advised funds often have larger sums of money they're willing to give. And so you're like, no, we don't take donor advised fund money. Well, okay, you're becoming your own worst enemy. And so donor advised funds, they can and they do make it fairly easy for organizations of all sizes to accept money. So your church can easily get in on this, get in on your giving from your donor advised fund. They just have to be a registered 501 and they can by default accept donor advised fund money. The donor, which is you can recommend a donation to your church from your donor advice fund and then your donor advice fund sponsor, which is usually Vanguard Fidelity dafi, can even send a physical check. So since your church likes checks, this allows you to give via your preferred method and then for them to receive in theirs.

[Matt]

Win, win, baby.

[Joel]

Looks like the donor advised fund might be the best thing going right now for your church and for your this overlap of interests.

[Matt]

So I give to the kids school and we do that via our donor advised fund. And I specifically Wanted to know how it arrived, but I think that maybe I'm getting ahead of myself here. I don't think it was listed originally and I think I entered it in. And so that's actually something that you can do, Mary, specifically. We'll get to that part. Let's say that your church is not listed when you are attempting to make a donation. And if you are using our favorite donor advised fund site, Daffy, they allow you as a member to request that the nonprofit be added. And so all you got to do is just submit the nonprofit's tax id, their ein number, their mailing address, and some other basic details via Daffy's request a charity form, and boom, that's it. It's pretty simple. And then they'll get added. I think I actually did that with the kids school. I don't exactly remember, but I do know that they received the paper check because I wanted to make sure that they were receiving it. And I was just like, hey, do you mind checking to see if this is early on in our DAFI days? And I'll be honest, Joel, I didn't know if I trusted it. I wanted to know what it was like, how is it going to show up? And as far as I know, they are still cutting a check and it's being mailed there to this day.

[Joel]

That's cool.

[Matt]

Yeah. I think it's just fun because we have a great solution for Mary because it satisfies exactly what she wants to do and also what the church wants to continue to do.

[Joel]

Yeah. Yeah. The church doesn't have to go through some fancy rigmarole in order to accept donor advised fund money just because they are a nonprofit. 501c3 they can and you can give to them from your donor advised fund. So it should be pretty easy, pretty chill. Make it happen. And maybe your church can still stay in that Luddite status of not accepting ach and credit cards, which is fine, but you can to still get to do what you want to do.

[Matt]

Yep.

[Joel]

All right. Sorry. Not. Not to throw shade. Just. Just saying. All right, we got more questions to get to, including what do you do with your 401k when you're changing jobs? Talk about that and more right after this.

[Matt]

You probably think it's too soon to join aarp, right? Well, let's take a minute to talk about it. Where do you see yourself in 15 years? More specifically, your career, your health, your social life? What are you doing now to help you to get there? Well, there are tons of ways for you to start preparing today for your future with aarp.

[Joel]

What about that dream job you've dreamt about? Sign up for AARP Re Skilling courses to help make it a reality. How about that active lifestyle you've only spoken about from the couch? AARP has health tips and wellness tools to keep you moving for years to come. But none of these experiences are without making friends along the way. Connect with your community through AARP volunteer events.

[Matt]

So it's safe to say it's never too soon to join aarp. They're here to help your money, your health and happiness live as long as you do. That's why the younger you are, the More you need AARP. Learn more at aarp.org wisefriend this message is sponsored by Navy Federal Credit Union. As the holiday season rolls around, Navy Federal knows that you strive to do everything you can to bring cheer and joy to your loved ones. And as a credit union dedicated to serving all veterans, active duty and their families, they understand that every little bit counts.

[Joel]

That's why, for a limited time, you could earn a $250 cash bonus when you spend $2,500 with Navy Federal's cash rewards and cash rewards plus cards in the first 90 days. But the giving doesn't stop there. You could also earn up to 2% unlimited cash back with these cards, so saving up for whatever the season brings just got a little easier.

[Matt]

Give joy, get joy. Join now@navy federal.org @navy federal Credit Union, the members are the mission. Navy Federal is insured by NCUA. Visit navyfederal.org cashrewards for details. Cash back terms and conditions apply. Offer ends January 1, 2026. Hey y', all, it's Joel and Matt from how to Money. Joel, you were just out in Seattle recently, weren't you?

[Joel]

Yeah man, it was amazing. I went for one of the most glorious runs of my life. Along the waterfront. It had everything you could ask for. Crisp air, mountain views, fairies gliding across the water. Beautiful.

[Matt]

I love it man. Yeah, for us, our road trip through Charlottesville was a highlight. We actually splurged on a custom built Airbnb and it was well worth it. The house had these unique touches, like a poured concrete counter there in the kitchen with a built in drying rack. Super functional. It even inspired some ideas for our house.

[Joel]

Plus, with a kitchen like that, you save money eating out.

[Matt]

Yes, exactly. That's what struck me. What seems normal to a homeowner, it can be the thing that makes sense, makes a guest trip really special.

[Joel]

Which is why hosting makes sense. Right. Travelers are looking for those authentic, memorable spaces. And if you don't have time to manage all that well, Airbnb's co host feature makes it easy. A local co host can help with everything from creating the listing to keeping your place running smooth.

[Matt]

Yeah. So while you are off making your travel memories, your home could be helping someone else make theirs. Find a co [e-mail] host we are back from the break, buddy, and it is now time for the Facebook Question of the week, which is from Paul, who writes, we happen to be in a good spot with our home mortgage interest rate. With a rate of 3.5%, is it better for me to just make the minimum payment and put whatever extra we have into Roth ira or our 401k? We have been paying extra into the mortgage to equal an extra payment a year in order to lower the life of the loan. But with a lower interest rate, the money should perform better in a retirement vehicle. Or at least I feel it would. Thoughts? I agree. I want to say I know it will, but you can't promise that because we don't know the future. But yeah, Paul, I would not be making these extra payments.

[Joel]

There's a burden in the hand of paying down debt. Usually so much of this comes down to what kind of debt and what the interest rate is. Because if he had said I've got this payday loan with an annual interest rate of 360%, what should I do? The clear answer is get rid of that thing as soon as possible and you can get back to your Roth IRA later on down the line. We're talking about baked in incredibly low mortgage rate. And so for us, paying it off as agreed makes the most sense not making any additional payments to try and get rid of it faster. And Matt, I always want to call like a 3% mortgage, like an asset. I know it's not. It's a liability right on your in.

[Matt]

Technical accounting terms, it's a liability like.

[Joel]

On your net worth statement, like it would be counted as that.

[Matt]

It feels so good when you can.

[Joel]

Earn more or just as much in a high yield savings account. You're taking zero risk. You're keeping that optionality to pay it off at a quicker clip if rates fall significantly down the line. I just don't see any reason to accelerate mortgage payoff. Investing in the accounts that Paul mentioned is a far better option.

[Matt]

That's right, Paul. You're also not asking about putting less toward your mortgage so that you can up your spending. You are trying to Proactively do something positive here. You're trying to invest more for your future. And the multi decade reality shows that you're going to be richer to the tune of hundreds of thousands of dollars by investing these dollars instead of opting to pay your mortgage off. And so, and this is based on historical data, again, this is what I was referring to. You're talking about high yield savings accounts, Joel, which is more guaranteed. It's guaranteed. It's like it's guaranteed to work 60% of the time or 100% of the time.

[Joel]

Right.

[Matt]

Like while those rates are sticking around, yes, you can count on the rate of return there, but what are those rates going to do?

[Joel]

I guess what I'm highlighting there is just that it's a zero risk.

[Matt]

Zero risk.

[Joel]

Right. And you can do even better by taking on that risk. Just know it's not guaranteed, but it's nice to have that guaranteed ability to.

[Matt]

Outpace it, at least for the near.

[Joel]

Term, at least for right now.

[Matt]

But when it comes to investing, it's the returns even higher. And it's for decades and hundreds of years. But that's not guaranteed either.

[Joel]

Who's living hundreds of years, by the way?

[Matt]

Well, he's not, but I would say max out that Roth, contribute more to your 401k and then just enjoy this 3.5% mortgage that I would consider even calling a gift at this point in time.

[Joel]

This time of year. We'll call it a gift.

[Matt]

Yeah.

[Joel]

All right, let's get to another question. This one comes from ESRA and she said, I'm curious as to what others have chosen to do with their 401k when leaving a job. Have you, A, just kept it with your old employer, B, roll it into an IRA, or C, roll it into your new jobs? 401k. Matt, this feels like a who wants to be a millionaire question. You remember that with Regis Philbin? It's a classic show. I saw, I saw it on TV rerun the other day and I don't know where remember where I was, but I was like, I think maybe I was in like a mechanic shop or something. I didn't have it on in the background.

[Matt]

We had the Sam's Club.

[Joel]

I was like, man, I wanted to play that game so desperately back in the day.

[Matt]

I think I'm just distracted by the fact that you said, said esra.

[Joel]

ESRA versus Ezra, which is my son's name.

[Matt]

Yeah, but she just spells it with an S instead of a Z. Yeah, so you can just say Ezra.

[Joel]

No, I guess I'm gonna say Ezra.

[Matt]

Okay, Ezra, for you don't cash out your retirement plan upon leaving your old employer. Now, and this is like a principal thing here for sure.

[Joel]

Right?

[Matt]

Because even if we're talking about a small amount of money, like obviously the tax hit is going to seem small, but it's going to take a pretty decent chunk out of your the future, compounding returns that you are no longer going to experience.

[Joel]

Right.

[Matt]

We're talking about your future retirement nest egg. But guess what, Joel? Ezra is. Didn't even put that out there as an option. She's like, okay, no, I'm going to. I'm trying to do the smart thing here.

[Joel]

Well, I believe, I can't believe you.

[Matt]

Even put that on the table of options here before me, guys.

[Joel]

Of course. Yeah, she was mentioning it for everyone else. We know ESRA would not do that, Matt. And so I think any of these options can make sense that she mentioned. Right. Which is best depends on your individual circumstance. Keeping it with your old employer can be a solid option if they're with one of our favorite low cost providers. But if that's not the case, I would take that one off the table, Matt. I still have 401 money with my old employer because it's with Vanguard. And I just have seen no reason to take it out of just this wonderful place and turn it into IRA money because I've got really low cost options and it's with one of my favorite brokerage. Why would I change anything?

[Matt]

Why switch it up?

[Joel]

Yeah.

[Matt]

And then beyond that Ezzy, you could roll it into your new jobs 401k. And that is if you have access to our favorite low cost investing options as well. And so we're specifically talking about Vanguard, Fidelity and Schwab. And that can be a solid move too if you're just looking to keep things simple. Right. Like you are looking to have all your eggs in a single basket.

[Joel]

One account login. It's like you see all your investable assets or most of them essentially in one place.

[Matt]

Yeah. If you like to stay organized and keep things super simple and buttoned up. But that being said, I could also see an argument to be made if you like to. Okay, I want to even pretend that money doesn't even exist. Let's keep it at the old employer. Again, assuming costs are low. I can almost see that being a strategy too. It kind of comes down to knowing yourself and what speaks to you as an investor.

[Joel]

I don't pretend it doesn't exist. I. I mean I don't look in there, like every month or anything like that, but I know it's there.

[Matt]

But if somebody might be tempted to feel richer than they are and then their spending is more indicative of their net worth as opposed to what it is that they're earning month to month, I think that could be a decent strategy.

[Joel]

The third option is rolling.

[Matt]

You like how I said Ezzy?

[Joel]

I did. Because that's what you call him.

[Matt]

Your son is one.

[Joel]

I have a lot of nicknames trying.

[Matt]

To mess with your head.

[Joel]

A lot of nicknames for him. I would call her Essie, though. It'd be different. But rolling that money into an IRA is another great option. It's the one that most folks and you have full control over where your money goes, which means you can opt for the lowest cost providers. You are in full control. That's, I think, why the majority of people opt for this choice. One of the biggest reasons, though, to potentially avoid this route is if your income is climbing and it looks like you're going to want to make backdoor Roth contributions in the future, essentially not having any money in a traditional Iraq makes that a much simpler task. So if you attempt to, you know, backdoor Roth money in the future and you have money in traditional ira, you're subject to the pro rata rule. That can be kind of a frustrating thing to work through. Yeah. So if you think that's on the horizon, I think one of those first two options is probably your better choice.

[Matt]

It doesn't mean you can't do it. You just have to calculate how much tax you actually owe. You got to figure out the percentage of the pre tax versus the post tax. But Ezra, I hope that gets you pointed in the right direction.

[Joel]

Ezra.

[Matt]

Joel, the beer that you and I enjoyed was a Czech style amber lager, and it also had freshly picked spruce tips from Maine. Could you taste the. The spruce?

[Joel]

I could, I could a little bit there.

[Matt]

Did you like it?

[Joel]

Especially in the end? I did, yeah. I loved it.

[Matt]

It wasn't. It wasn't too over the top sometimes.

[Joel]

Very vibey this time of year, you know? Mm.

[Matt]

Sometimes it can feel like you're drinking Pine Sol a little bit where you're just like, oh, my gosh, it feels too astringent. Because a lot of times I think that's the only time we experience spruce or like juniper. Oh, no, I guess I'm thinking about gin. There's juniper, juniper berries and gin.

[Joel]

Is that what you did as a kid before the Tide Pod challenge? Was it the Pine Sol challenge?

[Matt]

Pine solid challenge. I didn't do any. Oh no, I take it back. I did the cinnamon challenge. You ever done that?

[Joel]

No.

[Matt]

It's a spoonful of cinnamon and if you can eat it so you put it in your mouth and actually swallow. Yeah. So what happens is it's so dry and powdery that the slightest inhale that cinnamon will shoot down into your lungs and then you spend the next day hacking your lungs out and coughing.

[Joel]

Sounds awful.

[Matt]

I mean I do not advise people to do this, but it's something that I certainly did when I was in high school as an idiot.

[Joel]

16 year old ingest cinnamon in small quantities and don't ingest cleaning products in any amount.

[Matt]

Definitely don't do that.

[Joel]

My thoughts on this I think I like the sweet caramel vibes that this had going on.

[Matt]

Yeah, that's that amber Czech lager, the toasted malt.

[Joel]

But then the the spruce tip note added something special to this one. So yeah, especially as a pre Christmas beer. I'm a fan.

[Matt]

The Christmas vibes are strong with this one. But buddy, that's going to be it for this Ask how to Money episode. You can find our show notes up on the [e-mail] but that's going to be it. So until next time, Best friends out. Best Friends.

[Trainer Games Announcer]

10 athletes will face the toughest job interview in fitness that will push past physical and mental breaking points. You are the fittest of the fit. Only one of you will leave here with an IFIT contract for $250,000.

[Ethan]

This is where mindset comes in.

[Trainer Games Announcer]

Someone will be eliminated. Pressure is coming down.

[Matt]

Trainer Games on Prime Video January 8th. Watch the trailer on trainergames.com A new.

[Trainer Games Announcer]

Year is on the horizon and your 2026 savings start here. Right now. You can access the Washington post for just $2 every four weeks. Head into the new year with six months of savings at the special intro rate. After that, it'll cost $12 every four weeks. Cancel anytime. You'll get unlimited access to trusted journalism that helps you understand the year ahead and the world around you. Now's the perfect time to subscribe because great habits and great savings start together. Go to washingtonpost.com iheart that's washingtonpost.com iheart and start your year informed with the Post.

[Matt]

Your ticket to big Savings is that big blue envelope in your mailbox, Valpak. It's brimming with deals from big name brands and your favorite local spots, dining services, stuff you're already buying. All for less and you could score $100 or other instant prizes just for opening it, or save even faster with mobile coupons you can use right [e-mail] Valpak there's definitely something in it for you. This is an iHeart podcast.

[Joel]

Guaranteed Human.