Ask HTM - Early Retirement Target Date Funds, Frugal Personal Hygiene, & Coercive House Painting #991

Summary

How to Money Podcast Episode Summary

Title: Ask HTM - Early Retirement Target Date Funds, Frugal Personal Hygiene, & Coercive House Painting #991
Hosts: Joel and Matt
Release Date: June 2, 2025
Publisher: iHeartPodcasts

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In Episode #991 of "How to Money," hosts Joel and Matt delve into listener inquiries surrounding early retirement strategies, frugal personal hygiene practices, and navigating insurance company demands related to home maintenance. This comprehensive discussion offers actionable financial advice, blending practical tips with engaging dialogue.

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1. Early Retirement and Target Date Funds

Timestamp: [02:23] – [07:38]

Discussion Overview: Joel and Matt kick off the episode by addressing a listener's concern about using target date funds (TDFs) for early retirement. They critically examine newly launched FIRE-specific ETFs (Exchange-Traded Funds) and their suitability for individuals aiming to retire before the traditional age.

Key Points:

• Critique of FIRE-Specific ETFs:

  • Joel highlights the high expense ratios of new FIRE-specific ETFs, noting rates of 0.67% and 0.89%, which are significantly higher than those of traditional low-cost index funds (typically around 0.02% to 0.3%).
  • Joel (04:27): “The expense ratios on these couple of fire funds that were just launched are 0.67% and 0.89%. Almost a full percentage.”

• Investment Philosophy Alignment:

  • The hosts argue that the investment philosophy of the FIRE community generally favors low-cost index funds or real estate, which offer better long-term growth due to lower fees.
  • Matt (04:25): “Every single year being taken out.”

• Suitability for Early Retirement:

  • For listeners like Bree, who aim to retire at 55 instead of the TDF’s projected retirement at 64, Joel and Matt suggest maintaining or increasing stock exposure rather than switching to an earlier target date fund with higher fees.
  • Joel (05:10): "I think it’s just kind of fascinating. This company launched, they're catering to... the expense ratios are kind of ridiculous in these funds."

Conclusion: Joel and Matt conclude that while TDFs can be useful for simplifying retirement investments, their high fees make them unsuitable for those pursuing early retirement. Instead, they advocate for low-cost, aggressive investment strategies to maximize returns over a longer horizon.

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2. Listener Question: Bree on Target Date Funds

Timestamp: [08:10] – [19:11]

Question: Bree from Illinois asks whether she should switch her 401k from a target date fund planning for retirement at 64 to one targeting retirement at 55, considering her goal to retire early and possibly work part-time thereafter.

Hosts' Response:

• Understanding TDFs:

  • Matt explains the basics of TDFs, emphasizing their "set it and forget it" nature, which can be both a strength and a limitation.
  • Matt (09:31): “So make sure you choose the index.”

• Expense Ratios and Performance:

  • Joel reiterates the importance of low expense ratios and how higher fees can erode long-term investment growth.
  • Joel (10:05): "So make sure you choose the index because that the actively managed comes with that. I mean I think it's around a half a percent higher expense ratio associated with that."

• Tailoring Investments to Goals:

  • They suggest that Bree should consider her long-term drawdown timeline rather than just her retirement date. Since she plans to retire at 55 but continue working part-time, allocating funds to a later target date fund (e.g., 2065) might better align with her broader financial goals.
  • Matt (15:33): “So what you're considering moving to is a 2065 Target Date Fund, something that does have a longer runway in order for you to have that exposure to the stocks, which is going to lead to higher returns for you.”

• Flexibility and Combined Strategies:

  • Joel and Matt discuss the possibility of combining TDFs with low-cost index funds to balance simplicity with higher growth potential.
  • Joel (19:41): “I actually think you can do both and I think it can make sense.”

Notable Quotes:

• Joel (10:18): “Significant difference.”
• Matt (12:22): “Yeah. It’s too conservative for younger investors.”

Conclusion: The hosts advise Bree to avoid switching to an earlier TDF with higher fees and instead maintain or adjust her current investment strategy to include more aggressive, low-cost index funds. This approach supports her early retirement goals by maximizing investment growth over a longer period.

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3. Frugal Personal Hygiene: Nate’s Razor Dilemma

Timestamp: [24:31] – [35:24]

Question: Nate from Texas describes a situation where he found a 12-pack of a different razor model priced at $20, compared to his usual $45 pack. He debates whether purchasing the cheaper option was frugal (smart saving) or cheap (compromising quality and fairness).

Hosts' Response:

• Evaluating Cost vs. Quality:

  • Joel and Matt discuss the importance of balancing cost savings with product quality. They note that while bulk purchases can reduce per-unit costs, the experience and longevity of the product are crucial.
  • Joel (26:16): “When you buy like the three pack or something like that, you're definitely overpaying per razor.”

• Practical Frugality Tips:

  • Matt shares his experience with different razor brands, pointing out that cheaper alternatives might lead to a less satisfactory shave and more frequent replacements if quality suffers.
  • Matt (26:56): “They are lower quality than before that I had Harry's, you know, the Harry's razors or whatever.”

• Ethical Considerations:

  • The discussion touches on whether exploiting pricing errors constitutes being frugal or crossing into unethical behavior. The hosts lean towards seeing it as a smart saving strategy, especially if the store honors price discrepancies.
  • Joel (28:38): “I think he's overthinking it. I mean, he seemed...”

• Alternative Solutions:

  • They suggest experimenting with even cheaper options like straight razors or maintaining proper razor maintenance to extend their lifespan, thereby maximizing savings without compromising quality.
  • Matt (34:21): “So what is Nate paying? He could have gone straight razor for five cents per razor.”

Notable Quotes:

• Matt (27:09): “It doesn't have that three-dimensional aspect that you get out of some of the better quads or some of the better stouts.”
• Joel (28:05): “Does my ethics need a tune up? I see a deal. If I see something marked like that on the shelf and I'm pouncing like, I am 100% saying, yeah, no, no problem.”

Conclusion: Joel and Matt conclude that Nate's decision to opt for the cheaper razors was frugal rather than cheap, provided that the product meets his basic needs. They encourage listeners to balance cost savings with quality and to explore additional strategies for maximizing savings without sacrificing performance.

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4. Dealing with Insurance Company Demands: Catherine’s House Painting Issue

Timestamp: [49:25] – [56:42]

Question: Catherine shares her frustration over receiving a notice from her insurance company demanding she complete several tasks—such as removing yard debris, cutting back vegetation, painting her house a single color, and trimming tree branches—to retain her insurance coverage.

Hosts' Response:

• Assessing Insurance Requirements:

  • Joel and Matt acknowledge that insurance companies are increasingly imposing property maintenance requirements to mitigate risk. However, they express confusion over specific demands like house color standardization.
  • Matt (51:38): “So that sucks.”

• Negotiation and Communication:

  • They advise Catherine to communicate directly with her insurance agent, clarifying the reasons behind such demands and negotiating feasible deadlines or alternative solutions.
  • Matt (53:27): “Start those talks, getting this started, communicating directly.”

• Understanding Underlying Reasons:

  • The hosts speculate that certain requirements, like uniform house colors, might be tied to community standards or aesthetic guidelines that influence insurance risk assessments.
  • Joel (56:09): “It depends on why they’re demanding the paint.”

• Exploring Alternatives:

  • They suggest that if compliance is too burdensome, Catherine could shop around for different insurance providers. However, they caution that most insurers have similar safety and maintenance prerequisites.
  • Joel (54:19): “But going with another insurance company likely isn't going to save you from this repair list.”

• Practical Steps:

  • Joel recommends taking immediate action on manageable tasks, such as trimming vegetation, to demonstrate goodwill and possibly negotiate more lenient terms for other demands.
  • Joel (54:19): “If there’s a return policy, that’s pretty generous.”

Notable Quotes:

• Joel (56:36): “I think this is insane. Like, this is where I would be pushing back.”

• Matt (54:43): “I mean, you can always do that. Think about that too.”

Conclusion: Joel and Matt empathize with Catherine’s predicament, advising her to engage proactively with her insurance company to seek reasonable accommodations and clarify the necessity of certain requirements. They emphasize the importance of maintaining open communication to potentially negotiate more manageable terms while ensuring continued insurance coverage.

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5. Retirement Account Prioritization: Cade’s Financial Strategy

Timestamp: [35:24] – [43:14]

Question: Cade from North Carolina seeks guidance on prioritizing his retirement contributions. With a salary of $130,000 in California and an employer match of 10% on his 5% 401k contribution (totaling 15% of his income), he is also considering whether to max out his Health Savings Account (HSA) or Roth IRA, noting that California taxes HSA contributions, which could undermine their typical tax advantages.

Hosts' Response:

• Maximizing Employer Match:

  • Joel and Matt commend Cade for taking full advantage of his employer’s generous 10% match, reinforcing the importance of capturing this benefit as a foundational retirement strategy.
  • Joel (38:19): “That whole structure is incredible.”

• HSA vs. Roth IRA Considerations:

  • HSA Advantages:
    • Matt underscores the triple tax advantage of HSAs: contributions are pre-tax, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. Additionally, HSAs are not subject to FICA taxes.
    • Matt (40:58): “It’s truly a unicorn.”
  • California Tax Implications:
    • Joel explains that California taxes HSA contributions and growth, reducing their overall benefits compared to other states.
    • Joel (41:06): “Both of these states have conspired against their citizens.”
  • Roth IRA Flexibility:
    • Roth IRAs are highlighted for their tax-free growth and withdrawals in retirement, along with the flexibility to use funds for non-medical expenses without penalties.
    • Joel (17:43): “Because you are investing for an even longer time horizon from a drawdown perspective.”

• Strategic Recommendations:

  • Despite California’s unfavorable tax treatment of HSAs, the hosts recommend prioritizing HSA contributions due to their overall advantages, especially if Cade anticipates moving to a state with better HSA tax rules in the future.
  • They also suggest maxing out Roth IRAs for their flexibility and tax benefits.
  • Matt (42:53): “So I do not love the fact that these states do not offer the same tax benefit that almost everybody else does.”

• Additional Financial Goals:

  • Joel emphasizes the importance of not neglecting medium-term financial goals, such as purchasing a home, and maintaining adequate liquid savings alongside retirement accounts.
  • Joel (46:01): “But then what if you want to make some moves in the here and now as well?”

Notable Quotes:

• Matt (40:58): “And they have one other thing... HSA is still better from an overall tax perspective.”

• Joel (43:14): “You're in California right now.”

Conclusion: Joel and Matt advise Cade to prioritize HSA contributions despite California's tax drawbacks, leveraging their long-term benefits, and to max out Roth IRAs for additional tax-advantaged growth. They emphasize maintaining a balanced approach that includes both retirement savings and medium-term financial goals, ensuring comprehensive financial health.

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6. Final Thoughts and Light-Hearted Discussion

Timestamp: [56:42] – [59:42]

Discussion Overview: Concluding the episode, Joel and Matt transition to a more casual conversation about their recent beer tasting experience, sharing their thoughts on Black Quad by Real Ale Brewing Company from Texas Blanco.

Key Points:

• Beer Review:

  • Joel describes the Black Quad as solid but lacking complexity, noting its single-note flavor profile with raisin and dark fruit undertones.

  • Joel (57:27): “It's not the most complex and interesting quad I've had. Kind of very basic in one note.”

  • Matt echoes similar sentiments, mentioning its harshness and lack of depth, contrasting it with richer quads like Westbrook's Mexican Stout.

  • Matt (58:06): “It drinks a little harsh. Like it almost had some metallic sort of flavors going on.”

Conclusion: The episode wraps up with a friendly banter about their beer preferences, reinforcing the personable and relatable dynamic between Joel and Matt. They invite listeners to explore additional resources on their website and sign up for their newsletter for more financial tips and discussions.

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Overall Summary: Episode #991 of "How to Money" offers a wealth of financial insights tailored to listeners' specific concerns about early retirement planning, smart spending, and managing unexpected insurance demands. Joel and Matt adeptly balance detailed financial advice with engaging, relatable conversation, making complex topics accessible and actionable for their audience.

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Transcript

[Matt]

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[Joel]

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[Joel]

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[Matt]

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[Joel]

I'm Joel. I'm Matt and today we're answering your listener questions.

[Matt]

Happy Monday everybody. Not only Happy Monday, Joel, but happy first how to Money episode of the glorious month of June.

[Joel]

It's a good one actually.

[Matt]

I just looked at the calendar. Happy 40th birthday to our buddy Lee.

[Joel]

Did you say 40th? He's much older than that.

[Matt]

48Th.

[Joel]

40.

[Matt]

Sorry, yeah, I said 40.

[Joel]

You're much older than 40, Lee.

[Matt]

But he's older than us, that's for sure. Now this is our Ask how to Money episode, Joel. We've got some great topics to get to listeners. She's asking about retiring early and it Seems like in her case, target date funds, they might be coming up a little short. We'll talk about how that's the case. We're going to take a frugal or cheat pertaining to personal hygiene. We're going to.

[Joel]

Should I shower often? Yes.

[Matt]

We're going to talk about saving money in the bathroom, but we're going to keep it clean. We're going to be talking about a listener who's being forced to paint her house. Joel, you're not going to believe the last thing that her insurance company said to her. Oh, little clickbaity style headliner.

[Joel]

I like it.

[Matt]

Yeah. Yeah.

[Joel]

Okay. So you mentioned something about retiring early and it's interesting. There's this new company out there that launched a couple of different ETFs, exchange traded funds. So. So that you can invest specifically for. For fire folks. Right. So this is intended to cater to people who want to retire early.

[Matt]

Joel, why do you hate fire ETFs? Okay, tell us, Tell the people.

[Joel]

Well, what's fascinating is that when you, if you've been inside of or listened to or read anything by people in the fire movement.

[Matt]

Well, go ahead and define fire financial independence.

[Joel]

Retire early. So it's typically people who want to work for 12, 15 years and they want to save and invest a whole bunch of what they're making so that they can quit work much earlier than.

[Matt]

The average person, even 20 or 25 years.

[Joel]

Because we still be early.

[Matt]

Even a working career that was 25 years would be shorter than the traditional. Retire at 59 and a half or.

[Joel]

Age 64, 65, probably able to retire in your 40s at that point. Right. So, but, but it's so fascinating because most of the people in that community would subscribe to kind of our basic investing philosophy, whether it's through real estate or whether it's through low cost index funds. But this new company that offers their own fire specific ETFs, like what Fire person is going to be interested in this? Because they have. Here's the rub. The expense ratios are kind of ridiculous in these funds.

[Matt]

There you go.

[Joel]

So we talk about how important.

[Matt]

That's the clincher.

[Joel]

That's the clincher. We talk about how important low cost is when we're investing. And the expense ratios on these couple of fire funds that were just launched are 0.67% and 0.89%. Almost a full percentage.

[Matt]

Yeah.

[Joel]

Every single year being taken out.

[Matt]

That's really expensive.

[Joel]

Yeah. I like when we're. Our favorite funds are a fraction of that. They're like literally zero. Or they're like no.

[Matt]

3 or they are. Yeah. Point zero, 2.03.

[Joel]

So who's going to get behind 20, 25x? So ridiculous expenses. I think most of the fire crowd is going to see through that. So I think it's just kind of fascinating. This company launched, they're catering to, catering to this crowd, who is. There's very much. They're very aware of what they're paying in fees.

[Matt]

They should be very attuned to it. And I don't think there's any way this is going to take off. I was trying to think through like an illustration of like how can we drive this point home for folks? And the actual branding from the site kind of gave me the some inspiration. Right? Because the branding of it, it's like a young couple and they're like in their van, they're on this road trip, like trip of a lifetime, you know, they're sitting on top of it, they're gazing at the stars. Very much kind of geared that way. Which made me think of sort of the online Instagram worthy like posts that you see. And so imagine. Alright, so here we go. There's gonna be a little bit of social commentary here. This illustration too. And let's imagine you're young, you're beautiful, you're getting ready to go on a vacation.

[Joel]

I don't even have to imagine that.

[Matt]

Please. A lot of times you feel the need to document your trip in a ridiculous sort of way. Like you are setting up the perfect shots, everything. It's gotta be picture perfect, man. It's gotta. The aesthetic, it's gotta be on point.

[Joel]

You didn't post on Instagram. Did it even happen?

[Matt]

Did you actually even take that road trip? Did you take that vacation? Did you take that, did you go to the same resort that they filmed the latest white lotus? White lotus, exactly.

[Joel]

Thailand.

[Matt]

Like that's literally what people are doing. Yeah, but what happens when you are so obsessed with the perception of this beautiful trip? If you are so obsessed with like you can't even eat your meal. Like, and you see, sometimes you'll see. I don't, I don't know if you see folks. I've seen folks out like at nicer restaurants and like you can't even. They haven't even touched the food because it's gotta be like, oh, I gotta set it up just right and make sure the lighting's right and all this. What does that do to the actual vacation or to the actual meal? It sucks all the fun. It sucks all the joy out of it. And you're not really actually having a vacation. You're not taking the trip. You're almost. It somehow almost even turns into work.

[Joel]

Right.

[Matt]

And so the very thing that you think you need to do in order to have a fulfilling vacation, it's like the thing that undermines the entire thing. That's how I see these funds. They're touting these funds as like, oh, this is the ticket, man. Like, this is how you're going to be able to sit on top of that VW of Westfalia with your significant other watching the stars. This is how you're going to have the cool leather strap backpack walking down the road with the. The desert stretching out before you. And for that. Oh, how'd you take that picture, by the way? Oh, we set up a tripod, all that kind of stuff. Hopefully this is a helpful way for folks to think about some of these funds. It's something that is completely not necessary to the actual goal of being able to retire early, if that's something that you want to do.

[Joel]

Let's get to a listener question about investing. But first we'll mention the beer we're having on the show. This is called Black Quad. It's by Real Ale Brewing. We'll give our thoughts on this one at the end of the episode. And if you have a money question we want to hear it. Go to howtomoney.com ask for the simple instructions to basically record your question for us. Send it over via email. Super simple. Take you a few minutes and hopefully we can take it next week on the show. Matt, let's get to a question from a listener. She's asking about investing in target date funds. She's got kind of a nuanced question on this.

[Bree]

Hi, Matt and Joel. This is Bree from Illinois. I have a question about my 401k. I currently have it invested in a target date fund where it says I'm going to retire when I'm 64, but my current goals are to retire when I'm 55 and probably work part time after I retire. I'm wondering if I should switch my investments over to a target date fund of retiring when I'm 55 or if I should just keep it where it is. And if I'm switching it, should I look at the market conditions and kind of time it according to that? I have a Fidelity account and I'm 36 years old. I really appreciate your feedback.

[Matt]

Thanks. All right, Bri, thank you so much for sending your voice memo in. And man, Target date funds. Let's talk about them. Because they can be an excellent choice, especially if you are with one of the low cost providers, Fidelity specifically they are one of those low cost providers sort of here and I'll explain why. Because they offer two different kinds of target date funds. One that is actively managed and it actually comes with a much higher expense ratio. And then another that is passive and is index based.

[Joel]

It's easy to get tripped up when you're looking at those Fidelity target date.

[Matt]

Funds, Matt, because they both named incredibly similarly.

[Joel]

Similarly. I just wish they would change the branding on those so that people could understand the difference. But you actually have to click through and look at the expense ratio so you know you're looking at the right one.

[Matt]

And it's. I guess I don't want to completely throw Fidelity under the bus. The, the, the actively managed fund it like if you're browsing their site and perusing it is under like the actively managed section.

[Joel]

True.

[Matt]

But the actual name of the fund, they are both called Freedom, like whatever. Like freedom 35 or whatever. But the one a much lower rate has freedom, let's say Freedom Index 202035 or whatever as opposed to just Freedom 2035.

[Joel]

So make sure you choose the index.

[Matt]

The one with the index because that the actively managed comes with that. I mean I think it's around a half a percent higher expense ratio associated with that.

[Joel]

So this is something like 10x higher expense ratio.

[Matt]

Significant difference.

[Joel]

Yeah.

[Matt]

So keep an eye out for that.

[Joel]

All right, let's talk about target day funds in general. And the point really with the Target date fund is. I don't know, Matt, if you remember those infomercials, the, the Ron Popeil Rotisserie cooker where he's like set it and forget it. And then he would yell that out and the crowd would yell it back at him. I watched a lot of infomercials when I was a kid.

[Matt]

Classic infomercial. I loved crowd participation. Yes.

[Joel]

So good. So that's what a target date fund is for most people is like literally a simple choice and then you never have to rethink it the rest of your life. And it will automatically, you know, your dollar cost averaging into that, that one fund for life and then the holdings inside of that fund will change over time. I think what I love about this, and maybe it's because my brain power is already lacking in some ways. But, but what you have to bring.

[Matt]

To the table, you're not experiencing cognitive decline.

[Joel]

Come on, it's coming. But, but like the brain power you have to bring to this decision is minimal, which we're all for. We talk about simplicity, like as long as the the choice is simple and you understand why you're making the simple choice, that can be the best move for you. Like you don't have to overcomplicate things. All you got to do is toss cash in regularly. And hey, over the years you'll see compounding returns. The only real negative thing though that I would have to say about target date funds is to watch out for those high expenses. Right, because the Fidelity funds, that's one example of that. But then also when you're talking about with other non low cost brokerage firms, the expense ratios on target date funds can be egregious. Also, just one other thing is they could be too conservative actually for younger investors. Bree, just know that 100% stock portfolio is likely to outperform a target date fund over decades. So even if we're just talking about a target date fund that's way off in the future, like 2060 or 2065, that is less conservative by nature because you've got many decades until you reach retirement. Those are still more conservative than an all stock portfolio in something like a total stock market or AN S&P 500 index fund.

[Matt]

Totally. And Brie is in her 30s. For younger investors, they are not aggressive enough. You want that volatility.

[Joel]

Not just because volatility is fun, but because it leads to better returns.

[Matt]

It leads to higher returns. Yeah, because you're exposing yourself to that volatility. And even if you are looking at a target date fund with bond exposure of that's minimal, something like 9 to 15%, that is still too bond heavy, at least in my personal opinion. And yes, that tends to smooth out the ride when that market volatility is high. But it also reduces those returns over time. So for instance, Voo, Vanguard's S&P 500 ETF, it has returned over 90% over the past five years, while Vanguard's 2065 fund has returned 60% over that same time period.

[Joel]

A significant difference in a given month or two. You might be talking about negligible differences, but once you over time it builds up time horizon like you're saying even just five years, which in breeze time horizon like that's still not a whole lot of time. The gap can grow significantly.

[Matt]

It compounds.

[Joel]

And Matt, I still remember the first person who told me about investing basically praised target date fund funds to the max. And so I was like, okay, all right. Target day funds must be the way to go. And then I started doing my research and I listened to more people and I ended up switching out of target day funds into like total stock market type index funds. One, the costs are a little bit lower, but that wasn't the real reason. It was, hey, I think especially given my age, I'm just too conservative right now. Even though it feels like, I don't know, the gap is maybe it's not significant, but, but in reality, over the last 10 years, I've done a whole lot better by being invested in those index funds than I have by being invested in a Target day fund. If I'd kept it the same, my net worth would be smaller. So I think over the long haul, Bri, more stock exposure is good and you've got time on your side to endure drawbacks without batting an eye. If you were, let's say 56, it'd be a different conversation. Let's talk about. Let's get to the heart of Bree's question though, Matt. Which target date fund is right for her? And you might think that the answer is straightforward. And for most folks, I would say it probably is. You're picking the target date fund that has the date closest to when you're likely to retire because not long after you retire, you're drawing down on those funds. But I'd also say this, it's not just about when you're planning on quitting. It's actually more about when you think you're going to need the money you've been saving up. Like, when are you going to actually tap those funds? So just because you quit your job. Well, I don't know, you might have other sources of income. Just like Bri said. She's like, hey, I'm going to probably be working part time. Let's say you're a real estate investor. Well, yeah. Are you actually going to need to tap those funds, Bri, when you quit your main full time job or because you still have income, are you going to be able to keep investing even after you retire, quote unquote from full time work? So my guess is you're still going to prioritize investing and growing those dollars, at least to some degree. And if so, I would likely with something further off like the 2065 Target Date Fund, so that you're, you are investing more aggressively.

[Matt]

Yeah.

[Joel]

Because you're not actually going to be withdrawing those funds immediately upon retirement. We're thinking about more your drawdown timeline than like your I'm retiring for full time work date.

[Matt]

Totally. And Realize too that what we're actually recommending here is for you to do the opposite of what it is that you're asking because you are currently set up to retire at age, I think you said 65, but you're instead thinking about retiring at age 55. And so what you're asking was that, so she's like 36, so she's thinking about retiring age, age 55, so 20 years from now. So what you're considering moving to is a 2045 fund. And so it sounds like you're currently in a 2055 fund. And you're like, okay, should I move it to a 2045 fund? But what we are actually recommending is for you to definitely not do that, but to actually do the opposite. Not to go from a 2055 to a 2045, but to go from a 2055 fund to a 2065 fund. Something that is, or something that does have a longer Runway in order for you to have that exposure to the stocks, which is going to lead to higher returns for you. So that's, I think that's the most important thing here is like, naturally you think, oh, I'm going to retire early, therefore I need to be looking at a fund that is targeted for that date. But especially given your case, the fact that you're talking about this only being a partial retirement, you don't necessarily, you have that flexibility to not tap those funds and for you to essentially weather any, any ups or downs in the current market.

[Joel]

And I do think that desire to retire early, Matt, actually means you should probably be even more aggressive right now because it means you're investing for an even longer time horizon from a drawdown perspective. So instead of a traditional like 25 year retirement, you say you retire at 65 and you need that money until you're 90. Well, you might be talking, Bree, about a 40 year retirement here. So I think the, the, the goal to grow your, your nest egg. Well, it's even more important in these years when you're farther away from needing that money. Totally.

[Matt]

Yeah. So like, as we're talking about risk, it's not something that you want to completely take off the table. You still want stock exposure in retirement and, and in a target date fund, you'll have roughly 50% stock exposure once you hit that retirement date anyway. Interestingly enough, the 2055 and the 2065 target date funds, they actually look really similar right now if you compare their.

[Joel]

Portfolio allocations, almost the exact same.

[Matt]

But that being said, I think the 2055 fund will get conservative more quickly in the coming years. I think this is a case of horseshoes. You're not going to nail it exactly. But I do think a 2065 fund will get you closer to where you want to go if you do want to make any changes. I think looking to more stock heavy options over the next decade is probably the move that I would make. You asked about timing the market. I wouldn't necessarily worry about that. I would just continue to dollar cost average into the market. If you are uncomfortable, this is within a retirement account, so you're not going to get taxed for you to sell. And so but that being said, if you're uncomfortable selling and moving in a different direction, maybe just future contributions put those towards the 2065 or even a 2070 fund. And then over time you got a little bit of both and that can allow you to feel more comfortable with the decisions you're making.

[Joel]

Matt's in a 2150 fund. So it's like when the aliens come to Earth. Like what's crazy is like you say.

[Matt]

2070 and that sounds insane.

[Joel]

It does. It really does sound so far away.

[Matt]

Sound crazy to say that out loud. But like that sounds, dude, we're going to be in our golden retirement years at that point for sure.

[Joel]

Okay, I have a question for you. Some people, Matt, think that, okay, if you're investing in a Target Date fund, you shouldn't have exposure to any other fund besides that. I actually kind of disagree and I think maybe another option for Bree here is to say, you know what, I'm going to keep half in a Target date fund and then the other half in a low cost index fund. Having exposure to both and essentially on purpose choosing to have more specific US Stock exposure in addition to the Target Day fund, you can balance it over time.

[Matt]

And that's kind of Paul Merriman approach.

[Joel]

Yeah, I was going to say that's kind of what, what Paul Merriman, who's been on the show, talks about. But I feel like when you, when you hear any financial planner who talks about, they're like, no target. It's either one Target day fund or you choose another path. Like you don't do both, but I actually disagree and I think you can do both and I think it can make sense. All right, Matt, we got more questions to get to, including one about which retirement account makes the most sense. But there's some state specific tax rules that might make one retirement account we love look really bad. We'll talk about that. And More right after this.

[Matt]

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Nice.

[Joel]

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[Joel]

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[Matt]

Yeah, we talk about our wives and our kids here on the show all the time. Joel, you've got three. I've got four kids. That is. Well, if you are in a similar boat. Life insurance is crucial to take care of your family. If something happens to you, this isn't something that feels especially urgent. It's not a text message or a call from your boss that you've got.

[Joel]

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[Matt]

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[Joel]

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[Matt]

Ooh yeah I do.

[Joel]

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[Matt]

It wasn't super painful, just only. Yeah, no, it was still painful.

[Joel]

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[Matt]

All right buddy, we are back from the break and we will get to that question regarding the prioritization of different retirement accounts. But we now have a question from a listener who he's in a shopping conundrum and he wants to know what you would have done in his situation.

[Nate]

Hey Matt and Joel, this is Nate from Texas and I had a frugal or cheap moment pop into my life the other day that I thought you guys might have some fun discussing. So I was due to buy more shaving razors and typically I buy the 12 pack which is the largest size they offer because you know bulk prices, lowest CPU, and those usually cost just under $45. While I was looking around, I noticed there was another 12 pack of the very same brand, but a slightly different model in a spot marked for $20. And at the time, I thought to myself, there's no way that's right. Plus, it's not my usual model. I'll just go for the devil I know. And it was only after I got home that I realized I almost certainly could have gotten the $20 ones and gotten the store to honor the price, even if it was wrong. And it probably would have been the exact same experience for me shaving. So had the thought occurred to me, and I did that, do you guys think it would have been frugal or cheap? On the one hand, you could argue it was frugal. They made a mistake, and I was simply seizing the opportunity to save a few bucks on a ridiculously expensive but necessary purchase. On the other hand, I could see the argument that it was cheap since I knew that it was kind of ripping off the company and someone had obviously made a mistake. Although, again, you could argue that after I did that, the manager probably would have sent someone to correct the price. So I'm curious what you guys think the right answer would have been in that situation. Thanks for all you do, man.

[Joel]

I always love a good, frugal or cheap.

[Matt]

Nate's got some shopping regerts. He's like, I should have done it.

[Joel]

Hey, man, I should have done it. Can't live your life looking in the rearview mirror. But we will offer some advice here. One, I gotta say, I love that Nate is buying in bulk here.

[Matt]

Of course.

[Joel]

Yeah. So when you buy more razor. When you buy like the three pack or something like that, you're. You're definitely overpaying per razor.

[Matt]

Well, that's all they sell at Aldi. So let's.

[Joel]

Is it three pack? That's all.

[Matt]

I think so.

[Joel]

Okay. But I will say. And we should get to that. Are you still using the Aldi razors right now? Okay.

[Matt]

The Lacura Liqueura brand sounds French. Yeah. Doesn't feel French.

[Joel]

Are they. Are they inferior?

[Matt]

They.

[Joel]

Okay, they.

[Matt]

I don't know if I'm going to recommend those razors to folks. Like, it's not.

[Joel]

I appreciate your honesty because you. You say only good things about Aldi. Typically.

[Matt]

I was trying them out. And it's not that I can't get a close shave. I feel like when I shave with them, I'm able to get a nice, you know, close shave or whatever, but It's. I've noticed that I've been nicking myself more often. So I don't know if that's because the quality of the blades aren't as high as before that I had Harry's, you know, the Harry's razors or whatever. And I'd been using those razors for like a couple years and I'd never cut myself to. Those are better with those.

[Joel]

Okay.

[Matt]

So it seems very clear. I don't know if it's the, the fact that the Harry's. There's like five blades or something like that versus three blades. I don't know what's. What's up with the, the Aldi brand, but that being said, I don't know if I can recommend the Aldi ones.

[Joel]

It's good to know.

[Matt]

Yeah.

[Joel]

Okay. So I do think buying more at a time, typically, even if you're buying the name brand, that'll help you save a little bit. But I think also it's where you buy matters. Right. So if you're buying in bulk at Costco versus maybe another store, you could save more buying at Costco, like and it might be more than a 12 pack. I think sometimes they sell like 20 and 30 packs of razors. So maybe you're set for razors for.

[Matt]

The rest of your life.

[Joel]

Many years. Yes. I think too, despite your run in with these Aldi blades and them not being the best. Personally, I'm. I'm often willing to try and experiment with the cheaper make or model on stuff.

[Matt]

Yep.

[Joel]

Just to see if it holds up or if it's good enough. And then you know what?

[Matt]

Luckily everyone can learn from my mistake and avoid the Lucura brand from. From all.

[Joel]

At least with Aldi though, right? They've got the double guarantee. So you can take it back to the store and be like, hey, this wasn't great.

[Matt]

Yeah.

[Joel]

Well, so if there's a return policy, that's pretty generous.

[Matt]

So that raises a whole nother aspect of Nate's question, which I personally think he's overthinking it.

[Joel]

Okay.

[Matt]

Like, he seemed. And I don't know if like my. Has my virtue expired, Joel? Like, do I need to be more.

[Joel]

Did it ever exist? Is a better question.

[Matt]

Do my. Do my ethics need a tune up? I see a deal. If I see something marked like that on the shelf and I'm pouncing like, I am 100% saying, yeah, no, I mean, it's a no brainer. Even though it might be a different model, it sounds like he was like, okay, well, it's just not something that I've used before. Not necessarily that it's an inferior model, it's just something that was different. But he seemed to think that he didn't want to take advantage of a mistake.

[Joel]

Perhaps I'm okay with taking advantage of mistakes. So here's. So it makes me think of our conversation not too long ago with Scott Kaise, who runs Going, which was formerly called Scott's Cheap Flights. And Scott's all about helping people get the best airfare deals possible. And we specifically talked about mistake fares. And we asked whether people are getting fired, right? If, if one of those mistake fares goes out and people get that like $480 round trip ticket to Tokyo or something like that. Is someone getting fired because they press the wrong button? He said no, typically not, I don't think so. But those mistake fares are. They're often short lived, but they're the best deals out there.

[Matt]

I don't know if that's the confidence that Nate's looking for. Like, I don't think they're getting fired, but maybe they're getting fired.

[Joel]

Well, I think just because someone made a mistake doesn't mean you don't book the deal. It's fair game, right? And Scott's obviously telling all his followers, hey, that there's this great deal out there. I think it's different. Maybe if this was a placement issue, because that could be. If it was just like literally on the wrong spot on the shelf. That could have been an employee or that could have been a shopper putting the thing back in the wrong place. And then you're like, but it was behind the $20 sign. But that's obviously that was clearly reserved for another item, a different razor. I will say this though, because it's a slightly different model. It could just be something that didn't work in the marketplace. They tried it out, they threw it against the wall to see 100%. That's what I think they're saying. Okay. Now we're discounting it heavily to get rid of it. And there are whole businesses built around this model to sell things at a discount that just didn't work. There's big lots, right? I've been getting ads lately, Matt, for this website that sells discount snacks because guess what? Maybe it was.

[Matt]

I know old Joel likes his snackies.

[Joel]

Because maybe they were the chips or the oatmeal bites or whatever it is, or the Dave Chan noodles, the two versions that people. Was it Dave? What's it, what's his name? The mobile yeah, yeah, yeah, yeah.

[Matt]

So, like, fancy ramen.

[Joel]

It's like the two kinds that nobody wanted that are sold at half price. And normally you wouldn't be able to get them that cheap. And this is just the kind of thing that happens in. In the marketplace all the time. It's like, this was a failed product. We'll sell it for cheaper over here.

[Matt]

It's like, I used to be willing to pay for the chili crisps, but these are like the chili chunks. So I don't know if I'm done with that, honestly.

[Joel]

It's exactly like. Like, they're like, we'll test this product out. It doesn't work. And then they have to sell it to a discounter.

[Matt]

These are the chili Chewies.

[Joel]

That's right.

[Matt]

No, I totally agree. Maybe it's just a color. Maybe they're like, oh, guys, you know what? We thought that the blood red razor handle with the blood red razor head, we thought that that would sell like hotcakes.

[Joel]

Sounds cool, right?

[Matt]

But it turns out that dudes don't like looking at a aggressively red razor when they're looking for a smooth, cool shave in the morning. Maybe the market doesn't like the tie dye razor. Seems a little too wacky.

[Joel]

I would.

[Matt]

Losers. I gu going to have to mark it down just to get it off the shelves, you know? Yeah, I totally agree. I think there are all sorts of different reasons like that that would lead a manufacturer to drop the price in order to, you know, move that product. What if it was the, you know, the lotion strips on the heads of the razors?

[Joel]

Oh, yeah.

[Matt]

What if they're like, oh, we want to try out some new scents? It's like hot dog flav. They're like, why does it smell like I'm at the carnival or the fair? I don't. I don't like these razors. And Nate could have been all over this deal. He could have also had a face. Nathan.

[Joel]

He'd impress a lot of people. Oh, a little combo with Nathan's Hot Dogs. Little Joey Chestnut representation on the.

[Matt]

Could have been an incredible crossover. Although, are they still.

[Joel]

No, they're not friends anymore. Joey Chestnut and Nathan's Hot Dogs.

[Cade]

He.

[Matt]

Yeah, he, like, walked out of the most recent sponsorship. No, he didn't compete at the most recent one.

[Joel]

They wouldn't let him, I don't think, because he. He was sponsored by a veggie hot dog or something like that.

[Matt]

I don't get into the free competition drama, Joel.

[Joel]

All right, well, I think one other tip here for For Nate. What? Yeah, one. I think if it's. If that's the price that's reflected, like, take advantage of the deal and sometimes even stock up because it's likely just something that wasn't as appealing to most people and you're willing to zig what others are zagging or literally just paying full price for the razor they're used to. I would also say this. Don't forget about what makes a razor last longer. And really the biggest thing that you have under your control, I mean, it's, it's going to dull over time in some ways because you're shaving your face with it. But if you dry it off after every use, that can extend the life of the blade. And so the truth is water makes the blade deteriorate. So. So even if you buy the nicer blades, taking care of them, dry them off, some people, Matt, even use like a blow dryer to dry the blade off, like 10 seconds with a blow dryer.

[Matt]

That sounds like a cheap move right there. How much electricity are you using?

[Joel]

Yeah, I don't know.

[Matt]

Just kind of dry it off on the towel.

[Joel]

Yeah. Dried off on the towel.

[Matt]

You're wearing a T shirt, right. When you're shaving, like, you're not wearing your fancy clothes, at least. Not me. Wipe it on the towel. It's around your waist.

[Joel]

Unless you're James Bond shaving in a tuxedo. Just. Yeah, give it a little quick try because that's going to give you more time, more shaves with each razor that you use. So I've even seen some folks say, Matthew, they get nine plus months out of a razor.

[Matt]

That was me with my Harry's. Really?

[Joel]

Were you getting nine plus months?

[Matt]

Well, that's when I. That's impressive. We talked about this like last year, a couple years ago. That's when I realized, well, and here's the thing, though. I never was nicking myself, so I was never bleeding. So I didn't think that they were, that they were dull. But I realized after the fact, like, once I finally moved to the new razor head, I was like, oh, this is what it feels like when the razor actually cuts the hair. As opposed to like pull them all out, which is, which is what was happening. There's a whole lot less hair tugging going on as I was shaving. So. But I literally, I mean, I don't shave. I wasn't shaving a ton back then. But the ability to stretch a razor, you know, when you're shaving like once or twice a week, you can really make it last long.

[Joel]

I almost never. I've got the little electric shaver and.

[Matt]

Electric shaver.

[Joel]

Yeah, it works great for me.

[Matt]

Okay. So years ago, something I'm considering. My next experiment is going to be going straight razor.

[Joel]

Oh, yeah, Remember that?

[Matt]

A listener reached out after we talked because I talked about using Kate's old razors in the shower.

[Joel]

And those straight razors are crazy cheap.

[Matt]

So literally, I don't know if the prices are still the same, but it's like you could get a hundred of these, like German, obviously razor sharp single razors that you put in a. You got to buy the handle, but it's like a hundred of them for like five bucks. So what is that, like five cents a razor versus, like, what's Nate paying? Like $3 or like a couple bucks for? You know, for his razors, the. The Aldi brand, you're looking at 75 cents.

[Joel]

Okay.

[Matt]

Roughly per razor, but 5 cents per razor. I mean, that's a heck of a deal.

[Joel]

Okay. If you try it out, please report back. I'll let us know.

[Matt]

Of course. Man, that's show fodder right there.

[Joel]

And the other option, I want that.

[Matt]

That first class, you know, high end. High end shaves.

[Joel]

True story. The other option is for Nate just to grow a sick beard. So think about that too.

[Matt]

You can always do that. Old Rip Van. Rip Van Winklet.

[Joel]

No doubt. All right, Matt, let's get to another question. This one is specifically about the order of operations for retirement accounts.

[Cade]

Hey, Matt and Joel, this is Cade from North Carolina. I really appreciated your thoughts on my wife's pension payout plan that I asked a few months ago. I do have some more questions now that I have received the job offer. After I will graduate from my program, I will be making $130,000 a year in California. And wanted some thoughts on how to best prioritize my retirement contributions. So when I put in 5% to my company's 401k, they will put in a 10% match for a total of 15% of my gross income. But following that, if I have access to both a health savings account as well as a Roth ira, how would you prioritize contributions to one over the other? I know that contributions to an HSA in California are still subject to California state tax, so that kind of hinders the overall tax tax savings that are normally found within the hsa. We likely can't max both mine and my wife's Roth IRAs and my HSA, at least right away. So would you suggest only maxing our Roth IRAs or maxing the HSA and then doing contract contributions to what we are comfortable with to our Roths. Thank you. I really appreciate the show. Best friends out.

[Matt]

Well, Kade, first off, I'm gonna say congrats on that sweet new gig you got. And you know what I'm gonna say is that I appreciate your transparency kind of sharing with listeners out there. It helps them to be like, oh, wait a minute, okay, maybe it makes them. They got something to shoot for. Or maybe it makes them think, okay, if Cade's doing this, I can do this too. I don't know. I appreciate that, the transparency.

[Joel]

That's a great salary, man.

[Matt]

Even in California as well.

[Joel]

I mean, it should be noted in California, you should get. I always think about still solid athletes who sign up to play for the California teams. And there feels a lot less in actuality is a lot less like after taxation. Because if you're in the highest tax bracket in California, what is it, 13, 14% additional being taken out?

[Matt]

That's a lot.

[Joel]

Sign up to play in Florida instead. You get to keep all that money.

[Matt]

But on top of that, he's got that company match. Like, that whole structure is incredible. Right. To be able to get 15% of your salary in your workplace retirement account when you are only contributing 5%, man, I love that. Like, you're like, all right, I'll show up with one third, you show up at the other 2/3. We'll call it 15, make it look like a bandit. I mean, that's actually not done. Because I think you've got the ability to go above and beyond Cade. But regardless, the fact that your employer is so generously stepping up to the plate like that, that's great. I think that's fantastic.

[Joel]

Yeah. And that's a far cry from what most employers do. Most do a 50% match, whatever you put in up to 6%. So if you put in six, they put in three. That's a total of nine. And that's not bad. Some people, some employers are even more generous. It's like, if you put in six, I'll put in six, then you're at 12. But this one, if you put in five, we'll put in 10. That's pretty glorious.

[Matt]

That's awesome.

[Joel]

Yeah. So you're already at that 15% savings rate that we like to to see. But we also love that you want to go further, and it's something that we would encourage, especially since the bulk of those contributions are coming from your employer. We want you, Cade, to Get used to the physical reality of saving and investing 15% of your own money year in and year out. And that's partly because any match is gravy on top. The truth is that match can change at any time. I've heard from many listeners who have had their match pulled back or eliminated, especially when economic times get a little trying. That's one of the first things, Matt, that employers often do is they say, you know that match that we offered? Yeah. We're going to, we're going to have to pause it for now. And sometimes that pause turns into an elimination of the match that they offer. That can be demoralizing for workers and it can also impact how quickly you're able to grow your net worth as well. So I guess I just don't want you to get so used to that that you're like, I'm. And it sounds like you're not, but I'm kicking in 5%. I'm overall saving 15. I can be happy with that. Well, if that pulls back in any way, form or fashion, then you're going to feel the pain of having to increase. So I like the idea of saving and investing a minimum of 15%, aside from what your employer's doing.

[Matt]

Totally. But K's question, Roth or the hsa? The answer is almost always going to be the hsa, of course, because of the triple tax advantage nature of it. In fact, there's that quasi quadruple tax advantage because you're not paying payroll tax, that FICA tax that's on that. And so investing inside of an hsa, and this is of course available to you because you are enrolled on a high deductible healthcare plan. But by investing those dollars that can help you to grow wealth that will never be taxed in ways that no other account offers. It's truly a unicorn. But you got to use it properly. You got to invest those dollars for decades to allow for those compounding returns. And if you do that according to the numbers, like when you crunch the numbers, the HSA is the superior vehicle. Even with the fact that, like you mentioned, that California, that they have some ridiculous HSA rules that effectively limit the benefit, it's still good, right? This doesn't mean that the HSA is a no go, just not as good. Yeah, exactly. It's not quite as advantageous as investing within an HSA in basically every other state.

[Joel]

And you said basically every other state. That's because there's literally one other state that does what California does, and that's New Jersey. And so these two states, which is.

[Matt]

Shaped like California, but on the other.

[Joel]

Side of the country, and both of these states have conspired against their citizens.

[Matt]

Shrink it down.

[Joel]

Right. A much smaller version in a way to basically say, ah, yeah, the federal government says that these accounts are going to be incredibly tax advantageous, and so do 48 other states. But we're going to be the two loan holdouts who treat you like an idiot when you invest in an hsa. So I do not love the fact that these states do not offer the same tax benefit that almost everybody else does. Not only do you have to pay income tax on the money you contribute, you're also going to owe state tax on the growth of the money you experience in those accounts. But should that impact what you do? Cade? The answer is maybe because the hsa, like Matt alluded to, it's still better from an overall tax perspective, even with those inferior tax rules in the state where you're living. But those accounts are starting to look a bit more similar. And the Roth ira, well, it has more flexibility. Right. It allows you to spend for other reasons beyond just health expenses. The hsa, that's how you get the tax treatment, is because it's basically constrained for that kind of spending in particular. Well, one thing that would factor into my thinking here, though, is are you planning to be in California forever? Because if you're likely going to move to another state in the future, you're going to be able to avoid future state taxes on HSA withdrawals, making it more compelling. So, yes, you're earning and investing in an HSA while in California, but if you're taking the money out in another state down the road, well, you're not then going to be subject to the California tax laws that are, again, antagonistic to HSAs.

[Matt]

True. It'll only be a thorn in your side for that period of time while you're there.

[Joel]

I want to say Cade said he was in North Carolina right now. So if he's like, hey, all my family's in North Carolina. I'm in California. That's where I'm gonna. I love this job. But, like, 20 years, 10 years down the line, we think we're gonna move back, well, then I would say that puts another check mark in the hsa, because you're not gonna be subject to the worst parts of California's tax law when it comes to hsa.

[Matt]

I miss the North Carolina part, if that's what he mentioned. What if he was moving from New Jersey to California and he's like, Oh, I think I'm gonna move back home at some point. Dang it.

[Joel]

Foiled again.

[Matt]

And some of it, like if you look at the numbers, yes, like the most like financially optimized thing to do here is to go with the hsa. But it also comes down to what you like, if it's worth, if the hassle is worth it to you as an individual, for you, if thinking through like this personal admin side of your life, if that lights you up, if the job that you're accepting in California is like financial management or something like that, then you're probably going to be all over the numbers. And this is great because not only do you have to track the expenses in order to redeem, that's not the proper term, but effectively to redeem your HSA dollars for retirement by keeping up with your medical expenses. Like everybody has to do that. But in addition to that you have to, I mean, so you mentioned that the income from those investments are taxed on a state level. That's something you have to keep up with yourself. It's taxed as regular income. And so that's just another, I don't know, it feels like a hassle for something that you may not be taking full advantage of. And so if that, if thinking through all of that kind of bums you out, then you can't go wrong with a Roth ira. Keep it simple. You've got all the flexibility in the world. You never have to worry about keeping up with records and medical expenses. It's just something to think about. The fact that you really do, it is treated, it is taxed like a brokerage account there in the state of California. But in addition to these retirement goals, I think like I want you to have the goal of maxing out both Roth IRAs. That's great, the HSA going for that. I think that the 15 into your 401k, this is all awesome. But don't forget about medium term goals that you have as well. I'm not sure if you are hoping to buy a home or not, but if that is a high priority, just make sure you start saving and investing for that goal or other goals you might have. You know, if you're looking to buy a home that is going to be a little more difficult in California. It's certainly not going to be the absolute best way to build your net worth. But you know, that's also not the end goal for most of us when we're looking at purchasing a home. We, yeah, we love all the retirement accounts out there. I love how they can reliably help you to reach financial independence. But just make sure that you are not only looking to the long term like you are on top of things. You mentioned your wife's pension question from a few months ago. Y' all are on it when it comes to your saving for old Cade, an old kid's wife. But when it comes to just don't forget about some of these near term goals and realizing that you get, you know, cash, savings, liquidity, it's important to not overlook that as well.

[Joel]

Cade in five years will be stoked that they've been, you know, they've saved multiple hundreds of thousands of dollars probably already for future retirement. But then what if you want to make some moves in the here and now as well?

[Matt]

Exactly.

[Joel]

Don't forget about that. All right, man, we've got more to get to on this episode, including one about being dropped by an insurance company. What do you do when you get that dreaded letter in the mail? We'll talk about that and more right after this. Let's talk retirement for a second. To me, it feels like it's getting harder for people to reach their goals for the future. We hear about inflation, rate hikes, the changing market. Are we even saving enough? And things keep changing, right? And here is where Fidelity comes in. Whether you're saving for retirement or close to living in it, Fidelity can help you get where you want to go, no matter your path or what happens along the way.

[Matt]

Yeah, but how? Well, they'll help you to create a free, personalized plan that adapts as your priorities change. They'll also show you what's called timely insights. These are small tips on ways to save and invest to help meet your goals. And you can monitor your plans so you can stay on target. The future is coming and so is retirement. Get ready to take it [e-mail] retirement.

[Joel]

Take on expenses charged by your investments and other costs and fees associated with trading or transacting in your account. Apply Fidelity Brokerage Services member nyse, sipc.

[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 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.

[Matt]

Events, 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 it's an.

[Joel]

Interesting time for business. Tariff and trade policies are dynamic, supply chains squeezed and cash flow tighter than ever. If your business can't adapt in real time, you're in a world of hurt. You need total visibility from global shipments to tariff impacts to real time cash flow. That's NetSuite by Oracle, your AI powered business management suite trusted by over 41,000 businesses.

[Matt]

NetSuite is the number one cloud ERP for many reasons. It brings accounting, financial management, inventory, HR into one suite. You have one source of truth giving you the visibility and control you need to make quick decisions. With real time forecasting, you are peering into the future with actionable data. And with AI embedded throughout, you can automate a lot of those everyday tasks, letting your teams stay strategic. We're a super small operation with just the two of us, Joel, but if we were any bigger, NetSuite by Oracle is what we would use.

[Joel]

Yeah, if your revenues are at least in the seven figures. Download the free ebook Navigating Global Trade 3 Insights for Leaders at netsuite.com howtomoney that's netsuite.com howtomone.

[Matt]

Alright buddy, we are back from the break. It is now time for the Facebook Question of the week which is for from Catherine and she wrote ugh. You like my ugh?

[Joel]

I love that she stuck that in there.

[Matt]

Yeah.

[Joel]

Frustration coming out when you read that.

[Matt]

Do you see ugh or do you hear ugh?

[Joel]

No, I definitely hear the former.

[Matt]

The actual ugh.

[Joel]

It's the frustration for sure coming out in tight.

[Matt]

Well, in particular with this one she wrote my insurance company is gonna drop me unless I complete these things by June 7th. Remove yard debris, cut back vegetation, paint the home all one color and cut the tree branches back from the detached structures. That's all fair, but the paint? WTF do they care that my house is all one color? Is there any point in trying to fight it? Joel, what you think? Should she fight it?

[Joel]

Do you? Do you try to fight the man Matt ever? Or yeah, I think sometimes you do. Oh yeah, sometimes you do.

[Matt]

I can be hard headed.

[Joel]

You probably try to fight the man against like better and thinks ways to more craftily deal with this. And maybe that's what I want to suggest, maybe is some, maybe craftier ways to deal with this instead of ease into it. Catherine, instead of letting your frustration get the best of you and just being like, screw you, why are you making me do this? Like, there are ways, I think, to, to get around this and to stay insured without completely ruining your life. So the truth is insurance companies are sending out more of these notices these days. We talked about that actually with our friend Lisa from Consumer Reports not too long ago.

[Matt]

Lisa Gill.

[Joel]

Yeah. And she was talking about how her.

[Matt]

In her tiny home.

[Joel]

That's right. That's right.

[Matt]

And her gravel, which.

[Joel]

The pea gravel. She was addicted to the pea gravel. Just with insurance rates going up around the country and insurers are being a little more cognizant about who they're insuring and what the properties look like. And then on top of that, technology is making it easier for insurance companies to kind of check in and see what's going on. Right. They're using drones, they're doing flyovers, they're taking images in an attempt to make sure they're not taking on undue risk. My neighbor Matt just told me the other day, hey, my roof is more than 10 years old. And now my insurance company is saying they don't want to insure me anymore. This is becoming. Roofs should last for 20 to 30 plus years. And the fact that insurance companies are just getting a little more antsy and squirrely about offering insurance when everything's not kind of perfect.

[Matt]

So that sucks.

[Joel]

For those of you out there listening who haven't received a letter, you might in the future. I remember getting one like these two met where it's like, trim back those branches. Hey, what's. I had this. The weirdest thing. It's hard to even describe. I had like a driveway where there was like a drop off. Do you remember that? At my, my first house, it was a hazard. Yeah, it was a hazard. And so I had to put up like a cement block in there so that the car couldn't go rolling off it. It sounds weird and it was. But like, so I get why the insurance company is basically saying, hey, someone could fly off this parking pad.

[Matt]

I forgot about that.

[Joel]

And injure themselves.

[Matt]

Oh, you would have like totaled your car if your car went on to that.

[Joel]

Yes.

[Matt]

So it's good for there to Be a stop.

[Joel]

I know in many ways it does make sense that insurance companies are saying, I don't know, you might need to do something for you to still be insurable. But I think it can be scary. It can feel like you got to cancel your Saturday plan is to get your house back in ship shape or something like that. Or be left without insurance, which comes with cascading consequences, one of which is forced place insurance. The lender says, oh, you're not insured anymore, we'll find that insurance for you. But then the insurance costs a heck of a lot more than what you were paying. And so, yeah, I think, I know Catherine's frustrated by this, but this should move up her priority list. But I also also just don't think.

[Matt]

It should freak her out. And I think this makes me think these are the kind of times you, you want to have an actual agent, like somebody you can call, someone you can reach out to, because that would be incredibly helpful. Because then, and I'm assuming that there is a way for you to upload pictures and whatnot, but just someone to talk to where you can send them some updated pictures. Let's say when you make those first repairs, right. Like you've cut back some of that vegetation, you trimmed some of those tree branches, that might be enough to satisfy them. You know, like you send those along and you're like, hey, I'm getting quotes for the painting. And then see what they say. You know, it's more kind of like a, there's more of a gray area as opposed to provide proof that all of these points have been addressed.

[Joel]

I think this is more of a negotiation, I think. Yeah. In some ways than it is a hard timeline, like get it done or you're out.

[Matt]

Yeah. Start those talks, getting this started, communicating directly. I think this is the right way to handle this. And it could obviously, I mean, I think it could buy you more time as well if costs to have some of these repairs made. If that's an issue. I think just starting the conversation while simultaneously financially preparing for that and maybe even yourself. Yeah. Take a Saturday, borrow some tools from a neighbor, like work on getting things cleaned up because buy some beer for.

[Joel]

Your friends, have an all hands on deck party to get rid of some of the excess vegetation.

[Matt]

Because in the end I do think that this is something you're going to have to address.

[Joel]

Yeah. And I think Catherine might be thinking, oh, you know what, maybe this is the perfect time to shop around for insurance. And the truth is maybe almost every year is the right Time to shop for insurance. Like, you should probably be shopping regularly, regardless.

[Matt]

That's a good thing to do.

[Joel]

Yes. Get. Get quotes elsewhere, sure. But going with another insurance company likely isn't going to save you from this repair list because they will probably do a drive by or a drone buy of sorts too. They will require similar fixes in all likelihood. So that might not save your bacon on this one. And while we get the shock right, these things should really be taken care of proactively. And I also get the frustration with the house color thing, Matt.

[Matt]

She's like, why do you care, dude?

[Joel]

There's multiple tones.

[Matt]

I think this is insane. Like, this. This is where I would be pushing back. I would be asking some serious questions. I have zero understanding how the color of your house is going to impact the liability that your insurance.

[Joel]

I bet they have some data somewhere. I bet they do.

[Matt]

How? But like, how would the color of a house or the fact that it's painted two tone. It's like, okay, it's dark green and light green. I don't know. An hoa. I understand an HOA saying, oh, sorry, according to the covenant that you signed and to be a part of this neighborhood or part of this community, it has to be one of these five shades. I get that. I even understand, speaking of different shades, like, if it's in a historic district, if there's some board that's just like, oh, no, we've only. We've identified the Sherwin Williams historic registry colors or some, you know, something like that. It makes no sense in my mind why the color of a house increases or decreases the liability and the potential for the insurance company to fork out repairs on that house. Yeah, like, that makes no sense to me.

[Joel]

I get that. And I think that's. Of all the things that are on that list, that's the one that Katherine has the most more of an ability to push back on, especially given how expensive that can be. She's like, hey, what if I do this, this and this and maybe explains the house call. This is where an agent comes in, like you were talking about. Explains why insurance companies, they don't typically have like, an artistic side to them. They're more.

[Matt]

I guess so, man.

[Joel]

Yeah. So. So. But maybe you can explain that to them and buy more time on that one.

[Matt]

But it comes down to, like, money as opposed to like art. Right? Like, art is. Is subjective as opposed to insurance is objective. It's all about the numbers. And that's where, like, if they can prove that, like, this color is so Offensive that this house is more likely to be vandalized. Okay. Then there's, like, some. I don't know, there's a case to be made there, and maybe they have that data. Maybe. Maybe. But, like, I don't know, man. It seems like it's in. Yeah. Infringing upon, like, what is this, like, Soviet Union? Like. Like Stalin?

[Joel]

Like, it does feel a little un.

[Matt]

American cracking down and saying that she's got to paint her house. I hate that.

[Joel]

I'd be curious to know which insurance company this is and why they're cracking down specifically on house color.

[Matt]

We need Catherine to post a picture of her actual house. And maybe when she posts a picture, it's like, oh, it's that color. That's racist. I'm not at all saying that that's the case, Catherine. But. But maybe there's, like, a mural or something like that, and it's distracting for. I don't know. Like, I was thinking about what could be so offensive, and then I actually thought of some things that could be very offensive to certain folks, for sure.

[Joel]

I guess, like, if it was graffitied or something like that, maybe.

[Matt]

Yeah. But, buddy, let's get back to the beer that you and I enjoyed today, which was a black quad, which is a. Not surprisingly, a quadruple. That's why I say quadruple. This is a beer by Real Ale Brewing Company out of. Oh, this is. Was this the last one from Texas?

[Joel]

That's right.

[Matt]

Or one of the ones you got from Texas Blanco?

[Joel]

Texas Blanco, yeah.

[Matt]

Yeah. What'd you think?

[Joel]

That's how a gringo would say it.

[Matt]

Blanco.

[Joel]

It's dark. That's how they bill it. So they're spot on there. It's got some. Some raisin, dark fruit vibes going on. It's. It's. I will say it's not the most complex and interesting quad I've had. Kind of very basic in one note. It's. It's solid. But I love a good quad, and this one let me down a little bit. But honestly, based on. I know you're not supposed to judge a book by its cover, Matt, but sometimes I do judge beers based on the can art.

[Matt]

Do you not like the clip art? It's a little kind of vibe. Little subpar.

[Joel]

A little subpar. So I wasn't. I did not have the highest of expectations going into this. And so I guess I would say my expectations were met.

[Matt]

I really try not to judge a book by its covers. So I went into this thinking. All right, actually, when you said what the style of beer we're drinking. I was like, oh, you know what? I'm totally in the mood for a quad. But this one drank a little harsh. Like it almost had like some metallic sort of flavors going on. So there just wasn't a whole lot of nuance going on. You caught it. One note. I'm willing to give it two notes. You know, it's got height and length. It just doesn't have the depth. It's two dimensional. It's not. It doesn't have that three dimensional sort of aspect that you get out of some of the better quads or some of, you know, out of some of the better stouts. That's like, oh, oh yeah. I can taste the sweet notes and the dark, bitter, roasty notes. Oh, it also has the spicy notes as well. That's the, the, that's the depth, obviously, I love.

[Joel]

Those are typically Mexican stouts.

[Matt]

Specifically, we're talking about Westbrook's Mexican cake.

[Joel]

Oh my gosh.

[Matt]

Which is a, you know, that's one of the few beers that we've had.

[Joel]

On one of those.

[Matt]

Again, that's one of the few beers we've had on the show multiple times. I think we've had it like two or three times for good reason for in. At different, different years because every time they brew it, it's slightly different. It should tell you something about the beer we're drinking. The fact that we're talking about another beer that we've had off in the.

[Joel]

Past lusting after the beers of yore.

[Matt]

But it's still fun to try something new and of course share a beer with you, my friend.

[Joel]

No doubt. Alright, that's gonna do it for this one. We'll put links to some of the resources we mentioned up on the [e-mail] there's a bunch of other money saving information up there too. If you are just, you know, trying to figure out, hey, where the money gears at, click start here at the. On the top of the homepage or there's a resources page as well if you're looking for things that we mention frequently on the show. And sign up for the newsletter while you're there too. You won't be disappointed. Matt. Until next time, Best friends out.

[Matt]

Best friends out. This is an Iheart podcast.