Ask HTM - Finding Travel Deals, 401k Match Changes, and Our Take on Long Term Disability #955

Summary

How to Money Podcast: Ask HTM - Finding Travel Deals, 401k Match Changes, and Our Take on Long Term Disability #955

Release Date: March 10, 2025
Hosts: Joel and Matt | iHeartPodcasts

In this insightful episode of How to Money, co-hosts Joel and Matt delve into a series of listener questions that span from securing the best travel deals to navigating changes in 401k employer matches and making informed decisions about long-term disability insurance. With their trademark blend of humor and financial expertise, they provide actionable advice aimed at empowering listeners to make savvy financial choices.

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1. Travel Deals: Maximizing Savings on Vacations

Listener Question: Nathan asked for tips on booking flights and hotels, specifically inquiring about the best websites, whether to book packages together or separately, and the advantages of booking directly with hotels versus third-party sites.

Hosts' Insights:

Joel and Matt emphasize the importance of flexibility in travel planning to snag the best deals. They recommend utilizing tools like Google Flights for comprehensive flight searches, including fare alerts that notify travelers when prices drop (50:12). Matt highlights the value of memberships like Scott’s Cheap Flights, which can provide access to exclusive deals that might not be widely advertised.

For hotel bookings, the hosts suggest a mix of third-party platforms such as Hotwire and Priceline, especially when travelers are flexible about the specific hotel, focusing instead on star ratings and general quality (51:41). However, Joel notes a shift in the landscape where direct bookings with hotels can sometimes yield better deals and more flexible cancellation policies compared to third-party sites. They also recommend calling hotels directly to negotiate rates or secure better terms, a tactic that’s often overlooked.

Additionally, Matt points out that leveraging memberships like Costco Travel can offer competitive pricing on all-inclusive packages, particularly for destinations like Hawaii or the Caribbean where package deals can lead to substantial savings (54:20).

Notable Quote:

Matt (50:22): "If you are a flexible travel nerd, Scott’s Cheap Flights are delivering those sweet deals to your inbox, and you might be like, 'Wait a second, Germany for $382? I'm in.'"

2. Navigating Changes in 401k Employer Matches

Listener Question: Chelsea reached out regarding her employer’s recent restructuring of their 401k matching program. Previously, her company offered a 7% match on eligible pay, but the new structure includes a 3% non-elective contribution for all employees and an additional 4% match on employee contributions, effectively maintaining the 7% total potential match.

Hosts' Insights:

Joel and Matt dissect Chelsea’s situation, highlighting that her employer’s shift appears to be a move towards ensuring every employee benefits from company contributions, regardless of their personal 401k contributions. Matt reassures Chelsea, suggesting that this change likely aims to encourage broader participation in retirement savings, especially in light of regulations like the Secure Act 2.0, which promotes greater financial literacy and employee investment in retirement plans (11:09).

They discuss the potential benefits of this change, such as immediate vesting and simplifying financial planning for the employer, which can lead to more predictable and manageable matching contributions. Joel underscores the importance of not reducing one's overall savings rate despite the structural changes, advising that any additional funds should be redirected into other retirement vehicles like Roth IRAs or HSAs to maintain robust retirement savings.

Notable Quote:

Joel (12:22): "The fact that Chelsea was there even before she got an added incentive from her employer is great. It's laudable and it's truly what most people should shoot for is, I think, a minimum savings rate of 15%."

3. Long Term Disability Insurance: Private vs. Employer Policies

Listener Question: Greg from Maryland inquires about whether he should maintain his private long-term disability (LTD) insurance policy or switch to his new employer’s federal disability plan. He expresses concerns about job security, preferring not to rely solely on his employer, and the longevity of maintaining a private policy.

Hosts' Insights:

Joel and Matt delve into the complexities of LTD insurance, emphasizing that while employer-provided policies can offer convenience and potentially lower premiums, private policies often provide more comprehensive coverage and greater flexibility. Matt explains that Greg’s private policy, which includes riders for inflation adjustment, likely offers more robust protection compared to standard employer plans (25:45).

They advise Greg to consider his personal risk tolerance and the specific coverage details of his employer’s policy versus his private one. Joel suggests that unless the employer’s plan matches or exceeds the private policy in terms of coverage and benefits, maintaining the private policy may be more advantageous, especially given Greg’s concerns about job security and the potential need for consistent income during prolonged disability periods.

Notable Quote:

Matt (27:10): "Getting a disability insurance policy can help you if you can't work for an extended period of time, but you might not need the one you purchased on the open market anymore, thanks to this new policy offered by your work. I say you might not."

4. Retirement Account Strategies for High Earners

Listener Question: Greg, also addressing retirement preparedness, seeks advice on whether to continue maxing out his Roth IRA, consider a backdoor Roth, or leverage post-tax contributions to his employer’s 401k. He is contemplating how to best optimize his retirement savings given his potential increase in income beyond Roth IRA eligibility limits.

Hosts' Insights:

Joel and Matt guide Greg through several strategies to continue maximizing his retirement savings despite income constraints affecting Roth IRA contributions. They recommend increasing contributions to a traditional 401k to reduce his modified adjusted gross income (MAGI), thereby potentially allowing him to continue direct Roth IRA contributions. Additionally, they discuss the Backdoor Roth IRA strategy, where Greg can make non-deductible contributions to a traditional IRA and subsequently convert them to a Roth IRA, bypassing income restrictions (40:18).

Matt also touches on the concept of a Mega Backdoor Roth, which involves making after-tax contributions to a 401k and then converting those funds to a Roth IRA, enabling even greater tax-advantaged savings. Both hosts underscore the importance of seeking personalized advice from a financial planner to navigate these options effectively, especially given the complexity and potential tax implications involved.

Notable Quote:

Joel (42:53): "The backdoor Roth can be the perfect way for you to basically keep contributing to that account if your income continues to rise."

5. Additional Financial Tips: EV Charging and Cost-saving Measures

Beyond the primary questions, Joel and Matt offer valuable advice on maximizing savings through everyday actions, such as optimizing electric vehicle (EV) charging times to take advantage of lower off-peak electricity rates. They advocate for strategies like unplugging EVs during peak hours and utilizing specialized electricity plans that offer reduced rates for EV owners (57:10).

Notable Quote:

Matt (57:37): "If you’re an EV owner in particular, it’s worth considering. Think about how much something like that could save you."

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Conclusion

In this episode, Joel and Matt provide listeners with comprehensive answers to pressing financial questions, blending practical tips with strategic insights. From optimizing travel expenses and understanding employer benefits to safeguarding income through disability insurance and navigating retirement account options, the hosts equip their audience with the knowledge needed to make informed financial decisions.

Listeners are encouraged to submit their questions for future episodes and explore additional resources mentioned throughout the show on the How to Money website.

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Notable Timestamps:

• 50:12 – Travel Deals Discussion Begins
• 11:09 – 401k Match Changes Introduction
• 25:45 – Long Term Disability Insurance Advice
• 40:18 – Retirement Strategies for High Earners
• 57:10 – EV Charging Savings Tips

This summary encapsulates the core discussions from episode #955 of How to Money, offering a comprehensive overview for those who missed the live session.

Transcript

[Joel]

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[Matt]

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[Joel]

This is Matt and Joel from the how to Money podcast.

[Matt]

Indeed. And this spring is a great time to start thinking about travel plans for the summer, figuring out how you're going to pay for that travel as well. And one great way to financially support your travel is is to host your home on Airbnb. It's simple and a great way to make some extra cash.

[Joel]

And now the Airbnb Co Host Network makes hosting even easier. You can access a network of high quality local co hosts who can help you with everything. They'll handle all of the messaging with guests and make sure everything is ready for their arrival. Find a co [e-mail] host the New.

[Matt]

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[Joel]

By earning cashback rewards with Colgate Palmolive Rewards available while supplies last. Limit Supply US Only January 1, 2025 through March 31, 2025 Full terms Visit cprewards.com welcome to how to Money. I'm Joel. I'm Matt, and today we're answering your listener questions.

[Matt]

Happy Monday everybody. As you are likely recovering from having lost one hour of slee yesterday last night. Spring forward is the worst man. Oh yeah, fall back.

[Joel]

The absolute best.

[Matt]

I remember realizing that for the first time as a freshman in college, someone mentioning that and it was we're hanging out and it's like 11:30 at night thinking okay, maybe we should kind of wrap things up. But then someone said no, it's actually technically it's more like 10:30.

[Joel]

And we're like, yeah, let's keep gaming.

[Matt]

Y'all we kept the party going because of that. Fallback is the best.

[Joel]

Yeah.

[Matt]

Spring forward is the worst.

[Joel]

Hope you guys are recovering well.

[Matt]

Yeah. This is our Ask how to Money Monday episode though. We're hear from a listener who's asking for our favorite way to book a travel deal for all the folks out there who are looking to get some vacation under your belt this summer, this spring. Another listener, she's got some 401k match changes there at her employer who's it's getting a little more generous. It's throwing her for a loop. She's trying to figure out what's going on. And another listener is wondering what our take is on long term disability insurance. Maybe we'll even share whether or not we have long term disability ourselves. We'll get to that and more during our episode today, buddy.

[Joel]

An EV charging question too, Matt, that we'll take. So.

[Matt]

Electric vehicles.

[Joel]

If you want the electric vehicle to save you the most money, you got to figure think about how you charge it and when you charge it.

[Matt]

I don't know if there is anything else out there that Joel thinks about more that he doesn't have than an electric vehicle.

[Joel]

That's true. Yeah, you're right. One of these days though, I'll get back in the EV game. Had that Nissan Leaf for six years. Loved it.

[Matt]

That's right.

[Joel]

I think EVs are fantastic. I just.

[Matt]

You were an early adopter is what they're called, Joel.

[Joel]

Yeah. And what do they say?

[Matt]

You've earned it.

[Joel]

Pioneers get slaughtered. And I might have with my 80 mile range Nissan Leaf. I see people selling those now.

[Matt]

You can still drive it around for like 20 miles before the thing crapped out by the time you sold it.

[Joel]

Well, I see people selling them now and it's amazing. They're like really only gets about 45 miles to the charge these days.

[Matt]

I'm thinking about it from a kid's standpoint, like isn't that kind of what you want? It's like they can't get far from from home before they. It's like boomerang where they have to kind of like get back home. Like, yeah, I gotta charge the ride.

[Joel]

If you get that car for your kid, make sure you have AAA because you might need to tow it on occasion. It's true.

[Matt]

Before we get going, I've actually got a frugal or cheap for you. And this is gonna be part confessional as well. Oh yeah.

[Joel]

All right, Usher, bring it.

[Matt]

I think our listeners, you. I think you quasi know what I'm about to share. But listeners hopefully should get a kick out of this.

[Joel]

I like playing priest to your confession.

[Matt]

So, so obviously we've got a small business here that we run. And so obviously we have a business checking account. But we don't just have one business checking account. We actually have two separate banks who we bank with because of just the.

[Joel]

Massive amounts of money that are going.

[Matt]

Exactly. Once you go above that 250.

[Joel]

Just kidding.

[Matt]

Just kidding. Now, the reason that we have two separate bank accounts is because. So we've always had a Capital One checking account. We got grandfathered in. It's a total, completely free account.

[Joel]

One of the best business accounts out there.

[Matt]

That's great.

[Joel]

But then we found another one.

[Matt]

It's great. There's another one. And we've talked about this company, this bank on the show before, Lili. It's L I L I Co. And the reason we had previously mentioned them, it was actually. I'm pretty sure it was in response to a listener's question. Oh, yeah. And they were looking to find a place to stash their business funds for their small business. And we went and found this bank. And the reason we still have them is because they pay 3% in the savings account that you can link to the business checking account.

[Joel]

Like six, nine months ago, it was 4%, wasn't it? It was.

[Matt]

I think it was a little bit higher. But still, 3% is fantastic.

[Joel]

Yeah. Especially for business accounts, which typically pay nothing.

[Matt]

And so someone might ask, well, why are you keeping that Capital One account around? Well, it's because when we open that account with them, they sent us a bunch of checks, a bunch of paper checks. So we've got these big, oversized, almost looks, you know, like the big oversized check that businesses write.

[Joel]

They make you feel so legit, makes.

[Matt]

You feel like a little kid, like you're writing fake checks or something. I don't know. But we rarely write checks, except for our 401k, which is with Fidelity. The way it's set up, we have to send in a paper check. It's not something that we can do digitally. And I think folks can probably hear where we're going with this. In an effort to optimize, we keep most of our cash over in Lili, earning that interest, which, by the way, they charge you for the best rate. But of course, you earn back more than what that rate is if you've got a decent amount of money in there. And so when I cut checks for the employer portion of our 401ks, Joel, I have to transfer Money from Lili over to Capital One. And guess what I forgot to do in the most recent iteration?

[Joel]

Yeah, I forgot to send it over.

[Matt]

There's just a lot financially going on with a business in my life. Completely slipped my mind until I saw the insufficient funds. Basically, a bounce check is what happened. And so we got hit, you and I. 450 each, I guess, with a $9 insufficient funds charge. And so the question here is, are we being frugal or cheap by having two separate accounts? And in this case, it came back to bite us. Or, you know, I dropped the ball, basically, is what I'm confessing here. But I want to know.

[Joel]

No worries. It's worth it. I'm not mad at you if you're wondering. Yeah.

[Matt]

Thank you.

[Joel]

Well, I think the question comes down to how onerous is it? And then how much are we actually making by having a higher interest rate from Lili? Part of it, too, was just testing for so we could offer good information to our listeners. Like, you and I are guinea pigs of a sort from time to time for financial products to a certain extent. So I think for that reason alone, it was worth at least giving it a go. But at this point, now that we've given both a go, they're both great accounts. Should we consolidate back to one?

[Matt]

Maybe.

[Joel]

Maybe.

[Matt]

Just for simplicity, I like seeing that interest payment come in every single month. It more than pays for the. It's a $15 a month charge. And we make much more than that.

[Joel]

Yeah.

[Matt]

Again, not because we have vast quantities of money there in our business checking account, but enough, in my opinion, to handle making one digital transfer every three months, which is how often I typically do that.

[Joel]

Yeah. So I think. Yeah, let's. Let's hold on to both. I mean, I have frugal multiple.

[Matt]

It sounds like you. Sounds like you're giving it the thumbs up. Frugal.

[Joel]

I think so. And yeah, I think that's one of those things too, where, Lily, maybe for someone who has a small business that doesn't have much money sitting in there for long, the 3% interest might sound great. And you might be like, whoa, I haven't seen any other business accounts that offer a rate of interest like this, but if you don't have a decent chunk sitting there inside of your business account, which you and I have to do to pay other people, or when money just kind of sits there for a minute before we pay ourselves, it's.

[Matt]

Good to have some reserves to cover. Rent, utilities, super small businesses.

[Joel]

It's just. And we're a very small business, but super small businesses might. Their eyes might pop open and be like, whoa, great. This is awesome.

[Matt]

But.

[Joel]

But in reality, it's probably not worth jumping through those hoops if you gotta pay the 15 bucks a month and you don't have much money earning interest.

[Matt]

All right, the beer that you and I are gonna enjoy during this episode is called a beer messu. That's right. It's like tiramisu, but beer. This is a gotta love a beer.

[Joel]

With a bad pun.

[Matt]

An Imperial Milk Porter by Six Bridges. And we will share our thoughts on this one at the end of the episode.

[Joel]

No doubt. All right, if you have a money question, we'd love to take your question on the next Ask HTM episode. Just basically record a voice memo on your phone, email it over to us at howtomoneypod. And. And if you're like a little confused, just go to how for the simple directions spelled out. Make it nice and easy for you. Matt, let's get to a question specifically about what to do when your employer changes the 401k match that you're eligible for. By the way, this comes from listener Chelsea.

[Chelsea]

Hi, Joel and Matt. I had a question about an update that my company is making to the 401k plan. Specifically how they structure the matching of employee. So previously the way it worked was that the company matched contributions up to 7% of eligible pay and now they are dividing that into a 3% non elective contribution. So the company contributes 3% whether or not an employee pays into the 401k plan or not. And then they're also adding a 4% elective dollar for dollar match on top of that. So everybody gets 3%. And then if an employee contributes more of their own, then they can get the full match up to 7%. And previously I don't believe there was any non elective contribution. So to me it seems like the company is now paying more into the employees 401k accounts. Basically a 3% for everybody. It doesn't affect me because I've always contributed more than 7% and gotten the full match. But I guess I'm just wondering why they would make this change. I'm sure it maybe has tax implications or something, but.

[Matt]

Yeah.

[Chelsea]

Just curious and wondering if you could clear that up for me. Thank you.

[Matt]

Oh, I think Chelsea's got a suspicious streak in her. She's. She's thinking, hey, you guys aren't gonna pull the wool over my eyes. No, that's. I don't think that's actually the case, I think Chelsea, but I get that.

[Joel]

Instinct because it feels like in the financial world, like they're trying to dupe you. There's their gotchas.

[Matt]

They're trying to get one over you.

[Joel]

Yeah, all over the place. You and I, we highlight scams or we highlight people who get taken advantage of. And so Chelsea, she's on the alert. I don't want to become that. That person.

[Matt]

Totally. No, I don't think that that's actually what's happening. It sounds like Chelsea and you didn't share what company you work for, but it sounds like it's a just a generous, solid company. It doesn't sound like that they're trying to trick you or anything. I think they might be paying a bit more. Right. So you're saying, well, like, why would they do this? There are many reasons I think that we'll get to. But bottom line, they're just making some of those matching funds easier to access, no matter what the financial status of the individual employee is. You, of course, you were brilliant to have always gotten the free money. You've always gotten the full match. And that means that you've been contributing with the employer money Included, at least 14% of your overall salary each year. Because I think she said she was even going above and beyond that. So that's, that's amazing. That's fantastic.

[Joel]

That's ultimately where we want everyone to be. The fact that Chelsea was there even before she got an added incentive from her employer is great. It's laudable and it's truly what most people should shoot for is I think a minimum savings rate of 15%. Matt, you kind of alluded to this. Let's talk about why her employer is doing this. I think at least in part, they're probably doing it to ensure that every single employee is at least saving something for their future. This is, especially with Secure Act 2.0, kind of part of the push to get the average employee invested, many of whom don't invest at all if there's not an automatic opt in. And so, you know, financial literacy in our country is pretty bad. That's pretty self evident. And your employer, well, they might see that a decent chunk of folks are missing out on this perk altogether. Like they're just not banking anything for their future. And maybe it sounds a little paternalistic, but I think of it as a good thing for employers to kind of watch out for that segment of the population and kind of force their hand in that way. Although really it's the employer forcing their own hand to make those contributions. And sure.

[Matt]

And you can always opt out. It's not like you don't have a choice, like you automatically get enrolled. But if you don't want to continue to do that, it's just back out. You can back out. It's just a nudge in the right direction. There's absolutely.

[Joel]

Yeah, right. I think this is, this is going to help, right. The ship at least for, for some of those people, at least a little bit. Right. Getting them to invest something. Then with these automatic contribution requirements becoming normal, this is just an on trend move for your employer, Chelsea. It could also make budgeting more simple for your employer. This is another reason that they might be interested in doing this. With elective contributions, it's hard to know what percentage of folks are going to invest and how much they're going to invest. The employer is like, wait, is Chelsea going to max her 401? We're going to be giving the full match to her. And what about other people? What are they going to do now? They're going to have at least a better idea of how much the match overall each year is likely going to cost them. I think it just makes for easier financial planning for your employer. So maybe it feels a little more generous and it also just gives them a little more future knowledge about what they're going to have to fork over.

[Matt]

Yeah, I think that's definitely true. It's both for the benefit, I think of the employer, but also the employee. Because from an employee standpoint, it's like, hey, we're all in this together. Like we are all saving for our future. There's like a cohesive team, sort of like can do attitude.

[Joel]

Sure.

[Matt]

And I think that that is especially for new hires. Let's say you're considering a few different employers and you've got this one and they're saying, hey, no matter what, and this isn't going to affect your pay, but you're going to be enrolled in a 401k where you get a 3% match of your salary. It feels like free money. There's something that's really attractive about that that I think I would be drawn to, especially if I was early in my career.

[Joel]

Well, I think the other thing that maybe goes underrated, under noticed, is those benevolent employers, they tend to get good street cred. I think about the employers in our town, Matt, where we live and the there are companies who just constantly make the headlines about being great places to work. And part of that is often what the benefits are. And some of these companies just have superior matches or better 401k plans or.

[Matt]

Completely free health care where everything is covered, including.

[Joel]

And word gets around in your network and people are like, oh yeah, you should come over here, work at mailchimp, because hey, they got these like cool benefits that most people offer. And that's just great press for anybody out there who's looking for work. They're like, yeah, maybe I'll apply over there.

[Matt]

It's funny that you mentioned. That's totally what I was thinking of when I mentioned the healthcare one because I like, I considered applying for a job like a long time ago because I had a bunch of friends thought.

[Joel]

You'Re gonna say last week.

[Matt]

I was gonna say last week. Well, that's the thing. This was years ago. I don't know if they've changed their benefits since they were purchased by the big company that took them over. But even still, yes, like you said, I think that's something that absolutely that is worth considering.

[Joel]

It's like that halo effect, right, that the company gets and the more generous they are with their employees, the more likely they are to get lauded for that. And that's going to attract more great employees.

[Matt]

Totally. And again, so it's not just for the benefit of the employee, but for the employer as well. I think you're talking about budgeting, but I think it's just going to be more. I think it could be easier to administer as well when you know that everyone is on board and that at a minimum they're getting a 3% match. Like you said, it's good from a planning standpoint, but it's going to be much easier to administer. I think the other big thing that this could do for your employer is that it allows them to achieve what's known as safe harbor status by contributing to everyone's 401k who works throughout the company. They can avoid certain non discrimination testing requirements. And this can be just a big pain in the butt that the something that the IRS requires. Many small businesses opt to go this route and basically it's just easier to ensure that their plan is completely compliant with government regulations. And the cool thing for employees about a safe harbor 401k is that the 3% match also vests immediately. It happens right away. So there's no need to wait a year or two to ensure that those funds are actually years before they have the ability to claw them back.

[Joel]

Yeah, and you and I were easily.

[Matt]

Count on those dollars being yours.

[Joel]

You and I were actually talking about that at lunchtime. Before we recorded Matt and just how with the job hopping that happens so much in today's world, especially younger workers not staying at jobs nearly as long. You've got to look at the fine print of how long it takes for that match to vest. Because if it's two years, if it's three or four years and you're not there that long, all those match dollars could just fly away, vanish out the window. It's nice to know that in one of these sorts of 401 plans, the match is vested immediately. There's no risk of losing it.

[Matt]

I'd call those phantom 401s. That would be the Friday flight headline.

[Joel]

That's a, that's a good term. I'm sure it's been used before.

[Matt]

Just tuck that one away, okay? Yeah, actually, we probably have already used that.

[Joel]

You probably stole it from somebody just unknowingly. There is, I think, maybe a potential downside for you in that I just want to highlight that you could dial back your PayCheck deduction to 4%, right to where you're still getting the full 7% from your employer because of this change. But your overall savings rate would go down. And I would just say we're okay with you taking the extra money and putting it into, let's say a Roth IRA or an HSA or a different retirement vehicle if your funds would be better suited. If you're like, hey, I'm gonna get the full match, which means I can reduce my overall contribution, but hey, I'm gonna take those funds and put them in another vehicle that's gonna be just as good for my future. That's great. But don't let this non elective match change cause you to save and invest less overall. That's the only way. I think this could have a negative impact. Like, cool, I'm just gonna dial my contributions back. I'm investing instead of that 14%, only 11%. And I'm just gonna consume the rest and upgrade my budget, increase my spending. That is truly, as I thought about it, the real only downside, from your perspective that I could think of.

[Matt]

That's only. I mean, so yeah, you're taking a more conservative financial approach to the long term, making sure you have enough set aside. That's only a downside if, let's say you have only been contributing towards your 401k or saving for retirement for like 5 years. Or let's say you are earlier on in your career, but let's say you've been doing this for 20, maybe even 30 years. I see this as not necessarily downside. If you now have the ability to perhaps pull back a little bit on your savings rate, and that allows you to prioritize some other financial. Other. Not financial goals, but other. Oh, yeah. Financial goals too. Like you got to. Yeah, like those still take money. And so not knowing how much you have set aside, that's the only thing that makes me want to qualify. The fact that that might be a negative, because it could be a positive, it could be a great thing. I think Chelsea, either way, is going to continue to. She sounds like a saver, so she's gonna get after it. And I love that more of her fellow employees are gonna have the chance to get that nest egg rolling. You know, just. It takes a little bit. Sometimes it takes a little kick in the pants. And in this case, the employer is doing that for. For folks.

[Joel]

And now when she passes the HR person in the parking garage, she doesn't have to give him the stink eye because she's like, wait, oh, no, it's all good.

[Matt]

She's like, oh, how come Chelsea, she doesn't look nearly as suspicious as she used to. We would pass each other, but we do hope that that answers your question. Gives you plenty to think about. Joel, we've got more to get to, including we're talking about retirement accounts here. We're going to hear from another listener who has a proliferation of retirement account options available to him. We'll get to that and more right after this.

[Joel]

Are you 100% sure you're doing all the smartest things for your money? To be completely honest, I wasn't. And that's coming from someone who has committed their life to personal finance for nearly two decades.

[Matt]

That's right. So you looked into a company called Domain Money. Their team of expert certified financial planners get to know what matters the most to you. They analyze every aspect of your financial life. They build you a personalized plan with clear steps to reach each one of your goals. They make it incredibly easy. Domain Money. It's like having your own personal cfo, therapist, and money coach all in one.

[Joel]

Yeah. I personally worked with Katie Song. She's an absolute gem. And the best part is that you can work with Katie or one of the expert certified financial planners on her team. I'm always looking out for great resources to recommend to the how to money community. And I can confidently tell you that Domain Money exceeded my expectations. And for a limited time, they're doing free 30 minute strategy sessions. So start today by booking a free strategy session with one of their experts by going to domainmoney.com howtomoney I am a current client of Domain Money. I received a financial plan as part of the compensation for Domain Money's advertising on the podcast, and therefore I have an incentive to promote Domain Money. What does the future hold for business? Ask nine experts and you'll get 10 answers. Will we have another bull market in 2025 or we're going to get a bear market? What about inflation? Will it continue to calm or will higher prices remain sticky? Wouldn't it be cool if someone could invent a crystal ball that would give us some foresight?

[Matt]

Well, until then, Joel over 41,000 businesses have future proofed their business with NetSuite by Oracle, the number one cloud ERP bringing accounting, financial management, inventory, HR into one fluid with one unified business management suite. There's one source of truth giving you the visibility and control you need to make quick decisions. With real time insights and forecasting, you're peering into the future with actionable data. When you're closing the books out in days, not weeks, you are spending less time looking backwards and more time on what is next. Our business is really small, but if we needed netsuite, we would be pumped about the time the cost savings that it provides. Whether your company is earning millions or even hundreds of millions of dollars, NetSuite helps you to respond to immediate challenges, seize your biggest opportunities.

[Joel]

Speaking of opportunity, download the CFO's guide to AI and machine learning at netsuite.com howtomoney the guide is free to you at netsuite.com howTomoney that's netsuite.com howtomone AI.

[Mike]

Is rewriting the business playbook with productivity boosts and faster decision making coming to every industry. If you're not thinking about AI, you can bet your competition is. This is not where you want to drop the ball, but AI requires a lot of compute power and with most cloud platforms, the cost for your AI workloads can spiral. That is, unless you're running on OCI Oracle Cloud Infrastructure this was the cloud built for AI, a blazing, fast, enterprise grade platform for your infrastructure, database, apps and all your AI workloads. OCI costs 50% less than other major hyperscalers for compute, 70% less for storage and 80% less for networking. Thousands of businesses have already scored with oci, including Vodafone, Thomson Reuters and Suno AI. Now the ball's in your court.

[Matt]

Right now, Oracle can cut your current cloud bill in half if you move to OCI minimum financial commitment and other terms apply. Offer ends March 31st. See if your company qualifies for this special [e-mail] strategic that's oracle.com strategic.

[Joel]

All right, Matt, we're back. Let's keep the Ask HDM questions rolling. This next question is specifically about a benefit that you get from your employer. But is it going to be enough to cover you in a time of need?

[Greg]

Hi, guys, this is Mike from Maryland. Long time listener and I love the show. My question for you is about long term disability policies. I'm a healthcare worker and I bought a disability policy three years ago that pays out about $100,000 a year with riders to automatically adjust for inflation. I recently became a federal employee literally a week before the new administration came into office. And reading through my benefit package, I saw that I have the opportunity to buy into a policy through the federal government. If you were in my position, would you drop the private policy and join the government policy? There's a couple reasons I'm hesitant to drop my policy. One is I work for an agency that the current administration is not very fond of. And being a new employee in the probationary period, even though it's a federal job, I'm not 100% sure how secure my job is. Second is I prefer not to rely on my employer completely when it comes to my livelihood. For example, I could purchase malpractice insurance through my employer, but I always keep a private policy because in the end, I don't think the company will always have my best interests in mind. And third is I've never stayed at a job for more than two years, so staying 20 years and keeping the policy seems daunting. And I know it'll be more expensive to restart the policy when I'm older. Curious to know what you think. Thanks.

[Matt]

All right, Joel, long term disability insurance policies.

[Joel]

Can I throw one thing out there before we get into long term disability?

[Matt]

Sure.

[Joel]

Just when Mike mentioned he works for the federal government and we talked about this on a recent Friday flight with what Doge has been up to.

[Matt]

Oh, that's true.

[Joel]

Just prioritize your savings and be prepared for whatever might come down the pike. It sounds like in Mike's case, his position might be disfavored. So I just want to put that blinking in red on his radar just to be prepared in case he were to lose his job or something like that. Sure.

[Matt]

Well, the fact is, Mike has done his homework. You know, he's purchased his own long term disability policy before even taking this job. And we think that most folks, not everyone out there. But we think most folks need term life insurance. We talk about it fairly regularly, but disability insurance, it kind of gets the short end of the stick. We don't talk about it nearly as much and it might even be more crucial. And that's because stats show that 1 in 4 folks will actually become disabled, at least for a short period of time before they retire. And so, Mike, if you were to become disabled for a couple of years, well, that's going to have a significant impact on your income, most likely. And while there might be some different programs out there, like state or government benefits that might be open to you, getting those benefits is a, it can be a hassle, it's a process. And they likely won't provide anything close to what your current long term insurance policy is willing to pay out.

[Joel]

Yeah, it might be a drop in the bucket compared to what you need compared to your current income. That could help, but it's certainly not going to cover the vast majority of your expenses. Having a disability insurance policy, yeah, it could help you if you can't work for an extended period of time, but you might not need the one you purchased on the open market anymore, thanks to this new policy offered by your work. I say you might not. But there are a few caveats here. By the way, in our opinion, most folks don't need a short term disability policy. There are.

[Matt]

Ooh, good opportunity to talk about the, the duck insurance.

[Joel]

That's right. Yeah, yeah, yeah, that's what, that's, that's what Aflac is typically trying to sell you. Like if you get hurt.

[Matt]

I try to avoid the actual names of these companies. You'll just in case they want to sponsor the podcast. Well, but you will not hear us voicing for Aflac, that's for sure.

[Joel]

True. And so yeah, that's, that's what an emergency fund is supposed to help with. So some folks might say, oh yeah, let me get the short term disability policy just in case I get injured. But it doesn't last that long. Well, the emergency fund, we think of that as self insuring, as essentially your short term disability policy that you are covering with funds that you have in a high yield savings account. We like the idea, right, of self insuring for a potential six month work drought or something like that if you were to lose your job. It's why we're so keen on saving up a substantial emergency fund. And it's part of our money gears if you go check it [e-mail] but a long term disability policy, that is something we're more keen on. It's something that can help if something happens to you and you can't work for quite a while for an extended period of time. And Mike, given your particular circumstances, I'd be reluctant, I would say, to let go of this individual policy right now.

[Matt]

Well, and I think that it's clear that Mike is. He's hesitant to give this thing up. And I think this in part comes down to your risk tolerance and how comfortable you are playing around the edges. Essentially close to the edge of the cliff. And so if you are someone who likes to be a bit more independent, or if you don't have others who you can count on for income, this is absolutely something that you're going to be more drawn towards. But at the same time, like, let's say you're thinking, okay, what would happen if I couldn't work, if I couldn't earn an income for a couple years? What, what would that scenario look like? And if you've got a mom who would like, basically make you move home and like, take care of you and help cover your expenses or something like that. Okay, well, maybe. Or, you know, you've got some parents who are like, man, I know that they would love to have me back, back home in my hometown, back in my childhood bedroom. You know, like, if that's the kind of scenario that. And there's like in a really solid financial position. Well, guess what, I don't think long term disability is something that you wouldn't necessarily want to consider all that much. And so, yeah, a lot of other backstops. A lot of it comes down to your individual situation. Yeah, yeah. And not just especially with the price.

[Joel]

Of it, which is something we need to talk about too.

[Matt]

Totally. And it comes down to like, if you have a, like, I don't hear him mentioning a partner necessarily. And so it's kind of. Kind of. It comes down to him and his ability to earn an income. But if you have a partner, partner who can work or who is currently working. Yeah, that's like, okay, well, we're not going to necessarily be in dire straits if the worst were to happen.

[Joel]

To me, that defrays some of that risk, the emergency fund, as well as another paycheck coming into the household, maybe not having kids yet that you would also have to support.

[Matt]

Less responsibility.

[Joel]

Yeah, all those things would allow you to take a little bit more risk. And it sounds like one of the things Mike said is he doesn't necessarily plan on staying in this job for too long or any job for too long. And I think even if you wanted to, Mike, it sounds like your job might not be super secure. But if neither of those things were true, we might have different advice. Because opting for the work provided policy only, you'd likely be paying a fair amount less every single month for that coverage. But for everyone listening, I would say double check and see what the actual coverage includes. Because employer provided insurance policies rarely provide enough coverage on both the life and disability fronts. So you might say, oh great, a free plan from my employer. Fantastic. I don't have to buy my own policy because I am covered. And that's just like a maybe, but probably not, right? Sometimes doubling up actually makes the most sense. I think, you know, taking the minimum amount of life insurance, for instance, for most employer plans and getting extra coverage on your own often makes the most sense. Matt. Back when I worked for a company getting a W2, they offered life insurance at 1x your pay. And so that just wasn't enough life insurance. But you could buy more through the company. But the rates that they would charge if you were to buy it through the company were far in excess of what I could get on the private market. And so let's say I was uninsurable, I'd had a bunch of different health catastrophes, then maybe it would make sense for me to get life insurance, more life insurance through my employer because it would be prohibitively expensive on the open market. But for young, healthy people in particular, not getting more insurance through your employer and getting it on the private market means you're going to have enough coverage. It means it's going to cost less.

[Matt]

Yeah. Just because there's a policy available to you through your employer doesn't mean it's the best nor necessarily the most cost effective way to go about it. And it sounds like Mike's, you know, that he's got his own solid policy there that's going to pay out well if he does encounter a disability. And he also mentioned the inflation adjustment as well. There's an inflation adjustment clause and that's pretty massive. Like that's a huge deal. And so I think if I were these days. Yeah, yeah, well, hopefully, yeah, hopefully we're past the worst of it, but man, it's inflation, it is sticky. If I were you, Mike, I would hang on to that policy, at least for now. And by the way, for folks out there who might be considering this, if you are looking into it, just know that a policy out there on the open market, it's not cheap, it often cost 1 to 3% of your annual salary. It depends on a number of factors, elimination periods and things like that that are built into your specific policy. But given the stats, it is an insurance policy that more folks should consider. That being said, I don't want to discourage folks, but I don't personally have a long term disability policy in place. Joel, do you?

[Joel]

No, I do not either. But I will say we're risky dudes. I guess if I lost my voice completely, that would be. That potentially put me in a bad position. But talking about kind of how much risk we can take.

[Matt]

But there's also other things. Well, here, before you keep moving, you're touching on like a specialized career, right? And if you, let's say you're like a concert pianist and like this is the only thing that you can do and you make a ton of money doing that, that's the kind of scenario, the kind of situation where it might pay to go with some long term.

[Joel]

Disability or there are literally people who have like football players, pianists who have insurance policies on the parts of their body that make them income. Right. There are specialized policies for those people. And you and I, I don't think we qualify to get that sort of level of insurance from our, you know, from our car.

[Matt]

But anybody can talk like I do. And most folks actually can speak a little bit better than I can, Joel. But that's an important consideration though, like if you are flexible to doing other. Like, I've done lots of different things in my life. I don't have like a career that looks incredibly specialized. I'm very open to being flexible to trying new things. Kate and I, we've even talked about this and she's like, well, I would go to work if something happened to you. It's like, okay, cool. These are conversations that are important to have.

[Joel]

And if you broke your back, maybe I would host by myself for a little bit. And then you'd be back on the mic hopefully in no time.

[Matt]

Like they're all sort of host from the bed. Just be like, all right, this is true. This is just what it looks like now, right?

[Joel]

We could do that. I think the other thing to note of why, like I don't have a policy is I'm comfortable holding on to more cash, self insuring more even for long term potential disability needs. And you're right, Matt, there's just a lot of flexibility I think that we have that maybe not everybody has.

[Matt]

Exactly.

[Joel]

And so I would say, yeah, it's not for everyone, but more people should consider it.

[Matt]

Yeah, and it depends too, how close you are to retirement, because that means you've got more money set aside. You're less dependent on your income to provide for your standard of living as opposed to your investment dollars doing some of that heavy lifting.

[Joel]

The closer you are to financial independence, the less likely it makes sense to you.

[Matt]

Oh, 100%. But let's get to our next listener question. This is from a listener who is considering a number of different options to make sure that he is properly prepared for retirement.

[Nathan]

Hi, Matt and Joel. This is Greg from Los Angeles. I really enjoy the show and all the knowledge and insight that it provides. And I keep telling my friends and co workers about it to help give them a better financial footing. I am a public servant, so I am contributing towards a pension when I retire. Over the last couple of years, I have been maxing out my Roth ira. My question is I am in the beneficial position of potentially earning more than 140,000 in the next couple of years. And I wanted to get your thoughts about, you know, contributing to my personal Roth. Should I continue to do the Roth IRA and once I get to that limit, just do a backdoor Roth or. What I'm finding from my employer is that we have the ability to contribute to a savings account which is a 401k and I'm wondering if I should just start that post tax and roll over my current Roth ira. I am in the process of also my pension. I contribute to the450,457 offered by my employer. And this 401k would then be a third bucket to fill either pre or post tax. Appreciate all your time and consideration and wishing you the best in coffee and beer.

[Joel]

Ooh, Greg, thank you first of all for spreading the word, for telling other people about the show. We really appreciate it if every single one of you out there listening told one friend just told one friend just proselytized a little bit about htm.

[Matt]

We double our listenership, Joel.

[Joel]

That's how it works, Matt. So than thank you, Greg. Appreciate that. And by the way, great coffee and beer. They really are inexpensive ways in moderation to bring some extra joy to your life.

[Matt]

Even with they can be inexpensive ways. Sometimes they're like we say, it's our craft beer equivalent for a reason. We're not spending the bare minimum on our beer, Joel.

[Joel]

No. And you're not on your coffee either in particular.

[Matt]

I've actually, I've kind of changed my mind.

[Joel]

You dial it back a little bit. Yeah. Is that partly because coffee bean prices have gone up so much that the expensive stuff has gotten even more.

[Matt]

Have you personally experienced that for sure.

[Joel]

If you were just to look at what I mean, I shop mostly at Costco, but yes, I look at the prices.

[Matt]

I wonder if it's impacting the cheaper beans then. Because the nicer stuff. So, okay, so first of all, personally. All right, try not to let this be a massive tangent, but I have personally dialed back my coffee consumption. I don't know if you've noticed, but I don't make coffee here in the office anymore.

[Joel]

Now that you pointed out I've noticed. But no, I didn't think about that.

[Matt]

It's been a couple months and I realized, you know what? I feel like my coffee drinking has gotten out of hand. Not from like a health standpoint. I could totally fall asleep at night just fine. But I realized it was something I wasn't needing, I guess. I don't know, it felt like it was getting just a bit out of hand. In particular, when I was. And I was just buying some of the nicer stuff. Like some of the bags I was buying, man, it's like a 10 ounce bag or like a 12 ounce bag for like 25 bucks. That's what I'm talking about.

[Joel]

Your fancy coffee is you're looking at.

[Matt]

Like over $2 an ounce. But I think Kate and I have found the sweet spot. Specifically, if folks want to know countercultures, big trouble. They sell it at Whole Foods, which is on our path to school for carpool. And oftentimes you can go in there and you get it on sale. And like when it's on sale, I'm paying less than a dollar an ounce.

[Joel]

Okay.

[Matt]

And this is like solid, really tasty stuff that we're drinking on the regular. I still go out and splurge and we'll get like a bag of the nice stuff or someone gifts me some really good stuff. Which you. You like to do. Yeah. One of our local roasters. That's phenomenal.

[Joel]

I'm still drinking, but those bags are expensive. I'm still drinking the Kirkland signature beans, but I don't know any better. And I kind of don't want to know better. I'm like purposely blindfolding myself. That's to fancy coffee to make sure that I don't spend too much.

[Matt]

I'm trying to do that with wine, but the more wine I drink, I'm like, oh, that's. Now I know. I don't even know how to say it. Rio Ho. Yeah, it's like a Spanish wine. I had like one of those recently. And I was like, oh, this is. I like this.

[Joel]

Okay, so sorry. We'll stop this tangent very soon, but I'm gonna pick you up a bottle. I haven't tried the Kirkland signature version of the Rioja. I wonder if it's any good. We'll give it a try.

[Matt]

Yeah.

[Joel]

Okay.

[Matt]

I have to give it a go.

[Joel]

But let's get to Greg's question, Matt, because that's what we do on the show, is answer questions at some point.

[Matt]

We will get to your question, Greg, after we talk about all the things that we want to talk about.

[Joel]

That's right. This is our show after all, Greg, not yours.

[Matt]

Hey, he's the one that brought up coffee and beer, so I'm assuming he's a fan as well.

[Joel]

If you didn't want that tangent, you shouldn't have asked for it. Well, congrats on having a pension available to you. That's becoming more rare, obviously. But what should you do, Matt, when you're making the big bucks and you can't contribute directly to a Roth? That is a question. That is actually a good question to have. It's a good problem to have because it means you're moving up the income spectrum. And some people, they think of that as a sad day, but I think of it as, like, a happy day because it means you're crushing it when it comes to the money you're making. I would rather make more and lose access than make less and still be Roth eligible. Like, if I had to, you know, had to pull the lever on that.

[Matt]

Choice, it's like option A or option B, which one would you choose? Okay, well, I hate that I can't contribute directly to a Roth, but it means good things.

[Joel]

Right? And, you know, Greg must be single because the income limit for joint filers is, like, $230,000. He. It's $146,000 for single individuals. But as you crest that threshold, my first suggestion would be to invest more overall dollars, which could help you remain Roth eligible 100%. That's the solution more people should consider, Matt.

[Matt]

Totally. Yeah. So if Greg were to start contributing to his traditional 401k, so. Not his Roth, if that's an option that's available to him. Roth, 401K. No, no, no, no. Go with a traditional 401K, and that could reduce your modified adjusted gross income, allowing you to keep contributing directly to a Roth, meaning that there are going to be no extra hoops for you to jump through. Basically, if you're Right on that line. Every dollar you contribute to a pre tax account is going to help you to lower that modified adjusted gross income, potentially keeping you under that income threshold, which can mean you can keep socking money into your Roth IRA like clockwork, just like you always have. Then if your income does go up substantially over time or if you aren't keen on investing more money, there are other ways to pull this off as well, which you've touched on.

[Joel]

But I think that's sometimes Matt's people are asking about, oh, student loan payments. If I contribute more to my retirement account, I might be able to lower those student loan payments. I think that's just another reason to. Yes. Consider investing more, particularly in those years where it might make a difference in your monthly budget. Right. And in this case where it might make a difference in your Roth eligibility. And Greg, you know, higher earners such as yourself can take advantage of what's known as the backdoor Roth. So that's something else that's worth mentioning. It's not another account. Some people think that it is. It's a process that you go through that involves basically extra hoops. And so what happens is you contribute money to your traditional IRA and then you convert those dollars into your Roth IRA instead of making that direct contribution to the Roth ira. And what you need to know is you're not claiming any sort of tax deduction for that initial contribution to your traditional ira. You'll make what's known as a non deductible contribution. Read up on the details. We've got a piece on this up on our website. We'll link to it in the show notes. But the backdoor Roth can be the perfect way for you to basically keep contributing to that account if your income continues to rise. And we love that you're trying to continue to put in after tax dollars into investments. Because I think having more Roth dollars, Matt, it's just going to mean more tax flexibility for Greg when he gets into his retirement years. He's going to have kind of the ability to dial in his tax rate if he has two bucks to pull from.

[Matt]

And the last strategy that Greg mentioned, contributing to his 401 and then converting those funds to a Roth IRA. That's what's known as a mega backdoor Roth, which I know is kind of ridiculous, gets a bit confusing. But if you've got even more money that you want to invest on top of maxing out your Roth ira, well, contributing to that would allow you to invest even more dollars there towards your tax advantaged. Roth ira. So and with him he's talking about all these options that he's got available to him. Right. Like he's got the pension, he's got the Roth IRA that he's been maxing out every year. But then on top of that, contributing to your employer plan as well. That's. I feel like he's entering, Greg's entering beast mode sort of territory. He's like, or God mode. You remember doing God mode in Dune? Oh yeah. Back in the day. His eyes have glazed over, they're like white and he's like indestructible from a retirement standpoint.

[Joel]

It's an embarrassment of riches essentially that Greg has here. And I will say too, Matt, I feel like I got a little confused listening to Greg's question. I just want to make sure that we're not missing anything here. So one thing I would suggest, Greg, since there are, there's a lot of money you're investing at this point and there are a lot of options open to you, I think it might make sense to talk to a financial advisor. We have talked about two different places that we suggest people go find an Advisor. There's hello nectarine.com and then there's Domain Money. Those are both two great places to turn. Domain Money likes to. They're all about giving you kind of an all encompassing financial plan. And so the cost is more expensive. Hello, Nectarine. And I've actually went there, Matt. It used to be 150 bucks flat for an hour. Now they have advisors who charge between $150 and $300 an hour. So they've changed their business model. And more of those advisors are offering premium model. Yeah. And more of those advisors are now offering Domain Money ish sort of plans too. So if you're like, I just got a few questions about this, that might be a great place to go. Especially again, you don't want to let the tax tail wag the dog. But you do want to make sure you're making a smart decision for your future and for your current and future taxes. So it might make sense to pay somebody for a couple hours of their time to kind of dice the details here.

[Matt]

Totally. So on the note of planning for your future, one, I guess one caveat too. It's always great to plan for your future. But Greg, I wouldn't spend too much time on this as well because so he said that he in the future years might be getting close to like earning close to 140 like you mentioned, 146 is the cutoff for Roth IRA, but that was actually for last year for 2024. For 2025, it's $150,000.

[Joel]

Yeah.

[Matt]

And so what I'm pointing out here is that by the time you hit that, you get closer to 140. Greg, like, there's a good chance that that threshold is moved even higher. And I'm not saying that you don't have the ability to, like, catch that threshold at some point. More power to you, man. Like, I think you can totally do that.

[Joel]

That's the goal.

[Matt]

Yeah, absolutely. I think there's likely a very good chance that you're going to be able to earn more than what that threshold is.

[Joel]

Like a greyhound. You want to catch that rabbit or whatever it is.

[Matt]

But I'm just highlighting the fact that you're not quite there. And they're going to continue to raise that with inflation. I mean, I think, like, just a few years ago or maybe four or five years ago, it was at like $125,000 or something like that. So it has come a long ways, and I think it will continue to do that as long as inflation continues to be sort of a thorn in everyone's side. So something else to keep in mind.

[Joel]

No doubt. So, yeah, you might not actually have much of a problem, and you might be able to kind of keep going the easy route of contributing directly to that Roth for many years to come. Just depends on how quickly that income escalates. But, Matt, we've got more to get to on this episode, including we'll talk travel tips. We'll get to that and more right after this. Are you 100% sure you're doing all the smartest things for your money? To be completely honest, I wasn't. And that's coming from someone who has committed their life to personal finance for nearly two decades.

[Matt]

That's right. So you looked into a company called Domain Money. Their team of expert certified financial planners get to know what matters the most to you. They analyze every aspect of your financial life. They build you a personalized plan with clear steps to reach each one of your goals. They make it incredibly easy. Domain Money is like having your own personal cfo, therapist, and money coach all in one.

[Joel]

Yeah. I personally worked with Katie Song. She's an absolute gem. And the best part is that you can work with Katie or one of the expert certified financial planners on her team. I'm always looking out for great resources to Recommend to the how2money community. And I can confidently tell you that Domain Money exceeded my expectations and for a limited time they're doing free 30 minute strategy sessions. So start today by booking a free strategy session with one of their experts by going to domainmoney.com I am a current client of Domain Money. I received a financial plan as part of the compensation for Domain Money's advertising on the podcast and therefore I have an incentive to promote Domain Money. What does the future hold for business? Ask nine experts and you'll get 10 answers. Will we have another bull market in 2025 or we're going to get a bear market? What about inflation? Will it continue to calm or will higher prices remain sticky? Wouldn't it be cool if someone could invent a crystal ball that would give us some foresight?

[Matt]

Well, until then, Joel over 41,000 businesses have future proofed their business with NetSuite by Oracle, the number one cloud ERP bringing accounting, financial management, inventory, HR into one fluid platform with one unified business management suite. There's one source of truth giving you the visibility and control you need to make quick decisions. With real time insights and forecasting, you're peering into the future with actionable data. When you're closing the books out in days, not weeks, you are spending less time looking backwards and more time on what is next. Our business is really small, but if we needed netsuite, we would be pumped about the time the cost savings that it provides. Whether your company is earning millions or even hundreds of millions of dollars, NetSuite helps you to respond to immediate challenges and seize your biggest opportunities.

[Joel]

Speaking of opportunity, download the CFO's guide to AI and machine learning at netsuite.com the guide is free to you at netsuite.com howtomoney that's netsuite.com howtomone and now a word from our sponsors at Betterment when investing your money starts to feel like a second job, Betterment steps in with little work life balance. They're an automated investing and savings app, which means they do the work.

[Matt]

Yeah, while they build and manage your portfolio, you build and manage your weekend plans. While they make it easy to invest for what matters, you just get to enjoy what matters. Their automated tools simplify the complex and they put your money to work optimizing day after day and again and again. So go ahead, take your time to rest and recharge. Because while your money doesn't need a work life balance, you do make your.

[Joel]

Money hustle with Betterment. Get [e-mail] that's B E T T E R M E N T.com investing involves risk, performance not guaranteed.

[Matt]

Alright buddy, we're back from the break. Let's keep talking about money. And of course now we've got the Facebook question of the week. And this week it's from Nathan and he asked, I was wondering if anyone had tips on booking flights and hotel. Are there sites that are good? Should I book them together or separately? Should I book directly with the hotel or with prices I see on other sites if they are cheaper? What do you think? Joel? All of the above.

[Joel]

That's a good question. There's a lot to talk about here. We'll do our best to offer a brief but helpful answer.

[Matt]

Just don't travel, book nothing. If you, if you want to save the most amount of money, stay home.

[Joel]

If you want to save you more, live in your mom's basement. That is going to be the best way to have that 90% savings rate that everyone's shooting for. Matt.

[Matt]

But occasionally buy some groceries for the house. Come on man, you don't want to.

[Joel]

Be a total leech, otherwise she's going to kick you out. Well, we are all about traveling and saving money on travel. Maybe we should just mention a few of our favorite sites. Matt. For travel and flights specifically. It used to be this combo of Google Flights and Southwest but now, thank the good lord above, Southwest flights are included in the Google results. So it's a one stop shop. You can set up fare alerts which is clutch. And I don't know if you need any other sites for booking besides maybe a going membership which used to be known as Scott's Cheap Flights. If you are a flexible travel nerd, I think Going is great because they're delivering those sweet deals to your inbox and you might be like wait a second, Germany for $382. I'm in. I didn't even realize I could get there that cheap. And that's what Scott's Cheap Flights does so well. If you just take one international flight a year based on their recommendations, you easily more than pay for the membership fee. I think Skyscanner is another solid site, but I don't know. I think that combo of Google flights, Southwest, Scotch, cheap flights. If you're just using those three resources, I think you can get mostly where you want to go.

[Matt]

Yeah, and that's typically the most expensive part of traveling.

[Joel]

One other thing on Google Flights is setting fare alerts. So when you're like here's where I want to go, make sure you set that fare alert and look at those.

[Matt]

You don't have to keep Checking on it every time.

[Joel]

And Google even tells you, hey, actually right now this is like an average time to buy. Or hey, this is a really good price. You should book now. And that's always helpful. That helps me know when to pounds.

[Matt]

Yeah, buy, make it happen. Be done with it. As far as hotels though, Hot Wire, Priceline, they're great. Don't forget about Airbnb, of course, we're always big fans of them. But if you really want a hotel, we like those third party sites. Especially if you're willing to book a hotel room without knowing specifically where you're staying. Like if you don't really care about the name of the place and you just want like a star rating, right, Like a certain quality, certain caliber of hotel, that's totally the way to go. The hot wire, hot rates, that could give you an incredibly low price price line. They've got the express deals and I think that that can be a great way to score a deal. And these sites used to have the best deals the majority of the time. But things have changed recently. Many of the hotels that you see listed on these actual websites, they've kind of wised up. And so if you see one that you like, look up pricing directly on their website. And what you can do, you can actually give them a call, which very few folks are willing to do these days. But if you call them up, there's a good chance that they'll match or even beat a deal that you're seeing elsewhere. And then on top of that, you typically will get a better cancellation policy as well by booking directly with a hotel versus one of these third party sites. Non refundable. It can be worth it if you're getting like the absolute sickest deal. But if not, you know, I like the idea of keeping your options open just in case you want to change your mind or something else comes up and you want to pounce over there instead of over here.

[Joel]

One of the things that I think that I've noticed, Matt, we're trying to book through Hotwire or Priceline on occasion is man, the deal, the nightly rate looks like it's way better than maybe what's offered through the same hotel booking directly on their site. But when you click all the way through and you look at the taxes and fees, all the fees, they're much more expensive. On some of these third party travel sites that, that talk about helping you finding the best deal, you're like, at the end of the day, I'm not really saving much money. The cancellation policy is way Crummier. Actually, maybe I'm paying more by going through one of these third party sites than going directly through the hotel. That did not used to be the case. It felt like you could almost always get a better deal on a third party site. That just feels like the era that Hotwire and Priceline when they had the monopoly on the best prices. That's. That's not really where we're at anymore.

[Matt]

It's not like it used to be. Yet it's worth it to have another Safari or Firefox. Not Firefox. What is it? Chrome browser open and doing the command tilde to be able to Firefox. Firefox is what they do people still use that? No, I'm sure there's some Firefox users out there. But also, hey, we almost forgot about this. Costco Travel. Don't forget about that because depending on the type of trip that you're taking, you might find better deals on all sorts of like in particular like the all inclusive style travel packages. And that's particularly true for like more exotic destinations like Cleveland. Not Cleveland, like Hawaii, like the Caribbean. And as always, the number one way to get a great travel deal is just to be flexible. Not only on the dates that you're looking to travel, but also the location. I think the best way to think about going on a trip is just to be like, at some point in this season, I want to take a break. And then, man, the world's your oyster and you're going to absolutely get the best deal. And then the Google Flights Explore feature is going to be awesome for that. You might get crazy cheap flights to an awesome place that wasn't even on your radar just because you clicked around some. You were like doing a little bit exploring, see what's out there, look where the deals are. And doesn't take long before you're like, guess I'm going to go to Mongolia. Sure, why not?

[Joel]

Didn't realize you get there for 280 round trips. Yeah, that's the cool thing. When you click the Explore feature, you might just be made aware of insanely low prices to a destination that you hadn't even thought about. And it might be, guess what? Especially if we're talking about Europe, a train ride away from the place you really want to go. And so you're like, sounds like fun. Great, let me fly into Milan and then I'll still get to hang out in Tuscany because the flight to Milan was way cheaper.

[Matt]

You're describing my travel back in gosh, when it was 2003. Joel.

[Joel]

Oh. Did you do that exact itinerary?

[Matt]

We flew into Milan.

[Joel]

Okay.

[Matt]

We took a. A. It was like a really long train ride. This is one of my first train ride. Yeah. Yeah. This one was rough.

[Joel]

Well, especially when you're younger. You got extra free time.

[Matt]

Yeah.

[Joel]

We're willing to do it to save the money.

[Matt]

We totally did that. And here is a little piece of advice that Nathan isn't asking, but consider driving, because especially if you have a.

[Joel]

Can't drive to Milan.

[Matt]

You can't drive to Milan. But, like, I mean, consider something a little bit more local instead of going abroad. Everyone thinks about something more exotic. But there's a lot of amazing stuff here in the United States. And I know, especially with kids when they can't fully appreciate all that's out there. Plus, they're also not appreciating how much it costs to fly in a plane, the ability to pile everybody in a car and to go see the mountains of West Virginia before we go see the mountains in the Alps.

[Joel]

Hey, says the guy who scoffed at my Cleveland suggestion.

[Matt]

Hey, I'm gonna hit up Cleveland at some point, but just haven't been there.

[Joel]

One of these days.

[Matt]

Yeah. So something to consider as well.

[Joel]

All right, Matt, one more quick Facebook question. This one's from an anonymous poster. They said, frugal or cheap? Unplugging my EV when peak hours hit and plugging back in after 7pm When I'm home and don't need to go anywhere.

[Matt]

No brainer.

[Joel]

100% frugal. Right. I'd be curious to know the kilowatt per hour price difference here, but often we're talking about getting that electricity for less than half of the price of full peak cost. I don't see why you'd pay extra if there's an easy way to avoid it. Matt. I think for this poster too, I would check with your electricity provider to see if there's an even better plan that you can be on as an EV owner. At least where we live, the power companies offer something that's known as a super off peak rate.

[Matt]

Oh, yeah.

[Joel]

And so this rate is between 11pm and 7am it's only 2.2 cents per kilowatt hour, which is like a fraction of what it costs typically to get electricity.

[Matt]

I think on Peak is 30.

[Joel]

Yeah.

[Matt]

And so literally it's 15 times more affordable.

[Joel]

Crazy times.

[Matt]

That's insane.

[Joel]

So if you're an EV owner in particular, it's worth considering. Think about how much something like that could save you. Especially. Especially if you're the kind of person who's willing to, I don't know, maybe do your start your washer and your dryer at night before you go to bed too, or early in the morning dishwasher. Also if you're using those appliances too during those hours and charging your ev, I think it's a no brainer to get that that lower rate.

[Matt]

Totally. And ultimately the biggest win is that you're not charging while you're out and about on the road. Because if your unwillingness to pay peak prices meant that you forgot to charge your car at home and then you had to stop at is it charge point those, some of those different stations, you're going to be paying a whole lot more, like five to seven times more. So the more you can charge at home, even if it's not the most optimized time, the more money that you're going to save. This might be the last time I share the story, but when we were traveling in Colorado, we rented a Tesla on Turo, wanting to get a feel for what it's like to drive a Tesla and have an ev. What that meant though is that we, we're charging at the Tesla superchargers and I tracked my charges religiously and the cost was pretty much exactly the same as had we rented a traditional internal combustion engine based on the average price per gallon there in Colorado times the number of miles that we drove. And so if that's you and you're constantly paying top tier charging prices, you're not doing this to save money, you're doing this for lifestyle.

[Joel]

The money saving benefits of an EV come when you charge at home and they can be amplified if you get one of those options off super off peak rates or if you charge at work.

[Matt]

Oh yeah, more folks have, when I had my Leaf, it's a benefit. Oh yeah, you, you did that.

[Joel]

So I tr. I would, they had 120 volt outlets and I would plug in when I got to work. But eventually they installed real charging stations and they covered up all the 120 volt. You know, I'm frugal enough. I would have kept charging at the 120 volt even though it was slower. I just charged at home. Then it just changed my habit.

[Matt]

But more employers are even offering that as a perk where it's just like, oh yeah, we've got level two chargers here. Like they are intentionally installing level two, the faster chargers for free. Speaking of attracting the top talent, that's a way to get folks on board. No Doubt when it's like a soft benefit that folks are able to realize. But buddy, let's mention the beer that you and I enjoyed today, which is Beer Massu. Do you want to say it? I said it the first time too.

[Joel]

Beer Massu.

[Matt]

Beer Massu.

[Joel]

Tiramisu Milk Porter. Imperial Milk Porter. This mat was thinner than I thought it was going to be, but solid. It's a. Yeah, but it was an Imperial Porter. So I was like, oh, is it going to be, is it going to be bigger?

[Matt]

Expecting it to be a bit heavier.

[Joel]

Kind of tasted more like a traditional porter. But I like the flavor profile.

[Matt]

Super good.

[Joel]

Definitely had the tiramisu vibes going on. A little bit sweet and lactose y for my tastes, but a solid beer and this is a local option too. I don't know if I've had much by Six Bridges before, so.

[Matt]

Yeah, malty dark but not too dark. Yeah, it had the like, it wasn't bitter. That's one of the things that you get with a milk stout is that it does have some of that lactose sweetness. But I wouldn't call it, I don't think it was too sweet. It was just like milky smooth as opposed to like hitting you over the head with the sweetness. Just like a touch of sweetness. Really enjoyed. It definitely makes me realize I don't think I've eaten enough tiramisu in my life. Speaking of Tuscany. But that's going to be it for this episode. Listeners can find our show notes up on the [e-mail] including that article to the backdoor Roth IRA. How to pull that off? So, buddy, let's wrap it. Until next time.

[Joel]

Best friends out.

[Matt]

Best friends out.

[Joel]

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