Ask HTM - Jumping Back Into the Workforce, HELOC Cash Grab, and Free Life Insurance Gotchas #1021

Summary

Podcast Title: How to Money
Host: Joel and Matt
Episode: Ask HTM - Jumping Back Into the Workforce, HELOC Cash Grab, and Free Life Insurance Gotchas #1021
Release Date: August 11, 2025

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Episode Overview

In this episode of How to Money, co-hosts Joel and Matt tackle a series of listener-submitted questions focusing on key personal finance topics: the decision to re-enter the workforce, utilizing a Home Equity Line of Credit (HELOC) for debt consolidation, and scrutinizing offers of free life insurance from credit unions. Additionally, they delve into the complexities of Social Security claiming strategies and address issues related to student loans and credit scores. Throughout the discussion, the hosts provide actionable insights, balanced perspectives, and practical advice to empower listeners in making informed financial decisions.

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1. Bea's Question: Should I Go Back to Work?

Timestamp: [07:53]

Listener Query:
Bea is contemplating whether to return to work despite her husband's income sufficiently covering their household expenses. Her primary motivation is the desire to accelerate paying off their mortgage. She is concerned about the financial viability after taxes and the personal sacrifice of time away from family.

Hosts' Discussion:

• Financial Considerations:

  • Tax Implications: Joel explains that while Bea's income might push her into a higher marginal tax bracket, it doesn’t drastically increase the overall tax rate due to the progressive nature of the tax system. For example, an additional $10,000 income taxed at 24% only affects that portion, not the entire income [11:09].
  • Mortgage Terms: Matt advises understanding the specific terms of the mortgage. If Bea has a favorable low-interest rate (e.g., below the prevailing market rates), aggressively paying it off might not be the best financial strategy [12:03].

• Retirement Benefits:

  • Employer-Sponsored Plans: Joel highlights the advantage of gaining access to retirement plans like a 401(k) with employer matching, which can significantly boost Bea’s retirement savings [13:01].

• Lifestyle and Hidden Costs:

  • Increased Expenses: Returning to work may introduce additional costs such as childcare, transportation, and wardrobe upgrades. Joel emphasizes having a clear understanding of these potential expenses to assess the true financial benefit [14:15].

• Work-Life Balance:

  • Part-Time Options: Matt suggests considering part-time work as a compromise to earn additional income while maintaining family time and reducing burnout [15:31].

• Quotes:

  • Joel: “You can’t discount the numbers, but there's other stuff at play.” [09:15]
  • Matt: “A part-time job could help you achieve those financial goals without sacrificing your lifestyle.” [15:31]

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2. Kevin's Question: Should I Use a HELOC to Consolidate Debt?

Timestamp: [22:34]

Listener Query:
Kevin is considering taking out a $50,000 HELOC at an 8.2% interest rate to pay off his travel trailer, personal loan, and several credit cards totaling over $1,000 a month. The HELOC repayment would lower his monthly payments to approximately $430–$450 for 15 years. He seeks advice on whether this is a sound financial move or if he should continue managing his debts as they are.

Hosts' Discussion:

• Pros of Using a HELOC:

  • Lower Interest Rates: Kevin could reduce the high-interest rates from credit cards (typically 20-24%) to a more manageable 8.2%, which makes monthly payments more affordable [23:42].
  • Simplified Finances: Consolidating multiple debts into a single HELOC can simplify financial management and provide immediate monthly relief [24:40].

• Cons of Using a HELOC:

  • Extended Debt Period: By lowering monthly payments, Kevin may end up paying off the debt over a longer period, potentially increasing the total interest paid [23:25].
  • Risk to Home: A HELOC is secured against Kevin’s home, meaning failure to repay could result in foreclosure [26:15].
  • Variable Rates: HELOC rates can fluctuate, potentially increasing monthly payments over time [26:27].

• Behavioral Considerations:

  • Discipline Required: Matt emphasizes the importance of maintaining disciplined financial habits. Without addressing the underlying causes of debt accumulation, Kevin risks falling back into credit card debt even after consolidating [29:13].

• Strategy Recommendations:

  • Accelerated Payments: Joel and Matt suggest making extra payments towards the principal when possible to shorten the loan term and reduce total interest [28:10].
  • Assessing Debt Habits: It’s crucial for Kevin to modify his spending habits to prevent future debt accumulation [29:11].

• Quotes:

  • Joel: “You're turning unsecured debt into secured debt against your home...}" [26:27]
  • Matt: “It could potentially keep you in debt longer than you otherwise would.” [24:40]

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3. Ian's Question: Social Security Break-Even Analysis Including Growth Rates

Timestamp: [30:21]

Listener Query:
Ian seeks clarification on the break-even analysis for taking Social Security early versus waiting until full retirement age. He references a seminar where it was suggested that the break-even point could be around 87-88 years old, especially when considering a 2% real return on investments. He questions the viability of living beyond this age to benefit from delaying Social Security.

Hosts' Discussion:

• General Guidance:

  • Delayed Benefits: Matt and Joel reaffirm the conventional wisdom that delaying Social Security benefits generally results in higher lifetime payouts, assuming longevity [33:45].
  • Investment vs. Delay: While it's possible to outperform by investing early Social Security payments, this requires a high level of investment discipline and favorable market returns, which may not be feasible for most individuals [35:39].

• Break-Even Considerations:

  • Health and Longevity: The decision to delay benefits should factor in personal health and expected lifespan. If longevity is uncertain, earlier claiming might make sense despite a higher break-even age [40:08].
  • Flexibility: Hosts recommend maintaining flexibility in strategies, allowing adjustments based on changing health or financial needs [40:22].

• Solvency Concerns:

  • Future of Social Security: Joel and Matt discuss potential reductions in Social Security benefits due to solvency issues, advising listeners to view Social Security as supplementary rather than primary income [42:17].

• Quotes:

  • Matt: “Delayed benefits provide a higher guaranteed income that can protect against stock market volatility.” [34:47]
  • Joel: “Most charts show that you're going to break even in your late 70s or very early 80s.” [35:23]

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4. Carm's Question: Is Free Life Insurance from a Credit Union Legitimate?

Timestamp: [47:24]

Listener Query:
Carm received an offer for a free $2,000 life insurance policy from her credit union and wonders if there's a catch behind the seemingly generous offer.

Hosts' Discussion:

• Marketing Strategy:

  • Customer Loyalty: Joel explains that such offers are often marketing tactics designed to attract and retain customers by providing valuable perks [48:26].
  • Upselling Opportunity: The initial free policy serves as a teaser, potentially leading to the purchase of more comprehensive and expensive life insurance products in the future [50:33].

• Advice for Carm:

  • Shop Around: Matt advises comparing life insurance policies through platforms like Policygenius or Costco to ensure she is getting the best coverage suited to her needs without falling for unnecessary add-ons [50:45].
  • Opt for Term Life Insurance: The hosts recommend term life insurance over whole life policies due to cost-effectiveness and simplicity [51:16].

• Quotes:

  • Joel: “That’s just a marketing ploy for them.” [49:56]
  • Matt: “Avoid whole life policies as they’re significantly more expensive and complex.” [52:08]

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5. Riley's Question: Impact of Missed Student Loan Payments on Credit Score

Timestamp: [52:21]

Listener Query:
Riley’s auto-pay for his student loan was disrupted, resulting in missed payments and a subsequent drop in his credit score. He’s considering using goodwill adjustments to address the credit hit and seeks guidance.

Hosts' Discussion:

• Understanding Goodwill Adjustments:

  • Definition: A goodwill adjustment involves requesting a lender to remove a negative mark from a credit report as a gesture of goodwill, especially after rectifying the missed payments [53:23].
  • Effective Strategy: Joel and Matt suggest that Riley approach his loan servicer politely, explain the situation, and request the removal of the negative marks, especially if he has a history of timely payments [53:27].

• Additional Resources:

  • Templates and Legal Aid: Matt points listeners to resources provided by student loan lawyer Stanley Tate, including templates for effective goodwill letters [54:45].

• Broader Implications:

  • Student Loan Payments: The hosts acknowledge the widespread impact of student loan payment disruptions and emphasize proactive communication with servicers to mitigate credit damage [53:29].

• Quotes:

  • Joel: “Don’t blame the servicer; instead, explain your situation and ask for forgiveness.” [54:27]
  • Matt: “Using a template can help structure your request effectively.” [54:45]

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6. Beer Review: Summer Li Hing Mango Sour from Lanikai Brewing

Timestamp: [55:37]

Hosts' Discussion:

Towards the end of the episode, Joel and Matt share their experience tasting the Summer Li Hing Mango Sour from Lanikai Brewing, providing a sensory review of its flavor profile.

• Flavor Profile:

  • Sourness and Tartness: Matt describes the beer as aggressively tart, akin to a "9-volt battery" experience, followed by a wheaty and bitter aftertaste [56:02].
  • Aroma: Joel notes the strong mango aroma reminiscent of fresh fruit, though the taste leans more towards tartness [55:58].

• Packaging and Transport:

  • Handling Challenges: Joel recounts the challenges of transporting the beer, resulting in a slightly dented can due to airport weight restrictions [57:19].

• Overall Impression:

  • Enjoyment and Quality: Despite the rugged transport experience, both hosts express enjoyment of the beer’s unique flavor, appreciating its true Hawaiian ingredients [57:52].

• Quotes:

  • Matt: “It's like aggressively tart. It almost felt like electric.” [56:02]
  • Joel: “This beer really hit the spot after a hike around a volcano.” [58:07]

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Key Takeaways

1. Re-entering the Workforce:
   Carefully assess both financial benefits and personal lifestyle impacts. Consider part-time roles to balance income needs with family time.

2. Using a HELOC for Debt Consolidation:
   While potentially lowering interest rates, be mindful of extending debt terms and risking home security. Discipline in repayment is crucial.

3. Social Security Claiming Strategies:
   Delaying benefits generally yields higher lifetime payouts, but personal health and financial conditions should guide the decision.

4. Evaluating Free Life Insurance Offers:
   Recognize marketing tactics and prioritize obtaining sufficient coverage through reliable platforms.

5. Addressing Missed Student Loan Payments:
   Utilize goodwill adjustments and proactive communication to mitigate credit score impacts.

6. Enjoying Financial Rewards:
   Taking time to appreciate personal rewards, such as unique beers, can enhance the overall financial journey.

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Notable Quotes

• Joel:
  “You can’t discount the numbers, but there's other stuff at play.” [09:15]

• Matt:
  “A part-time job could help you achieve those financial goals without sacrificing your lifestyle.” [15:31]
  “It could potentially keep you in debt longer than you otherwise would.” [24:40]

• Joel:
  “Most charts show that you're going to break even in your late 70s or very early 80s.” [35:23]

• Matt:
  “Avoid whole life policies as they’re significantly more expensive and complex.” [52:08]

• Joel:
  “Don’t blame the servicer; instead, explain your situation and ask for forgiveness.” [54:27]

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Conclusion

Joel and Matt effectively guide listeners through complex financial decisions by addressing real-world scenarios with clarity and practicality. This episode underscores the importance of balancing financial strategies with personal well-being, encouraging proactive management and informed choices to achieve financial stability and a fulfilling life.

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For more detailed discussions and resources mentioned in this episode, visit howtomoney.com.

Transcript

[Announcer]

This is an iHeart podcast.

[Joel]

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[Matt]

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[Joel]

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[Matt]

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

[Announcer]

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[Joel]

Welcome to how to Money. I'm Joel.

[Matt]

I'm Matt.

[Joel]

Today we're going to take some of your listener question.

[Matt]

Dude, it's gonna be so good to get to some listener questions.

[Joel]

It's been too long.

[Matt]

I wonder if I've missed this one the most, the ability to directly respond to listeners. I feel like it's been something that's been missing in our lives, hearing their voices.

[Joel]

I know I hear them in my sleep usually, but that's different.

[Matt]

The unique questions that they have for us. For instance, a listener, she's determining whether or not she should be going back to work. She's got a few factors that she's she's weighing in her mind. Another listener, he is wondering if he should take out a heloc. He essentially wants to know if it's like the golden ticket and if it's going to solve all of his problems. And there are also multiple factors when it comes to getting back to him as well. Hopefully provide some good feedback. Another listener is asking about some free life insurance that was sent their way, wanting to know whether or not it was legit. So we will get to those three plus more during our episode today.

[Joel]

Is it a scam or not? And by the way, this also means, what's the catch? People have like kind of mostly stopped sending in listener questions, Matt. Because they were like, oh no, those guys are gone. Yeah, I'm not gonna send questions. Some folks, some folks still do.

[Matt]

They trickled in.

[Joel]

Yeah. But we just to let you know, if you have a money question, we'd love to help you out with it. Send it our way.

[Matt]

We're back at it. We gotta do it.

[Joel]

Back in the seat.

[Matt]

What you got? You got a little story for us here?

[Joel]

Well, I was one listener email we did get while we were away that I was impressed by because it's something that we talked about how just AI chatgpt, that kind of stuff. I've mostly stayed away, but I am curious about the use cases. Kate used AI apparently a lot on your road trip. Right. Especially to find. I've used AI.

[Matt]

No, I 100%. The ability to type, include a prompt and say, hey, give us a three day itinerary for this city. It's just another tool essentially. Right. It's not to replace, ooh, maybe I should look this place up and see whether or not they're going to be open because, oh, in fact we're going to be there on Sunday. What does that mean? Are the hours different? How do I get the tickets, things like that. And of course it can't replace your own judgment as to whether or not you want to go there. Like just because it's fed to you. Yeah, obviously look it up, make sure it's not an AI hallucination. But on top of that, you personally need to decide whether or not this is going to be something that you're going to be interested in.

[Joel]

Well, one of the use cases, still a great tool though for AI that I had not thought about was like as a decision making tool and listener. Chris sent in his thoughts on how he used it essentially to decide which air conditioner to go with, as he had to replace one at his home.

[Matt]

I don't think I saw this email.

[Joel]

Oh, really? So he was basically saying like, hey, so many people tell you to go with the more energy efficient seer 20 air conditioner. Right.

[Matt]

But does it go up to 20.

[Joel]

I don't know how high it goes high.

[Matt]

This one goes up to 11.

[Joel]

But. So he was like, all right, there's this massive price difference though. If I go for the more energy efficient one, how is it going to save me enough over the life of the unit to justify the increased cost? So he was asked ChatGPT and ChatGPT was like nah man, go with the cheaper unit because yeah, you'll pay a little bit more every single month, but you won't pay so much that over the lifespan of the unit, which I think they've estimated at something like 20 years that it'll be worth it. So go for the cheaper unit, you'll save more money now you won't pay more over the life of the unit. And I think you probably maybe could have done the math on a piece of paper or something like that. But that's AI can be useful for.

[Matt]

It's a nice shortcut.

[Joel]

Yeah, it is a nice shortcut.

[Matt]

I think that's one of the best use cases when you have the ability to just truncate or just drastically shorten the amount of time that you're spending researching something.

[Joel]

Yeah.

[Matt]

Because yeah, what was his name? Maybe Chris. He's like oh, should I go with the stainless steel? Should I go with the platinum encased air conditioning unit? Sure does look nice. Maybe it'll be more efficient. No, not worth.

[Joel]

Turns out not worth it.

[Matt]

Yeah.

[Joel]

Makes me think that maybe AI would be a great tool for rental properties. And just kind of saying as you're thinking about making offers, well, under what parameters does it make sense for me to make an offer? What price do I need to pay to ensure that this is a good investment? There are you could feed a bunch of stuff into ChatGPT and say hey, this is one of looking for. This is kind of my buy box as Chad Carson calls it. We had his episode not too long ago.

[Matt]

Yeah, a couple weeks.

[Joel]

Yeah. And maybe AI could help you make an informed decision there too. So maybe I have short sold AI not used it in the ways that I could. I appreciate hear from other people who are using it.

[Matt]

Well, I completely understand. Like is it going to be worth the vast amounts of money that all the companies are pouring into it? You know like Meta, Microsoft, Google, like they are all dumping ridiculous amounts of money into AI thinking it's the next best thing. And I think it's going to be good, it's going to be helpful. But is it going to be as life changing? I don't know right now at least it feels More like fancy Google. Right? It's like this. Honestly, the same queries I punch into chat or into Grok. I use Grok some when we were planning out our trip. Those are the same things I punch into Google. It's not all that different. The ability to then take that information and then formulate what it is you're going to do. There's still magic that. That lies with us as humans to make that best decision for ourselves. But yeah.

[Joel]

All right, let's mention the beer we're having on this episode. This is a summer lihing mango sour from Lanikai Brewing, which picked up when I was in Hawaii. So we'll, yeah. Give our thoughts on this one at the end of the episode.

[Matt]

Do you remember Indiana Jones and the Temple of Doom?

[Joel]

I do.

[Matt]

Lanikai sounds like the thing that, that one, the priest. I don't know, the guy that's like pulling people's hearts out of their chest. Is that what he says? Lanny?

[Joel]

Kai? Oh, maybe it's been a while.

[Matt]

I don't think that's what he says.

[Joel]

But I don't think they named it after Indiana Jones. I think it's literally named after like a beach or something.

[Matt]

But the number of times I watched Indiana Jones and the Temple of Doom as like, probably too young. Probably as like an 8 year old or something like that, man, I loved it.

[Joel]

Your parents would have been hauled off to jail these days.

[Matt]

It was the 80s, man. That's just like what you did.

[Joel]

Everything flew in the 80s. All right, if you've got a buddy question, go to howtobuddy.com ask for the simple directions on how to submit yours over to us and hopefully we'll take it next week on the show. Matt, let's get to that question about whether or not to go back to work. Does it make financial sense?

[Bea]

Hi, this is Bea and I hope you could help me with this question. How do I calculate whether me going back to work is worth doing? We don't necessarily need me to go back to work because my husband's income can handle all our bills, expenses and loans. But we do want to try to pay off our house faster. I have a friend that said that for me going back to work, it's not going to be worth it because after they take out all the taxes and such for my income, if that is true, I'm hoping to know soon so I can switch schools for my kids if I need to to open up that option. It would be a sacrifice of time away from taking care of my family in one way or another if I decide to work. So I do want to make sure it's worth doing. Please help you make an informed decision.

[Joel]

Man. I think if we had to go back to work, Bea should have to as well. Don't you agree?

[Matt]

Oh, yeah. Now that we're back from the beach.

[Joel]

Yeah.

[Matt]

Yeah. So there you go, B. Hope you enjoy your work. No, it's interesting because what she said was that I'm trying to calculate whether or not this makes sense. And I think at the. Maybe we'll get to it eventually. But I think this feels more like an emotional. Not emotional, but just like a personal fulfillment question as opposed to it being numbers based. But we will specifically talk about the numbers here because numbers play a role for sure.

[Joel]

Sure. You can't discount them. But there's other stuff at play.

[Matt]

Yeah, yeah. And there are obvious benefits of going back into the labor force. Let's say your kids are, you know, they're at school all day long. Like ours finally are finally. Yeah. Kindergarteners. Man. It's amazing.

[Joel]

I thought that day would never come, Matt. And now it's here. I'm dropping them all off. Can you believe it? Literally 8:05. I'm like, see you. What does this day hold for me now?

[Matt]

But maybe B is finding herself in a position like that. I'm not totally sure because she did mission like kids in schooling. But if that's the. She's got her day back. That's where Kate's at. She's like, all right, what do I get to. What am I going to. Well, right now I still feel like we're catching up, getting life back in order after the summer. But that being said for B, there might be a world of new possibilities that have just opened up for her. And even if that's the case, though, I think a full time job, it might feel like too much. So we're going to kind of hopefully be run through the pros and cons with you here.

[Joel]

Let's talk about the advice from B's friend. And we would say your friend's probably awesome, probably super smart, but they're not quite right here. And yes, you're going to pay taxes on your income if you go back to work, that's a given. But the tax you pay, it's not going to be anywhere close to being in excess of your earnings. Right. So it is true that going from a one income household to having two incomes. Yeah. It could bump you up into a higher tax bracket. And yeah, you might even pay a Slightly higher rate on a portion of your income. Right. But because we have a progressive tax system, it's not going to mean that all of your income. Right. That your family's bringing in is going to be taxed at this higher rate. Some people think that, Matt, where it's like, well, but if we bump our income up $45,000, we're in a new tax bracket, all of a sudden we're paying a higher percentage. It's like, no, it's the next dollar beyond that tax bracket move up that gets taxed at a higher rate. Those will get taxed more, not all the preceding dollars. Right?

[Matt]

Yeah. Yeah. So that's the difference between your marginal tax rate and your effective tax rate. Because a lot of times folks get confused and they get it mixed up. They focus on the marginal tax rate and you're like, oh, no, I'm. Now we're going to be adding the 24% tax bracket. And it's like, well, your effective tax rate is much less because it's including all the other previous tax brackets that your income essentially flowed through before you arrived at that 24%.

[Joel]

I'm just pulling these numbers out of my butt. But if you went from like the 22 to 24% bracket and let's say 10,000 of the dollars the bee earned at work were then taxed in the 24% bracket, well, maybe her effective tax rate goes from something like 10.8 to 11.5 or something like that. Right. So, yeah, it does go up and you are paying a higher percentage overall. But still, it doesn't, it doesn't negate the benefits that you would get from increased income.

[Matt]

So that's talking about the numbers. I think the biggest deterrent to actually going back to work should be that you just don't want to. It sounds like you've got financial goals that you do want to accelerate, and increasing your income. Getting that job is certainly going to help you to get rid of that mortgage faster. You're likely going to be able to pay it off in years instead of decades. But I guess maybe I want to push back against that particular goal because if that is the only reason that you're looking to potentially upend your life, the particulars matter, the details of your specific mortgage matter. And if you're doing off that two.

[Joel]

And a half percent, that would be a terrible mortgage.

[Matt]

Yeah, yeah, yeah. And so this is a lot of times we don't like to get into the details, but this is an instance where knowing the terms of. And you Be being familiar with the terms of your loan are incredibly important because yeah, if you lock down a pre pandemic amazing 30 year mortgage rate, I would not advise for you to pay that thing off early.

[Joel]

Other financial goals would be more pressing.

[Matt]

Yes. That being said, let's say you just got this house a couple of years ago and oh man, we're sitting at like 6.75%. Well, if that was me, I would be focusing on eliminating that mortgage as soon as possible as well because it's tough to get a, you can't get a guaranteed rate of return that high. And that's essentially what you'd be doing by tackling this mortgage sooner.

[Joel]

Well, the other thing about going back to work when B's talking about, hey, this is going to help me accelerate financial goals, well, she might have access to a retirement plan via this new employer, which could help accelerate investing goals. So maybe it's, hey, all right guys, I'll listen to you and not pay off the mortgage quickly. But hey, the 401k with the match, that's going to help me achieve my investing goals and the desired amount that I'm trying to save up a lot more quickly too. And that is true. So I think if your goal is kind of in that direction of increasing the amount of money that you have in retirement accounts, then that can make sense. If you're like, we feel like we're behind or we're just trying to accelerate because we want to achieve financial independence faster than going back to work certainly will help you do that. Right.

[Matt]

And from an orders of operations standpoint, that would come before paying off a high a mortgage. Not that's high, that's low.

[Joel]

Yeah.

[Matt]

All of a sudden that low rate mortgage becomes a low priority, especially taking.

[Joel]

Advantage of the match, which most employers offer. And then yes, going back to work, it means financial freedom. And then full financial independence could be achieved a whole lot more quickly. Especially, especially, and this is key if your spending doesn't change in a meaningful way. Because sometimes that happens, Matt, especially when the second spouse goes to work and it's like, well, now you know what we need? We need more help. We need to pay for this person to watch our kids in the afternoons. And then you know what? We probably need to pay for grocery delivery. And you know what? We're probably going to eat out more because it's a heck of a lot more convenient when I work late nights and cooking those meals just becomes more onerous. I get that, that makes sense. But you have to factor all that Stuff in you even have to factor in, well, do I need to buy a whole new wardrobe? Because I'm going back to work and I'm going into the office. All these hidden costs and what about the miles I'm going to put on my car and the gas and the intern? I mean, like a lot of different costs could go up as you go back to work. So I would want to have clear eyes about what costs might increase, what cost definitely will increase as I'm going back to work and just say, well, is it going to be as beneficial as I thought it would because it's going to involve trade offs. Right. Of your time. It will and could help accelerate you towards those goals, but it could also increase costs in other parts of your life.

[Matt]

You know, I think even considering going back part time could be a good solution for B. And I just want to put that on your radio because like even a 20 hour work week, that might feel more doable, especially if you're juggling other responsibilities, right? Like let's say maybe the kids aren't somewhere full time in school. And even if they are, man, you have to coordinate like who's gonna pick up the kids or who's gonna be where. Since you don't need to work, I think you might be able to have your cake and eat it too in this case. So you're earning some additional money, but at the same time you're not sacrificing in all those other ways that Joel just talked about from a lifestyle standpoint. And also if your spouse gets great his job, like healthcare for the whole family, well, that perk that you would miss out on by having a part time job, well, it doesn't even matter to you because it almost feels like a win, right? Because you've got more balance, you've got more family availability while also accelerating towards those financial goals, albeit of course at a slower pace. But hey, if the goal is to retire earlier someday, I do think you're, you're kind of getting a little bit of practice with a diminished work life now. I think part time work could be the best way to thread this needle.

[Joel]

Yeah, yeah, I agree. And often when you choose part time work because you might not be receiving some of the benefits that full time employees might be receiving, contractors can get paid a higher average hourly rate. We have a friend who got let go from his job and now he's contracting with that employer, contracting back to work for them, and his hourly rate's a heck of a lot more than it was when he was a full time employee. So in some ways it's actually been kind of a win. So I would at least consider that be. And I think it bears mentioning that if you're going back to work just for the paycheck, it's going to be more mentally taxing. But I would rather you search for something that you're actually going to enjoy that's going to kind of move the happiness needle for you inside. Even if maybe, let's say it means a smaller salary because it will make this transition back into work more sustainable. And we're also fans of looking for an employer that offers a good work environment and some flexibility who might understand if something happens and you gotta go to your kid's school to pick them up early for an orthodontist appointment or something like that, which sounds like my life right now. And Matt graciously allows me the opportunity to do that.

[Matt]

I do what I can.

[Joel]

Gotta go get those braces on, man. I think that's gonna help you avoid burnout. And there's just a lot of factors when you're trying to come up with an answer to this question of whether or not you go back to work. And, and you mentioned having to change your kids school if you decide to go back to work.

[Matt]

So that seems like a big deal.

[Joel]

That seems like a really big deal. That could be a really big deal for them emotionally, friend wise. So have a discussion with your spouse about the pros and cons of this move. You know, paying off the mortgage early, it's not a bad goal if you've accomplished a lot of those other financial goals incredibly well. But the price I think doesn't have to be 12 hour work days. Maybe you can find some happy medium solution that's not like all or nothing. I'm going back to work full time, nose to the grindstone versus kind of something with a little more balance that could help you achieve those goals faster, but maybe just not nearly as quickly as you might have otherwise been able to do.

[Matt]

That's right. All right, B, we hope that gets you pointed in the right direction. And Joel, you know, we've got more to get to. We're going to hear from plenty of listeners. We're going to hear from a listener who's asking about Social Security and whether or not to take it early or not. We'll get to that and more right after this.

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[Joel]

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[Matt]

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[Joel]

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[Matt]

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[Joel]

That's guardianbikes.com built in the USA, made specifically for kids. Guardianbikes.com all right, Matt, we're back. We got more listener questions to get to this next Moving debt around. Is it just moving deck chairs around on the Titanic or can it make sense to swap one debt for another?

[Kevin]

Yes, Kevin here. My question is, would it be smart to pull out a $50,000 HELOC on my home with a 8.2 interest rate which is basically going to pay off my travel trailer, a personal loan and a couple credit cards that equal a little over a thousand dollars a month. And my payment for the HELOC is going to be 430 to 450amonth for 15 years. Is that a good idea or should I just bite the bullet?

[Matt]

Whether or not he should bite the bullet and just pay off the debts he currently has, I think that's what he's asking there, Joel, versus trying to diminish, finagle it and make it happen.

[Joel]

And I get this, I totally get how you might in the initial thought is turning credit card debt that's I don't know what, 20, 21, 22% right now into maybe higher, less offensive 8.2% debt that that kind of squares upon your initial observation and you're like why wouldn't I do this?

[Matt]

Well, especially given to how many different mortgage servicers have been sending out the different mailers and emails saying, hey, wouldn't you like to tap your home for some home equity? Think about all that you can do, perhaps with all this money that you've, all this equity that you've accrued over.

[Joel]

The past few years. And of course, your mortgage servicer, do you know what they know? They know roughly what your home is worth, and they know how much you owe. And so they, you know what they do? They give you a specific number so that you might get that mailer and they might say, hey, Kevin, you've got $219,000.22 of home equity that you can tap right now.

[Matt]

Yeah. The specific number you start thinking about, oh, I could totally see that amount of money in my. Well, you wouldn't. It's a heloc, so it's not like a home equity loan. Right. So. But I feel like a lot of folks would see that number and they would just immediately just like move that over to their savings account or the checking account and be like, oh, that would look nice sitting over there. Think about all that. I could do with that.

[Joel]

There's a reason they send the mailers out, and it's because it works on the market.

[Matt]

I think it's effective. Yeah, but this isn't as easy as that. Kevin. I'm going to say, first of all, be careful, overly focusing on just the monthly payment. Yes, it is going to be nicer to lower the interest rate and the monthly payment amount, keeping your monthly payment in check, providing more breathing room every single month. But doing so, it could keep you in debt longer than you otherwise would be. It's sort of like, let's say you've owned a home for 10 years and you're like, you know what, let's go ahead and refinance this thing. It's going to make things a bit easier. But guess what? Now you just hit the, you just reset the clock on another 30 years.

[Joel]

Then instead of paying till you're 60 on that house, you're paying till you're 70.

[Matt]

Yeah. You're 70 years old. And so it, I think it could also help you to feel more comfortable taking on even more debt. Right. So this is, it could potentially be a behavioral thing. You're like, oh, you got that cleaned up and maybe you're used to the amount that was going out every month to service that debt, and all of a sudden you hadn't changed a thing and now you, yeah, you've got more, more debt to Boot.

[Joel]

And I think this happens a lot, Matt. I think this is a tactic that the people take, which is if I can just get that monthly amount lower, even if it means, let's say, a higher interest rate or worse terms, then that is going to give me some breathing room. And what ends up happening with that breathing room is typically that it gets spent. So for a lot of people, it is now you are paying off that debt item for a longer period of time, and then you also take on other obligations with the extra money that you would have had in your budget that could have gone towards saving or investing. So maybe if you are incredibly disciplined, you can make this payoff. But. But most people aren't.

[Matt]

Yeah, except you said if with worse terms, like a higher interest rate. That's the thing, though, in Kevin's case, he's like, man, this is so much better, guys. Truly, this is a slam dunk. Right. And that's. We're even going to push back a little bit on that. Yeah.

[Joel]

I think it's also important to mention here, Matt, that the 8.2% rate, it's not bad, right? It's not terrible in today's environment, but that rate is also subject to change. And so your rates could go up, your payment could go up. At the same time, one of the biggest risk factors here is you're taking unsecured debt, you're turning it into secured debt against your home. And if you're unable to pay your heloc, you'd be risking losing your home. That's a massive difference between not paying your credit card bill, which isn't ideal, but the risks just aren't the same because American Express, they don't have the power to foreclose on you, to essentially kick you out and take the roof from over your head, whereas your mortgage service provider does, because they've got this interest in the property if you're not paying on it.

[Matt]

Yeah. I think at the end of the day, this answer comes down to you knowing yourself, Kevin, because, yeah, this really might be the best decision, but only if you are motivated to pay off that balance as quickly as possible, if you are disciplined in your approach. Like the fact that he was willing to say, hey, I'm going to be locked into this for the next 15 years. Like, what that tells me, though, is that he doesn't have the ability to quickly or to easily eliminate the sort of collection of debt that he has. Right. And so that's another benefit of the heloc is just to clean things up, like, right now it feels like he's got like this rat's nest of debts going on every single month.

[Joel]

It feels like an organizational tool of sorts.

[Matt]

Yeah, and I totally get that. But the behavioral side of things I think is incredibly important because if you, yeah, if you consolidate all that debt onto the HELOC and you stretch that out for 15 years and then you take that additional savings that. So I think he said it was around a thousand per month and he's getting it down to like 400, four something.

[Joel]

Yeah.

[Matt]

So basically he's got like $600 worth of savings. I would, I think I would be very willing and very okay with Kevin saying, all right, I'm going to consolidate, we're going to do the HELOC and now I'm going to take that additional $600 and how about instead of locking into the 15 years, how about we start paying down extra every single month, putting that towards the principal because then he's not going to be in that addition that debt for a full 15 years. He's going to get out of that thing way sooner. Four to five years, maybe so much faster. I think that is more of sort of the. Again, he can't like go after it. Crazy right now based on how he was talking about like, yeah, I'm kind of resigning myself to the 15 year thing, but you also don't have to do the whole 15 year thing.

[Joel]

I said that. Weird.

[Matt]

You also don't have to resign yourself to the full 15 years. Right. Like you have the ability to find somewhere there in the middle. And I think that's where I would.

[Joel]

Love to see you, Kevin. And especially at an 8 plus percent rate, holding onto that for 15 years going to be the best thing for your finances. Trying to get rid of it as quickly as possible would be the goal. But yeah, I think this isn't as much of a no brainer as it might seem on the surface to a lot of people. And that behavioral side, you're right, Matt.

[Matt]

It'S what you do with that additional.

[Joel]

Money, what you do with the additional money. And also now, once you've got all your credit card debts wiped away, what about the habits that led you into credit card debt in the first place? Are you going to have this HELOC debt that is going to take potentially 15 years to pay off and then are you also going to accrue more credit card debt? The habits have to change or else the strategy, even this HELOC strategy isn't going to work. It's actually going to blow up in your face.

[Matt]

Yeah, you totally need to commit to that. Yeah. I guess I wanted to say that because I felt like we were downplaying the interest rate thing because as I was thinking at 3, I'm like, geez, yeah, 20, going from 22, 24% down to 8, something like that is a massive difference. Especially if you are looking out over the years, over the even decades, if you're looking at a short term, like a short period of time where you're just going to attack it, the rate doesn't matter that much because you're talking about what, maybe one year's worth of payments, maybe two years. But when you stretch it out like that, gosh, that is a ton of money going to interest. But like Joel said. Yeah, we want to make sure that you address, you got to nip it in the bud. We're not just going to gloss over the surface.

[Joel]

Yeah, Joel.

[Matt]

Let's hear from our next listener who has a question. It's a quasi early retirement question. Quasi how much should I be depending on the government? Let's hear from Ian.

[Ian]

Hey, Matt and Joel, this is Ian from Virginia. I really enjoyed your discussion on Social Security last week, particularly the break even analysis. I was wondering if you could address the breakeven analysis including the impact of growth rates. I was once in a Social Security seminar a couple years ago and I remember them showing a chart where the break even point would be like 87 or 88 years old if you take it earlier, you know, assuming some sort of return on that money that you would be getting versus waiting till full retirement age. They've since taken that off of the Social Security website because they said it was pushing people to take it sooner and I guess maybe they don't want people taking it sooner. But yeah, if you could take a look at that. I've included a resource in the email, but also even the seeking alpha has a chart where there with a 2% real return assumed you're still looking at a break even point in the early 80s. And I just don't know how much people are going to be doing past 80. But if you take it sooner at 62, you'll have all those extra years to, you know, play pickleball and do other things. So thanks a lot. Enjoy the show.

[Joel]

Matt, you plan on playing pickleball in your 80s?

[Matt]

Pickleball's fun. Have you been playing?

[Joel]

No. I would like to though.

[Matt]

Well, we talked about our local court, how I was like, oh, it's going to get re striped. Well, they did re Stripe it. But it's still a tennis court. Did you saw it?

[Joel]

They didn't put pickleball lines on it.

[Matt]

They put the lines on it, but it's real subtle. Okay, so there's, there's. I saw folks out there today during my post lunch walk. I saw some.

[Joel]

They were playing. Pickleballs were out there.

[Matt]

They're doing the.

[Joel]

Okay, okay. No, I'd like to get into the.

[Matt]

Sound it makes, but are people.

[Joel]

How. How long? Like, what's the time frame? How old is too old to play pickleball? Are people still playing in their 80s?

[Matt]

Yeah.

[Joel]

Okay.

[Matt]

That's. It's a low impact sport. The. I mean, we've heard folks talk about it from a very competitive standpoint, but it's like a low impact, kind of chill, social way to. To play tennis, essentially.

[Joel]

So they're playing.

[Matt]

If you don't want to run as much.

[Joel]

They're playing to the villages down in Florida is what you're telling me.

[Matt]

Yeah. Which it sounds like Ian is considering. Like, he doesn't sound. He's got retirement, like questions on his mind, but he doesn't sound like he's necessarily. Does he sound like he's 62?

[Joel]

No, no. I think he's still away from this, but I think he's really.

[Matt]

I don't know though, because he said he went to. He went to a Social Security retirement seminar.

[Joel]

Yeah.

[Matt]

That's something you do.

[Joel]

Like for his grandma or just for his own edification. Like, it sounds like he's trying to get his mind around this, asking for a friend. He just doesn't sound super old. So maybe you are, Ian, and your voice just sounds young. I don't know.

[Matt]

Know, but he sounds young to me.

[Joel]

I think it's important before we get into this question just to say that there's a lot of nuance and there's not one single answer that makes sense for everyone. So much of this depends on whether you are married or single. Right. It depends on how long you expect to live and then what bumps happen along the way. So we'll do our best to offer some of those caveats in response to your question, Ian, but we also just. Just know that there's just. There are a lot of moving parts and so we don't have any advice like, well, everyone should take Social Security at age 70 or. Or everyone should take it at their first possible available date at age 62. There's no clear and precise answer that everyone can do the same thing. And it makes sense.

[Matt]

Totally. That being said, the general Conventional wisdom and recommendation is to claim your Social Security later. That for most folks on average, that is going to be the best choice for them. One of the major reasons to consider taking Social Security later is because of the higher guaranteed income that you're going to receive. You choose to take your Social Security early on when you are 62 years old. Is it like a 30% reduction as opposed to waiting to full retirement?

[Joel]

Yeah, something like that.

[Matt]

And so essentially you wait a little bit and it's a, it's sort of like we're talking, we talk about this all the time. By paying off debt that is a guaranteed rate of return essentially on the money that you are using to pay down that debt in a similar way. It's just like all you got to do is wait and there is a guaranteed return. There's no risk associated here. And that's important because the older we get, the more we need to take some risk off the table. Right. 100% stocks, well, that can work out well during those wealth building years, maybe when you're younger, but once you reach wealth preservation status for a lot of folks, it's going to be a bit too stomach churning.

[Joel]

Yeah. Like think about the COVID downturn or 2022 when we saw stocks decline pretty meaningfully.

[Matt]

Could you have held on those?

[Joel]

Feel like not much of a gut punch, which to me, when I was late 30s, early 40s. But the older I get, the more I'm going to start looking at that balance. And a giant drop is certainly going to impact me mentally and it makes sense that it would.

[Matt]

Plus just the guaranteed income. It's something like an 8% higher payout every single year that you wait. It's just a great way to shelter you from that potential stock market turbulence that you're going to experience. That's the price of admission.

[Joel]

Yeah, right. Like, I mean, you could get. And I've heard people claim this, Matt, hey, if you start taking Social Security at 62 and you invest that money instead in the overall stock market in something like voo, you could do better actually than waiting and delaying your Social Security payments till age 70, there's a.

[Matt]

Very good chance you'll do better.

[Joel]

And there's. Yeah, there's a decent chance of that if you're a savvy investor and you are actually investing most of those dollars.

[Matt]

But the truth is, are you going to do it?

[Joel]

Are you going to be able to actually do that? Are you going to actually invest the money and are you going to be able to invest it in such A way where you can stomach the volatility and eke out higher returns. I don't know. Ian said, what even is the breakeven point? A lot of charts are different charts factoring in different things that will tell you different predictions of what the break even point will be. Depending on when you take Social Security, I would say that most charts show that you're going to break even in your late 70s or your very early 80s. It does get more complicated if you opt to take Social Security early and you do invest like I was just talking about, you invest those doll of spending them, which is not what most people do. Most people are not like, hey, what's the most optimized route for me to grow those dollars to the biggest amount possible? Because that's not typically the goal at that point in your life. But if they do, if someone takes that route, they might be able to hit that break even point much later in the spectrum or it definitely pushes it out. Yeah. To like what typically what like 80, 87, 88.

[Matt]

It just depends on what your returns are.

[Joel]

It depends on what your returns are because it might actually be the most, the most intelligent move from an overall return standpoint. But again, you're adding a lot more risk into the equation if you do that. So. But because you're investing your check right, that that break even date gets pushed out further and it just makes sense because you're growing your wealth by investing those checks instead of using them to fund and supplement your monthly lifestyle. But most people are claiming early. Matt. Almost everyone claiming early is doing it because they need the money to support themselves. Because. Because it's the majority of the income they have coming in at that point in their lives.

[Matt]

Yeah, I will say I would not be surprised if a larger percentage of how to money listeners might be in the camp of, you know what, we've got some of this additional money on hand. What should we do with it? We do want to take the more optimized approach. I know a retiree who took Social Security early for the past five years he has been investing those dollars and.

[Joel]

Dude, he's done well.

[Matt]

He's done really well and I don't think he's ever going to hit that break even point had he waited and taken the higher payout because of his returns over the past five years. And if he continues to invest in a non flashy way, he has the ability like he's never going to be able to hit the break even point because his returns have been so high.

[Joel]

Typically the only people who can do that is the people who have been great savers and investors for many, many decades. So they have enough of a cash at the margin.

[Matt]

See, that is so key. That is how you have your cake and eat it, too. If you have that income, whether it's additional money from investments, whether maybe you're still working, right. Like, maybe you are still paying the bills because you're like, you know what? I tried the retirement thing for a few years and I'm gonna pick up this part time because it provides fulfillment. I love it. I get to talk to folks and by the way, check it out. I get to pay my bills every single month.

[Joel]

Or you got a pension coming in, right?

[Matt]

Or a pension, yeah. If you've got these additional sources of income, well, you have the ability. You're not counting on that money. Right. And so if you are able to take those Social Security checks and stick them in the market, you can stomach more the ups and downs because you're not needing to tap those dollars immediately. I think that's certainly a way to be able to have your cake and eat it too. But even as we're crunching these numbers, there are other factors like your health that you need to main. I don't know, you can't just get bogged down in the spreadsheets and be like, well, this is the optimized path. There are so many other external factors like your health, how you're feeling, and.

[Joel]

We'Re not promised tomorrow. So that's a really difficult thing. But also. So there are a lot of predictive signs along the way, especially as you enter into your early 60s, like, how, how long do I think I'm going to live? What's going on with me health wise? How often am I going to the doctor and what for? That can influence your decision.

[Matt]

Yeah, let's say you were planning on holding off. You're like, you know what? I want to get the fattest check from the government as possible. Oh, no, let's wait until I'm 7 years old to maximize it. Well, it's going to be a good idea to remain flexible, perhaps to change your strategy if you encounter health problems earlier than you thought. You can't ignore the real risk of d early than you were expecting to because this is an instance where perhaps it's like Gertrude McFuzz, like, too much of a good thing leads to poor results. Joel, Deferred gratification. It's like typically always going to be a helpful skill. Right. The marshmallow test. Can you say no to the one marshmallow now so that you can have two in five minutes when the scientist comes back into the room that you're being held in. As a five year old, would you.

[Joel]

Say no to one beer now for two beers later?

[Matt]

It just depends on how first I am. It depends on the given situation, depends on the types of beers. Delay gratification, deferred gratific. This is great. Until it's not because you don't have the ability to spend that money because you've died.

[Joel]

You're delaying gratification for a reason. And that is for those golden years. And typically those early 60s are the, the most fluid. Right. Your body is working better than it will 10 years down the road. So maybe you do want to front load so that you can take vacations, realizing that you've, hey, I've saved and invested enough for those later years of my life, but I want more financial flexibility now and I actually want to spend some of those dollars.

[Matt]

I want to go have some fun.

[Joel]

That's a reasonable choice. It might not the most optimized financial choice. You might say, hey, I live once you're 89 and you're like, my paycheck is, my check from Social Security is still smaller than what I would have gotten if I had waited. But man, I look back at those pictures from all those great trips.

[Matt]

Well, I have the ability to get out there and do all the fun.

[Joel]

Things that I can't take anymore.

[Matt]

I'm thinking of another couple who, this is like an ongoing conversation with them. There's one who wants to spend, I think that wants to spend more of the money now and the other wants to hold off because they've seen more of the high cost costs towards the end of life. Right. Because it does taper off a bit as you're not out there exploring the world. But then some of those final years can be really expensive too. You've got some of that, some of that long term care that you're paying for, especially out of the home.

[Joel]

Yeah, yeah.

[Matt]

And it's a tough, tough tightrope to walk.

[Joel]

Talk about pivoting your strategy. You know, my parents pivoted their strategy because of health concerns and it just makes sense. Like you, I think you want to retain some flexibility in that decision. Married folks have even more to consider because it can often be smart to claim the lower earning spouses early. Claim that maybe in those earlier retirement years, then wait until like age 70 to claim the other. But that depends on other factors too, including health. But if you fall into the camp of not having enough money to make it without Social Security. And that's hopefully something that how to Money listeners are not falling into that camp because they're taking action and they're being proactive, investing and saving for their future. You just might have fewer choices, less ability to optimize your claim date.

[Matt]

Totally good.

[Joel]

And so, yeah, you might be able to hold out six more months extra or a year extra for that slightly increased check, but you're not able to hold out multiple years in order to increase your check even more.

[Matt]

Yeah, but there's also, there's kind of an elephant in the room, which is the solvency of Social Security. And this is something that we've covered a few times. Bottom line, I don't think Social Security is going to go away completely. But if our politicians don't do something, if our members of Congress don't take action, benefits will be reduced, I think, I mean, likely by 25% or so in the next eight to 10 years. And I feel like they keep kind of bumping up the solvency date. And that doesn't mean that younger how to Money listeners should just discount any hope of getting any Social Security at all. But it is not a bad idea to save and invest in such a way that you see that check more as gravy on top because you have done such a great job preparing for retirement on your own. It was earlier this month, Joel, I was thinking about, I was reviewing the numbers with Kate, which we do either at the end of the month or the beginning of the next month. And I always like to get in there with our investments and kind of do some projections and tweak the numbers a little bit, see what that change in lifestyle would do for us when it comes to number of years and retirement and all that kind of stuff, blah, blah, blah, blah. But there's always a caveat where I say, that being said, this is a bit conservative because I never include Social Security again. I'm trying to not count on that just in case something does happen with it. And again, that does seem like an extreme position, but I do think it's a worthwhile goal to have. It's just like financial independence. I think there's a lot of folks who push back against that and they're just like, yeah, you and your like pie in the sky, head in the clouds kind of dream for folks to strive after this. But I do think it's something that's totally worthwhile striving after.

[Joel]

Agreed. All right, we've got A few more questions we need to get to, including one about free life insurance and problems with a student loan servicer. We'll get to those right after this. Looking for a smarter way to teach your child to ride a bike and support American jobs at the same time? Most kids bikes are just cheap imports. They're heavy, clunky and hard for kids to control. Guardian Bikes is changing that. They're assembling bikes right here in the USA with plans for full US Manufacturing in the next few months. It's a commitment to higher quality and American craftsmanship you can trust. Each bike is lightweight, low to the ground and built to help kids learn to ride faster, many in just one day. No training wheels needed.

[Matt]

And here is the real game changer. Guardian's patented SureStop Braking System 1 lever. It stops both wheels, giving your child more control, faster stops and it prevents those scary head over the handlebar accidents. It's so easy that even a two year old can do it. And so if you are ready to support American jobs and keep your kids Safe, head to guardianbikes.com today. You'll save hundreds of dollars compared to the competition. And when you join their newsletter, you'll get a free bike lock and pump, which is a $50 value.

[Joel]

That's guardianbikes.com built in the USA made specifically for kids. Guardianbikes.com this episode is brought to you.

[Matt]

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[Joel]

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[Matt]

That's right, make your plan with Navy Federal and TrueCar today. To qualify for the $250 bonus, car purchase and financing must be completed by September 2, 2025. Terms and conditions apply and are available at navyfederal.org TrueCar Credit and Collateral subject to approval. Navy Federal is insured by NCUA Hey y', all, it's Joel and Matt from how to Money and Joel. We both love Getting outdoors and embarking on the next big adventure. Actually, you've been taking it to the next level with your backpacking trips.

[Joel]

That's true. Yeah. But folks might be surprised to know that our last international trip was actually all about relaxing. Right. Instead of hoofing it, we went to the Dominican Republic. Sometimes doing less is exactly what you need. You need sun, sand, and no spreadsheets.

[Matt]

It's true. Yeah, it was great. Waking up to the water, unplugging, recharging. The whole vibe was just about slowing down. I think that could be the worst part of setting off on an overly ambitious trip is the fact that the amount of planning and the amount of logistics that goes into it, it can be a lot. That's why slowing down is sometimes exactly what you need. Finding that balance.

[Joel]

Yeah. That kind of peace is what travelers are looking for in Airbnb, right? Whether it's a quiet beach spot or a cabin in the woods, hosting can help someone else get that same experience.

[Matt]

That's right. And on the flip side, hosting could help you to fund your next big adventure. If you're thinking about hosting while you're away, the Airbnb co host feature makes it easy to get started.

[Joel]

Started.

[Matt]

Someone local can handle the day to day, so you don't have to worry. Find a co [e-mail] host. All right, buddy. We are back for the break. It is now time for the Facebook question of the week, which is from Carm. You think that's short for Carmen?

[Joel]

Makes me think of the bear.

[Matt]

Carmel Carmi. Oh, is that how he spelled it?

[Joel]

I don't know.

[Matt]

What was his full name?

[Joel]

I don't remember. It was Carmen.

[Matt]

I think they called him Carmen. I think so. Okay, season three, not so great, was it?

[Joel]

I haven't watched season four. I've heard good things.

[Matt]

Oh, when did it come out?

[Joel]

I don't know. A couple months ago.

[Matt]

Okay, I totally fell off. Okay. Carm said I got an offer for $2,000 in life insurance for free from my credit union. What's the catch, Joel? Should Carm be eliminating their membership with the credit union? Should they be fleeing? What do you think?

[Joel]

Maybe, you know, throw a Molotov cocktail through their window? That's what I would do.

[Matt]

What are you guys trying to do, incite violence?

[Joel]

No. Don't look a gift horse in the mouth, Karm.

[Matt]

Domestic terrorism is what Joel's advocating for.

[Joel]

Total joke.

[Matt]

Please don't do that.

[Joel]

Don't do that. No. A joke. Don't look at gift horse in the mouth. But this I think is a fully fledged free offer. It sounds like a sweet perk and it could be, but. But yes, of course the credit union also has self interested reasons for sending this out to you. One, they want you to continue to be a member because if you value this perk that they're offering that doesn't cost them very much at all, you might stick around as a customer.

[Matt]

Yeah, you're not going to go running for the hills.

[Joel]

In fact, you think, well, that's the place I'm going to turn when I need an auto loan or a home loan because they're such sweethearts. You're going to be endeared to the credit union, which makes sense.

[Matt]

You know, the number one thing they're buying your love. Yeah. To a certain extent that's how business works. Is that what sales are, just a way to sweeten the pot a little bit? Bit sometimes trying to buy your allegiance? I was gonna say the number one thing that credit unions need to do is just like to update their websites.

[Joel]

Yeah, dude.

[Matt]

Like the interfaces, the, what do you call it, like where you log in the platforms.

[Joel]

The dashboard user interface.

[Matt]

The user interface with every single credit union that I've dealt with.

[Joel]

The local ones.

[Matt]

Yeah, that's true.

[Joel]

The national ones are much better.

[Matt]

They are better. Yeah. I'm thinking about the local ones which tend to offer the best rates when it comes to different loan products. They're terrible.

[Joel]

Yeah.

[Matt]

Like it's the most backwards thing to go in there and to like link an account or to try to find any information.

[Joel]

But we still love credit unions because they offer the best rates barely most of the time on most loan products.

[Matt]

So I'll say I said barely too. We still love them.

[Joel]

Yeah, we still love them.

[Matt]

They most definitely offer the best, the best rates. Yeah, we still love them barely. They're like hanging on by a wire.

[Joel]

Okay, well back to Carm's question though. I think the main reason that they're sending this out is that they're hoping that Carmo buys more life insurance. Right. It's kind of this like this teaser. It's like, well, we're going to give you this for free, but really you're going to be left wanting more. It's kind of like a lay's potato chip or something like that. You can't eat just one. And they're like, bet you can't survive on just $2,000 worth of life insurance. And now that you know that you need some life insurance and you got a little bit. They're going to assume that you're going to be, you know, knocking down their door to get more. Right?

[Matt]

That's true.

[Joel]

2000 bucks in life insurance, it's not going to go very far. But now that they've whet your appetite, maybe you're going to want that $500,000 or maybe even a million dollar policy. And then, you know, they just, they just scored a little revenue. Heck yeah.

[Matt]

So it's just a marketing ploy for them. That being said, you probably don't want to call that number until you get a policy. In the heat of the moment, I think it would be better for you to shop around and policygenius is great for that. We are seriously big fans of what it is that they're doing. Costco, they actually offer discounted life insurance policies for their customers as well. I think those are probably going to be the two best recommendations we have. But check out our site for more details on how to figure out what term that you should be opting for. How much coverage it is that you need.

[Joel]

Because it's more than $2,000, I guarantee.

[Matt]

Yeah, yeah, yeah. And by the way, term life is most definitely what it is that you want to go with. We'll take questions from time to time about whole life. Some of the different types of life insurance out there gets funky and it's also going to cost you way too much money. And it kind of co mingles that investing life insurance benefit.

[Joel]

Those premiums can be 10 to 15 times higher.

[Matt]

Stay away.

[Joel]

You got better things to do with that money. Some folks might say, well, I have this free policy from my employer, so maybe I don't need additional coverage. That's also not true because those policies typically cover like one times your wages. Maybe a little more if you have a generous employer. But even just those two policies together, you might be like, great. I get paid $75,000 a year. Got this extra two grand, $77,000 worth of coverage. Look at me. That's awesome. And that is 35 times better than.

[Matt]

What it is that Carm got off.

[Joel]

Yeah, that'd be great if you had that much. But you also probably need more and you need a policy of your own. Right. And you can buy more through your employer, but it's a lot more expensive typically. And it's only a good idea unless you, if you have like extreme pre existing conditions.

[Matt]

Yeah. And again, it is kind of like a marketing ploy a little bit. It's just like, oh, they tease you with a little free little sampling. It's just Like Costco, they give you the taste and it's just like, oh, before you know it, dropping way too much money on Aussie bites, which are so delicious, but so expensive. Let's get to this email from Riley. He wrote, at the beginning of this year, I was notified by my credit card account that my credit took a hit. So I pulled it up. Turned out that for some reason my auto pay was on a. Turns out my auto pay on a student loan account, which had been fined for years, got messed up and wasn't paying. This notification hit me in February and the account stopped paying in January. So that was two installments of what is technically three loans, even though they are through the same creditor. That was a pretty hard hit to my credit and I thought there was nothing I could do, but I just came across the goodwill adjustments where you can basically ask for forgiveness. Anyway, I'm looking into it, but wasn't sure if you had already gone over that or if that's something you could do sometime. Joel, let's talk about goodwill and not that kind of. Not that goodwill.

[Joel]

Yeah, go get your T shirts there.

[Matt]

They're much cheaper and not goodwill hunting.

[Joel]

Don't buy your underwear, though. That's weird.

[Matt]

No, don't do that.

[Joel]

So Riley's not alone in getting dinged on his credit score right now due to his student loans. That is happening across the country to literally millions of people. And it's only gonna get worse in the fall. A lot of folks being impacted negatively by the restart of payments. Not having. Yeah, not maybe not having a connected account anymore or not having the money to pay for their payment because they weren't assuming it was going to come back. There's just a lot of. And we'll continue to cover it on Friday flights and stuff. What's happening in the student loan space, it's not pretty. And yes, for Riley in particular, maybe for others as well. If you have a significant impact to your credit score because of an inability to pay a student loan payment or some kerfuffle like Riley experienced, a goodwill letter I think can be a smart way to proceed. You're not telling the servicer that they screwed up and they need to fix it. You're not pointing the finger and being like, like, you've done me wrong. You're telling them that you made a mistake and then you're asking for grace. And I think that can be a smart tactic. Like, you know, I would do it probably after I made a couple of on time payments. They're more likely to Grant you this goodwill adjustment and say, all right, we'll remove that mark from your credit report if you're back on track and you're paying on time. But you have a pretty good track record over the prior years. So I would think. I would think that they would be at least willing to entertain the idea.

[Matt]

I get it. That's right. And I'll say, too, you don't have to start from scratch. Student loan lawyer Stanley Tate, he's actually got some great resources that we'll link to. He's got a good template over on a site that we will link to in our show notes. That way you can take that, make it your own offer. A great explanation, Riley, as to what went on, what happened there.

[Joel]

I guess you could, like, ask ChatGPT to write you something, but the fact that Stanley's already got something up on his site, I feel like that's. That's helpful. Stanley does a great job covering the student loan space and kind of what's happening and the changes.

[Matt]

We tried to get him on the show once, didn't we?

[Joel]

We did.

[Matt]

I think he said no.

[Joel]

I think he was like, I'm too busy for lame podcasts like yours. And we're like, oh, okay, that's. That's a bummer, because we really like what you do.

[Matt]

Stanley. If you hear about this, we would still love to have you on.

[Joel]

Yeah, for sure. Anytime.

[Matt]

I can't remember why it was that it didn't work out, but we'll. We'll go barking up that tree again soon.

[Joel]

All right, well, we hope that helps. Riley, Matt, let's get back to the beer that we had on this episode.

[Matt]

Let's do it.

[Joel]

This was again a summer li hing mango sour Al from Lanikai Brewing.

[Matt]

So you started to explain to me what li hing means. What is it? It's like this sour powder dust or something. Yeah.

[Joel]

Made from plums, I want to say, and mixed with other things. And it becomes. It's a. Like when you. If you've had, like, sour gummy bears or gummy worms or Sour Patch Kids or something like that.

[Matt]

If you've had sour patches.

[Joel]

Everyone's tried those.

[Matt]

Who's never had gummies.

[Joel]

This is like the less intense Hawaiian version of sour powder that they make. And so they put it in. That's all.

[Matt]

That's all natural.

[Joel]

That's right.

[Matt]

If it's made from plums.

[Joel]

That's right, Exactly.

[Matt]

That grows on trees.

[Joel]

So I really. I mean, this is like true Hawaiian ingredients in here. Mangoes, super Cool. Hang from every tree, it feels like over there.

[Matt]

So get this. Did you get much mango in the actual beer? Because when I cracked it and smelled it, I'm like, oh, man, it's like I'm standing in the kitchen at the cutting board right now peeling a mango. That's what it smelled like. But I didn't pick up a whole lot of the mango fruit. I don't know.

[Joel]

I got more of the lee hing than I did the mango.

[Matt]

Yeah, More of the tart going on. And maybe that's because maybe if it was a little bit sweeter, it would have tasted. Maybe more of that mango flavor would have shown. But man, it was like aggressively tart. It almost felt like it was electric. But then it stopped and it switched to more of this wheaty. Like a wheaty profile. Like, I felt like I was tasting those Cap' n Crunch notes, like in the mid where I was kind of like, oh, oh, interesting. After the. After I took my tongue off of the 9 volt battery. That's what it felt like when I.

[Joel]

First for sipped it.

[Matt]

And then interestingly enough, it finished, like quite bitter. Like it's got the sour sauce aftertaste. The aftertaste is surprisingly bitter. Like it's not quite that hoppy bitterness that you expect with a New England hazy, but it's like a totally different.

[Joel]

I think it's the way the li hing changes and it's hitting different taste buds versus on your tongue.

[Matt]

Gave my entire tongue a workout. Like, there was no part of my tongue that was unscathed after. Not unscathed unless stimulated.

[Joel]

Well, so this beer, this brewery had a second location in Volcano, which is right outside Volcanoes national park, where we stayed and we drove by it and there was like a line out the door and so we opted to go elsewhere. But I'm kind of bummed that we didn't get to hit it up while we were there because this beer, I really enjoyed it. Pretty cool. And I wish I'd tried more of.

[Matt]

Their stuff, but I could totally see many folks saying after they hiked some volcanoes, like, you know what I want now? A fruity electric sour beer to quench my thirst.

[Joel]

Hits the spot after, like a hike around the room above a volcano. Right?

[Matt]

That sounds perfect.

[Joel]

Yeah.

[Matt]

Thanks for bringing this one. It's quite beat up. I feel like it made it though. I was looking at the can, the cans, quite beat up.

[Joel]

Should have seen me at the airport.

[Matt]

Were you wrapping it in stuff?

[Joel]

Yeah, well, so I had wrapped it up pretty well, but then when you get to the airport and we checked one bag because you had to check a bag to bring beer and you weigh the bag and they say, oh this sorry sir, this is 57 pounds. You need to get down to 50. And they were really serious about the weight amount. And so I'm stuffing everything I can into other. I've been through this before with beer packages in other places and I've had lenient flight attendants or people there at the counter. This person was not lenient.

[Matt]

Oh man. And it's not like it's liquid, so it's not like you could have put that in your pocket. So that means you had to stick on like five sweaters. Is that what you were doing? Yes.

[Joel]

And then it's not as well protected so that's why it's a little dented up, but made it so well.

[Matt]

Regardless, glad you were able to bring that one back. I enjoyed sharing it with you, my friend. You can find our show notes up on the [e-mail] that's going to be it for this episode. So until next time, Best Friends out. Best Friends Out.

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