B (7:36)

I would probably ease up. I mean by the time each of these kids is 18, they're going to have well over $300,000 each. And if they're talking about a public, you know, I don't know if it's in state, out of state, who knows, It's a long ways to go. But if you're saving this much for college, I'm guessing you guys are saving a lot for yourselves. So this is, any shortfall, you're probably going to be able to cover it.

A (7:57)

Yeah, I, I mean, you didn't ask me what I would do, but I would ease up a little bit and see where, where they stand, you know, like you can, you can kind of ease up or maybe you can say like, all right, we have cash flow right now. Let's do it for a couple more years. But like by the time that five year old, that four year old is first grade, I don't know, you probably can let this roll a little bit. That's just my 2 cents or super duper. Fund it for three more years and then look at the numbers and build out the tuition planning and see where you stand.

B (8:29)

One other thing that I would do, I wouldn't wait until high school to start peeling back some of the risk. Once Those kids turn 12 years old, that's when I would start peeling off some of the risk.

A (8:39)

Yeah, okay, fair enough. Good, good idea, man. Okay, Ann says, I would love to get your opinion on whether Roth contributions or conversions make sense for me now or in the future. Okay. I am a 54 year old woman, single parent to a child. I live in California. High taxes, okay, Cash flowing. The kids college right now. Net worth 3 million bucks. A small condo makes up about a third of that retirement and other investments are the remainder. 60 grand in a Roth, one and a half in a traditional 401K, 340 grand in company stock. Yowza. Okay. About five years ago, in anticipation of my child going to college, I went from working part time to full time and became an owner in my company. As a result, my income has ramped up significantly year over year for the past five years and should continue to rise. Rise. I've used this income to help my parents and to pay off all of my debt except my mortgage. All right, in terms of spend, basic fixed expenses, around eight grand a month. But when I add in the extras, it's 11 grand a month AGI. Listen to this, Mark. My adjusted gross income has gone from 350 to 770 over the past four years, doubling more than doubling. And she thinks it's going to rise to more than a million in the next few years. It's a highly stressful job, long hours. Well, what do you think? It's not going to be stressful making a million dollars a year. Come on. And she hopes to scale back when her kid graduates in 2028. And I'd like to go back to earning say around 350 grand. Hope to retire no later than 2033. Okay. Now each year about $100,000 goes to my company sponsored retirement and related accounts, 401ks company match HSA cash balance plan. And this year I'm going to put 100 grand or so into a brokerage account. And each year I use a backdoor Roth. Okay, so you're ready for your two questions. Here we go. I don't see any case to be made for contributing to a Roth 401 right now due to my income levels and state and federal tax rate. Also I can do an in Plan 401 Roth conversion, but I don't have the free cash and it doesn't seem to make sense from a tax perspective. I also believe I will be in a lower tax bracket when I retire. That's interesting. All right, so do you agree, is there a case to make the 401 Roth or do an in plan conversion? Well, I certainly wouldn't do an in plan conversion right now. So let's just see, what does she have? She has $340,000 that is in company shares. She's going to start putting 100 grand a year into a brokerage account. So right this minute she is in the 37% bracket. She will go down to 35% mark. So you want to make your case for her to do a Roth 401k right now or not?

B (11:49)

Well, I mean I can just tell you that I would. I do same tax bracket in terms of doing conversions. I mean if she knows her income is going to go down in a few years, you know, obviously I would probably wait until then.

A (12:00)

Yeah, because I think that. Okay, let's say you the reason why you would do more Roth right now is that even with what you're doing, you have this money that's already in traditional, that one and a half million bucks. And so what I think the case that Mark would make is you that's already going to grow. And it's like 20 years of growth. Remember, you're not taking money out of that 401k till you're 75. And yes, you could convert later, but the dollars are going to keep growing. I don't think it's like a moral imperative for you to do a Roth right now, especially if, you know, we're really just talking about a few years. Because you remember, mark, it's now 20, 26. So it's just two years before she goes down into a tax bracket that is more like 35% as the top bracket. She, she thinks, she thinks, she thinks. But I mean, I could, I can live with that. So the question then is, would it be advisable to start contributing to a Roth in 29? Yeah, that's when I think, but I don't know if you have to. I would just contribute to a Roth and I wouldn't necessarily do the conversions until you kind of see where you land. I, we. I feel like there's a lot of unknowns with this plan, you know, 7, 350 to 770. You didn't expect. 770. You're going to go to a million and, I don't know, maybe land somewhere lower than that. Who knows? I think that what you're going to have is by the time you're 60ish, we're going to be able to have 15 years where maybe you're not working or that's when I think we could start to do some in plan conversions. I wouldn't necessarily do it while I'm in my 50s, because who knows what this kid's going to do. Maybe the kid's going to go to grad school, I don't know. But this is quite a great problem to have, don't you think?

B (13:47)

I'll say.

A (13:48)

Oh, my God. All right, quick last question. This is from Jasmine, who said, last year I began working a remote job which pays through PayPal. Someone mentioned that I need to pay quarterly taxes to the irs. Even though I always get money back. I can't find clear information online. It's confusing. Help me understand if this is something I need to do. I made about two grand a month with this job. Okay, well, listen, you'll find out. Right now you're about to file your taxes. Whether or not you're going to have to make quarterly payments or not. You probably don't have to if you're withholding somewhere else, I don't know. You'll make a decision based on this tax filing year isn't that. I mean, there's no reason to necessarily do anything this second. She'll find that out. Isn't that right?

B (14:28)

She's going to know real soon. But if nothing's being withheld, then yeah, you're probably going to want to, you know, kind of go by what tax bracket you're in and put aside that percentage eth each month just to make those quarterly payments going forward.

A (14:41)

Exactly. And don't sweat it. This is not like some horrible thing like making a quarterly payment is pretty easy to do. So don't sweat this. All online. Mark taught me many years ago. All right, gang, that's it. That's the program. Thanks so much for listening. Don't forget, when you go to jill on money.com to submit your question using that contact us button, we would love for you to sign up for our free weekly newsletter which comes comes out every single Friday. And we also want you to check out all the other content that lives on the website. Just do that. Okay? You can subscribe to us on the Odyssey app or wherever you find your favorite podcasts. Just remember, we always want you to, either metaphorically or even physically, with permission to put your hands on someone's back. Someone needs a boost. This will make you feel good. This will make the person feel really good. Change your work. Change your work. Wealth, change your life. Thank you for listening and we'll talk to you tomorrow. Hey gang. I just made a first time ever purchase on behalf of the pod. I was so psyched because Mark and I don't do a lot of promotional materials, but I was able to create a branded sweatshirt. Yep, a Jill on Money branded sweatshirt with vistaprint. Now I'm not usually good at these things, but Vistaprint made it simple to bring this idea like, oh, wouldn't it be cool if Mark and I could create some sweatshirts that we'll try out and maybe the listeners would want to get them as well. They've got these great design tools. They have fast shipping, human support. If you need a little guidance along the way. Because the sweatshirts were so easy to execute. Now I'm thinking about doing some other stuff. Maybe there's some baseball caps or, I don't know, other fun stuff that you guys would want, you'll let us know. There's a reason that over a million people trust Vistaprint for their small business print needs. Vistaprint Print your possible Right now, New customers get 20% off with code NEW20@vistaprint.com it is not hard to destroy a college Last season, the podcast Campus Files brought you stories of fraternity drug rings, stolen body parts, campus cold, and more.

B (16:49)

And now Campus Files is back for another season. There's a guy screaming into his phone.

A (16:54)

He's like, I just saw Charlie Kirk

B (16:56)

get assassinated right in front of me. Every week is a new episode and a new story.

A (17:01)

It was so chaotic, it's almost like a university under siege. Listen to and follow Campus Files, available now wherever you get your podcasts.