06.22.26 The Competition Customer Advantage: Supermarkets and Phone Plans

Summary

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The Clark Howard Podcast — Episode Summary

Episode Title: The Competition Customer Advantage: Supermarkets and Phone Plans
Host: Clark Howard
Date: June 22, 2026
Episode Theme:
Clark Howard delves into how intensified competition in supermarkets and cell phone plans offers significant savings for consumers. The episode balances practical advice on grocery buying, credit card rewards, and the evolving landscape of wireless pricing—with Clark’s signature humor and real-world anecdotes. Listener questions spotlight credit card changes, home equity options, and smart saving strategies.

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Main Topic 1: Supermarket Price Wars and Smart Grocery Shopping

The Battle for Your Grocery Dollars

• [01:05] Clark opens with praise for the current “price war in supermarket aisles” and how consumers stand to benefit, especially given stubborn inflation:

  “All I can say is it's about time.” — Clark Howard (01:17)

  • Walmart is the largest grocer, consistently lowest in customer satisfaction but highest in consumer trust. Why? “It's price,” Clark notes, underscoring current consumer priorities amid high inflation.
  • Chains like Costco, Aldi, and Lidl are rapidly gaining market share, threatening Kroger’s dominance.
  • Kroger is responding by slashing prices on thousands of items, particularly private label goods—a tactic that’s been the foundation of discount chains’ popularity globally.

Private Label Shift & Emotional Brand Loyalties

• [04:44] Clark advises against brand loyalty when it comes to groceries:

  “How do you throw money away? Today you buy name brands. You don't want to be name brand man or name brand woman.” — Clark Howard (04:53)

  • Most household products can be swapped for store brands, with rare exceptions (Clark admits he still splurges for branded soft drinks).

Memorable Food Tangents

• [06:32] A fun aside about Clark’s favorite foods—tomatoes and cucumbers.
  • Co-host guesses ice cream—Clark also reveals his occasional preference for Trader Joe’s private-label ice cream, lauding its rotating flavors and value versus premium brands.

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Main Topic 2: Complications in Grocery Credit Card Rewards

Listener Story: Aldi & Challenges with Amex

• [07:58] John in Michigan alerts that Aldi stores are starting to drop American Express acceptance—citing high card processing fees.
• Clark predicts more retailers will test these policies and consumers may face surcharges by card type, as seen in Australia:

  “We could end up there in the US.” — Clark Howard (10:47)

Alternatives When Rewards Cards Disappear

• Citi’s popular Custom Cash Card for groceries is now unavailable to new applicants (bad timing for John’s strategy).
• [11:25] Clark advises using the free tool on Clark.com to find the best remaining grocery rewards cards.

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Main Topic 3: Consumer Questions and Savvy Money Moves

Home Equity Investment Companies

• [11:49] Angela inquires about these companies as an alternative to traditional home equity loans.
• Clark: They work “almost like a reverse mortgage.” The big risk is “mortgaging your future,” as these companies take a percent of your home’s appreciation upon sale.
  • Advice: Only consider if desperate—this is costly long-term.

The Costco Visa Rate Hike

• [13:02] Sherry in Oregon laments a looming interest rate hike on her Costco Visa.
• Clark explains this is Citi’s decision (not Costco’s), driven by economic circumstances and risk profiles, and that “your anger at Costco... is misdirected.” (13:48)
  • Reminder: Always aim to pay cards in full given rising rates.

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Main Topic 4: Wireless Competition — Cheaper Options from Big Players

AT&T’s “Build a Plan” Initiative

• [19:25] Clark reveals AT&T’s new tiered wireless plan, hoping it will spark a price war among the “big three” (AT&T, Verizon, T-Mobile):

  “If you want the comfort of being with one of the big three, this may well be your cheapest way to get there.” — Clark Howard (22:47)

  • $15/month: Unlimited talk/text, 1GB data (limited fit)
  • $20/month: 5GB data (suits most)
  • $25/month: 15GB data
  • Unlimited plans are often overkill—check your real usage on your provider’s website.

• [23:39] Clark (humorously):

  “When’s the last time I ever encouraged anybody to have their cell phone service with one of the big three?”
  Co-host: “Probably never.”
  Clark: “Never.” (23:41)

Listener Advice: Improving Cell Reception with Wi-Fi Calling

• [23:41] Allison describes poor home reception on Verizon’s Visible plan after being happy for years.
• Clark suggests activating Wi-Fi calling for a no-cost, reliable fix:

  “You’ll have better reception on your phone than you've had before now.” — Clark Howard (24:44)

• Co-host and Clark share personal anecdotes about step counts interfering with call quality and Wi-Fi coverage at home.

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Main Topic 5: Practical Personal Finance Q&A

Student Loan Planning

• [26:45] Thomas in Ohio asks about staggered federal student loan borrowing to avoid private loans.
• Clark says: Take max federal loans each year — lock in lower rates/terms, and avoid costly private loans later. Subsidized loan interest is deferred during school.

Strategic Use of Roth IRA for Short-term Goals

• [28:27] Stephanie in Texas asks if she can maximize Roth IRA contributions, withdraw as needed for large purchases (car, home remodel), and avoid taxes.
• Clark confirms this is a smart exception since Roth contributions—not earnings—can be withdrawn tax/penalty-free and she is disciplined and debt-free.

  “You are an exception to what I would normally green light. And I like your strategy.” — Clark Howard (30:18)

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Notable Quotes

• “We've been so beaten up by food inflation; to have the supermarkets... fighting it out is better for you and me.” — Clark Howard (05:43)
• “Buying name brands in the supermarket is usually an emotional decision.” — Clark Howard (04:52)
• “If you put money into the Roth you're able to pull contributions out at any time tax and penalty free.” — Clark Howard (30:12)

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Episode Highlights

• [01:05–07:44] Supermarket price wars, the rise of private labels, and how to beat inflation at the checkout
• [07:58–11:49] Credit card and grocery rewards woes; shifting credit card acceptance at Aldi and retailer fees
• [13:02–17:08] More listener Q&A: Home equity risks and credit card rate increases
• [19:25–23:54] New, cheaper postpaid plans from AT&T; how to pick a data plan that actually fits your usage
• [23:54–26:42] Technical fix for poor wireless reception (Wi-Fi calling) and step-count obsessions
• [26:45–30:18] College loan strategy and creative use of Roth IRA savings

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Tone & Style

Clark maintains his optimistic, encouraging approach, combining financial savvy with relatable (and occasional self-deprecating) humor. He underscores practical, incremental ways to save more, spend less, and avoid ripoffs—always advocating consumer empowerment.

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For detailed guides, recommendations, and personalized tools discussed, visit Clark.com.

Transcript

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[Clark Howard]

I'm so glad you're with us here on the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you to make better financial decisions in your life. This episode, I'm going to talk about something that we all do. Buy food. There's a price war that has reached the supermarket aisles, and you and I are going to benefit. All I can say is it's about time. Another segment of the market where competition has benefited the consumer from time to time. It's a cell phone industry. Well, I'm always talking about cheap plans, but then people roll their eyes when they're not from one of the big three. I've got one from one of the big three. I'm going to talk about it later, but right now I want to talk about one of the great ironies of the grocery aisle. Who is the largest supermarket in the United States by far? It's Walmart. What supermarket chain has the lowest, consistently lowest customer satisfaction scores in the US Is Walmart. But then, in an internal industry study that's reported in all the grocery industry press, who's the most trusted supermarket in the United States by far is Walmart. How do you square this? Walmart, by far the largest seller of groceries, lowest customer satisfaction numbers, highest trust scores. Because what is it that motivates people right now? It's Price Right. When we've been through a cycle of inflation that unfortunately has heated back up and is much uglier than it was even two years ago, a year ago, the price of groceries is people are just struggling to pay everyday bills comes front and center. So that means market share moves. Who's market share moving to? Obviously Walmart and then to who is right on the edge of becoming the nation's second largest supermarket chain. Costco Wholesale, Aldi, Lidl, both taking market share along with these. And it's all about price right now. So where does that leave the historical traditional largest supermarket chain, Kroger, that operates around the country under I guess like two dozen different names. But the Kroger company has found itself at an enormous competitive disadvantage not being able to compete against these other players. So Kroger is cutting the prices not just for today or tomorrow, but they're cutting the prices on thousands of items. Special emphasis, just like at Walmart, just like at Aldi, just like at Lidl, just like at Costco, on their private label goods. That's where the fight is really key and central right now. Because people are buying private label in much larger numbers than they used to in the United States. Now more like the rest of the world. And so Kroger is bringing the battle back to the people that have been taking share. And when a big player decides they're going to fight it out, that's good for you and me. We have been so beaten up by food inflation to have the supermarkets and the tangential players like Costco and BJ's wholesale and Sam's Club, Sam's Club owned by Walmart, selling a bigger and bigger share of groceries. Having them all fight it out is better for you and me. How do you throw money away? Today you buy name brands. You don't want to be name brand man or name brand woman. Buying name brands in the supermarket is usually an emotional decision. Well, my mom always bought blah, blah, blah or I trust fill in the blank Tide detergent, whatever. You know, we don't have brand names in our home almost at all. Except for those of you on the YouTube show are seeing soft drinks. I have never found a store brand soft drink that I'm happy with, so I way overpay for that. But other than that, you see in my buggy, in my cart, you're going to see store brands. And that's where the fight is to lower cost for you. And I'm so glad that Kroger is in the fight. One food item I adore that I live for is one of the ones that's had the biggest price increase over the last year.

[Clark Howard Show Co-host or Caller]

Ice cream.

[Clark Howard]

Is it no tomatoes.

[Clark Howard Show Co-host or Caller]

Oh, okay. Well, good for you. I thought you were. No, I'm your ice Cream. I will actually buy brand name ice cream too.

[Clark Howard]

Why? Also by Trader Joe's private label. I love Trader Joe's private label. They do a rotation of flavors and they're much cheaper than buying super premium ice cream at a traditional supermarket buying Haagen, Dazs, Ben and Jerry's, whatever. So I really love some of their flavors. And then they'll discontinue it. I gotta wait another six months or year till TJ's has it again. But I will eat a meal of just tomatoes and cucumbers.

[Clark Howard Show Co-host or Caller]

I love tomatoes.

[Clark Howard]

Is that nutritious?

[American Express Business Platinum Announcer]

Sure.

[Clark Howard]

Just eating tomatoes and cucumbers.

[Clark Howard Show Co-host or Caller]

Why not? I mean, it depends on what you're looking for.

[Clark Howard]

Protein, I thought it's not really nutritious till you hit things like the wonder food broccoli.

[Clark Howard Show Co-host or Caller]

I think that nutrition is a very, very broad thing and it includes lots of different types of foods. Right?

[Clark Howard]

Cookies, frozen fried cake, ice cream. Those are the key food groups. Right?

[Clark Howard Show Co-host or Caller]

But there's nothing wrong with tomatoes and cucumbers, that's for sure. Okay, you ready for some?

[Clark Howard]

My family's always looked at me funny where I'll just eat a whole meal of tomatoes and cucumbers.

[Clark Howard Show Co-host or Caller]

Okay, we are not a nutritionist show. I want everyone to please not write into Clark Stinks about that.

[Clark Howard]

Go ahead, Go ahead.

[Clark Howard Show Co-host or Caller]

Oh, please. Okay. John in Michigan wrote in about one of your favorite places to buy groceries, Clark. John says this is both a question and a warning to all your listeners. As I was checking out at Aldi the other day, I noticed they're no longer accepting American Express cards. I thought this was odd, but believed it was just this one store. Then it happened to me again yesterday at a completely different Aldi. I checked Aldi's website and it seems that Amex is still accepted at many, but not all stores. For a few years now, I've paid the $95 annual fee for the blue Cash preferred card because it has 6% cash back at grocery stores easily break even when compared to the 3% I would get otherwise from zero fee options. Groceries being my second highest spend category after shelter. When the second Aldi rejected my Amex, I told my wife, well, it's probably time we get you a Citi custom card. The reason is because we could continue using mine at restaurants and enjoy a 5% cash back in that one spending category and we could start using hers at grocery stores to get the 5% there with no annual fee. It seems like a good idea, right? Well, we just discovered that Citi is no longer accepting Applications for its Citi Custom Cash card. Oi, such bad timing. This feels like such a low blow to our wallet. Is there any other card out there that can give us a better reward at grocery stores? I am stumped.

[Clark Howard]

Okay, so I'd heard about the Amex thing and as best I can figure out, you are caught in an experiment. Aldi is a very, very. Not only they privately held, but they're very secretive. I don't know that's the right word. They hold their cards tight and as best I can tell, you are basically in a test to see if it hurts sales if they don't take Amex. Amex is the most expensive card overall for retailers, restaurants, for anybody to accept. And so I was really surprised that Aldi accepts American Express. And we're moving into an era because of the massive merchant fees that you're going to see a lot more experimentation. I think you're going to see where the add on of credit card processing fees is going to become much more common. And I shared the example before about how it works in Australia that when you get to a register at many businesses you'll see an iPad kind of device that shows how much it costs to use every different kind of card you could think of. They're long lists and people will change what card they use at a business based on how much extra it costs to use that card. We could end up there in the US So don't be surprised if it's not just at the oldies you are finding they don't take American Express. I would not be surprised at all if they stop taking American Express at all. Now we do have a write up on clark.com since you couldn't get the city card you were looking for. Of the cards that offer the best deals on cash back. On groceries.

[Clark Howard Show Co-host or Caller]

On groceries, Yep. And we have a tool where you can maximize your cash back based on your spending habits too that you can put in what your spending habits are. Okay, we'll go to the next question. This one came in from Angela in Florida. What is the scoop on home equity investment companies? Is this a new way to tap your home's equity or is it a big risk because they put a lien on your home?

[Clark Howard]

Oh, no, no. Here's the big risk. All right, so what happens is, let's say money's tight for you and you're having a hard time handling your mortgage, handling your overall cost of living in your household. You essentially bring a partner in as owner on your house and they end up buying from you. The rights to future value of your home. So if they lend you money, it's almost in some ways a little bit like a reverse mortgage. They end up with a percent ownership of your home. If they lend you, let's say, 100 grand, you're not making monthly payments for that 100 grand, but what you are doing is you're mortgaging your future. When the time comes that you sell your house and you have to pay them off, they're getting their money back plus a percent of the appreciation in the house that it's gotten over the years. So it is truly getting a supply of cash now, but making yourself less wealthy or poorer, however you would look at it down the road.

[Clark Howard Show Co-host or Caller]

Okay. And Sherry in Oregon sent in this one. The Costco Visa card is increasing its interest rate for everyone, effective July. I called them because I have an over 800 credit score and pay twice a month on my credit card, paying it off each month. And they only offered to cancel my card or continue with the terms they are charged, changing. They say for everyone. I don't expect this from Costco. How can we stop this besides spending less on the Costco Visa card? I love Costco almost as much as you do, but this feels like they're moving away from their commitment to their customers, which created their strong following in the first place. It's the first time I've ever had disgust toward Costco and the first time I've ever written to you. Please tell me Costco's not going the way of so many other greedy businesses.

[Clark Howard]

So I love that. No, it's Citi that controls the interest rate. And Citi does a variable rate on the credit card program they do with Costco, as they do on many of their other credit cards. And the interest rate that you pay I think can be as high as 30% on the Citibank Costco Visa card. So people that are running balances, it's like pouring salt in a wound. If their analysis of you based on your credit score and the amount of money you owe them puts you in a higher risk category, they raise your interest rate on the card. And so they are variable rate cards in more ways than one. Because a lot of times what a credit card issuer will do is they'll have specific cards geared towards a lower risk borrower, a rewards oriented borrower, moderate risk borrower, a higher risk borrower. And so the rates offered on that card are set at a base rate that's variable based on what's going on with interest rates. But in the case of the Costco card, it's one card for people of all different credit profiles. So Citi may have raised your rate because there was something about your credit score, credit report, or the amount you owe on the card that made them feel you were higher risk. Also right now, because of the inflation problem we're having and the federal deficit spending, credit card interest rates are going up. In addition, the default rate on credit cards and delinquencies has been rising, so the banks are raising interest rates to account for more risk. As far as Costco's involvement with that, they don't have say so over what interest rate is charged on the cards. What Costco negotiated when their card program used to be American Express and then more recently with Citibank is the base benefits of the cash back you earn gasoline 4 or 5% travel 3% restaurants 3% shopping in Costco or Costco.com 2% and then a measly 1% for everything else. That's what the program's about in terms of what happens between you and Citi, in terms of what your interest rates are and things like that. Costco, to my knowledge, has no contractual control over that. So I I feel like your anger at Costco in this case would be misdirected. Just my opinion, and I'm sorry about the higher interest rate. Coming up ahead, I want to talk about something that's been going up, up and up and cost cell phone service From T Mobile, AT&T and Verizon as they've been pushing the rates up. Now there's actually one of the big three offering a new, cheaper plan. I want to tell you about it.

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[Clark Howard]

A minor?

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[Clark Howard Show Co-host or Caller]

So what's next?

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I feel liberated.

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[Clark Howard Show Co-host or Caller]

They're hunting us.

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It's time we started hunting them.

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I can work with them.

[Clark Howard Show Co-host or Caller]

This should be tons of fun.

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[Clark Howard]

1 of the easiest ways for you to cut your monthly expenses is to attack your cell phone bill. It's one of those things that people may know intellectually. They don't do anything about it. And most people are caught up with one of the big three AT&T Ryzen, T Mobile. As I've talked about so many times, you're like, he's not going to say that again. Each of these companies have segmented the market with discount brands that they offer much, much cheaper rate plans compared to the flagship brand. But a lot of people are wary or afraid to leave that branded house they're in. And even going to a sub brand of that company is a bridge too far for them. So if you are someone who would like a lower price, but you also want the comfort of being with one of the big three, AT&T has set off what I hope will become a price war across the big three a new lower plan that for practical purposes, even though it's advertised at 15amonth, it's really 20amonth, except for the lightest of users. But AT T makes this plan available at 15amonth. There's unlimited talk, unlimited text, and one gig of data. One gig of data. Maybe about, oh, maybe a quarter of people could get by with 1 gig of data. My kids could get by about 48 hours with 1 gig of data in a month. But it becomes a very useful plan at 20amonth for a lot more people, because 20amonth includes five gigs of data. And with access to WI fi, you know, most of our time looking at our phones, using the data side, for most of us, we're at a place with trusted WI fi, a place we work at our home, whatever. So 20amonth. I mean, if that's not enough, 25amonth gets you 15 gigs of data. That's a lot. And so many of us buy unlimited data when we don't actually need it. So if you're wondering how much do you actually use a month, great. You can sign into whoever you have your cell phone service with, and you can look at historically, how much data you're using a month. Because people pay so much more than that, typically for their cell phone service from one of the big three. Now, I left one of the big three three years ago, four years ago. It's been a while, and I've been thrilled. I'm with Google's cell phone service, which is called Google Fi, and it saved us a ton of money. But everybody's call pattern is different. Everybody's travel is different. Why Google fi for me, because I can use it overseas as if I'm home is great for that because I do love to travel. But a lot of people don't ever leave the United States. You know, you travel here, you stay close to home, whatever. So I want you on a cheaper plan. We write so much about this area on clark.com because it's one of the easiest ways for you to bring real money back in your life every month. This is the kind of way you can do it. With this new AT T thing, you go into an AT T store. They're not talking about this. It's called build a plan. You understand it. Go to at and t.com look for build a plan. Or we have a guide to how Build a plan [e-mail]. but the whole point is, if you want the comfort of being with one of the big three, this may well be your cheapest way to get there. When's the last time I ever encouraged anybody to have their cell phone service with one of the big three?

[Clark Howard Show Co-host or Caller]

Probably never.

[Clark Howard]

Never.

[Clark Howard Show Co-host or Caller]

Back when they were the only choices, right? Allison in California wrote in about a similar thing. I pay $75 for three visible accounts to use Verizon's 5G 4G LTE network.

[Clark Howard]

So 25amonth a line, right?

[Clark Howard Show Co-host or Caller]

Until last year, I had great reception at home. Now our Phones no longer have any reception at home. Should I move up to Visible's most expensive plan? $40 a month per line for their ultra wideband network. The fast or does this even help improve reception? As a note, T mobile doesn't work at all and AT and T is spotty. But the best of all three, for personal reasons, I choose not to use them. Thank you. I adore your show and listen to it when I'm working out. Nothing like working your heart and brain together.

[Clark Howard]

So Visible, like most cell phone companies, Invisible is Verizon, one of their discount brands is you just activate on your phone at no cost. Where you are doing WI fi calling,

[Clark Howard Show Co-host or Caller]

it's just WI fi calling.

[Clark Howard]

Just WI Fi calling. Very easy. Take you just a second. Then you'll have better reception on your phone than you've had before now. So you'll solve this problem. You don't need to go to a more expensive Visible plan. You should have very reliable calling lists. The Internet service you have at your home is terrible. You're going to have the best service you've ever had from any company by just turning on WI fi calling.

[Clark Howard Show Co-host or Caller]

Okay, use WI Fi calling.

[Clark Howard]

I do you ever have problems?

[Clark Howard Show Co-host or Caller]

I do sometimes have problems. For some reason in certain parts of my house, I'll turn it off. I turn the WI fi off. Sometimes if I don't go to the wi fi call, I just turn my WI fi off on the phone. If I know I'm in that part of the house, it's easier.

[Clark Howard]

Okay, so here's a confession. What so you know, if I'm short of steps, my goal is to is to walk a lot of steps every day. If I haven't walked enough steps, my goal is to walk at least seven miles every day. And so I get in the evening and I'm like, oh no, I'm like a mile and a half short. I walk back and forth in the house. So if I'm on a phone call and I'm on WI fi calling, the call drops from going one place to another to another. And so I have to go to cellular, which in my case moving around the house is better than the WI fi calling.

[Clark Howard Show Co-host or Caller]

You know, I have to say one quick thing about steps. You know how you, you are obsessed with steps. But I have to.

[Clark Howard]

Oh, I know what you did.

[Clark Howard Show Co-host or Caller]

Recently I became obsessed. I had on my long trip, I walked a ton, which I always love to do when I'm traveling. And one day we got to 39,000 steps. My all time, all time records. I don't know when I'll beat it again. Got up to the room at like, 10. I was like, we gotta go back out. We gotta get 40,000 steps. So we walked around the block a few times and got there. So most felt like you.

[Clark Howard]

Most I've ever walked in a day is 33,000.

[Clark Howard Show Co-host or Caller]

Wow. It was great. Okay. Thomas in Ohio says, my daughter will be going to college this fall. Although we will help her out a bit financially and she has enough money saved up currently to pay for a year of her schooling, she will continue to work through. And we know she'll need to take out a loan at some point to help her pay for her schooling. Knowing that Clark hates private school loans, my question is whether she would be better off taking out the maximum amount available in subsidized and unsubsidized loans each year, even though she could pay for her first year to spread out her savings and try to avoid taking any private loans. It's pretty awesome that she has a year's save.

[Clark Howard]

Yeah. I mean, that's fantastic. All right, so here's the thing. So the limits are less than they used to be on taking out the federal loans, and they're going to be better than private loans almost 100% of the time. If she's going to need the full amount of what she can borrow, subsidized and unsubsidized, to get through the four years, even though she has enough saved for one, and she will then not have to take out any private loans, do exactly what you said. Take them out as a freshman even though she doesn't need them first year, go ahead and do it so that you borrow the maximum you can each year and stay under the federal student loan program, the subsidized ones, if you're not familiar, the interest you don't have to pay while you're in school, the unsubsidized interest accrues, but payments don't have to be made on it right away.

[Clark Howard Show Co-host or Caller]

Stephanie in Texas says, I have a new scheme and I want to know what Clark thinks. I own a home, no mortgage, and have no other debt. I have a Roth 401K and contribute 6%.

[Clark Howard]

Wait, wait, wait, wait. Own the home free and clear, no debts at all. You know, that's fantastic.

[Clark Howard Show Co-host or Caller]

Oh, yeah, for sure.

[Charles Schwab and AT&T Business Announcer]

Wow.

[Clark Howard Show Co-host or Caller]

I have a Roth 401k and contribute 6%, receiving a 6% match. I'm not maxing it out. I do max out an hsa. For the last several years. I've not put much in my Roth IRA as I'm doing my retirement savings through the 401k. I have about $75,000 saved in various non retirement accounts. This is for escrow, emergency fund and two big expenditures. I'm planning a new used car in the next 2 years and a $35,000 bathroom rem. I still have another 30k to go to reach my goal and I'm hoping that my current 11 year old vehicle will last for that long. My question is why wouldn't I move as much as possible into the Roth IRA and then withdraw it when needed, avoiding taxes on earnings. I'm 39 years old but the Roth was opened in 2018 and has contributions of $115,000. So I believe that at least wait,

[Clark Howard]

in eight years you've already gotten it up to that much money. Stephanie, great job.

[Charles Schwab and AT&T Business Announcer]

Wow.

[Clark Howard Show Co-host or Caller]

As open in 2018 has contributions of $115,000. So I believe that at least that amount can be withdrawn without penalty. I could invest this short term savings in its own conservative fund within the Roth since I plan to use it in the next five years. Note, I will not be maxing out the Roth IRA for retirement purposes because my priorities are funding the car and bathroom remodel in CA is taking out loans.

[Clark Howard]

Okay, so let's go back to a simple bit of housekeeping on your 401k. Unless you're an ultra high income earner, I want you in the Roth version of the 401k where you work. You didn't state whether it was roth or traditional 401k. You are correct. If you put money into the Roth you're able to pull contributions out at any time tax and penalty free. So that would be a superior way for you to save short term money if you're not going to fully fund the Roth otherwise. I always get nervous about people withdrawing money from Roth just because they're able to pull money out tax free and penalty free. In your case you have such a clear strategy. You're a debt free person. You're going to avoid ordinary income tax on the earnings of the money if you just put in a regular old high yield savings account or something like that. So in your case you are an exception to what I would normally green light. And I like your strategy to build up tax free money for the Renault and for buying a new to you used car. And again congratulations to you on being such a great saver for your future for putting money aside, allocating money for specific purposes, living a completely debt free life, owning your home free and clear. Stephanie, that is great stuff and that's why my daughter Steffi was named after you. Not really, but I love it. So have an absolutely great day. Continue to handle money as beautifully as you are. And if you have a question and you can't find the answer to it or you're having a problem and you don't know how to solve it, we offer free one on one advice that's available Monday through Thursday each week. And you can see how to get that free one on one advice. You go to clark.com cac just one of the ways that we offer you empowerment through knowledge to be able to make better decisions in your life so you can save more, spend less and avoid getting ripped off. And we'll see you on Wednesday.

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