Understanding Your Workplace Retirement Accounts with Delyanne Barros

it is workplace retirement accounts. It's the four oh one K, the four oh three B, the four seven, the YadA, YadA YadA. They are all very similar. So we're not going to go through everything individually. We're gonna talk to our good friend Alien Barrios about the differences though, and what you should do with yours, how yours may differ from another one. Can you have multiples? So this is going to be a super important episode, even if it

doesn't have the sexiest name. All these numbers and letter combinations in parentheses, like what in the world do they mean? And in many ways makes sense that we don't talk about this very often because it is one of those things that in general at most we're looking at it once a year, maybe less. If you've been at your place of employment for a while, you kind of set it and forget it, or you don't set it because

you don't understand those numbers and letters. So hopefully Delian will be able to explain a little bit more to us and then mostly just provide the motivation we need to do the thing to do the thing once. Yes, So if retirement and investing is something you're looking to learn more about, we do have a lot of investing episodes that are specifically focused towards keeping investing simple, keeping

it retirement focused, and keeping it reasonable. Uh So, some of our favorite ones are episode two oh five, which is how to Say for Retirement and episode ninety four which is Retirement one oh one, and those are really good, but also our minimalist investing episode I forget what number that is, but that one is very good as well. And somebody who knows a lot about investing, I am somewhat of a nerd when it comes to investing for retirement,

not all investing per se. But somebody who is a nerd about all of it is our friend Delian, and you might know her as Delian the Money Coach on TikTok on Instagram. She is an investing coach and she's been named one of the most influential voices on money by Time, and she was the host of Diversifying, which was the first personal finance podcast produced by CNN. She is a rock star and she is just as relatable and nice in person as she is on social media.

So super excited if you don't know her to introduce her to you. Yes, let's do first. I'm ready. I was, it was too. This episode is brought to you you were wondering. I knew you were wondering too. This episode is brought to you by Debt Free Stories. And I can't believe that I forgot this one because this one is a brand new one. So Daffree Stories is our new YouTube series that just launched this week and is

releasing weekly through February. Because you guys continuously ask us for more Debt Free Story interviews and we can't possibly fill the entire show with them because there are so many other things we want to talk about, like workplace restirement accounts for you know, we're selling you what you want, but we're giving you what you need. We're putting what you want on YouTube. We have a ten episode series exclusive to YouTube where we are interviewing listeners just like you,

who have paid off debt in various ways. That's another reason I'm very excited about the series, because it's not just experts and entrepreneurs and all of these people you continuously here on podcast paying off debt. We got listeners. We got you guys to share your stories, and we're celebrating with you. And you have provided so much inspiration and wisdom in these interviews. I'm so excited for everybody

to hear them. We've got a variety of people, variety of backgrounds, and so we hope you'll find it as inspirational as we did. If you want to catch that, head to YouTube dot com slash Frugal Friends and subscribe to the channel and turn on notifications because the first episode is out and you want to get a notification for every episode when it drops each week. Yes, I'm so excited for this YouTube, but even more excited in

this moment for Delian. Delian, welcome and thank you for hanging out with us today to talk about this like rifeting really sexy topic, salacious um I do think it's sexy. Honestly, I take offense to that. So you're very welcome. This will be a rated our episode. We're gonna have to retirement. Okay, I'm so excited. I'm just delian. You are a force.

Just reading your bio before we jumped into this, I'm so excited for you to be here and explain all of these numbers and letters and the ways in which they combine to mean something for our rate in our episode. Can you can? Can we start there with the four oh one ks, the four or three bees, the four fifties, seven bees, etcetera, etcetera, etcetera. There may not be that many ETCeteras. You'll know better than me, But what are

the differences between these accounts? What are they? Yeah? I think first, you know, a good place to start is why do they have these awful names? So like, could they not have come up with a better name for these accounts? Please? Yeah? The sad truth is that they just literally plucked the section out of the I R. S Code and was like, oh, this is section four oh one K. I know, we'll name this this account four oh one K. I'm like, wow, you guys are

just really reserving that creative energy for other things. Okay, cool. Um, so that's where that those names come from. It's from the I R S Code, and um, I think people get overwhelmed. Yes, there's so many front accounts. But the good news is that for the most part, they're very, very similar, Like their similarities are way more than their differences. So whatever you know, whenever I'm talking about investing in general, like you guys have here, a lot of the concepts

that we discuss apply across the board. So that's the good news, right, But today I guess we're gonna highlight a little bit more of like what the differences are. But the biggest similarity between them though, are that these are employer sponsored plans, so these are accounts that you need to get through your employer. Although I'm gonna make a caveat already it's that there are so low for one case and set I raise, which are for the

entrepreneurs out there. So if you're like, hey, I'm a business owner, I'm self employed, and I left out of this conversation, I would say no, like listen in, like this is still gonna apply to you. Because everything that we say for the four oh one K and everything else is going to apply to the solo for one K, so it's all going to translate. Um, so both entrepreneurs and employees can benefit. But yeah, I think the you know, the other difference between them is they apply to different

groups of employees. So you've got the four O one K, which usually applies to people in the private sector, right, that's like most of America. And then you have the four H three B s which are nonprofits things like you know, people who work for legal aid or any other kind of nonprofit, who's a teacher, um. And then you have the seven which is for government employees, so people in the military, any kind of other government establishment, they usually get access to the four seven. That's the

biggest difference between them. There's a few other things that will probably highlight as we go, but that's that's the biggest distinguishing factor there. Nice, And all of these are retirement accounts, is that correct? Correct? So the the there specifically you know, retirement accounts that are going to provide you some and a tax savings, which is why you'll sometimes hear them being referred to as tax advantaged accounts. Um. So whenever you hear anybody say, oh, investing your tax

advantaged accounts. They're talking about these traditional retirement accounts in addition to like things like your I A. And then when you hear people say non tax advantage account, that's usually the brokerage account, right where that's not tied to

your employer at all. Yeah, that's that's like when you've maxed out all of all of the things that they put a limit on, means that you should like try and max those out first, because that's the reason there's a limit on it, because there's some kind of like tax advantage. So, yeah, we don't talk much about the brokerages because most people, for most people like really the employer sponsored program is fine. And then potentially a rap

ira which is like a different episode. But is that what you find you work with like a lot of people. Have you found that to be true or any like common exceptions? Yeah, I think you know, America is mostly

made up of four oh one k millionaires. And again I'm using the four old one k colloquially because that could also include like four or three v millionaires and millionaires, but four oh one k millionaires meaning people who are just like everyday normal people who are working their everyday normal job that's not very glamorous and just like you know, living life, and they are putting money slowly and surely into these accounts, and over a period of thirty or

forty years, boom, they have a million dollars in these accounts. Right, like just doing a very boring like tried and true investing, long term investing, which is what I preach, which is what I teach, and it's what I practice. And so it is possible to become a millionaire you know, through these accounts, absolutely, and people do it all the time. Um Am I going to say, like every single person

can do it. Obviously I can't say that because we have you know, insane amount of income inequality in this country, and there are some people who are like, hey, I'm just trying to get food on the table. I cannot invest. So I'm not gonna sit here and be like everybody you know is going to be able to achieve this. But for a lot of people, right for um and I would say for probably the majority of Americans, you can make this happen with a little focus and a

little automation. So the boring can be sexy, is what I'm hearing, That's what I'm saying. I'm like, like, when I think about like all these you know, stock grous who are out there screaming into the ether about the stocks that they pick and all the stuff, I'm like, y'all aren't retired, Like do you guys really love looking at these stock charts and like playing in the market, Like, I mean, I guess some people like that stuff, but I can guarantee that for the most part, most people

do not care. They do not care what's happening with the FED and if they're raising interest rates and they don't care, you know, if like apples down or if Tesla is doing this, they don't care. They just want to live their lives, but know that their money is like growing on their behalf, and they want to do it in a way that's not gambling, and they're gonna lose all of their savings overnight, right, And that's the best where I am. And I'm in this space and

I have no interest in picking stocks. So these accounts are basically the way you need to think about them is that they are vehicles to those to that life, right, Like you can get to that by using these vehicles. And most four O one case four through the S four the sevens will not allow you to buy individual stocks anyway. So that's another big, big distinguishing factor here is that most of the time you can't even dip

your toe into that hole, let's pick stocks situation. So it already takes out some of that um temptation, right, But there are going to be a list of investments inside of it, and you are going to get to decide what goes into it. For most people, um, some four O one case, some of these plans, your employer will choose it for you. Most of the time they'll be like, hey, we're just gonna throw you in this thing called the target date index one or target date

fund or mutual fund. And you can change it though, like you have a right to change it, and I think most people don't know that, Like I think they just assume, hey, this is what my employer put me in, this is what's best for me, and it is what it is. But you actually do have a right to change it, and you can change it as many times you want. I don't suggest doing that right, like going in and changing it every quarter, but you should know

that you have those options. There. It's such a helpful reminder to hear that doing this, this kind of simple thing, it might take some time for a day to look into this, make sure that you are signed up for the right types of accounts and putting money into it regularly. But beyond that, we don't have to be keeping a pulse on the stock market or have infinite amounts of play money to be able to do singles, talk investing, or do other types of risky things with our money

to see a payoff it with it. I think myself included in many of our listeners like, that's just not the financial situation that we're in. And yet we want to know what are the wise choices we can be making with our money to see ourselves in a better financial position in the decades to come than than maybe we are right now. And so it's just such a helpful reassuring reminder that like the slow, steady, boring thing

can be the sexy R rated lifestyle we all want. Yes, yes, absolutely, and um, you know, I think the other thing that we can't obviously gloss over is the biggest benefit of these accounts is the free money right that you get attached to. I mean when your employer offers you that employer match, that's like a no brainer to me. That is the no brainer of the investing world. If you can get that employer match, which literally doubles your money, you're gonna get a hundred sent return on your money.

But you're not gonna get right away in the stock market, right, that would take forever. But you can get an immediate percent return, meaning like, oh, your employer offers three percent match, and some people are like, what does that mean? Three percent of your salary and that's usually pre tax, your pre tax salary that you put in three percent, they're going to put in three percent. Boom. You just doubled

your money. Right, So for me, when somebody asked me, doesn't make sense for me to participate and there's a match immediately, yes, like immediately as definitely at least up to the match. If you can keep going beyond the match, fantastic. But if that's all you can do, then do that. And I encourage people to do and this is gonna be controversial. I encourage people to do this even if they have debt. Okay, even if you have credit card debt, Oh my god, I know, even if your credit card debt.

I encourage you to do this because that is money that is going to compound so much over time, and I don't think that anybody should leave that on the table. And also I could say, are that a part of your compensation? Your employer surely did when they hired. They took that into consideration when they made your job off, or they're like, oh, if this person ops in and they take this match, look how much extra money we're gonna have to give to this employee. So you should

be considering it part of your conversation as well. Yes, I say that all the time. It's that your employer is paying you less because they have factored in this match and they're hoping you don't take advantage of it and they save money. So by not meeting your match, you're actually refusing three to six percent of your salary. And that's the way like to look at it. But yeah, the yes, the getting the employer match. It's usually very little and you don't even like notice it. It's pre tax.

It comes out pre tax, so before they take out fight US, Social Security and all those other taxes that make your paycheck look so skinny. After you take it you're like, you know, you're like, where ago before they take any of that for Uncle Sam gets his grubby little hands on your paycheck, you get to take that money out first and put it into your investment account. And that's why I say that money is so powerful because pre tax money can grow faster, right because it

has not yet been taxed. So, um, I'm a huge fan of these accounts, and it frustrates me that a lot of employers don't offer education around this, Like why isn't it standard that when you get hired that you get an orientation that includes an explanation of your four own K, your four or three B three B benefits. A lot of employees don't get that, which definitely I'm like,

it blows me away. Yeah, So you touched on the tax benefits of these these accounts, So what are the biggest like tax advantages, because I know some people are like itemizing their deductions on taxes. Most people are not, so that the pre tax doesn't matter as much to them, so they go with a rath like what are some of the advantages to these employers sponsored accounts over just getting an i RA and and sticking with that? Right? So, first,

of all is the contribution amount. Right in IRA, as we know, you can only contribute six thousand dollars per year. It's going up to sixty next year, big book, thanks for raising i r s again just like you said, right, Joan, Like they put a cap on it for a reason, because hello, who doesn't want to grow their money tax free? So with the with these plans, though, the cap goes up much more. Right. It's it was hundred this year, it's going up to twenty two thousand, five hundred next year,

I believe. So imagine sucking away twenty two grand a year in pre tax or even RATH money, because now employers are starting to offer a four oh one k RATH option. So imagine how having a giant raw IRA allowing you to put away twenty two thou dollars a year tax that lets you grow money tax free? Right, So how does the tax benefit work? If you go if you use a traditional for one K, which means pre tax, you're getting the money taken out of your paycheck.

Like I said before Uncle Sam gets his hands on it. So let's say you made a hundred thousand dollars and now you're putting dollars into your four one k. Uncle Sam basically closes his eyes and he's like, oh, oh my bad, you did not make a hundred thousand dollars this year. You made eighty thousand dollars this year. He pretends that you did not make that extra twenty dollars that you put into your four one k, so your

taxable income actually comes down, right. So I usually tell people, if you're in a higher tax bracket, consider a traditional

pre tax account to bring down that taxable income. But if you're in a lower tax bracket, consider locking in that lower tax bracket and going the Roth route, right, so that you can lock in that low tax bracket because my my, again, everybody nobody knows what taxes are going to be in the future, but everybody assumes that taxes are going to increase, especially because our debt is insane, right, Our national debt is through the roof, So the chances

are that taxes are going to go up. So if you can lock in your tax bracket now, you can, like I said, not have to pay taxes on that money. Ever. Again, yeah, it is a very nuanced like balance. So when I had UM, when I was maxing out a four oh one K and a roth Ira I made, and they

also offered the rath furrow one K I made. I like just did a like straight even balance, like half of it went to regular and half of it went to Roth because I was like, you know, I think my income is gonna go up, but I don't know how the tax bracket is going to be, and I just want to like have all my apples in separate baskets. And so that you brought that up because I am such a fan of tax diversification, which is exactly what you did, right, And that's what I did too in

different parts of my career. So I'm glad you said that. Because these choices are not all or nothing, So you don't have to be like, oh, I'm going all pre tax, are all roth. You can actually split up your contribution and you can decide. You can be like, oh, I'm gonna do eight pre tex roth or like you did fifty fifty. So I I love that you did that. And the other thing that people get confused about is, oh, if I put money in my wrath for one K, does that mean that I can contribute to a rath

I array, Yes, you can. Those are completely separate accounts. They do not affect each other, so really important, I think also to know how these different accounts interact with each other. Right, but if you have more than one of these four oh one K, four or three B four seven, Oh again, I'm gonna put the fourth seven

in a separate category. Now, if you have a four O one K in a four O three B, you can only put in like the total, right, so if the total is dred, that's your max across those accounts. So you can't just dump twenty grand into a four one K and twenty grand into a four oh three B. Now Here comes the four seven to save the day. This is one of my favorite I have two great features that I love about the fourth the seven. So if you have access to this account, kudos to you.

I hope you're taking advantage of it, because here's one one of the benefits. You can contribute to a four oh one K and a fourty seven and max out books, so you can actually dump twenty grand into one twenty grand into to the other. I know most people can't afford to do that, but if you can, go for it.

And the other second benefit of the fourth seven is that you can withdraw from it any time without paying the temper cent penalty, So it does not have that fifty nine and a half requirement like the four oh one K does. So this is a great account for early retirees. You guys know them all about, you know, retire early, relaxed early, as I like to call it. UMO seven is an awesome account for early retirees because you can pull money from it without paying the tempercent penalty.

You are going to have to pay taxes obviously if it's a pre tax account, but you get around that teen percent penalty, which is huge. Is that on on money you put in and growth that you avoid. That that's great because on the raw fire only the what you put in you would still see a penalty on the growth. Yeah, fantastic, right, nice? Who is that for?

Fifty seven being normally accessible to usually government employees? So if you work for some kind of government agency, government employees usually people like in a military or some form of that. Okay. So, so speaking of all these different types of accounts in the sandbox of retirement accounts, how do they play together? Like? Can an employer offer more than one type of retirement plan? Can you take advantage of all of them. Do you have to pick and choose?

Like what you You're kind of hitting on that a bit, but could you say more about how they play in the sandbox. Yeah, an employer can definitely um offer more than one, and I've seen that many many times over, so you you don't have to. Sometimes they do enroll you in it. For instance, I've seen something like a four oh one K where they it's a profit sharing plan, so they're like, oh, you can't contribute to this plan,

but we're dumping profit sharing money in here. And so in addition to this four oh one K pseudo four oh one K here, we're also going to give you access to like a four oh three B where you can actually contribute money. So sometimes they'll have different you know, requirements like that are different restrictions. And then the fourth the seven is usually an account that I see coupled

with many other accounts. So you'll have a fourth seven and a four h three B. That's like the most common one that I see because nonprofit and government usually goes together a lot um. But yeah, you can participate in all of these accounts. Again, just like I said, you can have them. You can contribute to all of them. You guys just have to be aware of like where

the caps are depending on which accounts you have. So just again four oh one K, four or three B the caps overlap, so the most you can put in there is that twenty dollars. But then when you factor in the four fifty seven, that's the little anomaly one where you're allowed to max out the four one K and the four fifties seven you can double dip. Right. So but you know, as far as like which one should I choose? I've had that question a lot, like, oh my blur offers both, which one should I pick?

The first thing you want to look at is again which accounts are is the match being offered in? Because it's not always both, So first of all, which one is the match coming in? So prioritize that one. And then the other thing I would look at is the fees. You know, what kind of investments are being offered and how much are they charging in fees because that is how they will eat away at your profit, right, and sometimes the fee can be oh high, especially in four

or three V accounts, which is crazy. I'm like, you know, those are the accounts where the fees should be the best. So this is like where most teachers are at right there are are taking a mantage of and it's the ones that are usually the worst that I've seen. Is there a way to get a quick answer on that. I feel as though if this type of thing, the

paperwork is extensive, it is. It's very frustrating, and so I've had um people call, you know, instead of like digging through all the statements, because it's not always in the statement, they purposefully hide these things like they're not just gonna have a big, weird Whaterally, you have a bunch of choices. You have only a few choices. Don't call for me. But they don't want you to know how much you're paying in fees. They don't want you

to know. Honestly, I don't I'm not a conspiracy theorist, but this is the fact of the matter. So they're not going to have a page that is clearly marked in big bold letters, Hey, this is how much you're paying in fees, you know, because that could suade people from participating, and they want people to participate, but you

need to know what your fees are. So you're looking for words like fees, expense ratios, um, oh god, there'll be so many different names right for fees, and so sometimes the best thing is to either go to your HR person and be like, can you walk me through this? Or who is our plan administrator so that they can walk me through it. I want somebody to clearly tell me how much of my paying fees inside this plan because sometimes it can be so high that it will

destroy whatever tax benefit you're getting inside of the account. Right, So if you're paying something like one or one and a half percent in fees per year, that's where the tax benefits starts through erode, and then it may not make sense to be in that account anymore. Yeah, asking those questions, even if we feel silly while doing it, ultimately is going to benefit us. I mean, we're talking about our lives beyond having to hold down a career like this is this is huge for our own future.

So it's worth uh sucking it up a little bit and asking the questions. Yeah, I mean I tell people, I'm like, this is money coming out of your paycheck literally, right, money that could have been going in your pocket, in your bank account. If it's coming out of your paycheck and going into this mysterious black hole that you're like, I don't know what's going on in there. It's time, this is the time we need to, you know, demystify it, because you should know what's going on with your money.

And this type of like throwing your hands up. I don't want to deal with its um attitude. I get it because I've done it too in my twenties and and that's one of my regrets. But if I can encourage you guys to, like, you know, like you said, take some time, go bug hr, go have a conversation with somebody and learn what's going on inside these accounts. It might surprise you. You You might learn some things that

could make huge impact in your financial future. Yeah. Absolutely, And a lot of the times it is not that hard. Like I my sister in law wanted me to look at her four oh one K to see what was going on, and it ended up being a fidelity account and she was in a life cycle fund that was the right amount of you know, diversified and like aggression

for her. She didn't really have the option to break it out into like the total stock market and the bond and she didn't really have that option, which was unfortunate because it would have saved her a bit on fees. But ultimately, if you're going down in a tax bracket because you contribute to a four oh one K, then like a quarter of every dollar almost is you're getting that back to put into your account. So, like, taxes are one of the biggest fees and one of the

biggest expenses you'll have every year. And so to take advantage as much as possible on paying your future bills now and saving money on future bills now by saving your money in this big place. You know, we're not talking saving like three or five percent on your utility bill, like now, you could be saving essentially on the dollar for your utility bill when you're a d doing that now. It's just like it's a like a perspective shift that when I realized that's what I was doing, I was

saving money on future bills by investing. Now, it put investing for retirement into perspective for me. Is like that tax saving is very significant, whether you get it from the employer plan or the I r A. Absolutely, And I tell people like, investing for your future is something that is difficult for most people because it's hard to picture yourself in the future. Right. It's hard to picture yourself as a little old lady, right, but I do.

I do that all the time. I visualize myself at sixty years old all the time to make it really palpable and to make it like really you know, like like real to me, Like that's a real person. She's gonna be here someday, and I want her taken care of. And when I finally get tired and I want to stop working, I don't want her to have to live

like a broke college student. I want her to live and have a nice life and have a dignified retirement and still be able to like, you know, have a drink by the beach and like, you know, hassle the young cabana boys and like have fun and do all the things and not have to scrimp and stress about every single dollar. I want her to like really enjoy herself, just like I enjoy myself now. I want that to continue into the future. Right. So that's what I tell people.

I'm like, like, have some love for that, for that person. You're building for that person, right, Like they're not here yet, but they're going to be in the Chances are that most of us are going to live until we're eighty nine years old, right as much as and Z wants to tell me that we are, you know, hurtling through space and we're catapulting through a count toward the comment and we're just gonna, like self implode. I'm like, y'all,

I'm gonna stay positive. And you know, to be a saver and to be an investor, you have to be optimistic. If you're a zooming gloom type of person, it's going to be very hard for you to you know, execute on these things, because how can you counter that. I love the picture that you're painting for yourself as as an older why peling the Cavana boys and drinking by the beach and I'm sure other things too, But also

I love what you're describing here. I think it's an important exercise, especially for those who might be a little bit of verse, to understanding the combination of these letters and numbers and what it all means and why is it important to me now? Because there is something to be said for thinking about and caring for our future selves, and not just our future selves, but others who lie

and depend upon us. When we talk about retirement. We're also talking about our kids or others in our our spouses, our family, and the better and kinder we are to ourselves, both in the here and now and in the future, the more kind we're able to be to those around us. If we have thought about and set up a good retirement for ourselves, that's a gift not only to our future selves, but those in our community and the space around us, because they are now not burdened with the

financial pressures of needing to provide for us. So there's there's so many different layers here and reasons to be looking at this and to be making wise decisions within our means. Yeah, I mean, and sadly for many of us, we are going to be in that situation where we're our money is gonna have to support three generations, our kids, ourselves,

and our parents. Right Like, I'm child free by choice, so I don't have children, but I do have a parent that financially I support, and she has zero savings to her name. My mom does nothing about saving and investing. You know, she works, she's responsible with her money, but she does not. It doesn't go beyond that, right, It's like a very paycheck to paycheck mentality, which is how we grew up. And so when I think about saving

and investing now, it's not just for one person. It's for me and it's for her, and it's you know, it's it's a it's a big burden to take on that. It's it's a lot. It's like, I understand, I don't have children. I don't understand what that feels like, but wow, caring for a parent is also extremely stressful, and I want her well taken care of, right, And a lot of us are going to find ourselves in this situation. So the sooner you start, you're doing yourself a favor

down the road, right, to make that situation easier for yourself. Yes, I'm so glad we're talking about this. It's a little adjacent, but Jill, do you remember the bill of the week we had recently where this uh this woman called in and she was thankful that she had her frugality allowed her to have the savings um and essentially retirement savings to when her Hurricane Ian hit uh Port Charlotte in

South Florida. Her parents home was destroyed, their retirement home was destroyed, and she had the savings enough to take

care of herself. That she could also then move her parents out to Colorado to be closer to her, so she could, you know, care for them and this unexpected thing that had derailed their retirement plans, and like that is that is the reason we are discerning with our money, and we choose to say no to things that don't matter now so we can say yes to things that money can't buy in the future, which is that's that peace of mind and that care for the people that

we love, and that's yeah, that's why I think saving for enirement is so freaking important. Is that it is We're all going to be there in some capacity, whether we want to believe it or not. I tell people, you know, I used to, I still say this investing is a privilege, but it's not a luxury. You know, it's not a luxury. It's a necessity. So I don't put it in the category of luxury. I think a lot of people do so that they can swipe it

away and be like, this isn't for me. Um, I don't have money to deal with this, so I'm not gonna I'm not gonna think about it. And that really hurts me because I'm like, oh my god, if they only knew that this is just as important as like paying a light bill or your health insurance bill or your mortgage. It's just as important, right, It's like it's on that level. So, um, I tell people, and you know, I don't like tough love. I don't. I don't use it, but but I sometimes I feel like I need to

shake people a little bit. And I'm just like you guys, if your income doesn't allow you to put some money away in an investment account, you need to do something about that, like a S a P. Because investing is a must, Like it's in the necessity, like you have to do this, right. We have no safety nets in this country, no safety nets, okay, so like we are on our own. Help is not coming. So it's so

important that people prioritize this. So sometimes I do feel like I have to like shape people a little bit because I think that they think, yeah, investing is like for ritual, it's nice, it's for rich, especially when they hear me talking about retiring early, which is an extreme privilege that I will admit. I'm retiring early is very um privilege, but it's still like being able to retire at some point, so you're not working the day you die.

I think that that's a part of the human experience that you're entitled to like have, right Yeah, I mean retiring at sixty is essentially retiring early because most people, the average is the average retirement age, people say they want to retire sixty five. The real average retirement age is sixty three. And I haven't looked at the data, but I don't think it's because people are pleasantly surprised

by what they're saving, right yeah. So, I mean retiring early doesn't mean retiring in your thirties or forties anymore. It doesn't have to be that. But if we can plan for the best and the worst at the same time, that's really the gift that time gives us. Okay, and last question, So we've we have touched on how important these accounts are. What if your employer doesn't offer one,

Oh what did you do? Then? So if your employer doesn't offer one for small boo boo for that employer, Like what I mean, I worked for small companies that can't afford these planks. Fine, so I get it, Yeah, I get it. But also I'm like, if you're a

company who can offer a retirement plan. I almost think like, maybe you can't afford to have employees, So think about that because having again, like I said, having a retirement plan is a necessity, and if your employer doesn't offer that, you're immediately cutting yourself off right there, right, So they're like, oh, shoot, now what do I do? So obviously there are other accounts that you can use what you guys have discussed before,

like the raw iiarray, the brokerage account right. And then if you do start a side hustle, which not everybody has the time or the energy to do. But if you do end up having a side hustle or a side business, you can open a solo for one K, so you actually, you know, can bypass the employer and go have a solo for one K and get access to all the things that I just um described to

you guys here. But like I said, I I don't think that that avenue is available to everyone, especially if you've got kids and you're already working sixty seven hours you're a week. You're like, where am I supposed to get the time of the energy to side hustle? Yeah, if you're working sixty seven hours a week and your employer still doesn't offer them plan. Then that is a different story. Agree, that's a different episode that you should agree.

We need to have a kind of sit down. But the raw Ey raise there the brokerage account, which again I don't want people to be like, oh no, but I'm not gonna get all these tax benefits and a brokerage account like I'm you know, it's this is such a bad option. We don't have time to go into this. But the brokerage account does indeed have tax benefits. Okay, they actually have a whole different little tax bracket that's

called long term capital gains tax. When you guys have time, if you haven't talked about brokera we can do a whole podcast episode on brokerage accounts. I love talking about them. There is a whole different tax bracket for investors in those accounts as long as you hold your investments for at least a year. So the tax brackets are zero percent. There's a zero percent tax bracket, there's a fift percent, and there's a twenty percent. So those those tax brackets

sound helloo right. They sound way lower than income tax brackets. Yes, this is why investing in America is like what the wealthy do, and they use brokerage accounts to create wealth and to lower their taxes. So don't discount the brokerage acount. Yeah. I always think that's so funny that that labor is taxed at a higher rate than cash sitting in a brokerage. I think it's funny too, like funny funny, yeah, yeah, yeah, that type of funny. Do you know what's funny happy?

Not always funny, but like sometimes really funny and just enjoyable. And every week we've got one for you. It's the that's right, it's time for the best minute of your entire week. Maybe a baby was born and his name is William. Maybe you paid off your mortgage, maybe your car died, and you're happy to not have to pay that bill anymore. To bills, Buffalo bills, Bill Clinton, this is the bill of the week, Bill of the week. Get part of it, Okay, I love that. I love that,

all right, Diliane. Every week we invite our listeners or our guests to share with us their bill for the week. It can be when you pay, it can be when you don't pay, it can be your neighbor bill, whatever, it's vague for a reason, and we would love to hear yours today. I know I wish I had a bill and a funny story to share, like a person bill, but they are the best. But mine is going to

be Um. I'm ditching one of my credit cards. So I have the MX Gold and I'm going to be canceling it um because I'm moving to Portugal and that is not a very like travel friendly card and they nobody, nobody in Europe likes MX. I don't like what happens. Don't sue me, MX UM. But basically I went to port a goal and nobody wanted to take it. So I'm like, yeah, that's a what two fifty annual fee that I'm paying for a card that's not really going

to be useful to me. So I have said goodbye to MX, and that's one less bill I need to worry about. Yea yea. For the side update of this move to Portugal, I'm so excited to hear that. That's so fun and yeah, cutting a bill that just won't serve you anymore, it's excellent and Amex misses nothing because you have canceled Llian. But Jill just got the card with the flowers. Did I just got the platinum? Oh boy, now I gained a bill. You lost a bill. I

gained a bill. But that card is beautiful and I just love looking at I'm not going to get it because I won't use of the benefits, but I like looking at it. I will milk that card for every benefit they can give. You should should and then maybe I'll move to Europe. Yeah, but don't use it there. Don't say that. When I'm done, you can come with day, can I? I mean, if you want to, um, well done, Delian. I'm so excited for you, and you're moved to Portugal.

Hopefully means other benefits to your bills and your finance. Isn't just your life in general? If you all listening, have a bill about amazing move to Europe or slicing and dicing credit cards are gaining credit cards are just a person named Bill, you know the Drill for Girlfriends podcast dot com slash Bill, leave us your bill. Actually we're really ready for it because our bill takes to do we need. Yeah, we were six months behind and

now we are. Now we're looking for them. Now we will be up to Dave's going to call episodes a week really shot us through the last six months back up. So please call. If you meet somebody named Bill, I don't care, just have him call you have Bill call us. And now it's time for Wow the sound effects are We told you we yell at you a top podcast here you should you should know the production quality of a top producing podcast. And that's us. I mean, you

guys have set the bar at a different level. For sure. There is here. It's what we only bar is on the corner. We've We've said it so high I can't even see it. That's why I haven't been able to see it for years. All right, So today's lightning round question that we will all take turns answering is and I made the mistake of abbreviating because I have pregnancy brain. And uh so I said, what's the biggest SP mistake you've ever made? And then that was interpreted in many

different ways. Right now I'm reading it and I'm thinking, isn't ESP like psychic stuff? Yeah? Wait what? Yeah? Okay? So and you can answer in any way that you want, like what's the big exp psychic stuff like mistake you've made, But the original intent of the question was, what's the biggest mistake you've ever made with your employer sponsored plan. We're gonna we're gonna blame the pregnancy brain on it, because that's what I do for everything now. So Deliane

is our guest, we would love to hear your biggest mistake. Yeah, mine was probably something that a lot of people do too, which is they just ignore that plan right when you first get a new job. You're like, what's the four one K That sounds really boring and weird, and oh, it's something I won't need till I'm sixty years old. Cool, I don't need to worry about that right now, And

then you don't sign up for it. And I found out three years later, oops, that I've been missing out on all this free match money, that this is money that could have been growing. And this was like during two thousand and eight to two thousand and ten, Hello, prime time to be buying investments, And so I missed

out on a lot of sales. But finally, my HR director, who was a black woman and is the only person in my fourteen year career as an attorney who ever spoke to me about money or investing, and she came to me and said, hey, why aren't you participating in the four O one K? What the hell are you doing? This is a really important plan. You need to sign up for it. So she kind of like you know, sat me down, quickly explained it, and I was like, Okay,

that sounds important enough that I should consider it. Oh and I get more money? Yeah, cool, sign me up for that. So I did miss out on three years of investing, but lesson learned. Well done for her seeking you out and and helping inform you. That's that's some females helping females right there. I was just thinking. I was like, Yes, women helping women make money. I love it.

I'm like, let's have more people do that leave? Yes? Absolutely, And sometimes it's those mistakes that that drive you into this different direction where you've not only made up for it, but you are helping others make up for it in spades. So that is yes. Um, so Jill, how about you? My biggest mistake is never being employed by a company or organization whatever offered these you know e s p s out there, they don't offer the psychic have no psychic stuff available to me. Now I just know nothing

about my future. Yeah, but I am currently an approved adjunct profect sir at a previous university that I attended, and they do offer even as an adjunct. I don't know if it is the four oh one K or like a version of it within the education realm, something along those lines. That was so excited. As I was filling out all the paperwork, I'm like, yep, I know what this is. Sign me up for the most I can put away. I mean, adjunct professors don't make much.

It's going to be like a very small paycheck. But I was so excited, like the first time ever this has been offered to me. Yeah, did you ever hear from like friends about did they ever talk about it? And you're like, what's that your employer offers? No? Sure, I don't live under our crock. I've heard about all these amazing things that other people get to take advantage of. But I have always worked in the nonprofit sector, very small organizations where they just were getting like star it

up nonprofits. So think about startup businesses, start up non profits they didn't have Yeah, yeah, yeah that was. That was my first job out of college was and I loved that job. I worked there for five years and they were just it was such a community focus. It wasn't a nonprofit, but it was community focused to where they charged the bare minimum for services and I so supported that. But when I had the opportunity to go to an employer that had a far oh one K,

I definitely took it. And uh then my biggest mistake came when I left that employer eight weeks before I gave birth to my son. I was the investing writer for this company. That is what I covered. I covered investing, I covered the fire movement, and I left and I was I gotta roll over my you know four oh one k, we'll do this and now you can do now services will do it for you, like capitalized. But I was like, I just you know, I can do this.

It's Vanguard. Um, I'm just switching from Vanguard to Vanguard. And I wake up a year later from having a child and realized I rolled over the money, but I never invested it. It sacks in And this was so it wasn't a horrible time, like things were kind of like stagnant to going down, so it wasn't like a huge miss. But sorry, no, it was like twenty nineteen, so maybe a little Yeah. Yeah, so I um be invested of like almost or something in twenty nine, not

to poor salt on the wound. Sorry yeah so but okay, so this was twenty nineteen when it when it came out, it was when I realized it. It was like April when I realized it. So you know, it wasn't the worst thing. Yeah, that was actually great timing. Yeah, and then my husband, we didn't wait for him. I was like, I'm not making this mistake again. So we we started to roll over his in March of this year. We

kept it for a while. It was in Fidelity and when we started it had to have been March or April. And then that for some reason, they were going to send us a check instead of like mailing it to Vanguard, And in the thirty days that we had that check, we were moving, so we just you know, when we get to the new house, we're going to do it. And we ended up by like putting it in right at the dip, so we were able to avoid that dip for that month and then kind of buy at

the bottom. And I was like, this is nothing that should be times. But I think we're two for two.

I think we're I mean, right, we're bad gamblers, but I guess we're good investment timers lucky, right, and yeah you acknowledge that, like, hey, we got some people will take that luck and be like I'm a master and vestor, I know how to time the market now, And then I'm like, no, no, don't extrapolate like your luck into like, oh now I can read the market and read candles, and I know how to predict our Our wisdom was on accident. It was uh newborn phase and moving so

we got yeah, definitely by accident. Well done with this vulnerable lightning ground, as Jen always loves it to be. We all make mistakes. Hopefully you can learn from ours. If you're currently making one of these mistakes, let's correct it. We're here for you. And also, Deli Anne, I mean you've got you're an expert on so many things. Where can people get more from you? I basically live on Instagram, so that's the best place to find me, is that Delian the Money Coach. You can also find me on

TikTok or Delian the Money Coach dot com. I am always They're always posting a ton of free content, so come check out it's all very helpful. So thank you so much Jillian for hanging out with us today and making this quasi boring seemingly boring subject not boring. I think we did a good job. Yeah, I think we didn't check check that box rated. Are it's done? Jill? Was that everything you were hoping it would be? Yeah? I love it when I can be enlightened on things

I'm not an expert on. I have made it very clear throughout the last four and a half years on this podcast that I'm not an expert when it comes to retirement savings and investing. But because of this podcast and you, Jen, I'm learning more and I think conversations like this are just super helpful and at bare minimum remind us to be looking at these things and what should we be thinking about, what can we be doing? So so grateful to learn from the experts here too.

This is why we bring on guests on the podcast, is why we do interviews to fill in the gaps. Absolutely. Yeah, I'm glad that we were able to share that in a way that was not dry and boring like you'd get on most investing podcasts. So and just the chance to hang out with Delianne for for a little bit on a Monday afternoon, So thank you and whatever day you're listening to this for hanging out with us. And uh, I'm We're so appreciative of you, and that's that's why

we do this. How we're glad you're here. We hope you got some helpful and nation from Delhiane and from this episode. Many of you also know that we have a membership for our listeners, something where you can get plugged in beyond this podcast, and many of our members are in debt, payoff journeys or saving more money, have a variety of financial goals and it's there that we do monthly money challenges, kind of a fun way to

engage and make better decisions with our finances. There's also accountability groups within the memberships, opportunity to connect with other fellow frugal friends and encourage each other and share your own tips and tricks along the way. And we want to congratulate one of the members from from our membership for a big win named her name is Christie l and said little things add up. I was thinking about my Amazon Prime membership and was wondering how many channels

I was streaming. I just went in and canceled them all for a savings of thirty four dollars a month. I had no idea I was spending that much on subscriptions. This is a huge win for me, Holly smokes Christie, that is a massive win. We were talking about minimizing and simplifying our digital lives and the impact that that can have on our finances in a variety of ways,

but definitely in this way. When we realize how many things digital things we're paying for and usually we don't need them all a month, I mean, that's that's a pretty big dent when it comes to discretionary expenses. Yeah, that's actually more than the monthly cost of them membership. So just being in there now you've recouped it and you are simplifying your digital life, which can simplify your choices.

So congrats Christie, thank you all for listening. If this sounds fun to you, these monthly money challenges gamifying our finances, where there's also all kinds of courses and interviews and more, challenge longees head to Frugal Friends podcast, dot com slash club. You could check it out, you could join there, you could just get all the Frugal Friends in all the different directions, YouTube membership podcast. Do it and we'll see there,

or we'll see you next time. Bye. Frugal Friends is produced by Eric Sirianni