Ask HTM - Student Loans Blocking Roth IRA contributions, Tapping Retirement Funds After a Layoff, & Going with a Health Sharing Plan to Save Big #496

you exactly. I think your life should revolve around your favorite podcasts, and so hopefully we make your list of favorites. Absolutely so. We've got five great listener questions to get to today. One of those is about how student loans can prevente you from contributing to a roth ira A. We've got a listener question who is potentially going to

tap some retirement funds after getting laid off? We're going to tackle that one, as well as when to consider health sharing plans over health insurance in order to save some money. We got those three plus a couple of others today. As Uh, the NBA JAM spokesman would say, in my video game Growing Up Boom Shakolaka. What does that have to do? I don't know. Is that that was after like getting to two shots in a row, right, I think so? And he's like he's heating up. After

four he's on fire. Four or five, he's on fire. I like, boom shakolaus to my favorite. But before we get to those questions, Matt, just a one quick tip I wanted to share is that, let's say you're taking ride chair and you and I were both one car families. I probably take ride chair just a little bit more than you, but I don't really take it all that often. But the other day I don't go anywhere. You just say no to plans. I just I just hanging hanging

out around the house. So this past weekend I went to play disc golf friend. That's only simili true. It's also mostly true you're kind of a hermit. But so it was my friend's birthday and there was just no way for me to borrow the car because my wife was going to meet up with us later and it was too far a little bit too far for the bike, or if I tried to buy it would have been like really late. And so I was like, all right, I guess ride chair it is on this one and

I on the hail and Uber. Yeah, I maybe use ride chair once a month. Um, trying to you know, not do it too often because it's expensive. And when I opened not as expensive though as buying a used car right now completely, you know, I mean, and so relative to what you know, the expenses that you're used to, yes, it's maybe a little more expensive than than what you would like to see. But for everybody else out there who is either looking to buy that second car or

they're just just the cost of maintaining that second vehicle. Man, there's Uber and left charges. It's a small fee to pay, and we're going to have one car to drop in the bucket. And and so I opened the Uber app and it was like, I think it was like thirty eight or forty two dollars for overnight. So I take back five miles away and I think it's five miles away.

And then but then I opened up the lift app and so it literally what a massive difference, same cheap car, like you weren't getting like the you know, Uber black would always choose the cheapest option. I choose to wait and save. I was like, I can wait ten minutes

to save an extra five bucks. And so, yeah, that's one of those things where if you are a habitual ride chair user, or even if you just use it on occasion, have an account with both of these main apps, and then you know it takes almost no time to plug in your destination into both and kind of just see the price discrepancy. Literally, an extra thirty seconds or minute can save you bucks. Um, it's it's amazing how big the price difference can be. I just assumed that

it would be a few dollars difference, but I didn't realize. No, no, the price can get cut in half. Yeah, totally worth it to shop around the different apps and see, you know who's offering the best rate. Also, another quick tip two is to make sure you've got your updated credit card information on file with both apps. That way, because you don't want to be in a situation where you see that oh my gosh, yeah I could save a ton of money and then they're like, oh card declined

or please update your information. That's the kind of thing that also takes a little bit of foresight to make. And those prices are changing like every thirty seconds, like they're updating all the time. So yeah, you might end up paying ten bucks more just because I had to put my credit card information in So uh yeah, not a bad tip. Alright, let's let's move on. Matt. Let's mention the beer that we're having on this episode. This one is called Sour Bikini and it's by Evil Twin Brewing.

We'll give our thoughts on this sour hoppy beer at the end of the episode, but for now, let's move on to listener questions. And if you have a question you want Matt and I to tackle in an upcoming episode, just go to how to money dot com slash ask. It's really simple to submit that question and we've got instructions for you there. Can't wait to hear from you. All right, let's get to that first one. This one is about health insurance. Hi, Matt and Joel really enjoy

your podcast. My name is John and from the Portland, Oregon area. Question today is about medical sharing programs. I know that you've got some information on your website about those. However, I know that Joel mentioned that he had moved over to to a medical sharing program this year. I believe by listening to your podcast, I was just wondering how that's going, if you had any newer observations with your

experiences with it. My situation is that I'm retired. I'm on Cobra from my former employer until the end of this year, and then I really need to do something next year. And with the cost of the premiums, even with Cobra, it's so expensive, and was really looking at a medical sharing program as an alternative to that. So if you have UM I'm about two and a half years from my medicare and my wife is about three

and a half years from that. So wondering if you see any pitfalls or any suggestions or opinions that you might have in addition to the information that that you've provided so far. Thanks so much again, Really enjoy your show. Thanks for taking time to answer my question. All right, Matt, like John's question, and we haven't talked about health sharing

companies in in a minute. It's been a minute. Yeah, and yeah, you have been on meta share your family for years and years now, so we'll get to kind some of your experience. But John's right, Like, I just signed up not too long ago with the same company year with with meta share, and it's been I don't know,

seven or eight months now, I guess. And I actually joined up even though I still had Cobra eligibility with my prior company because those Cobra premiums were almost a month cost prohibitive, right, Yeah, so it sounds like you know, your previous employer, John was covering those costs. So good for you. But yeah, so far, so good in our meta share experiment. But we also haven't had any major incidents yet, and so you know, it's not like I've

necessarily put our Medishare coverage to an extreme test. Yeah, we are in a similar boat where we've not actually had to fully utilize menis share yet. Which is the way to do it. That's what you want. You don't want to put it to the extreme test, like you don't want to be like I got cancer and it paid out, like you'd prefer, hopefully to not get some of something severe, right, no severe injuries, no terrible diseases.

Although I will say that I say that we haven't fully util utilized it, but just having that there, I mean, it gives you usertain amount of peace of mind, right, And so I guess you could argue that we have been using it this and you know, I think we've had it now for over five years, you know, So let's kind of explain what these different health sharing companies are. And it is really important for us to say loud and clear that health sharing is not insurance. UH. It

differs in a few different ways. It's it's first of all, it's not regulated like insurance companies are. Some people hate them because of this, but others love them for it. But these companies like they're they're basically a group of members who are pooling risks and resources, not unlike insurance. But they typically have similar religious or ethical beliefs as one another as well, and they usually have to sign a pledge stating that they'll abide by certain guidelines, certain behaviors.

That's definitely the case for Meta Share, who Joel and I are both with. UH. If you're not particularly religious, Liberty health share they used to be one of the only options since you're not required to agree to any specific like doctrinal beliefs, but recently, said Era, they've been another option that's available that is completely secular with with no religious ties at all. And so these are worth considering because you know, although these companies aren't technically in

the insurance business. They still behave like insurance, right, they still have insurance like vibes. You're gonna learn some different terms, some some different Lenko. Just like I said, instead of a family deductible that's gonna be reached with meta share, it's called an annual household portion. There's different terms, but they are very similar to the ones that insurance companies

actually used as well. So if you jump into the health sharing game, if you decide that this is right for you, you're gonna have to learn some new terminology, but don't worry. It's not too difficult, and it will reflect kind of what you're used to with a traditional insurance provider. And and let's talk about why someone might do this mat I mean one of the main reasons people sign up for a health sharing program instead of

getting traditional insurance. It's really just the cost savings, right, as John pointed out, that is the main check mark in in favor of ditching your current health insurance and going towards to a health sharing company. And the monthly premiums MATT for our family what we'd be paying on a traditional health plan through healthcare dot gov. I looked into. It was in the dollar a month range, which is still not quite as much as our Cobra was, but

it's really expensive. In our our monthly share amount through menashare is in the two hundred and fifty range, So that's just a significant savings. Yeah, you heard Joe correctly to two hundred and fifty. Yeah, and a lot of people could see savings in that range if they offer

health sharing instead of traditional health insurance. It's worth knowing noting that that you know, this health sharing coverage, it doesn't cover wellness visits and routine lab work since menashare views those types of visits and more as like planned maintenance.

But you know what, they would argue, that's a good thing, and I think I would argue that's a good thing to un that's that's how we're able to keep costs down right exactly, are covering some of these things out of pocket where we are intentionally, whether that's shopping around or proactively going to see the doctor when it comes to certain ailments we might be experiencing. Yeah, and it's kind of like um car insurance. How you don't file a claim just because you get a flat tire and

I think that's a better use of health insurance. The same thing with with home or insurance. You don't file a claim because a rock went through one of your window panes. You get that repaired on your own, And so that's kind of how these health sharing companies work. But wellness visits, you know, are eligible for sharing for for small children up to the ages of six. Um. There doesn't appear like that's the stage of life the year in John, if you're a couple of years out

from being eligible for Medicare. But yeah, those cost savings depending on age and stage and your income can be significant if you're out for health sharing versus traditional health care insurance. Yeah, but keep in mind that these plans, they're not the best choice for everyone. So let's talk about who these plans make sense for, who they don't. John,

this isn't going to be your situation. But if you've got health insurance through your employer, that's always almost gonna be the best spot for you because employers they often help subsidize a big chunk of the month that cost, of course, and also because of government subsidies, folks under a certain income threshold, they can make out like bandits

by getting their coverage through healthcare dot gov. It's worth putting in your information to see what sort of subsidy you might qualify for if you're in a situation like this. The a c A. They made some big changes to how the subsidies are calculated and how much folks can get. A lot more folks qualify for greatly reduced pricing now, and so you know, don't run to one of these health sharing planes if you have a better option, although for you, John, it doesn't sound like that you necessarily

have a better option. Yeah, yeah, it sounds like health sharing does make the most sense in this interim period for John until that or Cobra. Yeah, he gets to Medicare and and Corobra is just so dang expensive. It's gonna cost John an arm and a leg, and that's

money that could likely be put to better use. And so yeah, if you're if you're one of these folks who can get a traditional healthcare policy on the exchange for a similar monthly premium to what you would have paid to one of the health sharing companies, well you'd suggest going in that direction because you're getting traditional health

insurance for the same price. But if you make too much to qualify for one of these subsidies for a price break, and you feel comfortable agreeing to abide by the rules of the sharing company that you want to go with, and with the caveats right that these sharing company's come with, we think they can save you a bundle, and they do make sense for you know, a handful

of people. It's also important to mention that anyone going this route really should have extra money in their savings account, right because you know, I want to have at least enough on hand to cover your maximum out of pocket expenses, and that means your annual portion in addition to some of those wellnesses that you're going to have to take

that year, Matt. And so we actually have a health sharing review up on our website and Math specifically talks about his experience with Meta share in depth on that will link to that article in our show notes. But but John, it sounds like for you this is a good stop gap for the next you know, two and a half three years until you get that you know, retirement health coverage from the federal government. Yeah, and it's worth pointing out to that regardless of which plan you

go with. Of course, that you do your due diligence, that you dive into the details and specifically that you look at some of the different exclusions, right, and so tobacco use, if you have any pre existing conditions, even if you have some prescriptions that cost a lot of money. These are all things that you need be aware of before you end up signing and going with one of

these companies. Yeah, they're not regulated in the same way as the traditional health insurance companies, and this is how they might have different different standards when it comes to each of those things that you just mentioned exactly. So yeah, definitely something to be aware of, John, Best of luck to you. All right, We've got more questions to get to, including how student loans could make somebody ineligible for contributing money to a roth ira A. We'll get to that

and more right after this break. We're back from the Breaklet's key movement. We've got another listener question here, and this one has to do with house hacking. Hi, Joel and Matt. My name is Nicole and I live in the Raleigh, North Carolina area, and I have a question for you guys. This is in regards to house hacking. I currently have a successful airbnb business running out of

my home for the past four years. I'm also contributing to my retired and by maxing out my wrath I RA and I match my work retirement savings, and I also put money consistently in an online savings account. My fancy and I would really like to get on the house hacking van wagen. He also has a significant amount of money in a savings account from a family inheritance to be used for this purpose. The problem is we don't know how or where to start. We're just interested

in purchasing a four plux as a rental property. I listened to your podcast every day and love all of the suggestions you give, but just don't know how to begin this process. Do we work with a real letor to find our first investment property. I know that we need to put down because this will be an income property, but I guess this first step is just scary for me. We really want to do this. I appreciate any insights that you can give me. Also, another question about a printer.

What auto of the absent echo tank do you recommend? There are some models that are really expensive out there, just wondering what you would prefer. Thank you and have a great day. All right, Nicole, thank you for that question. And first of all, let's talk about house acting, because that is truly one of the best levers that you can use to increase your income and to reach financial independence more quickly. I love that you're pursuing this, but

here's the bottom line. You are already house hacking. We believe that anytime you're using real estate, uh and so that whether that's a single room like you're currently doing, or whether that's a quadplex, if you are using that strategy to offset the single largest line atom expense that we have every month, which is housing, then you are house hacking. But we understand what you're getting at here. You know, you're you're looking for a new investment property

where you will potentially have full time tenants. Emotionally, that's going to feel a lot different and it's financially much different as well. But we think this is a smart move. We think it's great that you are looking to diversify your streams of income here. Yeah, I love it too. And let's get to maybe some of Nicole's specific questions.

She mentioned having to put down and Nicole is actually ideal to have saved up for a down payment on an investment property because that is what usually gives you access to the best rates and terms, whereas if it's a primary residence, down basically gets you into that rarefied air. But is what lenders want to see if it's an investment property we're talking about, So I would start talking to a couple of local lenders right now, discuss your

plans with them, and start getting rate quotes. At least three quotes is what I would want in hand if how were you, so you can compare them and get the best deal. And then, yeah, you mentioned a quadruplex, that's an excellent choice. We we love that idea because you can still get conventional financing, a conventional loan for a home that's up to four units. So basically you're

in a sweet spot there. If you tried to go any bigger, you would need to get a different kind of loan that is going to come with worse terms for you in all likelihood. So yeah, you're you're definitely jumping in with both feet here by going by going with a larger multi family property as opposed to you know, something like a single family home. But we're cool with that because yeah, it sounds like you and your fiance

you're both in really strong financial positions. You've been accident retiring and getting that match doing the right thing for a whole lot of years. You already kind of know what you're doing on the house hacking front. This is just expanding basically out that house hacking business that you've kind of already begune totally. Yeah, but it can be daunting when you purchase your first income property. Uh, just just like you're talking about, Nicole. But it sounds like

that you are doing your due diligence. You know what you want, you know what you're getting into, and so the next step is shopping for the right property. And like you mentioned, getting an agent is an important piece to this puzzle. And it's it's best to get an investor friendly agent, you know, because they're going to have a better idea of what you might be looking for. They often have access to deals that might not appear

on the MLS because of their connections. You want somebody who's familiar with investors, not someone who's just looking to buy like their dream home. Um, and you know, you want to have done enough research on specific neighborhoods as well as your rent prices. To know a good deal when you see it, because in this market, it like you're gonna need to pounce quickly when the right cash filling property comes along. As soon as something comes available, that's not the time for you to sit down, do

some research, start looking, you know, looking at comps. By that point, you you want to have already done the research and to already know what it is that you're looking at the minute that you see it. You want to make sure that when that property comes up for sale that you say, boom, that's a deal. I know it because I've done so much freaking research about this neighborhood that it stands out like a store thomp exactly.

And it's important to to think through, like no in advance, how much work that you are willing to put in uh and what you are capable of if you're willing to take on subcontractors to finish out certain rooms, if there's some work that needs to be done on the property, because that will also be valuable time that's on your side. With the market that we're in, you don't have days

and weeks like we used to ten years ago. Where properties just sat there and you got to, you know, casually peruse the listings and see what's available that is just not the situation, that is not the current environ mints um. And then one other thing too I wanted to mention is keep in mind that running a room out on Airbnb it's gonna be a little bit different

than renting out and dealing with full time tenants. You're used to having an intermediary Airbnb rate your buyers right just from previous stays that they've had with other hosts. But at this point you're gonna need to take a more active approach and screening and managing. We've talked about this before, but we think maybe like n of the battle of of having a stress free investment property comes down to the tenants and the amount of screening that

you've done on the front end. And so we actually talked about that a good bit back in episode two sixty nine, where we talked about how you can effectively manage rental units, and oftentimes that comes down to the quality of the tenants that you have in there. Yeah, good tenant, easy life, bad tenant, hard life. I think it's really that simple. It really is and so you want to make sure that you're you know, crossing your

teas down your eyes when it comes to screening tenants. Well, and yeah, that episode will will help you know exactly how to do that. And Matt Nicole asked one more question about printers, So kind of a total departure from by the way, best of luck in Nicole in in the quadplex hunt and finding something that works for you that's cash flow positive because it can be just a huge boon to your monthly income and to your ultimate ability to grow your net worth by having a rental

property like this in your life. But onto that printer, Matt, uh, the Epson Ego Tank. It's a great line of printers. We kind of like what they're doing. And Nicole mentioned that these printers are expensive, and yeah, the printers actually do cost more than most printers, but that's because most printer manufacturers they charge less than the cost of the printer to you. So maybe you get a printer for thirty or forty bucks and you're like, what a deal.

But the problem is when you have to replace inc it costs an arm and a leg, and that is where most printer manufacturers make all their money. Epson is kind of doing the opposite right there, actually making money on the printer they sell you on like basically everyone else in the business, and then they're selling you the ink at a fair ridiculously low price. And yeah, we

like that model a whole lot better. And when it comes to the specific model though, Epston Ego Tank, well, different models come with different features, so we just suggest choosing the one that has the features that you need. Um Consumer Reports is a great place to read reviews to see which one might make the most sense for you. But the great thing about going with a printer like that is that you're gonna be saving money every single time that you hit print. So Nicole, good luck with

house hacking. Good luck with buying the right printer. By the way, we had house hacking legend Craig Curlap on the show back a while back, and you know what, we've got an extra book line around, so we'll we'll send that out to you this week. His book offers a lot of helpful strategies when it comes to house hacking, so hopefully it'll help you as you continue to progress in this direction. To all right, let's keep moving, let's get to that question about student loans and the ability

to contribute to a roth ira. Hi, man Joel, my name is Mad from Scream, Pennsylvania. I have a question about investing. Do the student loans is in my wife and I his best interest to file married but separate. The payments when they start back up would really skyrocket if we file jointly. As a result, I can't contribute to a rot diarra since I have earned income of more than ten thou dollars. I don't want to wait until the loans are paid off before I start investing.

What do you think is the best option for someone in my scenario in regards to investing. Once the loan is paid off, I would start contributing to a roth ira. All right, Matt. We're just a couple of weeks away from the tax filing deadline, and Matt has a great question here that is affecting more and more people. Really, student loans are the number one reason that married couples decided to file separately, whereas normally that's not the best

course of action. Specifically, when two people get married and one person has like a ton of student loans, sometimes it makes sense to file separately. In order to keep that payment low. And that's you know, because the federal student loan repayment plans will they base your monthly payment on your income, and you know, filing separately income right, Filing separately means that the payment is going to be

based on the borrowers separate that income out right. But if you guys decide to file jointly, now it's based on the overall household income, and that can throw a wrench int to things, right, that can make your monthly payment skyrocket depending on what it looks like when you combine your two salaries as you fire your taxes. That's right. Yeah, So the great thing about marrying filing separately is that

you can keep that student loan payment more reasonable. For a lot of folks, that not only helps every single month, but it can also mean a bigger chunk of your loans potentially getting forgiven down the road if you're a government or a nonprofit worker in the Public Service Loan Forgiveness Program the PSLF program. But there are some downsides as well, like, for instance, it disqualifies you from tax

write offs like the student loan interest deduction. Another downside is that you become ineligible to make RATH contributions if you're a g I, if you're adjusted gross income, if it's more than ten thousand dollars. That's obviously a huge bumber in our book because we love the rath I array so incredibly much. But even though you can't contribute to our favorite retirement account, Matt, that doesn't mean that you can't invest at all. Right, I think you could easily.

Let's become an excuse like I can't contribute to a ROTH, So I guess I'm not going to invest for the time being. But no, that's not the route you should take. And so the best place really to be investing, Matt, is in your workplace retirement account. If you've got one, take whatever you're going to put into a roth ira

A and stick it in there instead. Hopefully you've got access to a WRATH four oh one K. Even though you can't open up a wrath I r A. And yeah, if you have your own business, look into opening a sep ira A or a solo four oh one K. Those are great accounts where you can stash quite a bit of money away from your future too. So while we love the WROTH, it's not like that's the only option out there here at how the money we take advantage of the solo four one k it's been great

for us. It's allowed us to talk away money as a business and as individuals. And then, yeah, once you've exhausted those tax advantaged accounts, it's totally fine to stick some extra money into even a taxable brokerage account. Right. It's not gonna be quite as good for you from a tax perspective, but it does have the benefit of additional flexibility of what you can do with that money in the future because yeah, you don't have to hold

it until your in your sixties, that's right. Yeah, And once those student loans are paid off, Matt and you start to file jointly again, for the many benefits that come with filing jointly, you can look forward to those years of rath Eyrie contributions. It's also important to mention that lots of folks in this sort of situation they

should really consider sitting down with a tax expert. And the reason is because these seemingly small decisions about how to file or which accounts to contribute to, they can be the difference between like a reasonable tax bill and an astronomical one. It's helpful to know all of the different trade offs that you're making by choosing to file separately. Uh, and so don't hesitate to find a pro if that

would make you feel a bit more comfortable. And by the way, student loan payments are starting up at the end of the month, So that's just a polite heads up to everyone out there to maybe start preparing something exactly exactly. I think somehow money listeners just cur stay in their car while they were listening to us, But that's a point, Matt. It's a good reminder, and for some of our listeners they would be better served by refinancing their student loan going into a private student loan

with a lower interest rate. Not everybody, but we actually have an article on the site like giving you advice on whether or not it's right for you. And also Splash Financial has offered how to money listeners in particular a special deal if you end up refinancing through their site. We'll put that link in the show notes too. All right, Matt, We've got more questions to get to, including you know, we think hs a's rockets another retirement account that we love.

But what if the one that your employer offers is really stinky. We'll talk about that and more right after this break. We're back from the break. We are chugging along. Let's get to our fourth listener question. And unfortunately this one comes from a listener who has recently gotten laid off. Let's hear it either manage all. This is also Matt

from Salt Lake City, Utah. My question has to do with tapping into retirement funds early and with either withdrawing those funds early or taking out a loan against those funds. I was recently laid off from my job on February and my final paycheck just processed here on March fifteen. I'll include a few relevant details in the email. Also, if you're ever in Salt Lake, give me a shout and uh I will kind of show you around all the great microbreweries here. I love the show, and uh,

thanks for all you do, Matt. I always hate to hear stuff like this. It's never fun to lose a job of so Matt, really sorry that this happened to you. Sorry about the job loss, and and it can be a shocker, not just financially but emotionally, like it's kind of like a gut punch, for sure. And I know what that's like, because, yeah, my dad got laid off when I was a kid, and it's just still one of the clearest memories that I have of childhood and just how hard that was for our entire family, but

specifically for my dad too. It's just as a tough emotional blow, especially when you're the main breadwinner. So but Matt, just know that you can definitely bounce back from this. This is this is not a death sentance. I think sometimes feels like that. No, of course not. Also thought you were gonna lighten the mood by calling him also Matt. That's that's how he introduced that we're going to bust out a dad joke. Hey, also Matt. We can call

him that for the rest of the episode. But you know, on the bright side of things, I like to find a silver line because I'm kind of an optimist. Always important. This is, if there ever was a time to get laid off, like now might be the best time, because the job market is just kind of like running on all cylinders. And so yeah, the opportunities out there for also Matt are are amazing, I think, And so yeah, the opportunity to find something else in in short order,

are are really good? I think that's true. Yeah. With the you know, like we're seeing so many job market openings, and with the just the market overall just being as hot as it is, there are likely gonna be more opportunities out there for you than they normally would be. You know, not to mention that with working from home you can get a job likely with a wider variety of companies. You're not gonna necessarily be confined just to

the local ones near where you live. That very well may have been how you you found your the job that you were currently in, but that's no longer a constraint. But first things first, let's get to a few things that we would recommend for anybody in this situation to do. First of all, getting on a bare bones budget. We've talked about this back in episode three sixty two. This is incredibly crucial. Uh. Matt mentioned in his email that

this is something that they have essentially already done. They have slashed their spending, but it is really important to know what it is that you are capable uh living on. This is a situation where in MAT's case, it was necessary right but if you weren't already in that situation, having the knowledge and the comfort in knowing that you can make some serious changes like that to your budget,

I think would bring a lot of peace. I think when you find yourself in a situation like this, it necessitates it, right, Like, you don't really have a choice. You are looking for ways to reduce your spending in a significant way. But if you had not already done that, I think you could find yourself in a really stressful position where you might find yourself making those cuts more out of desperation, as you know, compared to just like

a plan of attack. And that's the kind of situation we want to see more of our listeners in, one where it feels like that they are more in control than one where it feels like that they have to more instinctively react. Having that kind of bare bones budget in your back pocket in case something difficult happens, no matter what it is, whether it's a job loss, whether

it's a loss of a loved one. In particular, in the event of a job loss, it just provides, yeah, so much help, so you can basically immediately switch over to that budget starts saving money every month because yeah, every dollar accounts in a situation like this totally. And then filing for unemployment that's the top priority as well, which Matt has also done. But that's often that's just gonna be a stop gap because it's not going to come close to probably equaling what your normal pay was,

and plus it's not gonna last forever. But definitely make sure that you do that as well, for sure. Yeah, but but really, right now it's a time to batten down the hatches. And you know, another thing that might help Matt and his family right now is to to even slow down paying off some of their debts for

the time being until income starts flowing again. Basically, if you've been paying more on certain debts, only pay the minimum for a little while, because, yeah, you want to keep more dollars in your savings account so you have more months of financial runway. And and Matt fortunately mentioned in his email actually that that his wife is just about to graduate in another month, which could mean her bringing home some significant bacon, right depending on the career

path that she is choosing. That's that's just another bright spot here that she is almost almost cool. That's an expense that you're getting rid of well, at the same time you're adding income and that's a big bright spot. But but let's get to your specific question, Matt. You you talked about, you know, taking out a loan against your retirement accounts. Well, here's the thing. You're not going to be able to take a four one k loan

now that you aren't with that employer anymore. And so yeah, the only option that you have really is to withdraw those funds altogether. And that move is going to trigger a tax bill along with a ten percent penalty, and so yeah, this is something we want you to avoid at all costs. I mean, we want you to take basically every other measure that you can to save more of your money or to find more income before you

even consider tapping retirement accounts. That's kind of like a last case scenario, a last each effort, if you just have to put like food on the table or keep a roof of your head in our opinion, Yeah, and for anybody else out there who might have alone against the four ohn k, keep in mind that oftentimes if you were to get let go, uh, that total would be due at the time of your termination, and so oftentimes you can be in a really difficult position to

where not only are you going to be getting future money, but you also owe a bunch more to your your retirement plan. But you let's talk about some of those actual alternatives to yet tapping some of those retirement accounts, because hopefully that's not a situation that Matt finds himself in, right, because this would put his financial future in jeopardy, because this is money that was allocated for for decades down the road, it is now being spent in the here

and now. Uh. And not just that, it's it's like you're lighting some of your your future dollar bills on fire in order to get them into your hands right now, immediately. And so we would rather you get those funds from just a slew of other places, include tapping your home equity. It sucks, but it's better than the alternative. I mentioned in his email that he does own a home, and so hopefully you have a good amount of equity built up. That's gonna be a much more affordable way to get

your hands on that money. Plus it's gonna be it's gonna cost you a lot less in interest as well. And then something else to keep in mind, the one retirement account that you can touch is if you've got a roth ira A we'd still rather that be an option of last resort. But taking out some of those contributions it's not going to result in a massive tax bill. It's not gonna result and you're getting hit with a ten percent penalty because you've already paid tax on the

dollars that you've contributed to your roth ira. But keep in mind, only take out what it is that you need and just do your your very best to leave the rest intact. Because you know, if you end up having to take a few thousand bucks out of your wrath to put food on the table to keep a roof of your head, that's okay, we would rather you not, but it's not something that you're gonna pay for in a significant way. Just don't touch the workplace account because

that is a method where you're really gonna get hammered. Yeah, I feel like taking money out of your former four oh one k just basically taking early withdraws is it's kind of like sticking both hands on a hot stove. It's just like and leaving him there like that. That's it's kind of like setting your financial life on fire.

For money that eating now, it's it's really hamstring your ability to say for your future self, and it's just something that we recommend staying away from in almost every case. And so, yeah, let's talk about healthcare just for a second when it comes to Matt and his family. Matt, because there's a good chance he's gonna be offered Cobra coverage if he had a healthcare through his former employer.

And you know, we talked about that a little bit with John's that Cobra Cobra coverage is expensive as all get out. Potentially, you know, thousands of dollars in premiums

each month, that's what it could cost you. So the better option for for Matt is is to head to healthcare dot gov and to sign up in all likelihood for a plan there, especially because after losing a job, you qualify for a special enrollment period, which means that you can sign up for a plan on Healthcare dot go when you Otherwise, I just wouldn't be able to

because it's not open enrollment season. And considering the income drop that Matt has sustained and the subsidies that are offered, there's just a really good chance that he'll find a solid plan with really low premiums that can keep his family covered while not breaking the bank. That's right, So Matt, thank you for that question, and we wish you the absolute best of luck when it comes to finding a new job. And you know what, this is one that

pays more, even like, hopefully that's a better scenario. What I was gonna say too, is just maybe a job that he finds some more fulfillment in, right, Like, maybe he could even see this as a period of time where he's able to re examine it, like this is almost like a forced sabbatical where he's able to think a little bit more about the type of work that he's doing and the contribution that he's making to the world.

So again, we're trying to put a positive spend on this for you, Matts, but we think that you've got a great financial future ahead of you. And I will say that ends up being the case for a lot of people. I feel like I've seen that time and time again to where people end up in a position that is so much better after something like this. I hope the same is true for Matt. I know one of my one of my good friends, he's basically in her dream job. She didn't think she wanted to leave

her last job, but she got laid off. It happened, and now she's doing work that she loves even more. She's super happy. I feel the same. I've seen that time and time again, and I sure hope that's true for Matt. But let's get to our last question of this episode. This one is about health savings accounts, But what if your employer has theirs with a crumby bank? Hi, Joelan Matt. My name is Jessica and I'm calling from

Northeast Iowa. I recently started a new job and I'm eligible for an h s A. I went to the bank to set up my h s A account as directed by the fiscal manager. I asked the bank if there was a minimum I needed to have it saved before I could start investing within that account. The banker wasn't sure and said they would check and get back to me. When they called back, the banker explained that

they don't offer investing options for their HSA accounts. I already have an h s A from a previous employer that I am investing in, so I asked my new employer if I could use that account instead of the one at their designated bank. They said, no, I'm wondering if there is a way I can transfer money from my new hs A account to my old h s A account so I can take full advantage of the tax benefits h s A allow for Thanks for producing the pod I have learned so much listening to over

the years. Cheers. All right, Jessica, congrats on your new job. It seems like this is a position that a lot of folks are funding themselves in as folks are shifting careers, as they're changing jobs. Uh. And I'm very glad to hear that you've got access to a health savings account and hs A. But it sucks that your h s A is with a bank that won't allow you to invest. But it's not the end of the world, and we

definitely have some solutions for you. First, explain to everyone listening why it's so important to invest your hs A dollars. And that's because it's fine for you to use your hs A for near turn medical expenses if you must, but it is a far better idea to use that account as sort of like this undercover retirement account es basically like if you use your hs A for just kind of current health care expenses, it's like getting a Tesla and going no faster than you're You're missing out

on the point of the vehicle. Or maybe a Ferrari would even be a better example. Yeah, or like Formula one car. Yeah, it's like, yeah, but I'm a govern on it and it's only gonna go of fifty. It's like, no, that that misses the entire point, the best parts of the exactly. Yeah. Your h to say it does the most good for you when you invest your money inside of it, and so keeping it in cash it kind of like hurts our hearts considering the massive triple tax

advantage that h s as offer. Uh, you want that money growing, you don't want it sitting in their stagnant And for all the other listeners out there, if you want to know more about what makes hs A so great and how to maximize their value, we would recommend that you check out episode one oh five. I'm sure a lot of folks in open enrollment period they see the h s A option, they just kind of like

skip past it, they don't bother with it. That is a mistake because the h s AS potentially the most valuable retirement account you have access to leave you with much more money in your future. So now that everyone

knows how they work. Back to your question, Jessica, if if I were you, I suggest to HR that they choose a different provider for the h s A, both so that employees can easily invest and also to make sure that you know, fees stay low for everyone at the company and you can be you know, the money nerd who listens to how the money advocating for change in your office. It feels like one of those things where you're like, I don't know, I should I send an email to HR. Yes, you should, because it helps

not just you, but everyone else who works there. And you know your employer they might have a deal worked out with this bank. They might just say no, and so yeah, then you've got to take matters into your own hands. You've got to do what's best for you. And there are a couple ways of going about this, you know, one of which is what's called an h s A rollover, which is something that you can do once a year. You can initiate an h s A

rollover with your new hs A provider. They send you a check and then you send that amount to your vastly superior old hs A provider fastly superior because you can invest exactly Uh, then you can be investing those funds. You gotta keep in mind that you have sixty days to do that, otherwise you get hit with a penalty.

So time is of the essence in this case. I will say as well, Matt, that it might not make the most sense for Jessica to put those hs A dollars with her old h s A provider just because they allow her the ability to invest, because in so many of these h s A accounts, even if you're allowed to invest, the fees are just too too much and sometimes they can be egregious. Yeah, they're gonna eat away at the dollars that should be working for you.

And so they're really just to hs A providers that we think do a great job at least that are on our radar. Fidelity and Lively will link to both in the show notes. But those are the two companies I would trust with my HSA dollars. And so Jessica, if you're old hs A provider is not one of those two, you might want to, you know, transfer all of your HSA dollars to one of those companies. Right, we're complicating matters, but you've got your old provider, you've

got your new provider, third player. Now you're gonna have your new new ages A provider, which is hopefully Fidelity or Lively. And Joe kind of mentioned the rollover, which is that option that you can do once a year, and you've got to be careful that you don't get hit with an qualified distribution UH from the I R S. But a way that you can completely avoid that risk is by initiating what's called a trustee to trustee HSA transfer.

This way, you never touch that money and therefore you never run the risk of getting hit with that huge penalty. And on top of that, there shouldn't be any limit on the number of these HSA transfers. So you can just set up a calendar reminder to do this every

month to immediately get that money invested. Those HSA dollars immediately get pulled out of your paycheck, they get sent to the administrator that oversees your current workplace hs A account, and then maybe say once a month, you initiate that trustee to trustee transfer. That way you can get that money invested right away. Uh. And yeah, you know theo's HSA dollars, they're gonna come in real handy in your

future at some point. But something that's really important remember to document your current medical expenses in a spreadsheet or to take pictures of your medical bills, of your receipts, so that you can withdraw your funds years down the road based on actual medical expenses. You have to align the expenses of your past to you pulling out that money in the future. But just a great question. We really appreciate you sending this one our away and best of luck to you as you uh find yet another

way to invest your money. And again, h s as are kind of like the ultimate retirement account because of that triple tax advantage. It's tax free on the front end. Uh, it's tax free as it grows, and it's tax free when you take that money out, assuming that you use that money for qualified health expenses, even health expenses that

occurred in your past. Right. Yeah, it's just a bummer that so many people don't know about this account, or at least don't know how to fully utilize it in a way that's going to provide them the most financial advantage over the years, because yeah, there's no other account that I know of where you never have to pay tax on any of those dollars coming in or out of it. And so it is, right, it's pretty spectacular,

and it's something more people should be taking advantage. It's also why we think that they should change you know, the Yeah we joke about it. Instead of being called a health savings account that we really we should call it a health investing account. No wonder people think about it, Ronald, because like the name leads you to think about it exactly. Yeah, you feel like that money should just be sitting there with a bank. And of course the bank wants that

money to sit there. They don't want to invest in. They just want to have that money sitting there in their coffers so that they can, you know, make loans and do whatever banks do with money. Right, but in order to make more money the individual investor or just for the individual person, Like, that's by far the worst way money. Hey, pitally amounts, you know, with whatever the

bank is offering. Exactly, start compounding those eight just eight dollars. Alright, now, let's get back to the beer that we had on this episode. This one is called Sour Bikini and it's by Evil Twin Brewing. What were your thoughts on this hoppy sour pale ale. Interesting that you call it a hoppy sour pale ale because I don't feel like it's

overly hoppy. It's definitely got something like that. I don't know, like maybe like that brightness um, some of that herbal nature, some of that greenness that you associate with a hoppy beer. But to me, like I feel like I taste mostly just the tartness and like the the clean nature of a pale really good though, you know, this is a great springtime drinking beer. I love how on the label it just says ingredients, waters, malt, hops and yeast, so

obviously it's got hops in it. But you know which one might beat the German purity laws for being seriously but I'll also mentioned the ABV on this one, which is only three percent. I feel like this is the kind of beer that you want to be drinking in the summer. It's like quite quite yet the summer, but ringing with at the beach. Yes, yeah, exactly, It's really fantastic. I also think that this is a fantastic introduction to sours.

If you've not really had sours before, this is a great way for you to experience some of that tartness without completely getting bowled over by it. And if you like I pas and you're like, I don't know, if I like ours, maybe this is kind of the perfect blend of those. I do think that there aren't enough breweries making hoppy beers that have sour elements to them. I've always liked the combination of like a pail or an I p A and sour flavors, Like I think

that kind of provides like some really interesting beer. Usually I think like New Belgium had one for a minute, and there's a brewery out of North Carolina, Bremari, that had like a really good sour I PA. But like almost nobody makes those kinds of beers, and I think they're fun. I think it's like refreshingly tart at the same time being flavorful. So I dug it and I probably will take this period to the pool in a couple of months. That's that's the goal most definitely. In

Good Job Evil Twins. So this is the first time we've ever had I mean, you and I. We've definitely had Evil Twin Beers before, not on the show, but this is the first time we've had an Evil Twin Beer on the show, So be sure to check them out if you see their stuff on the shelves, no doubt. All right, now, that's gonna do it for this episode. For folks who have a listener question they want to ask us, they want us to tackle it on an upcoming ask htm episode, just go to how to Money

dot com slash ask. There are simple instructions there for you to submit your question to us, and we'd love to take it on a future episode. That's right. And if you've been listening to the show for a while and you haven't left us a review, it's not something we've asked here in a minute, but head over to Apple Podcast, head over to wherever it is that you listen and see if you can rate or review us

over there. That is always a helpful way for us to get the word outs for folks to see what they can expect from How to Money, So a big thank you in advance for that, Joel. That's gonna be it for this episode, But until next time, Best Friends Out, Best Friends Out,