DeepSummary
The episode begins with a sponsored advertisement for Policygenius and Fundrise. Andrew then introduces the Money Q&A format, where he will answer three questions. The first question is about which home renovations are worth the money. Andrew breaks this down into interior and exterior renovations, providing data from the National Association of Realtors on cost recovery percentages for various projects.
The second question is about calculating savings rates when factoring in employer contributions. Andrew explains how to incorporate 401(k) contributions, employer matches, and vesting schedules into calculating one's overall savings rate. He commends the listener on their impressive savings rate.
The final question covers the best retirement accounts for self-employed individuals. Andrew discusses the pros and cons of different options like Roth IRAs, SEP IRAs, Solo 401(k)s, and provides his recommended order for considering these based on one's tax situation and employee status.
Key Episodes Takeaways
- Certain home renovations like refinishing hardwood floors, adding insulation, and replacing garage doors and roofs tend to provide among the highest returns on investment.
- When calculating your savings rate, be sure to include employer 401(k) contributions and any vested portion of employer matches.
- For self-employed individuals, a Roth IRA and/or Roth Solo 401(k) are generally the top recommended retirement accounts to prioritize contributing to.
- The optimal retirement account(s) depends on factors like tax situation, income limits, and whether you have employees.
- Home renovations are often money pits that don't increase home value as much as people expect, so do research beforehand.
- A high savings rate is one of the most important factors for building wealth over time.
- Considering tax implications is crucial when choosing between Roth and traditional retirement accounts.
- Data from organizations like the National Association of Realtors can provide insights into typical ROIs for home projects.
Top Episodes Quotes
- “A garage door is a 100% cost recovery.“ by Andrew
- “Yes, your employer match does count towards your savings rate as well. But this is something that you want to make sure that your employer match is fully vested before you count it towards your savings rate.“ by Andrew
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Episode Information
The Personal Finance Podcast
Andrew Giancola
4/8/24