Mr. Money Talks: Becoming a 401(k) Millionaire (01/04/25)

01/04/25

In this episode, Mr. Money shares valuable insights and practical tips to help listeners achieve the coveted status of 401(k) millionaire. From starting early to maximizing employer matches and contributions, Mr. Money guides listeners through the steps to build a seven-figure retirement nest egg.

Episode Transcript

Unknown (00:00):
The Information and opinions presented are for
general information only and arenot intended to provide specific
advice or recommendations forany individual you should
contact your investmentprofessional, attorney,
accountant or tax advisorregarding your individual
situation. The opinions of thepresenter do not necessarily
reflect those of independentFinancial Group LLC, its
affiliates, officers ordirectors. Mark Rothstein, aka
Mr. Money, is the owner of tristar financial LLC and Tristar

(00:20):
Income Tax Services LLC. Mr.Money is a marketing name only
and is not intended as anythingother than a marketing name for
entertainment purposes.Securities and advisory services
offered through independentFinancial Group LLC, a
registered investment advisormember, F, I N, R, A, S, I p, c,
tri star financial LLC, tri starIncome Tax Services LLC and
independent Financial Group LLCare unaffiliated

Mark Rothstein (00:41):
entities. Good afternoon, and this is Mr. Money
live in the K i, d o Talk Radiostudios, 580 on your am dial.
Yes, I am a money expert. Nameof the show, Mr. Money been
doing this for over 40 years asa tax man, preparing people's
taxes, hour after hour, yearafter year for all these years,

(01:05):
but also a Certified FinancialPlanner means I have expertise
in many areas of financialplanning, and if you ask me, you
do need someone in your lifewho's a tax expert to do the
Planning and a financial expertwho understands the investments
world, but all of itholistically. Can talk about

(01:26):
your retirement, can talk aboutyour credit scores. Can talk
about savings and budget andeducation planning, or five to
nine plans, which is where youput money away for your child,
for schooling. So again, I'mhere at 585 436 is the number
585 436 if you'd like to talkabout it. I know we all have

(01:49):
discomfort around money. We justdon't want to talk about it. So
maybe for the next hour, youjust listen, and then take some
action. All the knowledge in theworld, Mr. Money's learned over
all my years ain't worthnothing. It's really about
applying what you've learned andmaking a difference for you and

(02:10):
your wealth and your financiallife. Teaching your kids about
money is a big deal. It's justnot done in the school systems,
at least. Somebody tell me whereit's really being done because
it isn't. And I always shake myhead, since money is an issue
for everybody, why would we nothave money classes in the
schools to teach them? When Iwas president of the Financial

(02:33):
Planning Association, what did Ido? I put me and my fellow
certified financial plannersinto the school system, the
Junior Achievement Program,where we went into the schools,
and we did teach the kids. Mywife was so excited by it, she
said, I'm in and she startedteaching some classes on
financial planning, on stocks,on investing. So again, it is a

(02:57):
need. If you have a need, you'dlike to talk about 5805436, is
the number here at the studio.Yes. Mr. Money's live. Yes. I'm
happy to answer questions. Beendoing it many, many, many years
on radio, and these last goinginto my third year here at k, i,
d, O, loving every moment of itmaking a difference for you.

(03:19):
Glad you're listening. Did youknow The average? This is the
average, excuse me, average 401,K, retirement at many people's
work. And what is that? Average401 K, balance, the average
person age 65 and older, has272,005 88 in his or her 401 K,

(03:42):
according to the latest datafrom retirement giant Vanguard
mutual funds, we've heard aboutVanguard, it's significantly
higher than it was in the end of22 2022, when it was 232,007 10.
Now it's a 272,000 you may say,Wow, Mr. Money, ain't that
great. However, this average of272,005 88 only half the stories

(04:08):
told, while the average 401kparticipant has 272,000 the
median balance for this agegroup is only 88,004 88
mathematically, that means halfthe participants have less than
88,000 in their accounts, whilehalf have more. So I'm hoping
you're putting money away. Andspeaking of money away, this

(04:32):
last year, we're now into 2025,Mr. Money's first show here in
2025, what happened last yearand the year before, stocks were
not only on pace, but they didit for the best two years in a
quarter of a century over thelast 25 years, these last two
years were the best for thestock market us. Stocks roared

(04:57):
to another blockbuster showingin the 202 Two Four, says the
Wall Street Journal here, andfew expect such a torrid advance
in the years to come. So yes,we've had two great years, but
does it really going to continueinto the future? Mr. Money is
going to talk about this a bittoday and a lot next week, on

(05:17):
what we can expect goingforward. But as far as what
we've just completed this lastyear, the S and P has climbed
24% notching 57 record closes asthe economy remained very
healthy, inflation did ticklower. A, one, A, I should say

(05:38):
artificial intelligence fueledthe rally with the big tech
stocks. So a lot was going on ina good way, even with the
stumble the last few days oftrading days. I don't have you
noticed, but the last few days,the market was not up. So they
didn't have this thing calledthe Santa Claus ending, where
everybody's just happy at theend of the year and the market

(05:59):
just goes up. Didn't quitehappen those last few trading
days. Nonetheless, the broad USstock index just simply had best
consecutive years the last twoyears, and it's created
millionaires, you bet it has. Itturned professional investors
increasingly bullish. So a wholelot of us have seen this and

(06:20):
said, I want more of it. By theway, gold was on its pace last
year, since 2010 to have itsbest year, which it did, while
Bitcoin more than doubled,vaulting over 100,000 for the
first time before slipping belowthe mark. Boy, oh boy. It seemed
really good for a whole lot ofplaces with a lot of your

(06:43):
investments. And again, manyinvestors anticipate that this
resilient US economy and aFederal Reserve that did start
cutting interest rates, yes, Mr.Money knows they did drop
interest rates a quarter of apoint in December. Again, happy
to have a third drop, half apoint, September, quarter point,

(07:04):
November, quarter pointDecember. And maybe it wasn't as
big a cut as some would like,but nonetheless, one percentage
point lower for the year of 202,foreign interest rates is a good
thing. But again, the FederalReserve did speak out and say
we're cautious against thinkingthat this rapid pace of the

(07:25):
stock market will continue andthat will continue to have
upwards of four drops ininterest rates next year.
They've kind of slowed thatthinking down. Interest rates
are still pretty high. By theway, they only dropped in 1%
last year, so it does affectborrowing costs, since interest
rates are still higher, andremember when it was 0% few

(07:47):
years back, everybody, Boy,those were the good old days,
much higher. Now and again, theFed also specifically said they
doubt how much it will cut ratesnext year. That's right. But
again, what's happened withthese stocks? The powerful rally
has left stocks lookingincreasingly expensive, says

(08:08):
some of the experts. Is againthe S, p5, 100, referring to the
500 large American companiesthat I referred to earlier,
which had a 24% climb last year,which is a huge number. It
traded late last week at 21.9times its projected earnings

(08:29):
over the next 12 months. That'sa big number that's according to
fact set. It's above a 10 yearaverage of 18.5 times. So again,
it's trading at a higherprojected earnings rate. That's
why people say it's veryexpensive to buy stocks at 21.9
times it's projected earningsover the next 12 months. But

(08:52):
again, many still worry that,yes, it's pricey, but they want
to not miss out on these gains.They simply don't want to miss
out. And again, is these highprices likely to stop the rally?
I don't think so, but it willcertainly weigh on the returns
that investors can expect goingforward into the year 25 and it

(09:15):
will heighten the key item whichMr. Money always talks about,
which is, we need the profitgrowth. So again, it's nice to
say the company seems to bedoing well, but when they report
their quarterly earnings, we dowant to see corporate profit
growth. We do want to see thatto allow us to be invested and

(09:37):
want to invest more. So again,we got to see those earnings
coming in. What does Wall Streetexpect? Members is coming from
Wall Street. They want yourmoney. They want you thinking
all is well. They want youinvesting. Wall Street analysts
right now expect profits fromcompanies in the S and p5 100 to

(09:57):
grow 15% In the year 2025 upfrom a projected 9.5%
for 24 these stats are allaccording to fact set. Is where
it's coming from again, but overthis past year, how have you and
I felt we're starting to turn amore skeptical eye to the
question of When Will companyspending on AI Artificial

(10:22):
Intelligence really turn intoprofits. We see the future could
be an AI, but it's got to turninto money, into profits. Shares
of Google, for instance, Amazonstumbled when investors looked
at a pairing of heavy spendingwith signs of disappointing
sales, so they're spending themoney on AI, so they're

(10:43):
receiving investor money. Butagain, we need the sales to
follow all this money beingsent. And by the way, I should
mention this, because Imentioned it multiple times
throughout the year, the biggesttech stocks continue to do much
of the work of powering this, s,and p5 100. This is through the
last week of December, TheMagnificent Seven, which I've

(11:06):
spoken about, alphabet, Amazon,Apple, meta platforms,
Microsoft, Nvidia and Teslaaccounted for more than 53% of
the stock index total returnlast year that includes
dividends, and this is accordingto the s, p, Dow Jones indices.
So again, and the video shouldmention alone, my clients so

(11:31):
often bring up Nvidia. Nvidiaalone made up 21% of that
return. So again, theMagnificent Seven accounted for
more than 53% of the stockindex's total return, and Nvidia
alone made up 21% of thatreturn. Remember, they're the

(11:51):
maker of this artificialintelligence chips that everyone
needs, and it saw its marketvalue leap past 3 trillion. I
reported on that when ithappened. Geez, by the way,
stocks in many industriescontributed to this rally. It
wasn't only the seven, as Isaid, they may have accounted
for more than 53% of the stockindex total return, but not all

(12:14):
of it. The financial sector hasclimbed 28% for the year, while
utilities and industrials gainanother 20 and 16% and again,
people think it'll continue tobroaden that it won't only be
The Magnificent Seven, but it'llbe the utilities or industries
or defense, etc, holdings. Butagain, we will see your job is

(12:39):
to talk to your financialplanner, look at your investment
portfolio, see if your assetallocated, is your risk proper.
Do you have too much money inone holding? So you've got more
at risk. And again, that assetallocation very important, and
how much is in each one of thedifferent asset classes. Again,

(13:01):
very important for you to do foryourself with a financial
planner. Maybe your tax personis also a financial planner. I
think they're the best they cangive you tax advice and
financial advice and again,don't forget, the Fed said they
will be continuing to cutinterest rates. That's possible.
That's a good thing. There maybe continued investment in

(13:22):
infrastructure and in theeconomy, and again, I can't keep
talking without at leastmentioning Trump. What's going
to happen with Trump, thispolitical front, the Trump
political front, stockscertainly did rally when
Republicans swept in Novemberelections, we all saw that,
raising hopes that the businesswill benefit from tax cuts,

(13:46):
businesses will also benefitfrom looser regulations. I
agree. Ain't that great again.Mr. Money likes less taxes. I'm
a tax man. I like you to keepmore of your money. You can
invest your money, whetheryou're a consumer spending it
which keeps the economy going,or to hire more people for your
business, etc, that's a goodthing. So again, stocks

(14:08):
certainly rallied with the Trumpwin. But again, we want to see
those tax cuts that werepromised during the last few
months, and we want to seelooser regulation that was
promised He also proposed Trumpdid the sweeping tariffs and
mass deportations, both of thoseeconomic experts say will add to

(14:30):
inflation. So we've got to watchand see, and of course, listen
to Mr. Money every single weekfrom two to 3pm here in Idaho,
local time live on Saturdays,and I'll keep you abreast of all
of this. But again, last thoughton that last point, again, we
need to see the details. We needto see. Will there be follow

(14:54):
through? Are you really going tonot tax? Social Security taxes,
President Trump? Are. You'rereally not going to tax overtime
that people make wages. Are youreally going to keep the 2017
tax cuts alive, which are greatand keeps us in a lower tax
bracket? Are you really going toget rid of something called the
salt deduction that was takenaway, which is where you got to

(15:18):
deduct your state income taxeswithheld on your paycheck and
your real estate property taxes,they were limited to 10,000
you're going to really lift thatfor people to deduct. All of it,
very important to know. And onelast thing I should mention on
this is it was a recordshattering, $1 trillion poured

(15:40):
into ETFs, exchange tradedfunds, index fund this past year
just a statistic. Investorsplowed more than 1 trillion into
US based exchange traded fundsin 2024 shattering the previous
record set three years ago, andraising Wall Street's hopes for
an even bigger year ahead.According to Jack pitcher

(16:01):
December 30 Wall Street Journalarticle. So we could see people
like, what's going on at themoment? People are going in.
People are going in. Totalassets in these ETF reached a
total 10 point 6 trillion at theend of November, obviously
higher by the end of the year,the biggest S and P funds led
the inflow with the S and p5100, the NASDAQ 100 also led a

(16:27):
lot of this. And again, peoplelike ETFs, or they do like index
funds. They do like the ideathat there is less cost to them,
less income tax, ramification ofthem, and people liked it. And
again, as I mentioned wayearlier on the show, people tend
to start liking this Bitcoin orcrypto currency. Mr. Money says,

(16:52):
talk to yourself, talk to yourfinancial person, talk to your
tax person. Talk about what'sappropriate and right for you
with all this good opening forMr. Money, we are going to lead
to the tax section when we comeback and we're going to talk
about costly tax blunders. Don'tmake these mistakes, just don't.

(17:12):
Mr. Money is going to talk aboutit couple of easy things to make
sure you don't do so your taxesare done best, and you get the
biggest refund all when we comeback. This is Mr. Money. Let me
tell you

(17:35):
how it will be.

Unknown (17:37):
There's one for you. 19.

Mark Rothstein (17:49):
This is Mr. Money being Mr. Tax man. Mark
Rothstein is my name in thebusiness doing taxes for a whole
lot of years, 40 plus years, I'man expert. I've been doing it
day in and day out for all theseyears. I am an enrolled agent.
That means I got all thosecredentials from the IRS, all

(18:09):
that continuing education, andable to present to the IRS if we
ever needed to for my clients tohandle any inquiries. And May, I
say, win these inquiries fromthe IRS when we can. But today
I'm talking about right thisminute, about how to avoid
costly tax blunders. Yep, youdon't want to make these certain

(18:33):
mistakes. Everything that comesout of my mouth is there to help
you to take the right action,pay less income taxes and again,
invest your money as best youcan in this section. Let's talk
about taxes again. It's time.Seems like Time flies by,
doesn't it? Income Taxes touchevery part of our life. We know

(18:57):
that it includes our work. Arewe saving for college, taxes
seem to show up with retirement.Taxes show up with home, buying
and selling. Taxes tend to showup when I want to do charitable
giving, paying for health care.Maybe that's tax deductible. So
again, taxes seem to beeverywhere. So let's talk about

(19:17):
a couple resolutions you canmake for this year,
specifically, couple things youcan do. Number one, don't need
to put your hand on your heart,but maybe put your hand up. That
says, my hands up. I will striveto avoid tax underpayment
penalties. Again, I will striveto avoid tax underpayment

(19:38):
penalties, higher interest rateshave pushed up the penalty. I
don't think you knew that onincome tax, underpayments to a
steep 8% for most of 2024 so ifyou did not pay all your taxes
in the IRS was hitting you with8% as an underpayment, high

(19:58):
interest rate they would chargeyou. Two it's still quite high
now, sitting at 7% by the way,this compares to 3% a few years
ago, so you got to avoid thesecharges. 7% Wow, Americans,
what's the bottom line? We mustpay at least 90% of what they
owe well before your April taxdue date. By the way, tax season

(20:22):
is due tax need to be filed byApril 15, 25 that's the day the
deadline is December 31 to getenough money paid into the
government for employees andothers who have their taxes
withheld on a paycheck. And itis January 15, 2025 for all the
self employed people that payquarterly, get that money in by

(20:46):
january 15, on your fourthquarterly estimate. And if
you're an employee, get thatmoney withheld from your
paycheck by December 31 again,you must pay at least 90% of
what you owe to avoid anyunderpayment penalties,
interest, etc. Taxpayers canalso avoid penalties by paying

(21:08):
an amount equal to either 100%or 110% of their 2023, taxes
depending on their income. Sopay in at least 90% of what
you're going to owe this year.24 or at least, get in 100% of
whatever you owed on theprevious year. 2023 taxes. And
again, you can get it on inthere by December 31 little late

(21:32):
for that on your w2 but for selfemployed people, get it in with
your estimated taxes that aredue January 15. From my self
employed people, don't forget,January 15 is your next
quarterly payment where you sendin money the IRS for the taxes
you owe on what you made duringthe year. By the way, when I say

(21:52):
what you made during the year,it's all the income coming in,
minus those business expensesagainst it, you get to a net
income, that's what you need toget paid in. Yes, those in any
federally declared disasterareas, you get further
extensions and deadlines andsome wave of penalties. Also, if

(22:13):
that's you, hand up againanother resolution. I won't
mistake my top income tax ratefor my effective rate. Mr.
Money, what's that mean? Again,I won't mistake my top income
tax rate for my effective rate.All that means is the US income
tax is progressive. The higherincome is taxed at a higher rate

(22:37):
as a result. What am I gettingat you? Listening to me, the
taxpayer with a top rate of 24%would also have income taxed at
the 10% tax bracket, 12% taxbracket, 22% tax bracket under
the current law, saying itanother way a filers rate, what
our tax rate that we pay is amarginal rate. It's one that

(23:00):
applies to the last dollars ofincome. Marginal rates are key
when making investmentdecisions. In other words, your
first couple dollars, you pay noincome tax. Then as your income
goes up, you start paying someincome tax on the next segment
of money and an income taxbracket of 10% the next chunk,
as you go upward, is at 12% yournext chunk going up 22% your

(23:22):
next chunk going up is 24% andyes, it keeps going your next
chunk, which is, I'll give it toyou, 190 7000 to 250 as a single
person, you start paying taxesAt the 32% over 250,000 single
person is 626, 35% then you getup to 37% and again, that 37%

(23:48):
tax bracket is on your moneythat you made from 626,000 or
higher. You're married. The 37%taxes you pay on your income you
made from 751,000 and higher. Soagain, Uncle Sam ain't getting
all the money. It's a ratethat's a little bit lower than
it gets higher, gets higher,just something good to know. So

(24:11):
key item is, Mr. Tax person, I'dlike to know what is my
effective tax rate, not mymarginal effective means you
average it all out on all thedollars. This is the effective
rate I paid on all the money Imade. The smaller tax bracket
income and the higher Hands upfor the next resolution, I will

(24:32):
be cautious when doing backdoor. Roth IRAs, again, I will
be cautious when doing back towork. Roth IRAs, I hear it all
the time. Mr. Money, I got toget my money to the Roth side. A
Roth 401, k or a Roth IRA, itgets to grow with no income tax.

(24:54):
It gets to come out with noincome tax. So those are great
and a back to. Roth are cleverway for savers to make indirect
contributions to Roth IRAs, ifthey earn too much to make
direct contribution, saying itanother way. IRA contributions
can either be 7000

(25:15):
or 8000 depending on your age.By the way, age 50 or older, you
get to put an eight grant to anIRA if you're younger, it's 7000
you can put in. Must be done byApril 15 of 2025 so no, it's not
too late for the tax year 24 toput some money into a retirement
account. You bet you can put inseven grand if you're under 50,

(25:36):
and you can put in eight grandif you're over but savers doing
a back door. Roth should beaware of the pitfall, and it's a
big pitfall. There could besurprise tax bill and complex
record keeping, if the saveralso has traditional IRAs
holding pre tax dollars thatwere deducted originally going

(25:58):
in, as most of us do. So. Let megive an example. Make it clear
for everybody this. So, yes, Ilike the idea of getting a back
door Roth, but the idea isyou're going into an IRA, then
you're moving it to a Roth, andyou must look at everything all
of your retirement, you're notallowed to just put, say, I put

(26:19):
Mr. Money. I put seven grandinto my regular IRA, I moved
that exact seven to a Roth IRA.Ain't life great. No tax issue,
no. If you put seven grand intoan IRA and you have other IRAs,
then there's a calculation thatmust be done. Let's say that
someone has 100 grand a pre taxfunds in a traditional IRA. So

(26:44):
I've already got some IRAs. Ialready deducted it. I got 100
grand in there. Those weredeductible IRAs I put in over
the years. I then add 7000 ofafter tax dollars to an IRA this
year in order to do a backdoorconversion. So I threw in an
extra seven that I'm just goingto roll over. You cannot,

(27:05):
because of the rules, allocatethat exact seven grand you just
put in that. You never deductit, move it to a Roth and think
all is well. What are the IRSrules? The IRS rules say that
you must look at all of it. Sofuture withdrawals from a
savings traditional IRA mustalso be prorated between pre tax

(27:29):
after tax funds to avoid overpaying taxes. So the back door
Roth conversion works best forsavers who don't have any IRAs
holding pre tax funds. Bottomline is, if you want to do a
backdoor IRA and then move it tothe Roth, called the back door
Roth, you've got to look at allyour IRAs to see what was

(27:51):
deductible in the past, whichIRAs you didn't deduct and do a
probation. So it's not just Iput seven in. I move seven over.
All is well, next ideas, thisone, last one biggie is, I won't
let a low tax year go to waste.What am I talking about? The

(28:12):
current tax laws, as they arefrom President Trump in 2017 did
bring us down to very low taxbrackets right now, many of us
would say it's still too high. Iagree, but nonetheless they if
you look at over all the years,our tax rates right now are
very, very low, and we should berejoicing, but such years like

(28:34):
now offer a great opportunity tomake smart tax moves with this
low tax year. This could meanconverting all or part of a
traditional IRA to a Roth.Remember, when you move from an
IRA to a Roth, you got to reportit. So maybe now is a good time
to report some or all of it,because we're in a low tax
bracket this year. So again,think about that. Maybe you've

(28:56):
got some stocks that have goneway, way up and so as a result,
and they're in a taxableaccount, also not retirement, a
regular account. If you sellthose, yes, you got to report a
gain, a capital gain, on yourtax return. But if you're ever
going to do it, now's the timeto do it, when we're in a low
tax year. And by the way, yousell it, you got to gain, you

(29:20):
report it. You're in a low taxyear. It's good time to get
those gains and paying minimaltaxes on it. And there's no law
against repurchasing those exactshares right away the next day.
Again, when you sell it for again, there's nothing to stop
you from re buying it the nextday. It's only if you have a
loss, you can't buy it the nextday. You got to wait 30 days. So

(29:42):
if you sell something at a loss,got to wait 30 days to rebuy
back those same shares. But ifit's a gain, nothing stops you
from buying it right away, ifyou'd like to. And again,
remember, but Mr. Money, I justwant a simple tax law. Let's
just, let's have a flat tax. Tomoney. Just think about it, if
we went to a flat tax whatexactly would be included?

(30:06):
Because the kind of taxes nowallow you to have a 500,000
exemption when you sell yourhome, or you can exclude some of
your capital gains, depending onyour tax bracket laws now or
right now, the way laws you geta child tax credit of up to 2000
for each of your children underage 17. So again, to just make

(30:28):
it a 15% may not be better thanall the rules that we've got
right now. So just food forthought, when we come back, Mr.
Money is going to answer thequestion, Mr. Money, what's the
question? The question is, whowants to be a 401, K
millionaire? What steps to takeso you can be a millionaire with

(30:50):
your investments, with your 401,K, all. When we come back, this
is Mr. Money. I need

Unknown (30:58):
somebody else, not just anybody. You know. I need
someone. Mr.

Mark Rothstein (31:06):
Money is here with some help for those who
want to be millionaires. That'sright, are there steps to take
to be a millionaire? The answeris yes, if you'd like to ask me
a question about that, by allmeans, 5805436, is the number
5805436, your personal Mr.Money's here to take your call.

(31:27):
And who wants to be a 401, Kmillionaire. I do. I'd even add
who wants to be a 401, Kmillionaire, s for the women and
a millionaire for men. I thinkif I'm saying it right, a record
number of Americans are 401, Kmillionaires, thanks to this
last year of the stock surge, ifyou heard the opening of the

(31:48):
show, you heard how much moneywas being made in this last
year, the tally of 401, Kmillionaires, 401, K, referring
to my pension at work, where Itake money out of My paycheck
and put it into my retirementaccount, and hopefully my
company matches me. The tally ofthe 401 K millionaires reached

(32:08):
544,000 in the third quarter of24 up from 497,003 months
earlier. This is all accordingto Fidelity Investments, by the
way. And few Americans do manageto save million dollars in their
401 K. It's true, very few do.The 544,000 figure represents a

(32:30):
little more than only 2% of all401 K participants at fidelity.
So it's not like everybody'sgetting there. But again, this
tally of millionaires reached544,000 that made it to a
million, only 2% of the people.And by the way, a million
dollars, no magic number Ialways hear. I want to be a

(32:51):
millionaire. And is that enoughto retire on? Again, I see lots
of articles everywhere I read isa million dollars, the right
number. Mr. Money can answer it.A million dollars may be the
right number. If the incomeyou're generating from it, plus
your Social Security, plusinvestments, plus rental

(33:11):
property, income, whateverincomes, if there's enough
coming in to suit yourlifestyle, there's enough to pay
your bills, pay your taxes, havea good life, then that's the
right number. Least. That's howMr. Money does it. I'd like very
clearly to see it's all aboutcash flow. Is there enough
coming in from all your sourcesso you've got enough to pay all

(33:33):
your bills without running out?Because think about it, if we're
living off the earnings fromyour investments, then you can't
say Mr. Money, I'm going to runout of money, because your
money's still there. We'reliving off the earnings, if you
can. And that's at least thegoal that Mr. Money makes with
every one of his clients that wefix it, generate it, work, it,

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to get our investment such thatthe nest egg is big enough with
everything else to have enoughto pay for a good lifestyle when
I retire. And by the way, youmay be curious, who are all
these 401, K millionaires, theytend to be Gen Xers or baby
boomers on average. Why is itthose people, they have been

(34:15):
saving for about 26 years andhave been contributing more than
17% of their pre tax income totheir retirement accounts. So
let me be very specific. Hereare eight tips. 12345678, tips
for achieving a seven figurebalance in your retirement
account. Number one, do not waitto enroll in a 401. K, only

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about half of Americanhouseholds have retirement
accounts at all. Only half ofAmerican households even have a
retirement account. So thesooner you enroll in the 401 K,
or whatever pension you have atwork, 403 b4, 57 plan financial
advisors. Me say, the betterchance you'll become a 401, K

(35:03):
millionaire one day. So thenumber one rule of retirement
savings is to start early. Ifyou want the number one rule,
how about that one, just startearly. Makes all the difference
in the world. It does. Numbertwo, a goal, a really good goal
would be to max out youremployer match most 401, K plans

(35:25):
offer a match from the company.What's that the company,
employer matches some or all ofyour funds paid into the
retirement account by the byyou, the employee. Typical
model, the employer matches halfof every dollar an employee
contributes up to a maximum of6% you, the employee put in six

(35:47):
the company will match and giveyou 3% that's free money. 3%
they throw in for you. Andagain, that's a good thing, but
again, so many people aren't inthe plan, and then so many
people are not putting in to getthe full match from the company.
Think about if you've put in 6%they're throwing in three 9% a
year. That's a good number.Okay, what's a better goal?

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Number three goal here, aim tosave 15% of your salary. Again,
one retirement rule of thumbsuggested you're wise to save at
least to save at least 10%everyone always says, put at
least 10% in. Mr. Money is hereto say, consider more than 10%
with an employer match and aslightly larger employee

(36:33):
contribution. 10% can easilybecome up to 15% you're putting
in so you're getting in theemployer and the employee. And
again, the more you put in, thebigger it's going to be. And
think about it, 30 years ofgrowth, Wow, can you get to
seven figures? The answer isyes. You can become that

(36:53):
millionaire person. Okay, again,Mr. Money, I just can't save
that much now. So set your 401 Kcontribution, whatever you can
afford right now, and put inthat feature called
automatically rises every singleyear by 1% Heck, if you get a
raise of 1% not your take homeshould be similar. Or if you get

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a raise of 3% you're putting in1% extra or 2% extra, you still
bring home more money. Again, avery good thing. Next of my
eight tips, maximize theretirement contributions. What
do I mean by that? If you haveenough wiggle room in your
budget, why not consider pushingyour retirement savings to the

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limit. Watch the limit. Yes, putinto your 401 k like Mr. Money
is talking about like I'm doingright now. The max is 23,500 if
you're age 50 or over by the endof the year, you get to put in
an extra 7500
here's the but, but that doesn'tstop you from adding even more.

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If you have it to put into anIRA individual retirement
account, there you're allowed toput in 7000 if you're age 50 or
older, can put in 8000 so again,the ultimate goal is maximize
everything you can in your 401K, get all that matching put in
the max you can. And then go andadd money into an IRA, any

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amount up to 7000 or 8000 ifyou're 50 or older, and get just
way more money getting in thereway more growing for you. By the
way, I should mention this, thegovernment, Congress changed the
rules this year. Contributionlimits in the year 2025 is brand
new. Starts this year. In theyear 2025 you have even in a

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higher catch up provision. Ifyou're age 60 to 63 you could
put in even more money. Ain'tthat pretty neat? So again, I
don't know who's wealthy enoughto put in the maximum 401, k,
then be able to put into theIRA. Then be the age 60 to 63
where you get to put a couple1000 even more into it. But

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again, it's one of my eight tipsfor achieving my seven figure
balance in my retirementaccount. That's one of them,
next one. And there's a biggie,do not cash out your 401 k if
you leave a job. That's a big,big deal. Research shows workers

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often cash out their low value401 K accounts when they leave a
company, which is doing ispotentially losing 1000s of
dollars of compounding interestover time because you took the
money out. So if you leave ajob, experts, Mr. Money, if
you're listening to me, issaying to you, make sure to roll

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over your 401, K, either intoyour own IRA account or a new.
401, K at your next job. Yes,you should check with your job
and see if you can roll overmoney to it and make sure you're
able to be in the program inyour new company. But again,
don't cash it out. Don't takethe money emergency comes. You

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should have an emergency savingsaccount. Mr. Money talks about
that, always having a littlestash on the side for
contingencies, for emergencies,for stuff that comes up, not
having to invade your 401 k ifyou leave your company another
one, just simply don't cash out.If the market drops in a bear

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market, that's when the market'sgoing down, some retirement
savers panic and they sell,hoping to protect their savings
from further losses. But ifyou've been watching the market
over the last 100 years, when itgoes down, it also comes back
up. So again, Mr. Money is notsaying manage your accounts.

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Look at your asset allocation,look at your risk tolerance.
Look Are you properly in theplaces you want to be based on
your age or your wealth, etc.But if you want to be a 401, K
millionaire, experts say it'srock it's very wise to ride out
these slumps, these ups anddowns, the market will go up and

(41:19):
down. So when there's a downturnin your retirement account, it
doesn't mean change everything.Should you look at it? Should
you review it? Should you talkto your financial person? Yes,
of course. But Mr. Money sayingdaily trading, jumping in,
jumping out, when the market'sup or down, not a good way to do

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it. Excuse me next, one of myeight, number seven, don't ever
rage. Your 401, k, if you canhelp it. Again, your retirement.
Count the 401, K is designed toreward those who save for
retirement, and that's what youwant to do. Early withdrawals,

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typically before age 59 and ahalf, trigger an additional tax
equal to 10% of the money youtake out. I don't know if you
knew that, but it's true. Soagain, you take money out before
age 59 and half, not only, youhave to take money out of
retirement and report it and payincome tax, then you got to pay
a 10% penalty to the IRS on ittoo. So if you're paying a 15%

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tax rate, you then make an earlywithdrawal. You're now
effectively paying 25% that'sfed side only, not the state
side. That's a whole lot ofmoney disappearing that could
have stayed there to grow, grow,over time, time, time, again.
Are there exceptions to get outof this 10% penalty? There are.

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Mr. Money has a whole long list.If you listen to Mr. Money all
year, you'll hear those. Butagain, a first time home
purchase may be up to 10 grand.You can get out with the 10%
penalty. A household emergencyis a new law, you can get some
money out without the 10% butagain, think twice before taking

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it out. And my eighth on my listhere, of tips for achieving a
seven figure balance in yourretirement account is keep
savings. Don't stop the typicalfidelity 401 K millionaire has
been building retirement savingsfor about 26 years time. Value

(43:31):
of Money, it absolutely works.Don't be daunted by the figure.
If you start saving in yourearly 20s and you retire in your
early 60s, you can easily besitting on the millionaire that
you want the million dollarvalue at least in your 401 k.

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And just give an example, let'ssay you earn $50,000 a year. You
contribute 10% to a 401 K,starting at age 25 I'm age 25
Mr. Money, making 50 grand. I'mputting 10% in my 401 K, my
employer offering the standard50% match. So if I can get a 7%

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annual rate of return, makingthat up, it's my example,
assuming a 7% annual rate ofreturn, yearly 2% raise in my
salary. Your 401 K balance willreach 1 million around the time
you turn age 55 forget aboutwait until 60 and get out at age
55 with that million in there.This is according to

(44:38):
bankrate.com calculator. So alot of good things going on here
that you can do. So do you wantto be a 401, K millionaire? Yes,
I would answer for you. Do youneed exactly a million? We got
to run the numbers to see. Butcertainly, a million is a good
number to shoot for. So again,just simply, in summary, do. Not

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wait to enroll in a 401, K, getthat company match the free
money from your company. Aim tosave as much as you can. Try to
shoot for 15% if you can, try toput into an extra Ira over and
above the 401, k, if you can,don't cash out of your 401, K

(45:20):
just do not do that. If youchange jobs. Don't be so fast to
get in and out of the marketwith the ups and the downs.
Don't ever rate it. Leave themoney in there. If you leave
your company, roll it over andlet the money stay there.
Growing, growing, growing andagain. Don't ever stop saving no

(45:42):
matter what do it and make sureyou've got a separate emergency
contingency account. So if stuffhappens in life, because it does
to all of us, and you need someextra money, you know you've got
it over there that you can getaccess to. And again, that
emergency accounts a big deal.Mr. Money says, have a separate

(46:05):
bank account. So the money comesto you. It doesn't all go to a
checkbook that you can spend allthe money, some of it is
earmarked and moves over to aseparate bank account, your
emergency account that you canuse for the future, if something
happens, Mr. Money does not wantyou using credit cards to pay

(46:26):
bills. Mr. Money wants you touse that separate account that
you built up doing all theabove. Do I think you'll be a
401? K millionaire? Answer is abig fat yes. Music's on, Mr.
Money's run out of time. We'llbe back with you live again next
week, Saturdays, two to threeo'clock. You can find Mr. Money

(46:46):
right here on this dial, 580 onthe am dial. The Information and
opinions presented are forgeneral

Unknown (46:50):
information only and are not intended to provide
specific advice orrecommendations for any
individual you should contactyour investment professional,
attorney, accountant or taxadvisor regarding your
individual situation, theopinions of the presenter do not
necessarily reflect those ofindependent Financial Group LLC,
its affiliates, officers ordirectors. Mark Rothstein, aka
Mr. Money, is the owner of tristar financial LLC and tri star

(47:11):
Income Tax Services LLC. Mr.Money is a marketing name only
and is not intended as anythingother than a marketing name for
entertainment purposes.Securities and advisory services
offered through independentFinancial Group LLC, or
registered investment advisormember, F, I N, R, A, S, i, p,
c, tri star financial LLC. Tristar Income Tax Services LLC and
independent Financial Group LLCare unaffiliated entities. A.