IRA, 401k or the Best of Both?

You can't invest in anything without first making a decision, and some of those decisions are bigger than others. Hi, I'm Rob West. One of the biggest investment decisions you'll make is IRA or 401k, or is there a way to have the best of both worlds? Mark Biller joins us today with some interesting insights on that, then it's on to your calls at 800-522-7200.

Call it 24-7-800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Well, our guest, Mark Biller, is the executive editor at Sound Mind Investing, where they've been crunching the numbers and comparing the benefits of our two most popular retirement decisions, that is the IRA and the 401k. Mark, welcome back. Thanks, Rob.

Good to be back with you. Well, Mark, not everyone has a choice between putting their money into a 401k or an IRA, but for those that do, they have to make a decision, don't they? Yeah, they really do, Rob. And, you know, IRAs and 401ks are similar in a lot of respects. They both offer some really significant tax advantages, which is really what makes figuring this whole topic out worth the effort. But before we dive into those specifics, there really are a couple of things that we should cover real quickly. First of all, we're assuming in this discussion that a person is financially ready to invest.

And what we mean by that is that they've got adequate emergency savings set aside, they've got little to no debt apart from a mortgage, maybe some manageable school loans. And then the second step is that a person really needs to determine how much they need to be investing each month in order to meet their retirement goals. So in this article that we're discussing today, we link to a free online tool. It's the Fidelity Retirement Score Calculator. There are lots of other ones you could use, but that's one that we like. Maybe we can put a link to that in the show notes today? Absolutely, sure.

Okay, well, good. So if we've got those two bases covered, then let's just say for the sake of example, somebody runs their numbers, and they figure out that they need to be setting aside 10% of their income for retirement. I'm just making up that number, but as a hypothetical, we'll say 10% of their income is being saved for retirement. Now with that in mind, now they're ready for that big 401k or IRA decision. Now, obviously, we're assuming here as well, that somebody has access to a 401k plan at work, because if they don't, they don't have a decision, they just go straight down the IRA path. So the first consideration then is, does your employer match a portion of what you would contribute into a 401k?

And if they do, that makes it really easy, because that matching money is the easiest profit that you're ever going to get. So in a typical setup, an employer might contribute say 50 cents for every dollar that you put in, up to a maximum of 6% is kind of typical, some do a little more, some do a little less. And some employers, if they're really generous, will even match your contributions dollar for dollar. So to be clear, then, if you've got a matching option in your 401k, you're getting an immediate 50% to 100% return on every dollar you contribute. So that's why we say if you've got a match, you want to contribute to the 401k or your workplace retirement plan, up to the full amount of the match, really no questions asked, because that's the easiest money you're ever going to get. So now the one thing to watch out for with that, is just that some 401ks do have vesting requirements, which means you only get the money that your employer matches after you've worked there a certain amount of time. So you just want to be aware of those rules.

Yeah, very good. So a person has met the matching contribution to your 401k. And then at that point, they have to decide where to go next.

We've got just about 30 seconds before our first break here, Mark. Yeah, sure. So we'll just set it up here. So we said the person needed to contribute 10%. They put 6% in to get the match. So when we come back, we'll talk about what do they do with the rest of that 4%? Very good 401k or IRA or both.

Plus your calls and questions on anything financial. In fact, for the next couple of segments, Mark Biller, investing expert here, executive editor at Soundmind Investing, he'd love to answer your investment related questions. Are you wondering what to do in this market? What's the right allocation for you? How should you think about your investments in light of these times? We'd love to hear from you.

800-525-7000 is the number to call. This is Money Wise Live. We'll be right back.

Stay with us. Thanks for joining us today on Money Wise Live, biblical wisdom for your financial decisions. I'm Rob West, your host. Joining me in this segment of the broadcast, our good friend Mark Biller, executive editor at Soundmind Investing. For more than 30 years, do it yourself investors have relied on Soundmind Investing for proven strategies and trustworthy guidance.

You can learn more at soundmindinvesting.org. You can also check out the article that we're referencing today that I think will be very helpful for you as you consider 401k or IRA or both. Mark, just before the break, you were talking about that example of a person who wanted to save 10% of their earnings for retirement. They get 401k matching on the first 6%, so they're naturally going to take that free money, which leaves them 4% to decide about how do they go about making the decision on investing the rest. Yeah, so once we've gotten past that point of matching, then the decision really starts to boil down to how a person plans to invest this money and if the options in their 401k plan match up well with how they want to invest it.

So I'll give you an example, Rob, to clarify this. If a person really just wants to invest in an S&P 500 index fund, you know, most 401k plans are going to offer that option and they're going to probably offer it at a very low cost. So that person could easily just keep on contributing the additional 4%. In other words, they put the full 10% right there in the 401k. It would keep things very simple and they're done.

They're done with this decision. Now, for our audience at SoundMind Investing, our members typically want to have access to broader investing options than the typical 401k plan is going to offer them. So for a lot of our folks, that's where they would want to consider opening up an individual retirement account or an IRA. There are a lot of different rules around IRAs and who's eligible for which type. So if you're interested in an IRA, I would really encourage you to look at this article because I think it's easier to see those limits than to hear them over the radio.

But generally speaking, as a ground rule, if you're a married couple with earnings of less than about $100,000 per year, you're likely to be eligible for fully deductible contributions to an IRA. As you get up above $100,000, then you're going to have to look at those specific cutoffs. Very good. Again, the article is called IRA or 401k.

You might be able to enjoy the best of both. You can read it at soundmindinvesting.org. Now, we'd love to take some of your calls and questions today on investing for Mark Biller. Here's the number with lines open 800-525-7000. That's 800-525-7000. Call right now.

After we take a call here in just a second, we'll continue the conversation. What about Roth IRAs? We'll explore that.

And what if your employer doesn't offer a 401k? Mark will tackle that as well. But first to Idaho. Hi, Julie. How can we help you? Julie, are you with us? Thank you for taking my call.

Can you hear me? Sure. Yes, ma'am. Yes. I'm actually on my way to meet our financial management company right now.

I called on Friday but you guys were booked up to talk. Our cost, we have about $1.5 million in our retirement and our cost to manage that is 1.4%. My first question is, is that reasonable? So, it ends up being about $1,900 a month from my calculation. That's my first question. And my second question is, isn't it the average amount that you would take out about 4%?

We're like really tight. Okay. You said you're taking out a little over 2, is that right? 2%, yeah. Yeah, you're pulling out 2% a year. A little over. A little over that. All right.

And tell us your stage of life. Are you retired currently and relying on this portfolio to supplement your income? Right. We both just retired this year.

It has been May 1st, last January. Okay. And do you know- We have our Social Security as well, yeah. Okay, sure.

And do you know roughly the breakdown of the investments in stocks versus bonds, percentage wise? Shoot, I don't. I don't. But I can ask that today. Yeah, no problem. Mark, your thoughts on an appropriate fee for a portfolio this size and how they should think about the rate of withdrawal?

Yeah. Well, those are a little tricky, but I'll give you my unvarnished opinion on those, Julie. 1.4% is probably towards the higher end of what I would consider to be a reasonable change. In other words, you can find advisors that are certainly going to be a little bit less than that. Now, the caveat there is I would say that the way that that money is being invested is going to influence the amount of that fee to some degree. So if you've got a very, very simple portfolio with mostly index funds, then it might be a little harder to justify a higher fee like that. If your advisor is doing some fairly unique things that other advisors maybe are not doing, then that may be a perfectly reasonable amount. So I'm giving you a little bit of a wishy-washy answer because it's difficult to know without knowing what the advisor is doing for you, the degree of financial planning involved, all of those kind of factors. But I would say that that's within the reasonable range, but it's towards the higher end of the reasonable range. So I do think there's room to talk to your advisor about that and have them justify that fee for you with the services that are being provided. As far as that withdrawal rate, that is going to very much depend on the size of the portfolio relative to the expenses that you're needing to support from that portfolio. That's another case where I would ask the advisor maybe to help you understand better by showing you maybe some projections as you would move out into your retirement years to show the anticipated growth of the portfolio and how the level of withdrawals that you're taking is being supported by the numbers that he's giving you in terms of that withdrawal percentage. And hopefully that will help you see that the reason he's using the number that he's using, or she's using the number that she's using, is being supported directly by the specific facts from your specific situation rather than a more general rule of thumb like that four percent.

That's kind of a stamp that works fairly well for a broad range of people, but you really want to drill down to your specific situation rather than relying on a broad rule of thumb that might work generally for a lot of people. Does that make sense, Julie? It does. It just seemed a bit low. We're kind of tight with it. I think we've been pretty, our home is paid for and it's worth quite a bit, so worst case scenario down the road, I don't know. But anyways, we don't have any debt. So on top of that, we have a pretty decent retirement. And so we're kind of tight, and we expected that we'd be tighter than when we were both working, of course, but it just seems a bit tight to me.

And so I'm actually on my way there to talk to them today. I definitely don't know a whole lot about it, but I don't know. Julie, let me ask you, the two percent that you're pulling out a year, was that driven by a recommendation by your advisor on what he or she believed you should take out in order for you to be able to make it up with returns? Or did you arrive at that number some other way?

I believe that that's part of it. And the other was, you know, how long he expected us to live. I'm 66.

My husband's 63. And I retired RN, and I'll probably do a part-time thing down the road, but I'm just kind of, we've got a lot of things going on right now. And how has the portfolio done over the last 12 months, and even 24? Do you have a sense of that yet? Well, you know, when we had the whole presidential thing, and things kind of dropped a bit, we lost, but we gained it right back. But they just started managing our money, honestly, the last couple months. Because my husband just retired May 1st, and it took a while to get all the pieces together, you know? So that's why I'm starting off with these questions, so that as they're managing our money, they're very well respected in the community.

They're Christian companies, they've been around a long time. And from what he showed me, which honestly is above my head, it looks like he's investing in quite a bit, you know what I mean? It's not like, like you said, it's not a real simple portfolio. I just don't know the questions. Well, I think, yeah, I think Mark has given you some great counsel, you ought to ask for really an understanding of what the fee structure is, and how the portfolio is being managed. I believe it is on the upper end of the normal range, but still in the normal range. I think secondly, I would want to understand why just 2% to maintain this balance.

I think you should be able to manage it in such a way that especially if the need is there, you could pull 3 or 4% and still not impact the principal over the long haul. Give us a call back after you have that meeting if you have questions. This is MoneyWise Live. Mark Biller here. Stay with us. We'll be right back. Thanks for joining us on MoneyWise Live, biblical wisdom for your financial decisions.

I'm Rob West, your host. Hey, are you using the MoneyWise app? Well, the way to maximize the MoneyWise app is as a pro subscriber where you can download your transactions from all your institutions, customize your envelopes, get the maximum benefit from the digital envelope system. It's the best one I've ever used.

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Mark Biller joins us today. We're talking about IRAs and 401ks. How do you choose or perhaps both?

We've been unpacking that today. We've got some lines open for your investing related questions for this segment, 800-525-7000. Mark, you helped us think about the typical person who's trying to put away 10% of their retirement plan into tax deferred retirement vehicles. You said we should absolutely maximize the match in a 401k if we have access to one.

Let's say that gets us to 6%. And then with the remaining 4%, we can kind of choose between the flexibility we might get in multiple investment options through an IRA versus the limited number in the 401k. But when does a Roth IRA come into play and how should we consider that? Yeah, Roths are great for certain circumstances, especially. Now, the contribution rules around a Roth are a little different than the traditional IRA that we were talking about a moment ago. So with a traditional IRA, when you put money into the IRA, you get an immediate tax benefit. And that can be great, especially for folks if they're maybe towards the later part of their career and their income is higher, that tax break right away is more valuable.

But generally speaking, and it's not just for younger folks, I don't want to miss apply this, but certainly for younger workers who are at the lower end of their earning arc for their career. The Roth IRA can be amazing because with a Roth, you don't get an immediate tax benefit when you put the money into the Roth IRA. But what you do get is at the end at the at the retirement and when you're taking money out of the Roth, none of that money is taxed when you take that out. So with a traditional IRA, you get a tax benefit now, but you pay taxes later. With a Roth IRA, no tax benefit now, but no taxes later.

So that could be an amazing deal. Now, as far as our conversation today, those contribution limits for a Roth are more lenient. So whereas we said some of those cutoffs and phase outs started about $100,000 of income for a couple for a traditional IRA, it's closer to $200,000 for a Roth IRA.

So a lot more people are going to be eligible over there. And so if you are eligible for either of these types of IRAs, and most people are, then as I was saying earlier, Rob, at SMI, we typically lean towards using the IRA for that additional contribution money because it's so much more flexible in terms of what you can invest in. Now, I would say there is one little caveat, and that is some people in their 401k plan, they're offered something called a brokerage window. And that can be a great option because it allows you to stick with the 401k and keep things simple that way. But that brokerage window basically opens up the full range of investment options, just like an IRA would.

So that's something that's worth checking on. If you have a 401k, does it offer a brokerage window? Because if it does, there may be very little reason to need to go out beyond the 401k and open up an IRA. Mark, do you like the idea of having the tax deferred and the tax free buckets to choose from in retirement? Let's say that's 20 or 30 years down the road, we don't know what the tax code is going to look like.

We don't know what our income is going to look like. So does having the choice between money that is pre-tax versus already is going to come out tax free, does that give you any advantage at that point? I think that it does. I've always been a fan of that tax diversification.

That's kind of a label that I've always put on that. And that's how I have approached things myself. So I have a blend of both of those IRA types within my portfolio. Now, I would say that again, for a younger person, I really wouldn't worry about that too much because to my eye, and of course this is a broad brush, but really that tax advantage to the traditional becomes much more valuable as your income rises. So I would pack the Roth early and maybe do the traditional later on. I like that.

If time is on your side, the Roth IRA, maybe just the ticket, we can thank Senator William Roth for that. All right, when we come back, Mark's going to stay with us and we're just going to dive into your questions. Ernest and Colleen and Darrell and Fred are all waiting patiently. We'll be back with you in just a moment. This is MoneyWise Live. Mark Biller from Soundmind Investing here.

Much more to come just around the corner. Stay with us. Grateful to have you along with us today on MoneyWise Live. I'm Rob West. Joining me today, Mark Biller, executive editor at Soundmind Investing. You can learn more at soundmindinvesting.org. Let's head to the phones with your investing-related questions.

Naples, Florida. Hi, Ernest. How can I help you, sir? Hello, sir.

How are you doing? Real quick, I'd just like to ask Mark a question about the 401. I'm currently been on my job for about 10 years, Mark, and I didn't invest when I first started because my job offers a 401. I'm a little late starting, but I just don't know how to go about invest, you know, starting it. I was wondering if you could help me.

Yeah, absolutely. Ernest, just a quick question. Tell us a little bit about the rest of your financial life. I understand here from the notes from my producer, you might have a little bit of credit card debt that you're trying to pay down.

So give us a sense of that picture. Yeah, I was completely debt-free and I had some dental work done and I charged it because I didn't have any bills. I'm debt-free, but it's six grand. It's currently five grand, but I should have that paid off in about six months.

That's my only bills other than my, you know, the rest of my bills as far as, you know, cable, electric, and all that kind of stuff. Sure. And do you have an emergency fund, Ernest, with a reserve? My 15 grand. 15,000.

Okay. Have you thought about, how much do you have in margin each month over and above your bills? I bring in about 45 a month, so I'm free to really, you know, aggressively. That's why the credit card won't be, you know, it won't be out there too long because I have no other major bills other than that of my regular daily bills.

Yes. Well, if you've demonstrated that you have that kind of margin consistently on a monthly basis, one option would be to go ahead and wipe out that credit card debt with the emergency fund and then just build that back up over the next six months to that $15,000 target. But beyond that, Mark, what thoughts do you have on getting started in the 401K? Yeah, I really like that idea of knocking out that credit card debt right away because there's probably a pretty high interest rate attached to that. So I'd hate to be putting money into the 401K and maybe making less there than we're actually paying in that credit card interest.

So let's go ahead and try and get rid of that right away. Ernest, how old are you? I'm 54.

Okay, very good. So, Ernest, I definitely would encourage you to investigate the 401K and see what kind of matching, if any, is available. Usually you can get that set up with your company's HR department pretty easily. And they may have some default contribution options. A lot of plans will offer what's called a targeted fund where you pick the year that you anticipate you're going to retire in. So for you, you might be looking at a 2030 or a 2035 type fund. And what that fund will do for you is actually invest between stocks and bonds automatically in the proportion that is roughly what that fund company considers to be right for a person your age. And that mix between stocks and bonds will get gradually more conservative as you approach that retirement year that you choose. And that can be a really nice initial option, at least, as you're just kind of trying to figure out exactly how you want to invest that. Some people are going to just stick with that and just let that ride all the way through retirement.

There's nothing wrong with that. That'll be a good blend of stocks and bonds for you. Or if you're more inclined to want to tinker with that a little bit, that'll buy you a little bit of time to figure out the exact asset mix between stocks and bonds. Maybe look over whatever other options are available in the plan and see if there's anything you want to do differently there. But that would hopefully get you started. And again, the same things we were talking about earlier, figuring out how much does your employer match, trying to get up to that percentage at least as quickly as possible, and then figuring out if you can add additionally from there.

Rob, any other thoughts? No, once you pay off that credit card debt, the only other thing I would say, Ernest, is because you're starting a little later, let's set a target of maybe at least 15% if you can do it, of your pay going into a retirement account. And you still got time on your side. Just get started as quick as you can. We appreciate your call.

Let's stay in Florida. Colleen, how can we help you today? Well, I've got a question as far as what to actually invest in with my retirement money as well as the money that was just given to me. I was recently divorced, so I was a writer on some life insurance policies, which I no longer have. So I'm looking to invest in life insurance policy, as well as trying to figure out whether to invest in a CD. The money's just sitting in savings right now. And it's not making really anything into savings.

So I'm trying to figure out what would be the best investment as far as investing in a Roth IRA or a life insurance policy for both. Okay. Do you already have a retirement account that's been funded at this point?

I have. I was retired 16 years ago. I'm only 56, but I retired 16 years ago. So I have an income coming in monthly that is retirement income, yes. Okay.

And beyond that, the rest of your money is in a taxable account in savings, correct? Correct. Okay.

Very good. And are you still working? I do seasonal work. Once I retired, I was a full-time wife and mother, and that went away a couple of years ago. So I've been doing seasonal work and a lot of volunteering.

And my heart isn't volunteering, so it's hard to go back into. Yeah. Very good.

Mark, your thoughts? It doesn't sound like she has access to a retirement plan at work. Yeah. One of the things, Colleen, that you've got to keep an eye on is with either type of IRA, you are limited in the amount you're allowed to contribute by the amount of earned income that you have for the year. So that could be a consideration. Now, it doesn't mean that if you have other income sources or other money available that you have to take your actual earnings and put that into the IRA, if that makes sense. But if you say you're only earning a few thousand dollars a year because you're retired, then you would be limited to that amount.

That would be the maximum you would be able to put into either of these types of IRAs. So that's one consideration. With the life insurance policy, would that be, is that something you would be choosing because you are needing to provide for somebody in the event of your death, or is that more just an investment consideration? Investment consideration. In fact, I want to leave more behind for my children more than what I currently have.

Okay. Well, generally speaking, I am not a huge fan of life insurance policies as an investment vehicle. I generally think that you can do better investment-wise outside of those. Now, I'm sure there are exceptions to that, but I would probably lean more towards the IRA as a pure investment choice. Very good. We appreciate your call, Colleen.

I totally agree with Mark. I think the key is up to the earned income. Let's get that into an IRA. Beyond that, set aside an emergency fund of three months expenses and then get the rest invested on a taxable basis.

Soundmindinvesting.org could be a great resource in terms of where to invest those funds. I'm going to get Mark to stick around for our final segment. We've still got a lot of investing questions, so if you're holding, just stay put. Much more to come on MoneyWise Live.

We'll be right back. Thanks for joining us today on MoneyWise Live, where we try to do our best to help you to be a good steward of what God has entrusted to you. His word is full, replete with wisdom about how we should handle our finances.

In fact, we need to recognize first our role as steward. God owns it all, therefore we're a manager, and money is a tool to accomplish God's purposes. One of those principles we see in the Bible is that we're to take what God entrusts to us and put it to work. Yeah, we're to give faithfully and we're to provide for our families and we're to seek to live lives with contentment, but we should also be investors. We should be responsible managers of God's money, and that means seeking a return on a portion of it. We're talking about that today. How do you invest God's money?

And specifically, IRAs and 401Ks as you plan for the long term. We've got a number of questions remaining on this topic. Let's head back to the phones.

Jacksonville, Florida. Hi, Lynn. Thank you for being patient today and how can I help you? Hi. Great. I'm doing well. Hey, I wanted to ask you, I'm still working and I'm hoping to retire in about four years.

I'll be around 70 then. I applied for Social Security the other week and I would like to use that extra money to pay off my mortgage, which is about $600, and I have two credit cards, about $7,000. I'm sorry, I owe $60,000 on my house and about $7,000 on two credit cards. So if I was to put that extra, I was told an extra $1,000 on my house, I can get it paid off in three years, but I want to know what order is the best to pay. Should I pay off my house? And with the $1,000 that I put on there, what's extra pay on my credit card debt? And also don't have any emergency fund and maybe put it towards that also. I don't know what order to pay it all off before I retire.

Yeah, that's great. Well, the good news is you've got plenty of margin, which means you're living modestly and being responsible with God's money. You've got four years. So the key would be, let's leverage these four years to get you in really good financial shape. And I would want to accomplish all three of these as possible.

It sounds like you can. One would be getting the emergency fund in place with a goal of three months expenses. The second would be eradicating that credit card debt. And then third, paying off the mortgage, which is going to put you in a really nice spot so that when you retire, your expenses are as low as possible. And the goal will be to determine what are your actual expenses going to be at that point once you're debt free. And if you have some other expenses coming off and perhaps you're no longer saving through retirement accounts at that point. And then secondly, what income sources will you have just to make sure that they balance out? I would set a goal to save $1,500 in savings as the beginning of your emergency fund.

That would be step one. So if something comes out of left field unexpected, we're not relying on the credit cards. Then I would take that thousand a month and pay off the cards next smallest balance to highest balance. Don't worry about the interest rates. Let's start with the smallest balance, get that one paid off and then go right down the line. And then I would take all that you were sending for the minimum payments to the credit card cards plus all of that margin. And I would then go after that mortgage until it's paid off.

And at that point you'll have three months expenses, no credit card debt and a home that's free and clear. Does that make sense though, Lynn? Yes, that's wonderful. And can I ask one more thing real fast?

Sure, yeah. I have a 401k, a retirement. I have not put into it for many of years because of not having enough money. Is it too late now to start putting into that because of retiring in four years?

It's not too late. No, I think the question would just be what would that do to your cash flow and your desire to be completely debt free when you retire? Have you looked at what income sources you have? Are you going to try to live on Social Security alone or are you going to need to supplement that with income from your retirement accounts? Well, are you talking about my Social Security money? Yeah, once you retire and you no longer have a paycheck, is Social Security alone enough to cover your bills if you're debt free? Yes.

Okay, so that's good news. Do you have any retirement balances from previous contributions years ago? Well, I have about $23,000 that's in there right now. Okay, all right. So yeah, I would probably not focus on funding that at this point.

I think the key for you is if you can get all this debt paid off and your emergency fund funded between now and retirement, then if Social Security is enough to cover everything at that point, then I think that will be the key as opposed to trying to play catch up over the next four years in your 401k and you still have your mortgage which is probably your largest expense. If we can get rid of that, that's probably the most effective tool for you as you plan for that retirement season. I hope that's helpful to you, Lynn. God bless you and we appreciate your call today. Daryl is in Fort Wayne, Indiana.

Daryl, how can Mark and I help you today? Yeah, I just had a question about savings accounts and money markets. I have an emergency fund and some extra that I was wondering what to do with the rate at the bank is, you know, 0.01 maybe 1.5 on a good day if you meet certain criteria.

Yeah. But I just wonder if there's a better way to save that money to get some kind of interest out of it other than that small amount. Let me just make sure I'm clear.

This is specifically for your emergency fund or is this for funds beyond your emergency fund? It'd be beyond. Okay. And what would be the time horizon on this money? Is this money you wouldn't want to touch for five years or more?

Possibly, yeah. Okay. And you're talking about savings accounts and so are you wanting to not take any risk with this money? I mean, are you willing to invest it in stocks and bonds or do you want to keep it more on the conservative end, even potentially the guaranteed end? Probably a little more conservative but I just wasn't sure if index funds or is it money market funds would be a good option. Yeah. And how much money are we talking about?

Maybe 10 or 20,000. Okay. So Mark, 10 or 20,000, this is money beyond the emergency fund wanting to stay on the more conservative end of the risk spectrum but not happy with savings interest, which I can certainly understand. What are your thoughts?

Yeah, absolutely, Darrell. It is tricky. There are not a lot of very good conservative saving and investing options. It's a real problem right now for a lot of retirees, a lot of savers.

There is really only one bright spot on that landscape right now that comes to mind as I hear the things you're trying to accomplish. Right now, Series I savings bonds, which the I is for inflation, these particular flavor of US Treasury savings bonds, the I bonds, are actually yielding a pretty attractive rate. They're at 7.1% right now. There are some limitations and you have to buy those directly from the Treasury. So you have to set up an online account.

It's not particularly difficult to do that. You fund it directly through your bank account and you have to hold those at least a year. So there are some restrictions around these but they are pretty liquid.

You can have access to the money in a year. They're very safe. They're Treasury bonds and they're yielding a lot more than most other bond types. I'd love to point you to an article. We actually have an article coming out on these in our December issue of Soundmind Investing, which is going to hit our website next week, in the middle of next week.

So I'm not trying to tease you there. I've just been writing about them recently. I know that they're about the only lone bright spot on the bond landscape at the moment. You can certainly look those up on the government's Treasury Direct website if you want to do that to get more information sooner. But that might be a good option for you to look at, Darrell.

Any other thoughts, Rob? No, I think that's exactly right. And what says the max you can put in in a calendar year for those I bonds, Mark? Yeah, they're limited to $10,000, but that is per calendar year. So you could potentially get an account set up and get $10,000 in right now and then turn right around at the beginning of 2022 and put more in if you were trying to get a little bit more in. Mark, I think that's tailor made for you, given the amount of money we're talking about, the yield that you'll find with those right now and the safety that you're looking for. Again, treasurydirect.gov. And if you want to read more, soundmindinvesting.org. We're going to finish today with Fred and Wheeling.

I'm going to voice his question because we're short on time here, Mark. He and his wife have 401Ks under each of their names with their respective employers. They're retiring next year and wanting to know, should we combine these? I know you can't do that, but talk to them about this decision, whether or not to roll it out to an IRA and whether they should stay with their current management companies or consider a change.

Yeah, good question. So this kind of gets back to what we were talking about earlier, Rob, where if you are happy with the investment options that you have in your 401K and the expenses seem reasonable within the 401K, then there really isn't a need to make that move. If, on the other hand, there are some other things you would like to be doing investment-wise with that money, that's where rolling that out to an IRA can be particularly attractive. And in a case where you've got two different 401Ks, it doesn't necessarily have to be an all-or-none decision. You could consider rolling one of those to an IRA and keeping the other one if you like those investment choices. So you've got some flexibility there.

That would be my approach, would be to look very closely at how do I want to invest and how do these options match up with that. Very good. And Mark, as we finish here, I've just got a few seconds left. This is not just about when we talk about retirement accumulating absolutely as much as possible. We need to set a financial finish line, which is also going to be a tool to tell us when we can accelerate our giving, right? Oh, absolutely.

This isn't about accumulating the biggest pile you can. It's about meeting your needs and honoring God with the rest. Awesome. Well, Mark, thank you for sticking around.

A little extra today. We had lots of questions, and so I appreciate you fielding those. Grateful for you, my friend. Thank you, Rob. My pleasure. Mark Biller has been our guest today, Executive Editor at Soundmind Investing. You can find out more at soundmindinvesting.org. Thanks for being here.

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