7 Essential Accounts You Can't Afford to Ignore

Today, we break down the seven essential financial accounts everyone should consider having for a well-organized financial life and efficient retirement planning. This video covers the fundamentals of accounts like checking accounts, high-yield savings, cash management accounts, health savings accounts, work retirement accounts, traditional IRAs, Roth IRAs, and taxable brokerage accounts. Kevin highlights common mistakes to avoid and shares specific strategies to optimize these accounts. Whether you're just starting out or close to retirement, this video will offer invaluable insights into managing your finances effectively.

00:00 Introduction
01:21 Essential Account #1
02:06 Essential Account #2
04:51 Essential Account #3
06:18 Essential Account #4
07:36 Essential Account #5
08:46 Essential Account #6
10:19 Essential Account #7
11:08 Strategies for Maximizing Account Benefits
19:11 Conclusion and Final Thoughts

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*ABOUT ME*

I’ve always been passionate about personal finance, investing, real estate, and helping people find the freedom to live their life with purpose. But when my dad died in 2015, I tried to help my Mom find an advisor to sort out her finances. Instead of a helping hand, I found an industry of financial advisors dominated by glorified salespeople working on commission — pushing products that were not in my mother’s best interest. Or advisors with minimums that shut-out all but the ultra wealthy. Disappointed with the options, I took matters into my own hands and launched Foundry Financial, a wealth management firm with transparent pricing that specializes in helping provide clarity around money — so you have the confidence to make smart decisions.My goal is to help a million people retire without worry!

📅 *THE BASICS OF RETIREMENT PLANNING*

Retirement planning has several steps, with the end goal of having enough money to quit working and do whatever you want. Our goal is to help people master retirement and retire without worry.

Step 1: Know when to start retirement planning. When should you start retirement planning? The earlier you start planning, the more time your money has to grow. That said, it’s never too late to start retirement planning. Even if you haven’t so much as considered retirement, don’t feel like your ship has sailed. Every dollar you can save now will be much appreciated later. Strategically investing could mean you won't be playing catch-up for long.

Step 2: Figure out how much money you need to retire, The amount of money you need to retire is a function of your current income and expenses, and how you think those expenses will change in retirement.

Step 3: Prioritize your financial goals. Retirement is probably not your only savings goal. Lots of people have financial goals they feel are more pressing, such as paying down credit card or student loan debt or building up an emergency fund.Generally, you should aim to save for retirement at the same time you're building your emergency fund — especially if you have an employer retirement plan that matches any portion of your contributions.

Step 4: Choose the best retirement plan for youA cornerstone of retirement planning is determining not only how much to save, but also asset allocation. It can make a massive difference in your retirement plan.

Step 5: Select your retirement investments. Retirement accounts provide access to a range of investments, including stocks, bonds and mutual funds. Determining the right mix of investments depends on how long you have until you need the money and how comfortable you are with risk. It’s often helpful to talk with an adviser to discover the right mix of stocks and bonds.

❣ *SPONSORED* No, this video was not sponsored.

⚠️ "DISCLAIMER:⚠️This is not financial or investment advice. This Channel is meant for EDUCATIONAL AND ENTERTAINMENT PURPOSE only. None of this is meant to be construed as investment advice, it's for entertainment purposes only. #retirementplanning #retirement #passiveincome

[foundryfinancial]

I reposted this, because I wasn’t clear enough on the taxation of MLPs — so I just edited it out.

[jorri]

Somehow you take financial stuff that usually makes my eyes glaze over and keep me interested! Thank you Kevin!

[jonathanschwartz]

Kevin, of all the CFP YouTube channels providing financial planning education, yours is my favorite. Your low key, thoughtfully organized delivery, with an occasional mention of California tax implications really hits the target. If I wasn’t a DIY’er or if there was a suitable alternative to AUM, I’d be calling. Thanks for the terrific content!

[hughofIreland]

Thanks for this great video.

One thing I regret is not investigating the Roth 401(k). I think I was first offered a Roth in 2008 or thereabouts. I wrongly assumed that, based on income limits for the Roth IRA, that I didn’t qualify. If I’d known the what I know now is likely a common mantra on this channel.

I did an MBA in the early 90s and had a great macro teacher who was prone to distractions. One day, he spent 15 minutes talking about 401(k)s versus IRAs. He showed the impact of fees and how to read mutual fund disclosures. The impact of even modest 12b-1 fees over a 30 or 40 year period was stunning. He suggested rolling funds into an IRA every time we change jobs. It was great advice.

I took it to a bit of an extreme and ended up changing jobs about every three years, one big driver was taking charge of my own investing. If you have the time—and more importantly the drive—to do it yourself, I think it’s worth considering.

[jonathanschwartz]

EXCELLENT overview. Thank you for providing the 30, 000 foot view. Regarding #3 HSA, please consider inserting the caveat in every mention of HSA’s, it is only available to those that have high deductible health insurance plans. Not sure what percentage of folks have such plans, but we’ve never had one in our careers.

[wmarian]

This video (as usual) was thoughtful detailed and highlighted interesting factors for my consideration. Do you have a vid with a deeper dive into HSAs?

[ps]

Great video. Can you please do a video on your last point, pay attention to asset location.

[jonathanschwartz]

May I suggest a similar 30, 000 ft overview of the 6 elements of Financial Planning?

[lscaruffi]

Many cash management accounts have checking account features that eliminate the need for a checking account.
Personally, I don't qualify for an HSA. And my employer retirement account, 457(b) plan, allows me to invest any most any financial product so I don't need a Traditional IRA. So, I'm "ignoring" 3 of your 7 accounts.

I agree with many of your points except this notion that you need so much in the Savings/Cash Mgt account. If those cash reserves are already in a qualified retirement account, just leave it there.

Anyway, I think the point is that you cannot make blanket statements on "7 essential accounts." Everyone situation is different.

[justkris]

CA resident here. Would love a viedo with more info ETFs.

[LR-jkjk]

Five tops: checking, emergency, savings, brokerage, roth ira. Skip emergency and roth if under extreme financial pressure. Anything more than 5 is splitting hairs and making life complicated.

[RMfromATX]

Great video. I always learn something. Thanks!

[leisureblank]

My employer didn’t offer a Roth tax deferred account, but I wish I could have seen to 2024 back when they started or I would have changed my IRA to a Roth. If I would have known about Irmaa before I was about 66, I would have done Roth conversions way sooner.

I couldn’t do an hsa as you speak of when working. I did my employers hsa one year which was just to pay for expenses, any amount not spent, did not roll over, it was lost. I bought bandaids ibuprofen, etc. bought a lot of junk I didn’t need and probably had to end up throwing out. I am currently on Medicare.

[sharonknecht]

Loved the HSA discussion… I have been doing this for the past five years and I use Google sheets just to put all my expenses per year and then I have a folder for my receipts. What I’ve noticed is some of my receipts have lightened up and you can barely read them… Is there a way I can go back and get these receipts and maybe start doing it digital any easy ways of doing this… Now I feel like I have to go back and get receipts that I can barely see.

[melroman]

i dont know all the terms but please correct me if i am wrong….i moved my deferred compensation into a roll over IRA. It is tax deferred but it was moved into a qualified tax deferred roll over IRA so triggered no taxes at that point. It went direct to the new account without it coning to me. So once in the roll over IRA ….i transfer money into a traditional IRA (amounts so I dont go over my tax bracket) which then gets transferred to a roth. So if I am thinking correctly the taxable event occurs when the monies are pulled from the traditional IRA into the ROTH. And yes it’s being done with my accountant and advisor.

[PaulGosselinsr]

It would be great to hear how simple IRAs work into retirement planning

[randolphh]

You explained the HSA advantage without noting that the concept of reimbursing yourself later “tax free” ignores the impact of inflation. If I spend $100 today, I can only deduct $100 tax free 20 years from now, even if that $100 grew to $300. A better strategy is to use the HSA money to pay for Medicare B and D after age 65, and the otherwise higher healthcare costs for most as they age.

[Jona-lj]

It's important to remember that one cannot contribute to an HSA if on Medicare. Contributions have to stop 6 months prior to going onto Medicare.

[hornbaker]

I realize this isn’t an exhaustive look at Roth, but the math is a whole lot more complex than just asking if you think taxes will be higher in retirement, and nobody does a thorough treatment.

Strategic use of 0% tax bracket long-term capital gains can have a massive tax benefit in retirement. Combine that with the standard deduction and avoiding the Social Security tax torpedo and IRMAA, and you could have a 0% tax in retirement with a huge income - if you’ve laid the groundwork with Roth so that most of your investments are tax-free and the rest fall under long-term capital gains.

[billminter]

You mentioned using funds in your HSA (reimbursing yourself for prior bills) as a source for paying Roth conversion taxes. Can I assume this a second-best choice as compared to using funds from my taxable account? Given that HSAs and Roth IRAs have similar tax benefits (except for the tax deductibility of HSA contributions), wouldn't using HSA funds or Roth funds to pay the conversion taxes have equivalent effects in regards to reducing the overall balance of my tax-free (Roth and HSA) funds? I would welcome a video exploring this option of using HSA funds to pay Roth conversion taxes.