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022: Where Should Your Next Dollar Go? The Family Savings Priority List
Manage episode 503724843 series 3553731
Two in five Americans can't handle a $400 surprise expense, and the median emergency fund sits at a shocking $500-600. Our hosts, Joey Loss and Adam Van Wie, tackle America's savings crisis head-on by offering a practical six-step framework for families to build wealth systematically.
Gen Z has $400 saved, Millennials embarrassingly trail at $300, Gen X holds $500, and even Boomers over 61 manage only $2,000 on average. Against this backdrop, Joey and Adam lay out priorities that could mean the difference between prosperity and poverty.
Step one: emergency fund. Three to six months of expenses creates a buffer between you and credit card debt, which is currently averaging 23% interest. Adam shares his personal victory of watching his 401k halve in 2008, then maxing contributions every year since, on his father's advice. Consistent saving works.
Next, capture your full 401k match (it's free money), fund a Roth IRA if eligible, max your 401k ($23,500 under 50, $30,000+ over), then build a taxable account for flexibility. This three-bucket strategy—traditional, Roth, and taxable—creates what Adam calls a "tax menu" in retirement where you pick your annual tax bill.
For families with kids, 529 plans come sixth, but with warnings. Don't overfund them. Don't prioritize them over retirement. You can borrow for college; you can't borrow for retirement. Florida's prepaid plan gets special mention, guaranteeing lock-in-state tuition rates even if you move away.
The optional seventh step, kids' "liftoff accounts," brings up a debate about setting children up versus letting them struggle appropriately. Adam teaches investing through small UTMA accounts where his kids compete for returns. In fact, his son’s been crushing it with a prescient Fortnite-adjacent investment!
Key Topics:
- America's Emergency Fund Crisis (06:57)
- Emergency Fund as Credit Card Buffer (07:49)
- 401k Match Priority (14:20)
- Roth IRA Eligibility & Benefits (15:47)
- Maxing 401k Strategy (16:45)
- Taxable Account Flexibility (20:34)
- 529 Plans & College Savings (24:13)
- Kids' Liftoff Accounts Debate (30:17)
This podcast is brought to you by Joey Loss, CFP®, Adam Van Wie, CFP®, and Strivus Wealth Partners. Through Strivus, Joey and Adam provide financial planning and investment management services to clients across the country from their home base in Jacksonville Beach, Florida.
You can find show notes and transcript of the conversations here: Strivus Wealth - Wealth Unplugged.
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Read our audio, video, and written content disclaimer here.
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