Upticks: Buying Happiness, Top 6% Get Richer, and Unfair 401(k) Plans
By Jake Falcon on July 3, 2024
This week on Upticks, join Jake and Cory as they go deep into relationships with money and the importance of understanding your values.
Is your 401(k)-match unfair? Do you know about this IRA tip for married couples? Do you plan to travel more with a stronger U.S. dollar? All this and more on Upticks!
Thank you for joining us this week! If you have a topic that you would like Jake and Cory to discuss or debate live on Upticks, please email it directly to me at luke@falconwealthadvisors.com and I’ll be sure to ask them to bring it up on the show!
Order ‘Retiring Right’ Today: https://a.co/d/geeSRDy
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Read a summary of the conversation below:
Personal Updates
Jake shares his recent activities, including golf lessons and home improvements. He enjoys being a homebody and notes not traveling as much. Cory expresses readiness to resume work while acknowledging newborn challenges. They discuss the impact of Cory’s absence on their work dynamic and plan his office return.
Jake’s Post
Jake emphasizes that investors don’t have to have a wealth advisor merely for index fund purchases, as these products are widely accessible. He is against paying ongoing fees for readily available products, suggesting limited consultations for specific information instead. At Falcon Wealth Advisors, we prefer direct investments in stocks, bonds, and options.
Is Your Company’s 401(k) Match Unfair?
Jake discusses an article suggesting potential unfairness in company 401(k) matches. Higher-paid employees receive larger matching contributions, potentially widening the wealth gap. Some companies address this by capping matches or using alternative structures. Jake finds this perspective on 401(k) matches thought-provoking, having not previously considered the fairness aspect.
Here’s a Tax Break That Married Couples Often Overlook
Jake and Cory explore spousal IRAs, a frequently overlooked tax break for married couples. This option allows a working spouse to contribute to a non-working or low-earning spouse’s retirement account. They highlight financial and psychological benefits, including increased savings and involvement in financial planning. Eligibility depends on the working spouse’s income and qualifications. They stress the importance of getting professional advice to navigate specific rules and maximize benefits.
Oh, the Places You’ll Go—With a Strong Dollar in Tow
The strengthening US dollar has made international travel more affordable, particularly to countries like Japan and Argentina. This is attributed to higher US interest rates and a strong economy. While people aren’t planning trips solely due to favorable exchange rates, they’re more likely to spend more on luxury experiences abroad. Jake speculates that as word spreads about these travel bargains, it may lead to increased tourism in countries with weaker currencies.
Social Security’s Funding Crunch Worsens as the Top 6% Get Richer
Cory discusses the Social Security funding issue, noting that a larger share of wages now exceeds the taxable cap. Potential solutions include eliminating the income cap or raising the payroll tax. Jake adds that while changes are necessary, they’re unlikely until absolutely required. He believes small changes could help, but tough political decisions are needed.
How Much Happiness Can Your Salary Buy? Researchers Can’t Agree
Jake and Cory explore the relationship between income and happiness. While research suggests a correlation, they emphasize that individual purpose and values are more crucial for contentment than a specific salary threshold. They believe in aligning financial decisions with core values and life purpose, cautioning against using purchases as emotional coping mechanisms.
Thank you for tuning in, we hope you have a great week!
