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1:00

to the Jill on Money show!

1:02

It's Wednesday, March twenty seventh and

1:04

we are really in a gang.

1:07

It is the heart of tax

1:09

season. And. I'm just so

1:11

happy that people are finally

1:13

getting onto this idea that

1:15

refunds are terrible. except that's

1:17

not happening at all. You

1:19

know why? Because. Everyone seems

1:22

to always be happy. I got a real

1:24

or gonna read find. An. According

1:26

to The Irises seventy one and

1:28

a half million returns that have

1:30

been filed already. The have issued

1:33

Forty nine Mclean refunds. So obviously

1:35

my one woman plea to please,

1:37

please, please stop getting a refund

1:40

is not exactly working. Average.

1:42

Refund right now is over thirty one

1:45

hundred bucks. That's actually a. Pretty.

1:47

Sizeable chunk and ah so this

1:49

makes me nuts. I know it

1:51

is something that many of you

1:53

understand but it still this weird

1:55

human nature he like yeah I

1:58

got a refund and so. I

2:00

went on the air yesterday and Cbs

2:02

mornings in order to explain. Why?

2:05

Refunds or a lousy the A, but also what you should

2:07

do with your resigned. So I'm good

2:09

at air. The segment come back

2:11

around and talk about some other

2:14

things that you can do with

2:16

your resigned. So here is the

2:18

segment from Cbs Mornings Yesterday Your

2:20

anchors are. Vladimir. Due to

2:22

a. Sony. To Kabul and

2:24

jury could duncan. Good. Morning til

2:26

ordinary to see. So what are the

2:29

top three things that you say? people

2:31

should be looking Suspend. Their tacitly

2:33

Sundance First. Of all I like to call

2:35

this is the big three of the has the

2:37

as a biggest three most important things in your

2:40

financial life. One is to have an emergency reserve

2:42

fund that can cover six to twelve months of

2:44

your living expenses. Okay, sounds like a lot but

2:46

it's very much. would you put out of that

2:48

three thousand and put it all to that N

2:51

N N N. Or if you have outstanding credit

2:53

card debt are high interest debt. I'd maybe might

2:55

split it between. My emergency reserve. Fun

2:57

and paying down high interest debt? Okay, maybe

2:59

number three would be. hey, let me put

3:02

as much money as I possibly can into

3:04

my retirement accounts. Know the your big three?

3:06

Use your thirty one hundred dollars to try

3:08

to cover at least those first two and

3:11

maybe number three with an emergency fund. Do

3:13

you recommend putting it in a certain special

3:15

saving as year and I'm anything that is

3:17

earning interest? Just to remind everybody when you

3:20

got that refund, that was an interest free

3:22

loan to Uncle Sam is a terrible idea,

3:24

but you you could have been earning four

3:27

or. Five percent on that money and said

3:29

Uncle Sam was holding it for you and am

3:31

giving effects you would know. Interesting. One of

3:33

the rings I'm thinking about now. of course. Little

3:35

saline an college and beyond are taught was about

3:37

a five twenty nine and why that might be

3:39

a good option. I love side Twenty

3:41

Nine plans to save for college education

3:44

because the money goes in and you've

3:46

already pay tax on it, but he

3:48

grows without taxation until your child or

3:50

your grandchild goes to college. When the

3:52

kid goes, take that money out, there's

3:54

no tax. Do so fi Twenty Nine

3:57

plans the ones that are offered. directly

3:59

through years state, they often can have

4:01

not just that great accumulation without taxes,

4:03

but some states give you an incentive.

4:05

They'll say, hey, will you have a

4:07

state income tax break when you put

4:09

money in? So check out your state's

4:11

plan. People lucky enough to own

4:13

a home often have a mortgage and people who

4:16

don't like debt will be inclined to maybe pay

4:18

down that mortgage with a refund. Would you recommend

4:20

such a move? Okay. Depends what

4:22

your interest rate is on your mortgage. For those millions of

4:24

people who have a sub 4% 30

4:27

year fixed rate loan, try not to pay down your mortgage.

4:29

I know it's peace of mind for those who have like

4:31

the six or 7% loans that

4:33

have been recently, they may want

4:35

to start to pay some of it down.

4:37

But again, those big three, that's your priority.

4:40

Okay. So you guys all know when I

4:42

tell you about the big three, you know

4:44

about that. The part of

4:46

this segment that we

4:48

did not get to was really

4:51

a drill down into why people

4:54

should be using their refunds

4:56

to jumpstart retirement. You

4:58

know, there's a lot of people

5:00

who don't have retirement plans available

5:03

to them. And for those

5:05

folks, you really need to be using

5:07

an IRA, a Roth or

5:10

a traditional. Now, of course, remember

5:12

the difference between the two is

5:14

very simply when you pay

5:16

taxes with any traditional

5:19

retirement plan, you get the

5:21

tax deduction today. And

5:23

then when you retire and you withdraw the money,

5:25

the government taxes whatever you're

5:27

pulling out at whatever your tax bracket

5:30

is at the time. Now

5:32

the government does force you to take money out when

5:34

you get to your 70s. And that's called

5:37

a required minimum distribution. Now,

5:39

meanwhile, a Roth is made a more

5:41

a Roth contribution is made with an

5:44

after tax dollar, no deduction today. But

5:46

when you withdraw the funds in retirement,

5:48

there's no tax that's due. And so

5:50

our friend Ed Slott and other tax

5:52

experts really want people to be

5:55

using Roths. Why? Because even

5:57

if you live in a high cost

5:59

of living state even if you've

6:01

got a high current bracket. They

6:04

are really worried that tax rates could rise

6:06

in the future and even if they don't

6:08

it's good to have some of that retirement

6:11

money that's already been taxed. So obviously

6:13

$3,100 into a retirement

6:15

account would be great but there's been another

6:17

interesting question that I started to field and

6:19

you know what always happens is I go

6:21

on the air, I come

6:24

off and the camera men

6:26

and women, the stage managers, they all start

6:28

peppering me with questions and

6:30

the one that I got yesterday when I

6:33

came off the air is like hey with

6:35

the stock market so high shouldn't I just

6:37

wait until it goes down in order to

6:40

put money in like I got my refund

6:42

this guy happened to get $12,000

6:45

refund and I said well wait a minute

6:47

what are you investing for? Well

6:50

you know like for return okay well

6:52

if you're talking about decades

6:54

in the future I'm not exactly sure that

6:56

any of us knows when the stock market's

6:58

going to go down for you so how

7:00

about just popping the money in and

7:03

stick to that diversified mix of low-cost

7:06

index funds you know you're basically

7:08

investing it for 10, 20, 30

7:10

years that makes sense. So

7:12

anyway I just I'm

7:15

always moved by this. Mark

7:17

people do love a refund

7:19

I hate them so much I really do.

7:22

I haven't had a

7:24

refund in many many many years. You

7:26

know I remember I told you this and I

7:28

think I've told the story on the air before that

7:30

the reason we knew that my

7:33

father's identity had been hacked was

7:35

that somebody claimed that he was

7:38

due a refund and intercepted

7:41

the money at which point the

7:43

IRS said hey wait a minute this guy's

7:45

been filing taxes for 50 years he's never

7:47

actually ever had a refund and

7:50

that's how he got flagged.

7:53

So if you are wondering what to do with your

7:55

refund we have plenty of ways you know before we

7:57

went on the air mark we did have a fun

7:59

thing which is Tony DeCople said, well, Jill, come on. What

8:01

would you do? Give us the irresponsible

8:03

way to spend the money. So we talked about what would

8:05

you do if you just wanted to blow $3,100? Mark,

8:09

what would you do with your $3,100? At

8:12

this stage of my life, I would go buy

8:15

some planters from my roof deck. Oh my god,

8:17

that's hysterical. You could probably buy one really fancy

8:19

one. But

8:21

that is a great one. I love that. At

8:25

first, I was like, well, maybe I'd get a

8:27

handbag, one of those crazy like Amanda type handbags.

8:29

But then I was like, nah, that's a seat.

8:32

And then I decided I would spend it on

8:34

tickets. Like I'd go see, I'd get a couple

8:36

of great seats to a Beyonce concert or

8:38

a Taylor Swift concert. It would be so

8:40

much fun to do that. So that's

8:42

what I would do the experience. I'd be all

8:45

in on the experience. What would you do, listeners,

8:47

billionaires out there? I hope you're not all

8:50

getting refunds. You know, truly, you could have

8:52

been collecting 4% or 5% over

8:54

the last year. And if you have gotten a

8:57

refund, can you please change

8:59

your withholding or change your

9:01

quarterly estimates so it doesn't

9:03

happen again next year? Can you

9:05

please? Pretty please? That'd

9:08

be so much better. The IRS has

9:10

this neat withholding tool. It's the Withholding

9:12

Estimator, IRS.gov. So check it out. All

9:14

right, if you've got tax questions, if

9:16

you're looking for ways to blow a

9:19

refund, or I mean wisely

9:21

invest your refund, give us a holler. Go

9:23

to jillonmoney.com. Click the Contact Us

9:25

button. Let us know if you would

9:27

love to come on the air live with us, Mark.

9:29

Does everything else. While you're on the

9:31

website, you've got to sign up for Jill On

9:33

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9:36

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9:39

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9:43

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9:47

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9:50

great deal. So check it

9:52

out. Don't forget to do something nice

9:54

for someone else today. Change your work. Change your

9:56

wealth. Change your life. Thank you for listening. And

9:58

we'll talk to you tomorrow. Do

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