The 201: Answering YOUR questions - Savings bonds, Estate planning, 529s, and more!

Happy Thursday!

Are you in the Minneapolis/St. Paul area this coming week? You've heard him on the show, and now Don McDonald from the Talking Real Money podcast is joining us for a cookout this coming Monday night at 6:30. Find details and snag your ticket at our Eventbrite page here. We'd love to see you. If you're in Minneapolis/St. Paul, come join our local SB community. It's a great group of people who love to have money/more lively discussions.

Not in Minneapolis/St. Paul? The rest of today's 201 is for YOU! We love hearing from you, and today’s episode is a real treat. OG and Big D answer some of your most pressing questions.

Enjoy the show!

-Joe

The 411 on financial planning and savings

35: Percentage of Americans who had a long-term financial plan in 2023.
$8,000: Median size of household savings account.
22: Percentage of Americans who didn't have any emergency savings in 2023.
42.3: Percentage of Americans with less than $10,000 saved for retirement.
3.2: Percentage of Americans with at least $1 million saved for retirement.
3.9: Percentage of income saved by Americans in 2023.
57: Percentage of Americans who were uncomfortable with their savings level in 2023.

Ask Joe and OG a question:

If you have a financial question you'd like answered, you'd Better Call Saul...Sehy and OG.

Visit this page and leave us a voicemail.

All about savings bonds

Stacker Suzanne called in with a question about some old Series EE savings bonds for her three children, now adults.

All about Series EE bonds. Series EE bonds are issued by the US Treasury and are guaranteed to double after 20 years. They are bought at half of the par value. Learn the details about these ultra-low-risk investments by reading this piece from Forbes (link).
What's the deal with I bonds? OG reminded us that I bonds were all the rage a few years ago when inflation spiked. The interest rate on I bonds is adjusted twice per year for inflation, plus a fixed rate may be paid on top of the inflation adjustment. Dig into the finer details about I bonds by reading this resource from Investopedia (link).
Know your bond's value. Learn how to look up your bond's value by reading this piece from Bankrate (link).
Using savings bonds to pay for college. Learn how to use your savings bonds to pay for higher education by reading this resource from TreasuryDirect (link).
Cash it out. If you have an old paper bond and would like to exchange it for money, learn how to by reading this piece from Kiplinger (link).

Wills, trusts, and estate planning

Stacker Derick called in with a question about at what point it makes sense to create trust.

Create your estate plan. Follow this 7-step estate planning checklist from NerdWallet to get your affairs in order before you pass away (link).
Know the difference. Learn about the distinct differences between wills and trusts by reading this piece from Investopedia (link).
The role of a trust. A trust grants the trustor more say in what happens with the assets in question, avoids probate, and can serve as a vehicle to avoid estate taxes. Dive into some of the reasons to have a trust by reading this piece from Kiplinger (link).
Do you need a trust? While everyone has individual needs and circumstances, there are some instances where having a trust as part of your estate plan makes sense. Learn when it could make sense to have a trust by reading this piece from CNN Money (link).
How to choose a trustee. Since the trustee is legally empowered to act on behalf of the trust, making the right choice is key. Learn how to choose a trustee by reading this piece from Forbes (link).
The role of a will. A will is a document that states your desires at the time of your death. Dig deeper into what a will is by reading this piece from NOLO (link).
Account beneficiaries. Naming beneficiaries on your financial accounts supersedes a will, and the information is not subject to probate. Check out this piece from Morningstar to learn the dos and don'ts of account beneficiary designations (link).
Be ready. Read this piece from AARP to learn what to do and who to contact when someone passes away (link).

College planning

Stacker Ethan called in with a question about whether it makes sense to establish a separate 529 plan for each of his two children.

Different ways to save for your child's college education. Learn different ways to save for your child's higher education by reading this piece from US News & World Report (link).
How to open a 529. Learn how to establish a 529 college savings plan properly by reading this piece from SavingForCollege.com (link).

Invest wisely. Just like any investment that has a specific time horizon, pay attention to how your kids' education funds are allocated...they'll be receiving their acceptance letters before you know it! Learn how to allocate assets for college by reading this piece from our friend Christine Benz at Morningstar (link).
What to do with unused Benjamins in Junior's 529 plan. Thanks to the SECURE 2.0 Act, some money left over in a 529 plan that has been open for at least 15 years may be eligible to be rolled over to the beneficiary's Roth IRA. Learn more about the 529-to-Roth IRA rollovers by reading this piece from Schwab (link).
Qualified education expenses. Learn what the 529-qualified education expenses are by reading this piece from our friend Robert Farrington at The College Investor (link).

How to allocate extra funds

Stacker Katie and her husband recently sold their house in Maine and moved to Philadelphia, where he is finishing up his medical education. She wants to know how they should use the money from the house sale.

Pay off debt. Katie has some student loans remaining that can easily be paid off using the excess funds, which OG recommends she eliminate immediately. Learn how you can pay debt off fast by reading the 7 tips in this piece from NerdWallet (link).
Bulk up the emergency fund. Since Katie is still looking for a job in the new city, it makes sense to use some of the money to build out their emergency fund. If you're in a situation where you don't have an emergency fund, learn how to build it by reading this piece from Investopedia (link).
Invest for your goals. OG and Neighbor Doug recommend that Katie and her husband allocate any money left over to investing for their goals. Learn how to set investment goals by reading this piece from Motley Fool (link).

Coast FIRE?

Stacker Austin and his wife are early in their careers and already have a relatively sizable investment portfolio. They are wondering if they can take their feet off the gas and lighten up on how much they're contributing.

The benefits of starting young. Since compounding is the seventh wonder of the universe, start investing as early as possible! Learn 5 reasons why investing young makes a big difference later on by reading this piece from Principal (link).
Margin of safety. OG recommends they do not take their feet off the gas just yet because just a few more years of huge retirement savings would add a large margin of safety to their financial plan.

Mom's Takeaway

Use the smarts I gave you, but don't hesitate to ask questions. Listen, I know you're a smart cookie...you get it from me (you're welcome). Keep making the right decisions, but never be afraid to ask for help when needed. Oh, and hang out with other smart and good kids; avoid the troublemakers.

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That's it! Enjoy the show!

Kevin & Joe

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