Where Do Bills in Collections Go in the Debt Snowball? (Hour 3)
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How can we roll over an old 401(k)?
Live from the headquarters of Ramsey Solutions, broadcasting from the pods of Moving and Storage Studios, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Christina Ellis, Ramsey personality, number one best-selling author, is my co-host today. Thank you for joining us, America. Tracy starts this hour in Ocala, Florida. Hi, Tracy. How are you?
Fine, sir. Thank you.
Good. How can we help?
Um, I was wondering if you could advise me the best thing to do. Um, we have a 401k that we need to roll over from my husband's previous job. And we were wondering if you could advise us the best thing to, you know, what to roll it over into. And should we honestly consider getting a financial advisor to help us grow? Cause we're very concerned, you know, for our retirement.
Where do debts in collections go in the debt snowball?
Sure.
Cause I'm 57, my husband's 53. Um, we do have a house that's going to be still in debt, you know, um, So we were wondering what's the best thing to do with this rollover check, and should we honestly consider hiring a financial advisor or however that goes?
Okay. Yes, yes, and yes, and let's walk you through it. The financial advisor, now you need to keep in mind, I like what you said. You need an advisor. You know what advisors do? They give advice. Okay. then you have to decide to take it. You don't do what they say. You listen to their advice. If you have a friend to give you advice about your kid, you listen to your friend, and then you decide on your own if you're going to take their advice, right?
What should I consider if my son wants to move back home?
Yes, sir.
And so what we recommend, anytime you're dealing with anybody in the financial world, you're looking for someone with the heart of a teacher, not the heart of a salesman. Because a salesman is going to tell you what to do because it's good for them. The heart of a teacher is going to teach you, and then you choose what to do because it's good for you. Okay. You see the difference? And you can tell the difference at about 20 minutes meeting with somebody. You know what it smells like in the room. When someone's trying to teach you and help you versus trying to sell you, you can feel that, can't you?
Yes, sir.
Okay. So go to RamseySolutions.com and click on SmartVestor Pros or SmartVestor because you're a smart investor. And drop down a list of people we recommend in your area that we have vetted. They will have the heart of a teacher, and they will give you advice similar to what we're getting ready to give you right now, Christina and I. Okay? Okay.
What's the best way to buy a home in today's market?
Now, what we always tell folks to do and what I have done and anytime you leave an employer, we always tell you to take your 401k, your retirement, with you if it's available. The way you take it with you is you do a direct transfer rollover. into a new IRA, and we suggest four types of growth stock mutual funds. I put a fourth in each. My personal 401k is in these four types, growth, growth and income, aggressive growth, and international growth. Now, the way the direct transfer rollover works is when you meet with a SmartVestor Pro, they'll show you some mutual funds, teach you about them. Based on you learning, you and your husband will select the four that you want this money to go into. You'll fill out the paperwork.
The paperwork is then sent to your husband's old place, and they will send the money directly into the IRA. That's very important. Because if they send the money to you, they have to withhold 20% on it. And you don't want that. We want the whole 100% to go over into the IRA. And there's zero taxes if you do it the way I'm talking about. But let's say you had $100,000 in there and they sent the money to you, so it's $80,000.
What are the implications of debts in collections?
You are required by law to put $100,000 into an IRA or you're going to pay taxes on it, only you don't have $100,000 because they kept $20,000 of it for taxes next year. It screws up the whole plan. You follow me?
Yes, sir.
So direct transfer rollover. You select the mutual funds and then move it back.
Yeah, and with all of that, I love, Dave, that you just taught through that.
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Chapters
8 chapters
1
How can we roll over an old 401(k)?
0:28–1:19
2
Where do debts in collections go in the debt snowball?
1:19–2:06
3
What should I consider if my son wants to move back home?
2:06–2:59
4
What's the best way to buy a home in today's market?
2:59–4:24
5
What are the implications of debts in collections?
4:24–5:19
6
How to prioritize debts in the debt snowball?
5:19–6:11
7
What strategies can help in negotiating with collectors?
6:11–7:06
8
How can I ensure my financial advisor is trustworthy?
7:06–37:05