Okay, we do have another question here from Keanu V, not Keanu Reeves. I knew it, that's why I had to add the last initial. No, I was like, man, 'Point Break' Patrick S, this thing's coming full circle. Keep going. But Keanu's question says, 'I make 69k a year, and after maxing out HSA, 401k, and Roth IRA, woo woo, that's right, how do I optimize the hyper-accumulation step in the financial order of operations? I mean, holy... Can you honestly, like, I'm just interested to hear your take here. I know how he's affording this.' Well, he just can. He can see the Matrix, that's what it is. He can see the... Oh, man. We are just... Man, we've got to take this on the road. Bo, I've never heard that one before. HSA, I know that the family is $7,750, so single, I'm going to assume single is half of that, right? So $3,875, plus 401K is $22,500, plus Roth is another $6,500. That is almost $33,000 of savings. That's incredible on $69,000 of income. That's a 47%, almost 48% savings rate, right? So, first, right there, Keanu, holy cow. You're crushing it. I think his question was how do I maximize hyper-accumulation for the three-bucket strategy? He's got to know the why. So, tell him the why of why we even have the three-bucket strategy.
The three-bucket strategy: we have a belief that as you begin to build wealth, you want to build assets in three distinct tax buckets. You want your tax-deferred, like your 401ks and your IRAs. You want your tax-free, that's your Roth IRAs and your HSAs, or Roth 401ks. And then you want your after-tax, or your taxable brokerage account. If you can build up those three buckets, when you get into retirement, when you get into Financial Independence, you get to pick and choose your tax rate. Meaning, if you know you have these three different pots you can pull from, you can control what the taxability on your annual income looks like. We have a number of clients right now that have large seven-figure portfolios with six-figure incomes that are paying in the lowest marginal tax brackets because they're able to gamify where their dollars come from.
Now, K has an interesting point, Brian. A lot of people ask this: 'Hey, I hit 25% before I ever get to Step Seven. Does that mean I need to shift, or how do I think about that? Or if it's not naturally getting to Step Seven, how do I know if that's what makes it?' Well, that's what I love about Step Seven with Hyper-Accumulation, because now, you go through the checklist to get to 25%. But I like Step Seven because it's really focusing on the why and how you're going to use it. If you think you're retiring much sooner than 59.5 or 55 from a company that has a 401k, then you probably need to have that after-tax account really boosted up to be that bridge to get you closer to retirement. So, that's the part that I like focusing on, the why. So you can not only have the pots of money but also focus on how you're going to use it. Now, what is the allocation from not only from an investment allocation standpoint but also from a tax allocation standpoint and an account structure. You're going to be set. That's why let's you. This is the art of the process. I really do think steps one through six is just checking the boxes of the basics. But it's when you get into those later steps, like the sevens and the eights of balancing the prepaid expenses, plus the why of when, that you get into the art of making sure you're maximizing every moment.
And that's also when we think the abundance cycle reaches graduation point too. And if you want to, you can go to moneyguy.com
, and we have a 'Work with Us' section, and this is exactly the type of stuff we help people work through. 48%, that's incredible, that's amazing. But you know what I will say, just because I want to make sure we have questions on the other side about the difference between a Financial Mutant and Miser, after you do that exercise of why, maybe even looking at learn.moneyguy.com
to know your number, so you actually know where you are in the process, if you find out all your goals are going to be accomplished but you have loved ones saying, 'Why are you so tight? Why are you so cheap?' Just make sure that you understand the difference between Miser and Financial Mutant. Because if you've already got the goals covered, it might be the point that you are stepping into Step Eight, which is the prepaid expenses or abundance goals, to make sure you are creating and maximizing those memory components as well. That's great.