Overview of The Exact Investment “Stack” We’re Using to Retire Early (Not Just Rentals)
Ashley and Tony break down how they think about retirement as real estate investors: not just relying on rentals, but building a broader “stack” of tax-advantaged accounts, employer benefits, and investment vehicles that create financial flexibility. The episode combines their personal retirement journeys with Scott Trench’s recommended order of operations for high-income households, emphasizing that the goal is not just to save for age 65, but to build optionality and financial freedom much earlier.
The Retirement “Stack” They Recommend
The episode lays out a practical contribution order for W-2 earners, especially high-income households, with a focus on maximizing tax advantages and free money first.
1. Take the employer 401(k) match
- Treated as “free money” and should be captured before anything else.
- Ashley and Tony both started retirement saving around their first jobs and employer plans.
2. Use an ESPP if your employer offers one
- Ashley highlights this as the most impactful wealth-building tool she ever used.
- At Tesla, she could buy stock at a discount through the Employee Stock Purchase Program, and that equity became a major foundation for their move into real estate.
3. Max out an HSA
- Best for those on high-deductible health plans.
- Noted for its “triple tax advantage”:
- tax-deductible contributions
- tax-free growth
- tax-free withdrawals for qualified medical expenses
4. Fund a dependent care FSA
- Useful for paying child care expenses with pre-tax dollars.
- Ashley notes she has never personally used one, but it can be a strong tax-saver for eligible families.
5. Max out 401(k) contributions
- The episode cites the 2025 max contribution at $23,500.
- This is a major tax-advantaged savings tool, especially after capturing the match.
6. Contribute to a Roth IRA
- Best for those under the income limit.
- They note the traditional benefit: after-tax contributions, tax-free growth, and tax-free qualified withdrawals.
- A major advantage highlighted: direct Roth IRA contributions can often be withdrawn tax- and penalty-free later if needed.
7. Use a backdoor Roth IRA or mega backdoor Roth if eligible
- For higher earners who exceed Roth income limits.
- Ashley explains the basic backdoor Roth process: contribute to a traditional IRA and convert it.
- The mega backdoor Roth may be available through certain 401(k) plans with after-tax contribution options.
8. Open and fund a 529 college savings plan
- Helps families save for education with tax-free growth for qualified education expenses.
- They discuss added flexibility:
- can be used for college, trade school, apprenticeship programs, and in some cases private K–12 education
- unused funds may be repurposed in limited ways, including a partial rollover to a Roth IRA
- Ashley also points out state tax deductions in some places, like New York.
Their Personal Retirement Strategies
Ashley’s approach
- First learned about retirement through a 401(k) at her first job after college.
- Rolled over an old 401(k) into a Roth IRA after leaving a job.
- Briefly worked with a financial advisor, but found it less valuable than expected.
- Currently contributes less to retirement accounts than in the past because she is prioritizing real estate opportunities.
- Has been consistently funding 529 plans for her children, which now have meaningful balances.
- Emphasizes financial flexibility: she wants multiple ways to access capital, including a Roth IRA, rental property sale, or business liquidation.
Tony’s approach
- Also first encountered retirement planning through a 401(k) at his early jobs.
- Used employer retirement benefits, but says his biggest wealth-building moment came from Tesla stock and ESPP participation.
- Real estate was always framed for him as a path to financial freedom and optionality.
- Says he is still too concentrated in real estate and wants more diversification.
- Currently has a retirement plan, but not much in it yet.
- Recognizes that a mix of real estate, stock exposure, and tax-advantaged accounts is healthier than being overexposed to one asset class.
Main Takeaways
- Real estate can be part of retirement, but shouldn’t be the only plan.
- Tax-advantaged accounts matter because they create compounding and reduce tax drag.
- Employer benefits can be powerful wealth builders, especially 401(k) matches and ESPPs.
- Diversification creates flexibility: a Roth IRA, rental properties, stock holdings, and education accounts can all serve different future needs.
- Think in terms of financial options, not just retirement age. The goal is to have capital available for emergencies, opportunities, and life changes before traditional retirement.
Practical Action Items
- Capture any employer 401(k) match first.
- Check whether your employer offers:
- ESPP
- HSA eligibility
- dependent care FSA
- after-tax 401(k) contributions
- Max out retirement accounts in the recommended order if your cash flow allows it.
- If you’re above Roth income limits, look into backdoor or mega backdoor Roth strategies.
- Start or review a 529 plan if you have children or plan to support education expenses.
- Reassess whether your portfolio is too concentrated in one asset type, especially if you’re heavily invested in either real estate or the stock market.
Closing Message
Ashley and Tony’s core message is that retirement should be built as a system, not a single account. Real estate may be their favorite vehicle, but they both see the value in layering retirement tools so they can reach financial independence sooner and with more control.