Whole educational system. And thats why im on a Constant Mission to teach you about every aspect managing your money so you will be able to become a better investor both when it comes to retirement investing and playing out with what i call your discretionary mad money portfolio which is a big machine why i wrote get rich carefully to begin with. Most of you even if you dont own individual stocks directly you probably have some exposure to the stock market, 401 k plan where you keep the bulk of your Retirement Funds which is why i want to take a moment to about retirement. For those of you who have been living in a cave for the last 20 years 401 k plans are the way you save foe retirement. Wait. For those of you who are about to fall asleep or change the channel, because the whole idea of saving for retirement puts you to sleep, hear me out because you need to know this im going to tell you some things that you wont hear from the socalled experts. This show is different. At this point its pretty much become conventional wisdom that you have to invest in your 401 k , that only an idiot would not contribute to a 401 k plan, a lot of experts will tell you to max out your 401 k if you make enough money for that to be feasible, the maximum contribution goes up over time from 17,500 to 18,000. Those come from your pretax income. I am not one of those things who thinks you should max out on your 401 k . I am not someone who is going to sing the braces of the 401 k because the truth is 401 k plans can be a real mixed bag. With a couple really great features and a lot of bad ones, too, and those bad futures will eat at way at your returns year after year sometimes through fees that are almost totally hidden from you that actually are quite upsetting to me. Ugly and i will tell you whether it makes sense for you to contribute more money to your own 401 k or maybe put that cash at a better place and better use somewhere else. First the good, its a tax Deferred Investment vehicle. Then you never pay a penny of Capital Gains taxes on the profits you make within your 401 k which allows your money to compound year after year, compounding big fantastic, totally tax free until you decide to start making withdrawals. Regular viewers of this show and readers of my books know im a huge believer in the power of compounding. Suppose youre 30 years old and you start investing 5,000 a year to your 401 k , you are not paying any income tax. If you choose your investments wisely you should be able to generate maybe perhaps as much as a 7 return on average. Over the course of the next 30 years you will be contributing 150,000 to your 401 k plan, because that money is able to compound year after year by the year pretax income, that could be worth over 511,000. If you had to pay taxes on dividends and Capital Gains, believe me, that number would be a lot lower, perhaps as much as 110,000 lower. Thats how important compounding is. And avoiding well, lets say the tax deferred nature of the thing. You only ever have to pay taxes on your 401 k money once, thats when you decide to withdraw it. Your withdraw taxes ordinary income and most of you will end up paying a lower rate than had you been taxed on that money you were getting those higher rate levels. Thats one major reason to like 401 k plan. The second many but not all employers will match or partially match your 401 k dollars. Your employer might throw in 50 cents up to a certain point. That is free money and you never want to walk away from free money especially when it is not taxed. If you dont get free money from much less compelling option. There are a lot of things about a 401 k plan that can be bad. Which is why if you dont get a match from your employer i believe its a better idea to save for retirement via the individual retirement account or ira, which has the same exact tax favored status of a 401 k . You can only contribute 5500 to your ira but when you change jobs you can roll over all your money from your 401 k into an ira and thats what you should do if you switch employers. Why do i think the ira is the better option . 401 k plans vary widely from company to company. Many more Companies Give you a 401 k plan with limited options. Sometimes you only get to choose between a dozen, maybe a couple dozen at most different mutual funds. For those of you who cant pick your own stocks in your 401 k my number one rule is before you plan you have to make sure it if i was you the option to put your cash into something thats actually worth investing in. I will make this simple. If you cant pick your own stocks in a 401 then you want a nice low expense index fund that mimics the s p 500. If your 401 k doesnt offer that go with a selfdirected ira from a full Service Discount company, im talking fidelity, so that you can have control over your money. Within a 401 k you have to pay that mutual funds fees, this is really important. But your 401 k administrator, the company the people your employer hires to runs these plans they will also charge fees. Meaning that all the money 401 k saves you on taxes a great deal can be clawed back by these fees. Have you ever wondered where your holdings arent increasing in value fees could be the reason. Here is my bottom line on the company you work for offers a employer match then you want to put money into that million that match is used up. After that put any additional Retirement Savings into an ira. If there is no employer match or there is an employer match but your 401 k doesnt give you any options worth investing in you would do better to skip the 401 k and go straight to an ira immediately. Deborah in california. Deborah. Caller hi, jim, thanks for taking my call. I have a twopart question regarding the value of listening to a companys earnings conference call. Okay. Caller the first part is how can we decide what we want to do, in other words, what action we want to take based on the Earnings Report since the stock frequently will behave in a contradictory fashion to the report . For example, a company can lower on the revenue and earnings Going Forward and the stock will go up. The second where you might think that it should go, down right . The second part of my question is im on the west coast so the calls frequently are at 7 00 and 8 00 a. M. Eastern time so for me the value of listening to the call is diminished because im not going to get up at 4 00 or 5 00 a. M. Right. Caller to listen to it. So im not going to really take any action on that. Here is the solution to this. You have no gun to your head unlike the hedge funds, you can listen at your leisure, im not trying to get anybody into a quarter to buy a stock ahead of a quarter if i can avoid it. What you want to do is take a longer term view in the comfort of your home without any noise, go listen to the call lr read it, go to yahoo finance, get some of the research, street. Com, cnbc, get some research, match the expectations with what was said, take a longer term view. Thats the advantage of the have to play that day. Doug in nevada. Doug. Caller booyah, mr. K. Okay. Yeah, my question is i have a 401, fairly substantial. Would it be advisable for me to change that to a selfdirected ira . Okay. What matters is the match. If you have if the employer is matching, no. Okay. You want to get the max you want to get the max match, so to speak, and then after that, yes, or but if its just six and a half or one half dozen to the other and the funds arent that good that you are allowed to be in your 401 k then, yes, i want you to choose a selfdirected ira. Let me help you take control of your financial future. When it comes to retirement if your company matches your contribution to 401 k max that out, but if you dont get an the ira. On mad tonight you just got your diploma so now what . Dont miss my investing advice for recent College Grads. Too busy to invest in individual stocks i will help you put your money back to the next best thing. Lets chart your course. Why dont you stick with cramer . Announcer dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer, madtweets. Send jim an email to madmoney cnbc. Com or give us a call at 1800743cnbc. Head to madmoney. Cnbc. Com. If everyone in this country went insane and decided to turn american into cramerican with me as your king you Better Believe id be making changes and changes front toe, but because this is a show about money im going to stick to the financial elements because the fact is it drives me nuts that we dont teach our young people about how to handle money. Would it be so crazy if you had taken a place in personal finance before you graduate from high school. I think that should be like our Awkward Health classes. Sadly i am nobodys dictator and i dont have any influence over educational policy in this country but i do control what we talk about on this show. Can i take a moment to speak words we all believe but rarely get to say in conversation . Look, money is important. Its really important. And caring about the state of your finances does knots make u some kind of superficial bourgeois monster. Lets say you have a lousy credit score and want to get married. You have just inflicted your horrible credit on your new spouse. Neither you nor your partner will be able to qualify for a loan to buy a car or home or even perhaps get a darn credit card. These things matter in life. They say money cant buy happiness but ive only found that piece of cliche conventional wisdom to be bious at best since being broke is a major buzz kill since i know firsthand from the time i fairmont. I sure wish i had an expert to guide me through all of this stuff way back then. Let me answer one of the most important questions out there, what the heck should young people do with their money . First and foremost and always you need to invest. Thats the only way youre going to be able to achieve Financial Freedom and by freedom what i mean is living a life where you are not totally 100 dependent on your paycheck. Im always thrilled when i see members of the younger demographic who are taking an active hand in managing their own money. Too many people start saving and investing way too late. I also know many young people feel like they have all the time in the world, many more start investing before they are truly ready when they are, in fact, Better Things for them to be doing stuff with their money so we have to drill down on this. Im going to give you three lessons and a caveat for all of those who are recently out of college. You need to pay off your Credit Card Debt. This is something ive mentioned before but its especially true for younger people. Credit Card Companies have gotten aggressive about offering credit to college students, no matter how much money you rack up in the stock market if youre carrying a balance on your credit card its going to eat into your returns and longterm the interest on those credit cards will probably be greater than the profits you can make from investing at least on a percentage basis. Just pay your darn credit card balance in full every month, automate it with your credit card company. You will be tempted not to, i cant defeat that Credit Card Debt no matter how great stock ideas i have on the shown. This is really for all young people who have recently graduated and actually for everyone out there. You need to save money but i recognize that not everyone has an inherent predisposition to save, we cant all be natural cheap skates and i acknowledge telling you to save over and over again wont necessarily do any good, however, the stock yourself into saving a part of your paycheck that you might otherwise spend. Investing in stocks can be a lot of fun. We try to do some entertainment within the teaching whereas leaving money in a savings account or certificate of deposit just feels like kind of joyless for a lot of people not to mention the fact that the returns are so small that they are basically, yes, indeed, i will use the word meaningless. Plus if you invest your savings in the market it will be a lot easier to resist the temptation to spend that money on things that you might not need because it will be sitting in stocks that you like, you will have to sell those stocks to get your predilection to not sell once you buy. Not only is this a terrific way to trick yourself into saving but its the smartest place to put your money. Traditional savings vehicles like money market funds, you see those rates, i check them every week, cds, they give you hardly any return at all. Its a waste to keep your savings in them when that cash can make you more money by stocks and working with your money. Second lesson for one investing, this is a much more targeted piece of advice, while you are still young you can afford to take a lot more risk than an old fogey like myself. When you are in your 20s you can get away with reckless strategies. Or playing with options and just generally being a lot more aggressive with your money. Why is that . Its not because young people are naturally better speculators, its simply because when you make a mistake in your 20s with your money, you have your whole rest of your life to fix it. You can afford to buy nor high risk stocks and end up losing your money when you are young because you have 40odd years to earn back your losses so you have to take those risks. Older investors you have to be more cautious. The closer you get to retirement the more conservative your investing strategy should be, more bonds, but if you are in your 20s you should invest like person. Forget about bonds, people, please, there is no reason for someone in their 20s to have Bond Exposure when that money could be invested in stocks. Young people i want you to take this advice to heart especially because i suspect that the recent College Grads most likely to invest in the market are also the ones who are in the most responsible, the most prudent about their money. And prudence is great when youre putting together a budget to live with within your means or deciding how much of your paycheck to save every month but for young investors being too prudent is actually being reckless. 20 somethings, live a little, at least in your stock portfolios, stick some risks, play around with speculative names, maybe tiny Biotech Companies with a lot of potential. Even if they blow up on you and go all the way to zero youve got your whole life to make that money back. Final levin, its never too early to start investing for retirement. In a roth ira. Here is the bottom line, for young people just out of College Investing is a great way to trick yourself no saving money, you might otherwise spend that money. Beyond that remember when you are young you can afford to take a lot more risks with your portfolio and its never too soon to start contributing to your 401 k or ira, especially with that ira is a roth. Lets go to mike in tennessee. Caller hey, jim, how are you doing . Love your show. Thank you. Time. Thank you. Caller my question is a few episodes ago you said that you did not like buying a stock if the peg ratio got above 2. Right. Caller im wondering wrong you use peg ratios as a sell signal and if you do how high will you let it go before you pull the trigger . When its more two times the growth rate i do get nervous. There are some stocks that dont to be careful like a cold stock, but the pical stock if it trades for lower, you know, great lower than two times that rate of growth im fine with it, but it is a red flag once it gets higher. A penny saved is a penny earned. Investing is a great way to trick yourself into saving money, its never too soon to contribute to your ira or 401 k . I have a lot more tonight on this deep dive into the pros and cons of index funds. Which way could i come out . Dont miss my take. Income is a big factor in choosing retirement path. Plus i wouldnt wish Student Loan Debt on my worst enemy. I will help you protect your family from this expensive dont go away, stay with cramer. Olay regenerist renews from within, plumping surface cells for a dramatic transformation without the need for fillers your skin never will. Olay regenerist. We live in a world where you have more choices about where to im vest your money than ever before. A virtual infinity of etfs, mutual funds, you name it, but more choice isnt always better. Sometimes having more options just makes it impossible to decide which ones are right and which ones are wrong for you. You have never had more options when it comes to Picking Exchange traded funds and mutual funds than you do right now, theyre everywhere. At this point theres so many different kinds of etfs that it can make your head spin. As a side note i hate how many of the sectorbased etfs, the ones that let you buy and sell an entire group like the banks, home builders, i hate the way whole stock market trades, thats something you can find out more about in get rich carefully. If you are in these etfs i have to urge you to find out about them. You have all sorts of etfs and mutual funds out there and they can all advertise, the companies that run these funds they want your money and one of the biggest mistakes you can make as an individual investor is to give it to them with a few significant exceptions. Unfortunately this is also one of the most common money mistakes out there, in fact, most people in this company equate investing with putting their money in mutual funds, 80 Million People have exposure to mutual funds, many of you dont have a choice, a lot of 401 k plans dont let you pick individual stocks, they give you a menu of mutual funds to choose from which is why i think all things being equal an ira is a better way to invest for retirement for you. What is to bad about most mutual simple. If youre investing in mutual funds youre most likely delicately getting hosed. Now, i dont want to paint with too broad a brush here. There are some worthwhile mutual funds and i will tell you how to find them in a minute. The problem with the mutual fund model. My main beef is that with actively managed mutual funds, mutual funds where there are people deciding which stocks or other securities to buy or sell we have some problems. Unlike hedge funds Mutual Fund Managers dont get paid for delivering performance, they collect fees from their investors, people like you and the amount of money they make depends entirely on the size of their assets under management, aum we call it, which means their biggest incentive is not necessarily to do well, but what theyre really being paid to do is bring in more money from more investors, salespeople for the funds. Thats part of the reason why in study after study it has been mutual funds underperform their benchmarks like the s p 500. In other words, if you invest in an actively managed fund for large capitalization u. S. Stocks then its performance will most likely fall short of the s p 500. Make matters worse, even though actively managed funds consistently underperform the market they have some of the highest fees in the business. How do you like that . They dont do as well as the benchmark and they charge more. So even if your fund does manage to beat its benchmarks the odds are good any outperformance could be eaten up by big Management Fees and you will end up with an underperforming investing. Of course, theres some actively managed funds with fabulous managers who consistently deliver terrific results and i will tell you who you to find them another time. When a mutual funds delivers Great Results they will stop getting new investments. To pete the market. As a general rule if you are going to invest in mutual funds you dont want to be an actively managed one, the fees are too high and the evidence that the bulk of them underperform is too staggering to keep going that way. I think your best strategy is to manage your own portfolio of individual stocks. But for those of you who dont have the time to Research Individual companies or if your who 1 k plan wont let you own them let me tell you the smart way to invest in mutual funds, if you want you can write this down, a cheap, lowCost Index Fund that mirrors the market as a whole. One that mimics the s p 500. Index funds are ultra low fees and you have a vehicle that will let you participate in the without having to spend the time this may sound like a simple solution. Dont overthink it. The point of putting your money in a fund is to save you the time and effort to manage your by its very nature a fund should be diversified. If youre going to take the time to play individual sectors that time would really be much better spent picking individual, to. As for etfs in most cases these vehicles are for trading not investing so i dont like them, many etfs rebalance every day and that can take a toll on any kind of longterm performance. There are some exceptions, the gld which is the etf that i like to play for gold but in general if you are not a pro and not managing a portfolio of different stocks and not day trading every single day you probably shouldnt be fooling around with knows etfs, either. At the end of the day i think a cheap s p 500 index fund is the least bad way to passively manage your way, better than the vast bulk of actively managed mutual funds, but an index fund bad and the ugly. And if you do have the time i think you can beat the performance of an index fund by picking stocks yourself which is the entire reason i do this show every night. If you dont have the time, though, then dont overthink it, just one cheap S P Index Fund is indeed the best way to go. Mary in maryland, mary. Caller booyah, jim. Uhhuh. Caller jim, i started listening to you a while back, then i started buying stocks on your advice. Thank you. Caller now im looking at my portfolio here and, jim, jim, mine eyes has seen the glory. So i want to get a little fancier and perhaps buy some china stocks. However, im curious about adrs and possible exposure to Foreign Currency Exchange rate. Well us on adrs. We have the battle him of the republic going overseas. Here is the way i look at it, if you want to own individual stocks and the businesses are good i dont care where they are, i dont care about the currency if the business is that great the stock will go higher, understand if youre buying an adr and its a European Company and the euro is being weakened by sell tran bank issues you will not do well even if the stock does well. All things being knew tall im fine with it, but if they are you have to say in the gold out u. S. A. Which is a smart way to invest. Matthew in new york. Caller booyah, jim. Booyah back at you. Caller yeah. Im 23 years old, recent college grad and new to the work force and i just started and maxed out my ira. Realizing time is on my side i want to go for an aggressive allocation or growth and take on risk but im unsure of how to do i want to get your suggestions for someone starting out through the retirement investing how would you go and allocate you want to have the fastest young Growth Stocks and those are tend to be found in technology sector, but also of course in biotech. Dont go too crazy. Have one or two stocks of companies not making money, no more than those. Junior Growth Stocks, companies that are worth a billion dollars or less, a lot of them are too small to talk about. One of those two. These are all fine. You can do those because if you lose money youve got the rest of your life to make it back. Sorry, not so much mutual love here. Picking stocks still the best way to manage your money but if you dont have time just please, please, please go with the cheap s p 500 fund over most actively managed funds. Much more mad money ahead including how to find the path to the better retirement. Student loan debt will put them in a better position to plan their future. Plus im responding to your tweets without the 140 character stick with cramer. Let me tell you about whether it makes sense for you or for you to go with a roth, which is a term im sure you have heard countless times but may not understand. I know ive talked endlessly about the benefits of using an individual retirement account or ira for short and a 401 k plan to invest for retirement. This is a subject i get a ton of questions about, should i put my money in a roth account or regular one. Why dont we start with a roth ira. Aside from the earned income tax credit the roth ira may be the single greatest thing our government has done for low income families since the send of the war on poverty which at best ended in a draw, poverty possibly winning in points. I told you about how a regular ira lets you take money, invest it and your compounds can compound year after year until you decide to withdraw that money when you retire. A roth ira works differently. With a roth you make contributions with aftertax income. In other words, unlike a regular ira putting money into a roth the other ha, though, once your money is in a roth ira you will never pay taxes on it again. As long as your cash remains in the account you dont pay Capital Gains tax, you dont pay dividend tax and when you withdraw it, which you can do without penalty after the age of 59 1 2 you dont pay any income tax on your withdrawals. In other words, with a roth you pay taxes now so that you dont have to pay any taxes, income tax 30 or 40 years from now when you are retired. Theres one more positive point about a roth. You can withdraw the money youve invested not your gains, just the amount you have contributed and wont get hit a 10 penalty which is what happens when you try to withdraw money from a regular ira before you hit that age of 59 1 2. Thats different from a regular ira where you dont pay taxes on your gains now but once you start withdrawing the money every penny you take out is taxed as ordinary income. It can be a high rate. Trying to decide between a roth ira or 401 k and regular ira or 401 k you are basically deciding whether it makes more sense to pay income tax now with a roth or wait and pay income tax once you have retired with a regular account. You have to figure out whether you will be in the higher tax bracket after you you have retired or lower one. This is a complicated question and has a lot to do with the specifics of your situation, your career and how old you are. A quick human rule of thumb, for anyone whose marginal tax rate a 25 or less i think you ought to go with a roth. Better to take your hit up front. Remember, for those of you who dont have the time to pick your own diversified portfolios, say, five to ten stocks the smartest thing you do is park your retirement money is a low Cost Index Fund that mirrors the s p 500. As you get older you can add some bonds but until you actually retire stocks should make up the majority of your retirement investments. I know i have said this before but im going to keep repeating but contrary to conventional wisdom. I want stocks not bonds until later. How about a roth 401 k , this works just like a roth ira, you make contributions with after tax income and never pay taxes on that money again because but because its a 401 k plan it has a higher contribution limit. An ira annual description are capped at 5,500. Unlike a roth ira a roth 401 k doesnt have any income cap. No matter how much money you earn you can take advantage of one of these as long as your employer decides to give you the option. Of course, all this depends on what you think the future is going to look like. I will admit if you believe taxes are headed higher over the course of your lifetime a roth 401 k where you pay your taxes now that is so the way to go even if youre making a lot of money in the present, but i think that belief is mistaken. For those of you young people conscious and you the obama administration, history says different and i believe we can close the deficit without substantially raising taxes thats about as political i will get on this show. At the end of the day this is beyond our control and therefore beyond our ability to predict. The bottom line, the lower your present income the lower your taxes, a roth 401 k or roth ira lets you pay those low rates now and never worry about taxes again for your retirement money. The less you make the more likely it is that a roth is for you. Its that simple. When youre saving for retirement, dont worry about what could go catastrophically wrong 30 or 40 years in the future, just worry about making break. I take prilosec otc each morning for my frequent heartburn because you cant beat zero heartburn prilosec otc. One pill each morning. 24 hours. Lately ive been reading a lot of stories about the crushing burden of Student Loan Debt. Right now tens of billions of americans owe more than a trillion dollars in student debt, thats an incredibly high figure. And its not just that it really or graduate school and immediately realize it might take decades to pay back those loans. Kids that graduate with no debt end up being worth a lot more money than their classmates who have outstanding student loans. Im a big believer in social mobility which is why im coming out here and teaching you how to use the stock market because its the greatest engine of wealth ever created and i want you to use it to make serious money. So for any of you who are parents or thinking of backing parents let me tell you right now that there are very few things you can do for your children that are better than paying for as much of their College Education as you can afford. We know that College Graduates have a much easier time getting jobs, especially in our current environment where unemployment still way too high and we know that they ultimately make more money. If i were to make an abe maslow hierarchy of financial needs i would tell you its more important to save and invest for for those of you who are parents how could your own retirement possibly be more important than making sure your kids have the best future possible . Simple. Because, believe me, if you reach retirement age and dont your kids who do you think is going to support you . Your kids. You dont want to be a burden on them so take care of yourselves first, however, after youve saved enough for retirement then its time to start thinking about college. Even if your kid is only a toddler. Even if your kid is a gleam in your eye. And the best way to save for College Hands down is through whats known as a, write this down, 529 plan. Now, these plans do vary by state. But the general rules are true all across the country, there are two kinds of 529 plans, first some states let you use a 529 as a way to hedge against tuition inflation by buying tuition credits at todays prices that can be used at the future. I want you to use a 529 savings plan. State but generally speaking a 529 doesnt let you manage your own portfolio, you have to pick between a mix of different mutual funds, this is not my favorite way to do things, i prefer you to have control of your assets and the selection of which stocks to buy or which actual instruments, okay, but 529s have so much going for them im going to swallow this one flaw. Remember, when you can only choose between funds go for a low cost fund that mirrors the market, either the s p 500 or Something Like the vanguard total market fund, which is you will see many of these 529 plans, it literally owns all the stocks traded on the New York Stock Exchange and nasdaq but since its weighted by market cap its performance will be similar to the s p which contains the 500 largest companies. What are the rules for this 529 plan . Lets say you just had your first child, congratulations, if you can afford it you should start a 529 with your kid as the beneficiary right then and anyone knows i traded big blocks of alcoa throughout the birthing, not one of my finest moments. Here is how a 529 works, contributions are not tax deductible so you are paying for this out of after tax income. Once your money is in the 529 plan you dont pay any taxes on your grains so you let them compound tax free year after year. Its like a roth ira except for college rather than retirement. Because of federal gift tax laws you can only contribute 14,000 a year if youre single 28,000 if youre married and file your taxes jointly. Thats a heck of a lot of money. By the way, your childrens grandparents can contribute to the same 529 plan, too, if you dont have a money a grandparent can start a 529 with your kid as the beneficiary. Lets say for some reason you or your parents are sitting on a huge sum of money. One of the cool things is you of contributions without incurring the fed cal gift tax as long as you dont write any checks to the plans beneficiary over the next five years. If youre married and file jointly you can contribute 140,000. For the next five years after that you wont be able to contribute anything without getting hit by the gift tax which is something you dont want. Once youve dropped that kind of money into a 529 you wont need to make too much more contributions. You want to get that money into your kids 529 as early as possible. The greatest of these plans is all about the power of compounding. You dont pay taxes within 529 so if you can somehow con drive to contribute 70,000 off the bat and invest that money in a low Cost Index Fund that mirrors the moment over time you will make an average of roughly 8 per year. I snow the stock market is more volatile than that, but if stocks generally perform like they have historically you could years. If you start saving right when your kid is born by the time he or she is 18 the value of your 529 plan would have doubled and doubled again. If you started with 70,000 you could have as much as 280,000 seeing it time and time again. Thats enough for a fancy expensive private College Education and decent chunk of law school. I know most people cant front load a 529 with that, but its worth keeping in mind that front loading as much as possible is indeed the best strategy. For grandparents this may sound grim, but your 529 plan contributions wont count towards your estate tax. Last thing about saving for college and grad school, any money in a 529 that you dont use you can transfer it to another relative, siblings, parents, even first cousins. If you save all this money and your ungrateful kid decides not to go to college you can just withdraw the money from the 529 plan but in that case you will have to pay taxes for any of why you are gains along with a 10 no paying for your kids College Education seasonal as important as providing for yourself in retirement, but if you have children after youve made enough retirement contributions for the year putting money in a 529 College Savings plan should be the night item in your agenda. Its the best way to protect your kids from the crushing burden of Student Loan Debt. M money is back after the break. I asked my dentist if an electric toothbrush was going to clean better than a manual . He said sure. But dont get just any one. Get one inspired by dentists. With a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean. Oralb know youre getting a superior clean. Thats a lot of dishes no problem. Ill use a lot of detergent. Dish issues . Get cascade platinum. One pac cleans tough food better than 6 pacs of the bargain brand combined. Cascade. [cough, cough] mike . Janet . Cough if you can hear me. Test test test test test test test test test test test test test test test test test test holy cow we have to get to some of your tweets that youve been sending me at madtweets, including once that are nice and smart. Kenneth tweets, i love you, i love you kenneth egan 23. Its recorded in my book. Some people call me jake tatum, no, im a sweet guy. Why care about shot term hit if you have longterm investment strategy. Amen. How many times have i said i like xyz stock, it goes down that day and people want to burn me in effigy or burn me in scalding oil. It doesnt have to be that day. Think a little longer term. Particularly one year out get better tax break. Here we have diaga who wants to know aside from your own what other books should Home Investors have under their belts to help them trade manage better. One up on wall street and beat the street, peter lynch, available on amazon. You might want to look at some of david darsts books, those are available on amazon. I use those to learn a great deal and he taught me a lot at but david darsts books are very good. Up next, dr. Hoy 480 tweets, do you ever sleep or did one of your biotechs provide you with clones to assist . Winky face. Winky face presuming means like an emoji thing. No, i dont sleep. Okay. Now weve answered that question. Now, btw which i think stance for by the way, i am now following your know what you own model or kwyo. Clean my portfolio this week. Yolo, yolo, you only live once so i totally agree with you. He wants me to know im in the market because of you. Sir, just give all the haters is big booyah. Keep teaching us what they want to grow. Jim. Okay. Let me give you a heads up. I love the haters. I wouldnt be doing this if it werent for them. I would have gotten out years ago. The haters and everyone in my personal life knows that. So, haters, youre why im in this game. Congratulations. And stick with cramer. Hey buddy, lets get these dayquil liquid gels and go. But these liquid gels are new. Mucinex fast max. Its the same difference. These are multisymptom. Well so are these. This one is max strength and fights mucus. That one doesnt. Uh. Think fast you dropped something. Oh. Ill put it back on the shelf. New from mucinex fast max. The only cold and flu liquid gel thats maxstrength and fights mucus. Start the relief. Lets end this. cell phone rings where are you . Well the squirrels are back in the attic. Mom . Your dad wont call an exterminator. Can i call you back, mom . He says its personal this time. If youre a mom, you call at the worst time. Its what you do. If you want to save fifteen percent or more on car insurance, you switch to geico. Its what you do. Where are you . Its very loud there. I like to say theres always a bull market somewhere and i for you right here on mad money. Im jim cramer and i will see you next time. It is thursday december 31st. Coming up on early today