Learn why I use a Roth 401k and advise my advisory business clients to do the same.
It’s a terrific retirement planning vehicle.
Take a look at our blog: www.bradrosley.com
Firm website: www.fortunefinancialgroup.com
Schedule Zoom Meeting with Brad:
#money #finance #advice
Thanks for watching the video Saving For Retirement? Why a Roth 401k is Your Best Option!…(read more)
LEARN MORE ABOUT: 401k Plans
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
Also paying taxes will just hurt more in your retirement years at a time when you need the money the most. Trying to minimize your tax burden in retirement makes sense. Pay taxes on your income now while in your working years when you have more discretionary money.
Hi Brad! Love your channel. I just subscribed. Another great advantage to Roth IRAs and 401ks is that Roth distributions do not count as income for ACA subsidies. So that's key for people who want to retire before 65 and have to get their own health insurance. I'm surprised this is not discussed more on You Tube.
Love your videos, Brad – been following for years as a self employed 401k guy – but I have to address your Trump and entitlement comments in this video.
You mention an explosive federal debt due to entitlements. Are you aware of what the federal debt was when Trump took over? Let me tell you – it was $20T. It is now approximately $27.5T, less than four years later. Obama did not do this terribly within a single term. This, despite (Candidate) Trump comments that he would "reduce the entire federal debt to zero" by the end of his "two terms". Well he didn't exactly make any progress in his first term, now did he? Let's also not forget which party controlled both chambers upon his inauguration, and held them for the first two years. It's also funny that Mitch didn't shut down the government during the last four years, too, as he did during Obama's years (of lesser deficit).
Your backdrop makes it pretty clear where you stand politically. And I support your right to take that stand. But – as a former Republican turned Libertarian – let's not forget what true fiscal conservatism is, and ignore that this is not what we have in the White House. I don't care what tax policy is from year to year, as much as I care that our inlays exceed our outlays. Reduction in tax rates appears to – thus far – not have created that result, as promised by Trump and his base.
You covered RMD at age 72, how much social security income is taxable, and IRMAA as reasons to chose Roth over traditional.
Other reasons why Roth is more beneficial:
Obamacare credits for those retiring before Medicare age. Possibly, partial tax exemption on property tax based on income. State income tax. 3.8% Net Investment Income tax. Federal and possibly state estate tax. Planning death of either spouse which changes your tax filing status from married to single. Some are for very high income or high net worth individuals but some are for pretty low income. You cannot $5000 won't make a difference especially if your only source of income is Social Security and your retirement account as those are the people whom have the highest income tax bracket despite being in the lower income range.
Wife and I are both government employees, both contribute 26K to our Traditional TSP's. By doing this we pay 20K vice 32K in taxes each year. We have 10 years until retirement so we will contribute 120K more to our Traditional TSP vice paying it to federal taxes. How could contributing to Roth TSP be better for us?
Does a ROTH fall under the inheritance tax law that you leave to your children?
Important to add that the company match and earnings on that match are still in “before tax” money, so you can’t completely escape this with a Roth 401k.
I work for a fortune 100 company that didn’t offer a Roth 401k until 2017. At most companies this is a fairly recent offering.
I have a regular 401k at work can I roll that over into a Roth 401k?
If you take $40,000 out of your 401(k) and your only other income is social security, how much will you owe in taxes? Not much if any. Maybe worry about the roth option for your second million.
That said, I do like the balance all 3 tax categories: tax deferred (regular 401(k)), tax free (Roth 401(k)) and taxable. That allows you flexibility in the future to plan your taxes.
But for the majority of people who are struggling to save even $500,000 for retirement, you won't have enough in the future to pay taxes unless the rules change a lot. And of course if the rules change a lot, your Roth choice may be no better. Again I like the variety of having all three…
A lot of people didn't have Roth 401K's available to them early on. However, the Traditional 401k was very helpful to lower your tax bracket while the kids were young and you had a mortgage to pay. My federal tax was very low for a long time thanks to what I could sock away.
Thanks for this. When I’ve run the numbers it seems to make no difference if the tax bracket is the same while working vs. retired. This assumes, as you said, you invest the money that you’re saving in tax by using a traditional 401k. I’m at a very high tax bracket now an expect it to be much lower when I retire so I’ve been doing traditional 401k.
Thanks for the videos! I'm self-employed with a Roth IRA and looking into opening up a Solo 401k.
Another great video Brad. Thank you