Sean Mullaney: Roth vs. Traditional – Which Retirement Account Reigns Supreme?

by | Feb 24, 2024 | Traditional IRA | 2 comments

Sean Mullaney: Roth vs. Traditional – Which Retirement Account Reigns Supreme?




Welcome back to Keep What You Earn! In this episode, Shannon continues her conversation with financial planner Sean Mullaney, as they delve into the strategies of traditional versus Roth retirement accounts. Sean breaks down the key differences between the two, offering valuable insights and dispelling common misconceptions. He emphasizes the importance of considering individual circumstances and goals when selecting the right approach for retirement savings, and provides practical advice for business owners to optimize their retirement planning. Shannon and Sean also address the evolving landscape of investment advice, encouraging listeners to make informed decisions and embrace the benefits of diversification. If you’re looking for expert insights on building a secure financial future, this episode is a must-listen!
Sean Mullaney is a financial planner and writes The FI Tax Guy blog focused on the intersection of tax and financial independence. In 2022 he authored the book Solo 401(k): The Solopreneur’s retirement account.
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The discussion is intended to be for general educational purposes and is not tax, legal, or investment advice for any individual. Shannon and the Keep What You Earn podcast do not endorse Sean Mullaney, Mullaney Financial & Tax, Inc., and their services.
What you’ll hear in this episode:
04:11 Concern over $34 trillion government debt grows.
06:29 Retirement tax rates favor upfront deductions.
10:11 Traditional vs. Roth, retirement dates and conversions.
14:42 Traditional 401k offers low effective tax rate.
18:12 Predictable fees, controlling for known investment costs.
21:47 “Trust market, diversify investments for personal finance.

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The information contained in this podcast is intended for educational purposes only and is not individual tax advice. Please consult a qualified professional before implementing anything you learn….(read more)


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When it comes to retirement savings, two popular options are Roth and Traditional accounts. Both offer tax advantages, but the choice between the two can often be a difficult decision. To help shed some light on the matter, we spoke with financial advisor Sean Mullaney to discuss the pros and cons of each.

Traditional IRA accounts allow individuals to contribute pre-tax dollars, which can lower their taxable income for the year. This means that individuals will not pay taxes on the money they put into the account until they withdraw it during retirement. On the other hand, Roth IRA accounts require individuals to contribute after-tax dollars, but withdrawals during retirement are tax-free.

According to Mullaney, the choice between Roth and Traditional accounts often comes down to one key factor: tax rates. “If you expect your tax rate to be higher in retirement, a Roth account may be the better option,” he explains. “However, if you anticipate being in a lower tax bracket during retirement, a Traditional account may be more beneficial.”

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Another consideration to keep in mind is the issue of required minimum distributions (RMDs). With a Traditional IRA, individuals are required to start taking money out of their account once they reach a certain age, typically around 70 and a half. This can impact the amount of money individuals are able to leave to their heirs. With a Roth IRA, there are no RMDs, allowing individuals to leave their savings untouched for as long as they wish.

Mullaney also points out that Roth IRAs offer more flexibility when it comes to withdrawals. “With a Roth account, individuals can withdraw their contributions at any time without penalty,” he says. “This can be especially helpful in case of emergencies or unexpected expenses.”

In conclusion, the decision between Roth and Traditional accounts ultimately depends on individual circumstances and financial goals. Mullaney advises individuals to consult with a financial advisor to determine which option is best for their specific situation.

In the end, both Roth and Traditional accounts have their own unique advantages and disadvantages. It is important to carefully weigh the pros and cons of each before making a decision. Ultimately, the best choice will depend on individual factors such as tax rates, retirement goals, and financial needs.

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2 Comments

  1. @asal2203

    How about the fact that total return looks different in Traditional vs Roth given traditional has more capital since pretax dollars were invested? Vs the return on Roth post tax dollars do not get taxed.

  2. @NiranjanBendre

    If someone is maxing out their traditional 401k for major part of their life 35/45 years, invest in index funds, also get employer match (which is traditional), and then try to do Roth conversions for 13 or so years 60-73 age then they will have to pay substantial income taxes during those 13 years and eventually might have to pay the taxes for all the period of before and during RMD period.

    Because employer contributions and sometimes even pensions bonus incentives can go in 401k so that is a balance approach one should take and put their contribution in Roth 401k.

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