This video covers the difference between a Traditional IRA and Roth IRA and how to figure out which is right for you.
OPEN FOR RESOURCES:
– Get $50 worth of free stocks when you open a SoFi Invest account and deposit a certain amount –
-Link for the deduction limits if your employer has a retirement plan:
Learn how to grow a profitable YouTube channel. In this course, I cover step-by-step how I went from 0 subscribers to over 70,000 subscribers and 4 million views and making over $100,000 on YouTube in under a year. From setup, to time-saving hacks, to making money on YouTube, to getting featured in media, this course has you covered:
If you just want to learn more about YouTube, you can download my Free Guide on how I grew my YouTube channel:
Are you a business owner or online entrepreneur? I’m an award-winning lawyer and have some free resources to help you.
Download my FREE Legal Guide on how to legally protect your business:
Or Download my FREE Trademark Guide on how to legally protect your brand:
▽MY RECOMMENDATIONS▽
➤ Refinance Your Student Loans
🎓 SoFi – (Exclusive) Get $100 when you refinance your Student Loans to Cut the Interest Rates!
———-
➤ READING
📚 This is my current favorite personal finance book
———-
➤ FREE DOWNLOADS
💸 Download the budget & expenses tracker or the net worth tracker I created
Free Budget & Expenses tracker:
Free Net Worth Tracker:
———-
➤ OTHER RESOURCES
📧 For other resources, check out my website
———-
About ME:
Hello! My name is Erika Kullberg. I’m a lawyer by profession, but my passion is personal finance. After I graduated, I had over $200,000 of student debt, so I made it my mission to dive into everything personal finance-related, so I could equip myself with the tools to pay off the student loans as quickly as possible. I ended up paying them off in under 2 years, and now it’s my passion project to share with you all of the strategies I’ve used to pay off my student loans, increase my net worth, credit card hack (travel on points), invest, house hack (invest in real estate), build passive income streams, and more. I hope you’ll join me on the channel!
📮 LET’S CONNECT!
SUBSCRIBE to my channel
———-
Instagram
———-
Facebook
———-
Website
———-
Guide to Legally Protecting Your Business
NOTE: This description contains some affiliate links, meaning that I may earn a minimal commission if you click through and use these links (at no additional cost to you).
Disclaimer: I am not a financial advisor. Although I am a lawyer by profession, I am not your lawyer and no attorney-client relationship is established with you in any way. This video, and the ideas presented in it, are for entertainment purposes only and should not be construed as financial or legal advice….(read more)
LEARN MORE ABOUT: IRA Accounts
INVESTING IN A GOLD IRA: Gold IRA Account
INVESTING IN A SILVER IRA: Silver IRA Account
REVEALED: Best Gold Backed IRA
Please scroll up and hit the like button to help the channel out 🙂
Get $50 worth of free stocks when you open a SoFi Invest account and deposit a certain amount – https://erikakullberg.com/sofi-invest
Learn how to grow a profitable YouTube channel. In this course, I cover step-by-step how I went from 0 subscribers to over 70,000 subscribers and 4 million views and making over $100,000 on YouTube in under a year. From setup, to time-saving hacks, to making money on YouTube, to getting featured in media, this course has you covered: https://erikakullberg.com/youtube-course
If you just want to learn more about YouTube, you can download my Free Guide on how I grew my YouTube channel: https://erikakullberg.com/free-youtube-guide
Are you a business owner or online entrepreneur? I’m an award-winning lawyer and have some free resources to help you.
Download my FREE Legal Guide on how to legally protect your business: https://erikakullberg.com/legal-guide
Or Download my FREE Trademark Guide on how to legally protect your brand: https://plugandlaw.com/trademark-guide
Thanks Erika, love your content. Could you please make a video about the best places to open a Roth IRA?
What platform to use to put money into a roth ira? How much should I put every month?
hey i wanted to know whats the minimum age to invest in index funds, in NJ. i wasnt able to find anything. the average for americs is 18-21
Is there a wrong decision if I’m choosing which is better? Maybe I’m overthinking it lol but currently I am a college student and not making a whole lot of money but couples years I feel like I will be
I have both at two different companies. Someone told me that wasn't allowed.
There's a ton more to this decision than guessing at if your tax bracket will be higher or lower than your tax bracket during contribution and other issues in this video. There are many stealth tax and other issues to consider than just the normal tax bracket. Oddly enough, I'm hard pressed finding too many real world situations where Traditional IRA will do better than a Roth IRA because of these stealth tax that most people will face.
1. Social Security. How much of your social security income becomes taxable varies depending on your filing status and your provisional income based on 1/2 x social security income + other income. The percentage of Social Security income included in your taxable income is 0%, 50%, or 85% depending on the provisional income. That distorts the tax bracket by 1.5 times or 1.85% at times resulting in effective tax bracket of worst case of 22% x 1.85 = 40.7% even without being in that high of an income range. For this formula, Roth IRA distribution is not included.
2. Insurance Premium credit when health insurance is purchased through Affordable Care Act's Healthcare Exchange are tied to income and household size. Obscurity of this provision often adds 12-14% additional expense above their normal tax income effectively turning a 12% tax bracket into a net 24-26% tax + insurance bracket during pre-Medicare age. This issue most often hits those whom want to stop working before age 65 and those whom got a layoff. They think they can convert their traditional retirement at a lower tax bracket only to be surprised by the fact that when they try to buy health insurance, the net total cost of your tax and your insurance premium is higher than when they were working.
3. Widow/divorce tax trap: A person might be doing just fine with their tax situation when they are still married. More often than not, the marriage ends either by death of one spouse or by divorce. Suddenly, their tax bracket can climb unexpectedly even when tax policy hasn't changed.
4. Some people pay higher premiums on Medicare Part B and Drug coverage. It is based on filing status and income level. The threshold hasn't been indexed for inflation for 10 years causing more people to pay higher premium. It's called Income Related Monthly Adjustment Amount (IRMAA)
5. With the new Secure Act non-spouse beneficiary generally need to distribute their inherited retirement plans within 10 years. If it is a tax-deferred account, it'll be taxable during the year of distribution whether they need the money at that time or not. If it were in a Roth account, the distribution will be tax free.
6. Some states offer Senior property tax exemption qualification is based on household income and county after reaching age 61.
7. Those whom retire in a state with a higher state income tax might need to lean more toward Roth.
8. Estate tax issues. Because numerically Roth has a smaller balance than leaving a tax deferred account, Roth account can reduce estate tax both at federal level and at state level. Conversely, it is better to leave the traditional IRA to a charity than a Roth IRA.
9. It's tougher to convert a larger balance traditional IRA to a Roth without pushing yourself into a higher tax bracket indefinitely. The more successful you are with investing, the bigger the growth and the longer it'll take to convert later on. For example, before age 65 is not the best time because of impact to health insurance cost from Obamacare, after age 65 is not that much better because of IRMAA, but you do want to convert before age 72 because of RMD. On balance, it might be better to convert earlier but you really do need to run the numbers. Mortgage payment calculators are ok at estimating the years needed to convert at a certain level with assumed rate of return but Monte Carlo Simulation is better.
10. U.S. Citizen retiring outside the U.S. Many countries have tax treaties with the U.S. where earnings inside a Roth IRA becomes tax-deferred in the country of resident but a government Roth 457(b), Roth 403(b), Roth TSP remains tax free. So for those whom are likely to retire outside the U.S. and have any government Roth accounts, you might be better off keeping those instead of transferring it into a Roth IRA. If Roth option is not available for your 403(b) or 457(b) plan, you still may want to keep it if you are retiring in a foreign country with higher tax rates than in the U.S. such as Japan. Caution: With most countries including Japan, Roth government plans will remain tax free only if you retain U.S. Citizenship and don't acquire citizenship in the other country.
This was super helpful. Finally I get a better picture of what this is. Thanks 🙂
Is there any minimum contribution limit to both traditional and roth ira like you should meet $6000 contribution each year?
Hi Erika,
Where can I open a roth ira?
Can you convert your traditional Ira to a Roth,
If you qualify ?
Thank you
This video needs way more views and likes its sad to see this generation so uninterested in setting themselves up for retirement. But if you were talking about how to get Supreme or Gucci you'd probably already have 50k-80k views
way to go erika
great video
Awesome video ERIKA. Thanks for sharing. I have learned so much from you on this CHANNEL. Keep the incredible content coming. Hope you have an amazing weekend. Much love
Interesting vid. Makes me want to open a Roth once I make a little more money. Thanks.
Great video. I use a Traditional IRA, I love the tax savings today and keeping more money in my pocket. Money today is worth more than money 20 years from now.
This is a clear and concise explanation of a confusing topic. Great.
Nothing makes me want to self-immolate more than when people want to rollover their Roth ira into their Roth 401k. It can't be done. Only the names are the same. Your employer should know this.
Also, thanks, Erika!
Beautiful you are the best . Thank you for everything you do to real help everyone else out Thanks
Is this a similar thought process to a Roth 401K vs a Traditional 401K? My company’s going to be offering them in a few months and I’m thinking of going for the Roth 401K for the same reason I went with the Roth IRA. Thank you for the video Erika!
Very informative video thanks for sharing!
1st