Traditional IRA vs. Roth IRA – Which Should I Choose? | Afford Anything Podcast (Audio-Only)

by | Dec 12, 2022 | Traditional IRA | 8 comments

Traditional IRA vs. Roth IRA – Which Should I Choose? | Afford Anything Podcast (Audio-Only)




Should Bret invest in a Traditional IRA or a Roth IRA?

If Amanda gets married, how will her child support be affected? What about her student loan forgiveness?

Joe is investing in bonds, which average a rate of return that’s equal to the interest rate on his mortgage. Should he switch to all-equities and redirect his bond investments into mortgage payoff, instead?

Taunia has a car loan, a 401k loan, a home improvement loan, a primary mortgage, and a second mortgage. She also has an emergency fund that only covers two months of expenses, and she’s trying to save for college for her two children. What should she prioritize?

Mickey has a six-month emergency fund. Should he leave it in a savings account or invest in bond ladders?

David made $10,000 from a side hustle last year. Can he open a Solo 401k or SEP-IRA for his side hustle business? If so, which one should he choose?

Should Andy invest in a Target Retirement Date fund, or should he split his money between a U.S. index fund and an international index fund?

Former financial planner Joe Saul-Sehy and I answer these seven questions in today’s episode.

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8 Comments

  1. Trumpet4Life

    Roth accounts kinda suck in high-income-tax states.  I would rather invest those state taxes and, thus, make them earn for me. Moreover, I can choose to retire to a zero-income-tax state and thereby keep those state taxes for myself … forever.

  2. Brent Shuffler

    Paula, for Taunia's debt-laden situation, I would unhesitatingly recommend eliminating the loan against the retirement-account. She mentioned impressive balances on the asset-side of the family's Balance Sheet, but she did not give the figures for the loans. Having loans creates an illusion of assets but diminishes net worth. The bigger point is that a given home is optional; if they have to sell this home to eliminate the related debts, that is one option for adverse circumstances. By contrast, retirement is not optional. As your guest advisor said, the best thing to do for your children is to take care of yourself and your future so as not to be a burden to them. Keep retirement-accounts strictly for RETIREMENT. Mortgaging your future is far worse than mortgaging your house!

  3. Chad Granoff

    Another rocking episode.

  4. George McGovern

    As long as the child is a minor….child support never goes away.

  5. Squintillions

    Amanda needs to get a divorce lawyer stat!

  6. Daniel Hill

    So, Paula, my question would be why you are in a 100% equity portfolio. Is it because of your rental properties? I've been debating on if I should consider rental properties like bonds.

  7. Steve Steve

    When comparing Roth vs Traditional no one ever mentions that Roth accounts aren't subject to required minimum distributions. That is a pretty strong plus that rarely gets considered.

  8. Oasis

    I'm learning so much in this question and answer episodes, thank you so much Paula, I greatly appreciated you. I look forward to listen to your podcast. More power to you

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