Aug 28, 2019
This week, I’m talking about the Roth. Roth 401ks and Roth IRAs are one of the most googled topics on retirement. And the advice out there is always this wishy-washy garbage that always hinges on whether or not taxes will be higher or lower in the future.
Excuse me, but how many of you out there know if taxes will be higher or lower in retirement? It’s absolutely ridiculous. Most people can’t even tell you what their tax situation will look like this year because of all the recent tax changes, courtesy of President Trump.
Go ask your CPA what they think taxes will be in 5 years...good luck getting them not to laugh.
The conventional garbage advice also follows that if you’re in a higher tax bracket, you should maximize your Traditional 401k and not contribute to your Roth because when you contribute to a Roth, you don’t get a tax deduction.
So why would you want to contribute to a Roth?
Because, you are...never...taxed...on...that...money...again.
If you get anything out of this week’s tips, I hope it’s this - don’t listen to the advice about Roths that require you to get your crystal ball out to predict future tax rates. And don’t fall into the trap of trading in a tax deduction this year for the future long-term tax benefits of the tax-free growth and withdrawals that come with the Roth.
That’s it for today! Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.
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