Confused about whether a Roth 401k or Pre-Tax is the BEST retirement savings option for YOU? You're not alone! But fear not, tax warriors! This video cuts through the jargon and explains EVERYTHING you need to know in SIMPLE terms. Discover the pros and cons of each option, including tax implications, contribution limits, and HUGE potential benefits! Plus, learn KEY factors to consider based on your age, income, and retirement goals. Don't let tax season stress get you down!** Watch now and make SMART choices for your future!
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Intro 0:00 – 0:15
Roth 401k or Pre-Tax 0:16 – 0:26
Roth 401k ONLY Scenario 0:27 – 1:57
Pre-Tax 401k & Backdoor Roth IRA Strategy 1:58 – 2:56
2:57 – 3:28 Pre-Tax 401k & Backdoor Roth IRA Strategy Tax Estimate
3:29 – 4:01 Roth 401k Only Tax Estimate
4:02 – 5:22 Roth Conversion strategy vs. Roth 401k ONLY
5:23 – 7:27 When This May Not Work For You..
7:28 – 8:30 Normal people. Fiduciary Advisors. Not Comedians.
#retirement #retirementplanning #dohstr8
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Love it, great breakdown guys! There are so many “it depends” factors when it comes to making any financial decision, especially this one.
Very very true! Thanks for watching!
Thanks for watching!! What’d you guys think of this topic and how it was covered? Do you like when we go through NestEgg? Have a topic you’d like to see us get geeky with? Let us know in the comments!
Thanks Dustin and Eric
Thank YOU, Bruce!
Can’t you do both: Roth and Pre-Tax?
You can; but you’re still limited to a combined total of $6,500 in 2024 if you’re under 50
Have you ever seen or would it even make sense that a client went part time at 60 made withdrawals from traditional ira to subsidize living while contributing to there Roth 401k for 5-7 years or so ?
Just do Roth conversions in that case
I am in the 12% US federal tax bracket. My retirement contributions are 100% Roth IRA/Roth 401k . I expect tax rates to be higher in the future and my Roth account distributions are not counted in taxation of Social Security benefits.
When I retire I will take an income of $117,000 – with the standard deduction it is a federal tax of 13k, or 11%. I’m currently in a 24% marginal tax rate. Add to that I will retire in a zero % state compared to 7% now. So 31% now or 11% later, not even close.
There are three reasons I think Roths are superior in most situations.
1. You’re done with taxes. With one small exception. Yes you have to pay the taxes upfront but once you do you never have to worry again.
2. You can withdraw your contributions without tax or penalty any time. Not that you would want to, but if you HAVE to you can.
3. No time limit/RMD. Plan on living to 200? Your Roth will just sit there compounding for over 100 years until you own all the things.
I need to see some investment planning that factors a combined strategy of securities and real estate. I’m attempting to max both Roth 401k and Roth IRA and also buy a new piece of real estate every 2 years for ten years. The goal is to end up with a $3m net worth. Help!!!
Great info and video, thank you! And while we know you can’t give direct advice, I did want to share that unfortunately these are “easy” and great ways to put money away, we need to make our money make money. If you can, make investments such as a rental home, etc. Won’t go into the reasons nor argue with anyone but our 401k or Roth IRAs will not sustain our retirement, especially those who had kids later in life or the simple cost of living now.