• The Ultimate Guide: Roth vs Traditional IRA

  • Mar 18 2024
  • Length: Less than 1 minute
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The Ultimate Guide: Roth vs Traditional IRA

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  • Confused about which retirement account is best for you? In this video, we break down the differences between Roth vs Traditional IRA, covering key details and considerations to help you make the best decision for your financial future. Watch now to become an expert on Roth vs Traditional IRA! In this episode, you will learn the following : ● Distinguishing between traditional and Roth IRAs, their tax implications and the significance of rolling over these accounts. ● The IRA contribution rules, emphasizing that one must have earned income to contribute. ● The importance of maximizing catch-up contributions for those over 50. ● The need to stay current with regulations that adjust for inflation and the changing ages for required minimum distributions (RMDs). ● The significance of keeping track of non-deductible IRA contributions, which can affect your tax situation upon withdrawal. ● The five-year rule for Roth IRAs, explaining that both contributions and conversions to a Roth IRA must satisfy a five-year holding period to avoid penalties. ● The estate planning considerations. ● The unique benefits of Roth IRAs in estate planning. SUBSCRIBE ON YOUTUBE! Looking for Personal Financial Advice? - Learn More Here TRANSCRIPT 00:00:00 Here's an example that you have to be aware of too, for example, a lot of people, oh, I've worked for years and I have a 401(k) plan. Years ago, my employer offered the ability to have a Roth 401(k). And so you took that up and put some money in there. 00:00:15 Perfect. 00:00:15 And then you say, I'm gonna retire and I'm gonna roll over my IRA and I'm going to– 00:00:23 I'm cringing. 00:00:24 Then take control of it and get it out of the company plan. Why are you cringing, Matt? 00:00:30 Because if you roll it over into the Roth portion, you're starting that five-year clock that we just talked about. And it's like, hey, I'm retired, and I'm ready to spend some of my money. And then you're like, mm. 00:00:43 Oops, I just rebooted my five-year clock. I just re-exposed myself to the taxes that I wasn't exposed to. 00:00:57 I'm so excited to be here. I can't even wait for the guitar riff, Matt. 00:01:01 You know what? Just cut that guitar riff out. 00:01:04 Let's do this thing. Welcome to the True Wealth Radio Show on this, the greatest Tuesday you've had all week. I'm your host, Dave Littlejohn. Joining me today. 00:01:12 Matt Dickson. 00:01:13 And we did show prep. 00:01:17 You did. 00:01:18 Yeah. 00:01:19 Well, I was kind of there for some of it, right? 00:01:20 You were. Oh, actually, no, we did do show prep, believe me. We've had a lot of discussion. Today, we are going to talk about something that should be relevant to all of our listeners. And no, we're not going to go run off into the weeds. We're not going to talk politics or anything like that, although it's probably unavoidable knowing who we are. But we are going to talk about IRAs. 00:01:41 Is it because April 15th is kind of around the corner? 00:01:44 April 15th is around the corner. No, it's the way you say it. 00:01:48 I feel like winter. 00:01:49 Irish Republican Army. Who is that? Not that IRA. 00:01:53 Not that IRA. No. 00:01:54 Yeah, I mean, that was sort of the start of it. And then I've had a number of questions that have just come up recently. We've had a number of clients that have also been talking to us about things like, should I convert some IRA into Roth and so forth? So we are going to talk today about exactly that. Right. 00:02:16 And maybe like, differences versus similarities? 00:02:18 Yeah, if you're, we're gonna look at traditional versus Roth IRAs and some of the use cases for the win of, you know, the different types. Like, why might you want one over another? Might you want both? What does it mean? And so, and some of this, we're not gonna shy away from, there aren't necessarily yes or no answers to th...
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