The Single Greatest Account to Own | Jill on Money

Подписаться 149 тыс.

Просмотров 75 тыс.

50% 1

On this episode of Jill on Money, Jill Schlesinger and Mark Talercio sit down with Ed Slott to discuss the single greatest account to own! If you'd like to submit a question for Jill on Money, visit: www.jillonmoney.com/contact.
Jill is an Emmy and Gracie Award winning Business Analyst for CBS News and host of the Jill on Money podcast. For more, check out: www.jillonmoney.com.
For more from Ed, check out: irahelp.com/
👕 Check out The Compound shop: www.idontshop.com
Sign up for The Compound newsletter: www.thecompoundnews.com/subsc...
🎙️ Listen to our podcasts:
The Compound and Friends: link.chtbl.com/compoundandfri...
Animal Spirits: link.chtbl.com/animalspirits
Ask The Compound: link.chtbl.com/askthecompound
Instagram: / thecompoundnews
Twitter: / thecompoundnews
“Jill on Money” is a publication by Jill Schlesinger, the content creator. Jill Schlesigner is not an employee of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Investing involves the risk of loss. Nothing in this podcast should be construed as a solicitation of an offer to buy or hold, an interest in any investment product.
The opinions expressed in this video are those of Jill Schlesinger and her guests. They do not purport to reflect the opinions or views of Ritholtz Wealth Management or its employees. Any recommendations or presentation of material therein do not imply the expression of any opinion whatsoever on the part of Ritholtz Wealth Management concerning the suitability or reliance on any financial topics discussed. The Compound and Friends is hosting “Jill on Money” videos for purposes of distribution for Jill Schlesinger through The Compound Media, Incorporated, an affiliate of Ritholtz Wealth Management. The Compound Media, Incorporated from time to time, generates advertising revenues on its media channels and has agreements in place to share those revenues with content creators. Ritholtz Wealth Management is not a client or investor with Jill Schlesinger. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship, or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees.
Jill’s Disclosures:
All opinions expressed by Jill Schlesinger on this website and on the “Jill On Money” radio show are solely Jill Schlesinger’s opinions and do not reflect the opinions of CBS News, its parent and affiliated companies or radio station affiliates. You should not treat any opinion expressed on this website or on the radio show as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Jill Schlesinger, CBS News, its parent and affiliated companies and radio station affiliates make no warranty as to the completeness or accuracy of any opinion expressed on this website or on the radio show, and any opinion expressed on this website or on the radio show should not be relied upon as complete or accurate. Before acting on any information on this website or on the radio show, you should consider whether it is suitable for your particular circumstances and seek advice from your own financial or investment adviser.
#thecompound #personalfinance #investing

Развлечения

Опубликовано:

30 июн 2024

Ссылка:

Скачать:

Готовим ссылку...

Добавить в:

Мой плейлист

Посмотреть позже

Комментарии : 200

@samheroux2782 3 месяца назад

MAKE SURE you leave a good pre tax balance so you can withdraw and fill up low brackets. Married couple can withdraw $125k at 12%. Makes no sense to convert and pay 35%… if you’re working in NY, doing Roth and then retire in FL, you paid NY tax for no reason. Also add in QCD. There is no ALWAYS, you need to plan…

@philipdouglasknight 2 месяца назад

Yes. I would also add that it's extremely important for folks whose income is in the range where their social security benefits are being taxed to know what their effective tax rate is going to be. The simple version is that when your income reaches a level where they pull in 85% of your social security benefit for every extra dollar you make, you have to multiply your tax rate by 1.85 to see what your effective incremental tax rate is. So the 10% bracket becomes effectively 18.5% and the 22% bracket becomes effectively 40.7%. Many people who assume their tax rate is going to be lower in retirement because their income is significantly lower will be shocked when the see the effect of the social security taxes. I'm planning Roth conversions over the next couple of years to take advantage of the rates before the Trump tax cuts expire. That said, you do want to leave some money in tax deferred if you want to do qualified charitable giving, or to fill out low tax brackets. Definitely do some financial planning with scenarios to figure out what the optimum mix is between Roth, tax deferred, and brokerage accounts. The answer is much more individualistic than many people think.

@JoeSoCal2303 2 месяца назад

Or assume you will get no social security and then your taxes are exactly the same?

@kevinstorm6009 2 месяца назад

@@JoeSoCal2303 as the old saying goes, Plan for the worst but hope for the best. So you need to plan for Social Security as if it will always be there when the time comes. IMHO, Social Security is unlikely to go anywhere, anytime soon.

@kevinstorm6009 2 месяца назад

Your point about NY State is exactly the point I was going to make. People who preach at the alter of Roth don't take into account people who live in a high tax state (and NY is one of the highest) and plan to move to a state with lower taxes after retirement. Those folks are most likely to pay FAR LESS taxes if they don't have their Roth IRA deposits taxed by NY State beforehand.

@tellsparck 2 месяца назад

@@kevinstorm6009 You still must pay federal taxes, which are much higher than state taxes (in any state).

@scottiebumich 3 месяца назад

Although I agree with the overall premise of not wanting an IRA which just compounds your tax liability, you are missing one key component. You have to run an analysis in which the savings you make due to the tax deferral on the front end is invested alongside in a taxable brokerage account. Although the government is giving you a loan when you make an IRA deduction... that loan is invested compounding your capital. Your entire argument relies on the individual not investing the savings from the tax deduction they get today.

@YeOldePirateMaster 3 месяца назад

They did such a terrible job explaining this. I’m not sure if it’s ignorance or what but this was pretty bad for “professionals”

@TheBigWanger 3 месяца назад

Amen. Money in my account earning more revenue , and compounding for decades wins my vote.

@dmulvany 2 месяца назад

Rather than put the savings into a taxable account, they could go into a Roth 401k. It's been said that people ought to save 15% of their salary for retirement. At least capture the employer match and the rest could go into a Roth 401k.

@thekhomish3781 Месяц назад

They're speaking from the pov of high earners. When I was making okay money but had student loans, etc. I couldn't afford to pay extra so the same 15k ended up in a roth as it would pre401k. With Pre401 you get more money into the market sooner (more time in the market) and you still have a paycheck amount that you can live off of. If you get raises, promotions, etc. then you can up the Roth amount more.

@charlesbyrne71 16 дней назад

Yep. I agree, but when I ask others who have deferred retirement accounts what they're doing with the tax savings most say they don't know. I ask them are you using the tax savings to pay off your mortgage, high interest loans, invest in college for the kids or increasing you tax deferral contributions by the tax savings? At that point they realize that they missed out on utilizing that tax savings and some are at or near retirement.

@repriser9876 2 месяца назад

Thumb up ! Salute to Jill. Jill says it is for rich people. As long as you give it all away, you don't worry about tax or income.

@midwestfinestrealty622 3 месяца назад

Loved the GR reference

@cliffpeebles9705 3 месяца назад

Great saying by Ed: Your IRA is an IOU to the IRS. There is no tax free money. You either pay it before you save it or after you saved it.

@davearey4922 3 месяца назад

Cliff - Ben answered your question on why he doesn't life risk adjusted returns on the most recent Ask The Compound. Show. Hope you give it a listen.

@cliffpeebles9705 3 месяца назад

@@davearey4922Hi Dave! Yes, I did hear Ben's response, and it made sense in the context of hedge fund managers using it as a crutch. I also say you were asking where I was. Thanks! See you Tuesday.

@garysolberg1923 3 месяца назад

It's interesting to see how the 401K isn't look at the same as when it was originally introduced.

@mikiowino 3 месяца назад

@@garysolberg1923…it was a great idea at the time but as much as it was great, they’s no strategy that remains great when the conditions it was created for changes. Truth is taxes are projected to change and as such it’s a tax deal to take at the moment to convert to a Roth

@cliffpeebles9705 3 месяца назад

@@garysolberg1923What do you mean Gary? You mean because of tax ramifications? (Roth) All I know if, is that if it wasn't for 401K, and saving and investing aggressively, I would still be working in a job I hated.

@oppenheim2 3 месяца назад

There have been proposals to eliminate or partially eliminate the income tax with a consumption/value added tax.

@splitliving 2 месяца назад

So, here are a couple little tidbits I didn’t hear in this discussion. 1. Roth conversions/donations, etc not only are not ever taxed by the original owner, but also never again by beneficiaries and 2. By using some long term tax planning, IRA’s can be converted to Roth little by little still allowing you to stay in the lower tax brackets and avoiding the Medicare penalty (IRMAA),

@splitliving 2 месяца назад

Just remember: there was a day (not too long ago):that Roth didn’t exist. Certainly within the financial lifetimes of us baby boomers. So, we had no other option but IRA’s and when we wanted to embrace the “new, better” deal we paid dearly to do so.

@vivii1219 3 месяца назад

Best video on Roth, ever!

@SHORT-FRIDAYS 3 месяца назад

i have all of my cash stored in my pillowcase at home; Can you advise me if I should move it to a shoebox or underneath my mattress?

@user-yb5bg8im5g 3 месяца назад

burry it in a sealed mason jar on your property. divy it up into the number of years you think you wwill live and put the remaing dig points in your will. i have .i sleep like a baby.

@josephjuno9555 3 месяца назад

Protect it Tupperware! Water and moth proof. Hide in different rooms, not together?

@kevinconners3685 2 месяца назад

Send me your address so I can give you personal advice 😜

@richardbudzic6289 2 месяца назад

Unless it is in gold or silver, it loses value due to inflation

@jfj794 2 месяца назад

In the end, inflation will severely shrink any savings mechanism.

@antillie7 Месяц назад

I started a Roth IRA and Roth 401k back when I joined the workforce. Now I am 41 and have $650k in Roth accounts which account for 86% of my retirement assets. I plan to Roth convert all of my traditional retirement assets between the ages of 60 and 70 before I take social security at 70. During those years I will be retired and living off of long term capital gains and qualified dividends from my brokerage account. (And possibly a seven figure inherited Roth IRA depending on when that happens.) Uncle Sam is getting plenty of money from me now in the 22% bracket but he will be getting almost nothing from me when I am old and rich. I don't think congress thought about the long term consequences of young people starting Roth accounts at 22 and going all in on Roth for their entire careers. People like me in the "Roth from the start" crowd haven't hit retirement age yet, but that day is coming.

@greggalexander5913 3 месяца назад

The biggest problem with our clients? They have too much money!

@BarnabyBarry 3 месяца назад

Good info-get a CALPERS pension or tell your kids-sure you pay taxes for life-w COLA -never have to worry about money-same w OT (always good even with higher taxes)

@imdoc7872 2 месяца назад

My wife and I are 401k heavy. We make a very good income and for that reason max out our tax deferred accounts to minimize our annual taxes but after listening to this I’m not sure if that is a good strategy. We just started a backdoor roth IRA each this year and max out each account at the beginning of the year which is a total of 14k. We also have a taxable brokerage account. Would you recommend that we decrease our 401k contributions? What would be the alternative? I know that owning real estate could be a solution but we do not want to be landlords. Would REITs provide the same tax advantage as owning actual properties? Great show by the way. Thank you.

@gigilaroux762 2 месяца назад

Buy farmland. Other than property taxes hardly any expenses if any. Hire a land mgr at 5% and they find the farmer and you sign a lease and done. It’s fabulous.

@sunsetmcg 2 месяца назад

Congrats on making money and saving so well. You didn't say how old you are or whether you want to leave money for family or causes. So it's impossible to say what you should do without more info. A good advisor can do the math after getting the info. You definitely have a solvable problem though!

@mrbigglesworth375 2 месяца назад

I believe a "taxable brokerage account" is just a good if not better as it has no age restrictions. Also, long term capital gains tax rates are very advantages. 0%- 15% 20%. Again, depending on your income situation, a married couple might have a 0% tax rate on the first 115K in long term capital gains/qualified dividends. Also, if you make the decision to convert IRA's to Roth you will pay that income tax today. But you are assuming that the government will not implement a "new tax" in the future to get you again. They won't call it an income tax but something else. Like national sales tax, Value tax etc... As this won't be an "income tax" those Roth accounts may be subject to that "new tax". So be careful assuming a Roth won't be taxed again!

@_emh 2 месяца назад

Best combination is a taxable brokerage and a Roth IRA: Withdraw brokerage gains up to fill the 0% bracket and withdraw the balance of your annual expenses from the Roth.

@HaloTupolev 3 месяца назад

There are a lot of apples-to-oranges framing devices being used, and many of the claims (like "lower tax bracket in retirement never happens") are demonstrably inaccurate. The broad theme that people don't understand that tax-deferred exposes you to future income tax also seems to be detached from reality: if anything, the opposite fallacy (favoring Roth by calculating total nominal tax expenditures rather than calculating how much you'll have available to spend at the end) seems considerably more common in my experience. When he said "most people who take RMDs take it because they had to", I giggled, and also had to resist the urge to bang my head into the desk. Yep, that's what RMD stands for! Roth accounts are extremely useful vehicles, and I do think tons of people should use them, but this episode does not make a good argument. It is deceptive and/or focused on a narrower audience than it presents to be.

@hanklouie 3 месяца назад

Totally, totally agree. The nearly-militant insistence that people can’t possibly be in a lower marginal rate at retirement is ludicrous. (The fact that his argument about this being the “lowest tax time period ever” is entirely based on the highest marginal rate - literally the rate for the absolute wealthiest people by annual income, and is entirely inapplicable to those in mid or even upper middle incomes.) He also conveniently ignores all the career turns and changes that can put one into lower income situations - taking sabbaticals, stopping work to care for family, retiring early or switching to half-time jobs - that present opportunities to strategically convert to Roth at the appropriate time, and would require a pretax pot of retirement savings to do those conversions. Upfront Roth is never an all-or-nothing, and he would do clients better by not giving ultimatums.

@Aortadetroit 2 месяца назад

This ignores his number one reason stated explicitly; Your investments grow tax free! Our medicare costs $2,500 a month for two healthy 65 year olds and my tax rates under Trumps horrible tax plan in 2025 will be higher than while we were working. He took out all the deductions. I wish I had sold half my real estate and put every dime into Roth IRA's despite the limited deposits of 7-8K a year. I tell my kids and every young person max out your Roth every single year except for those rare occasions where a traditional IRA will drop your tax bracket. I've spent years looking at this. My kids will be screwed in retirement and tax free income is the only solution for average earners. None of this applies to the wealthy (say 10 million plus in liquid assets).

@HaloTupolev 2 месяца назад

@@Aortadetroit No, it does not ignore his number-one reason. Growth is *also* tax-free in pre-tax traditional. Both account types pay zero in capital gains, and both pay income tax once: either when the money is originally made at your job (Roth) or when it's withdrawn (pre-tax Traditional). If you're only looking at Tradition in terms of current bracket, you're missing half the picture.

@Aortadetroit 2 месяца назад

@@HaloTupolev You don't understand the investment Sir. If you pay taxes on distributions (traditional) your money did not grow "tax-free." It grew tax deferred AND it can raise your tax bracket! Exclamation mark because that is everything.. In my bracket that means massive increase in taxes overall.

@HaloTupolev 2 месяца назад

@@Aortadetroit I don't understand why you're bringing up "your bracket." That doesn't have anything to do with my point. I'm not arguing that there aren't any people who whom a maximum-Roth strategy is preferable: obviously there are. I can't see your financial statements, but I don't have any reason to think that it's a poor strategy for you, and I'm not arguing for or against you personally using Roth or Traditional. If you pay $3k in taxes on $10k, and put the remaining $7k into a Roth, and it grows by 10x to $70k, the original $3k in taxes has also effectively grown to a $30k difference in money available to spend. So even though the taxes were only "$3000", the real cost of those taxes has grown into the same $30,000 that a $100k Traditional account would get slammed with if it ended up getting taxed at the same 30% rate. In both of those cases, the *real* impact of the taxes on your financial result is $30,000. And in both cases, this is due to income tax on an investment that has grown, with no taxation directly imposed on that capital growth. Semantically, I don't necessarily think it's illogical to perceive the taxes on tax-deferred investments as "tax on growth." That's a matter of the English language, not of finances. But if you do this, I *do* think it's illogical to not also regard the implicit growth-on-loss in a Roth as being essentially the same thing.

@rickmc73 3 месяца назад

The all Roth stuff is inaccurate or at least misguided for decent sized groups of Americans . Useful for mass market application, yes. It’s a rare product that can be very good for both lower income/asset people and much much higher income/asset people, albeit for different reasons. But all Roth all the time mantra and the reasons said to support it miss a decent amount of people that can benefit tremendously from smart use of traditional 401k/ira accounts. These are mostly hyper savers debt adverse people on moderate incomes as well as high income people with expected periods of low taxable income. These groups can and should use Roth conversions to reap the tax arbitrage available to them. I get the appeal of all Roth all the time to mass market media outlets but for a show that has a good amount of individualized content and advice, this should be discussed as part of a Roth bent conversation.

@jonjansky 3 месяца назад

Mint.

@user-yk5hc4qt1n 3 месяца назад

What they are not talking about is that there is always a chance the government changes the rules about the roth or any account. They change the rules for certain accounts all the time. If we continue to get deeper in debt anything is on the table

@crohmer 3 месяца назад

they do bring that up

@user-yk5hc4qt1n 3 месяца назад

Can you time stamp it for me? I missed it@@crohmer

@andichrist2000 2 месяца назад

If they do that they would most likely grandfather existing ROTHs in otherwise people will lose their shit because they never got the Tax deduction. Most likely scenario is they drastically raise taxes in general and also print more money since that’s their go to

@user-yk5hc4qt1n 2 месяца назад

@@andichrist2000 Probably...but let me ask you what percentage of the population do you think has money in a roth? Not a lot of votes there no matter how many people lose their shit.

@mikeflair6800 2 месяца назад

I am not sure. Starting at a young age, and being able to 'defer tax' for 40 years compounds to HUGE financial benefit over the life of an individual. I am 70 years old right now, and pay the 'lowest effective tax rate' that I have ever paid. In my case, looking back, there is no question that regular IRA worked out best, by a large margin, for me. My experience contradicts this message.

@fullauto1125 2 месяца назад

I’m 54 on the same plan as u, I believe in the end it work best.

@thekhomish3781 Месяц назад

can i ask...why is your tax bill lower in retirement (age. 70?) then when you were working? Is it the Trump tax cuts? You still pay a mortgage? The ability to take the gross amount and put it in the market for longer is appealing especially when I was young and broke and need my paycheck.

@frankkeel8410 2 месяца назад

At 79 married with a annuity is it a positive to go to a roth worth the added tax . We do not need the rmd.

@theclown888 2 месяца назад

Better to use a taxable brokerage account than a traditional IRA.

@lifesajourney101 Месяц назад

Why??

@tammiepulley7167 2 месяца назад

OMG! The light just came on. I just got ROTH religion.

@wilma6235 2 месяца назад

Did I hear correctly he would do Roth conversions even when at 37% tax bracket?

@khanhpham9418 3 месяца назад

49 y/o with 1.5 M in an IRA and 400k in a Roth IRA. Is it worth doing Roth IRA conversions if I currently live in the people’s republic of California but plan on retiring in Las Vegas where there’s no state income taxes. CA state income tax for me is around 10%. Thanks again for your thoughts

@TheBeagle1956 2 месяца назад

Wait until you’re out of California and sell any real estate in California, vote in Nevada, find doctors in Nevada and change all accounts to a Nevada address. California may still come after you since you had a deduction in California. You need to be able to show you’ve cut all ties to the state.

@mrcmid9132 3 месяца назад

Roths are great but you still will pay your share of taxes up front on payroll funds. Personally I have both, a traditional 401k and a Roth Ira.

@acparks1 3 месяца назад

Right. This guy talks forever about tax free but ignores the fact that the money you put into a Roth is already taxed money.

@mikiowino 3 месяца назад

@@acparks1 Yes, it is but now you never have to worry about paying taxes on it in the future at a time when you could be on a higher tax bracket….its really a smart tax deal to take

@CWO-J 3 месяца назад

I have no issue paying taxes on the seeds of my harvest if all future gains compound tax free with no RMD.

@mrcmid9132 3 месяца назад

@@CWO-J I totally agree

@belangp 2 месяца назад

I can't understand how he can be so confident in his assertions.

@ChiIeboy 2 месяца назад

Allow me to help you understand why he is so confident: it's called _facts._

@belangp 2 месяца назад

@@ChiIeboy Elaborate.

@andichrist2000 2 месяца назад

Which assertions in particular shouldn’t he be confident in?

@RS-lw9cd 2 месяца назад

Ed Slott is the guru of IRAs (both Roth and Traditional). When it comes to IRAs, you should believe him.

@belangp 2 месяца назад

@@RS-lw9cd Ah, the old "appeal to authority" fallacy. Are there no other gurus with differing opinions?

@doubleclick21 3 месяца назад

Why I dont make Roth contributions (for now): 1) married filing sep for income based student loan repayment reasons 2) highest state and local tax bracket in a very high tax jurisdiction (it's not the high taxes that bother me, it's how poorly/ineffectively it's spent) 3) optionality to convert to Roth at advantaged times/in advantaged jurisdictions 4) already have plenty of Roth funds from when 1 & 2 didn't apply 5) will probably oversave/overinvest/underspend to such a degree that I won't ever be concerned with my tax bill; I expect I'll be more concerned with figuring out dinner reservations.

@andratoma9834 3 месяца назад

What is a ROTH 401k?

@noahcash 3 месяца назад

I dont really get the point here, first you max out your roth which has pretty low annual contributions limits, then you can decide to do a pre-tax 401k/IRA ? What am I missing here?

@YeOldePirateMaster 3 месяца назад

You may have the option to use a Roth 401k, not just a Roth IRA.

@RS-lw9cd 2 месяца назад

Order of contributions for retirement: 1) If your 401K or Roth 401K has a match from your employer, contribute up to the amount of the match. For instance, if your employer matches the first 4% of your contributions, then contribute 4%. Don't miss the opportunity to get free money from your employer. If your employer is matching dollar for dollar on 4%, you make 100% immediately when you contribute. 2) Once you have done #1 and have sufficient funds available, contribute to your own Roth IRA to the limit: Tax Year 2024 - $7,000 if you're under age 50 / $8,000 if you're age 50 or older. 3) If you maxed out #2 and are able to contribute more for retirement, bump up the % contributions to your 401K or Roth 401K.

@michaelskyros8803 3 месяца назад

Joey doesn't share food.

@kentloar2175 25 дней назад

I would argue an HSA, when properly invested, is better than a Roth IRA. No tax when you put it in or take it out (assuming you have qualified medical expenses).

@craigsimons4930 2 месяца назад

This advice is only applicable to people who are already in the highest tax bracket. Otherwise it would be stupid to convert a huge sum all in one year and subject it to much higher tax rates than it would be if you were spreading it out over decades at much lower rates.

@alan30189 21 день назад

It’s applicable to everybody who has a traditional IRA and wants to convert to a Roth. You convert based on your current income tax bracket and try to avoid the next highest bracket. For people who are in a high tax bracket, they will probably want to wait until after they retire and are in a lower tax bracket, then start converting.

@andrewt9434 3 месяца назад

Homeboy forgets the fact that it’s extremely rare for an employer to match roth contributions in employer plan (where majority of americans are saving for retirement) im a fan of roth my also missing out on that employer march for 10-30 years at an employer is something to consider….

@kevinconners3685 2 месяца назад

Many companies match but it goes into a regular 401k account not your Roth.

@summerwind55 2 месяца назад

Why is putting your house in a revocable trust not advisable? Jill made mention of that.

@Savannah-ed4rv 2 месяца назад

Sadly I have neither one. Life is what happens when you're making other plans. 😢😮

@RavBarring 2 месяца назад

Look into an IUL. Be careful though. An IUL must be designed in such a way the costs of Insurance aren’t eroding your money and the Tax Free growth. Let’s say, the most you can save a month is $1000. Make sure to see that guideline premium reads close to $12k. If Target is $12k. The person who wrote the policy has written himself a fat commission check. (Not everyone qualifies for these btw)

@orpheus7117 2 месяца назад

Thank you. I’m 38…just change my 401k to contribute completely into Roth! Will look into converting my other 401k accts to Roth later!

@captured_agent5714 14 дней назад

For the love of God don't hold 100% of your retirement in Roth-treatment accounts. Unless you are going to for some reason have a higher tax rate in retirement

@gigilaroux762 2 месяца назад

How can u convert an IRA to Roth if the maximum is only 7500 per year?

@malinallitekpatl1 2 месяца назад

The 7,500 maximum is what you can contribute per year. You can convert much more than that each year, pretty sure there's no limit for conversions.

@splitliving 2 месяца назад

Back door Roth-and you pay regular tax rate on conversion

@makdaddy8399 2 месяца назад

Remember....you can't touch it for 5 years after the conversion.

@repriser9876 2 месяца назад

Could the Congress need the same deal as 2010 again? To pay off some government debt.

@sylviaskinner6849 2 месяца назад

I think it’s too late for me to convert to a Roth IRA. I have a 401(k) with 180,000. I just retired and I need to start taking monthly deductions to live on. I was wondering what you all think.

@princesskaitlinhazelwood4703 3 месяца назад

Well in theory the growth is tax free. The initial contribution of Roth is after tax. Traditional is pre tax. But in theory Roth the growth is never taxed. While brokerage accounts is after tax money and theft tax capital gains.

@roberttheodoregeorge 2 месяца назад

I'm under pressure to grow my reserve that currently holds about $800k. I'm down by 20% already following the crash and I fear I could lose more.

@Emily-le2op 2 месяца назад

It is very easy to buy in on trending stocks but the problem is knowing when to sell or hold, which is why a coach is important. I've been in touch with one for about a year now and although I was initially skeptical about it, I will say l've made more progress within a year generating 6figure profit.

@SaintYvess 2 месяца назад

That's truly remarkable. I hope you don't mind pointing me towards their direction.

@Emily-le2op 2 месяца назад

She's 'Melissa Jean Talingdan ' The best I've seen so far. Simply do your diligence.

@SaintYvess 2 месяца назад

Out of curiosity I looked up Melissa on the web and I have to say her Credentials are really Amazing.

@TruthFreedom1776 2 месяца назад

Okay I'm confused. I'm 51 years old I have only 15,000 in a 401k how do I convert to Roth?

@helenwood3199 Месяц назад

It is not tax free, Ed. You pay either now or later, but definitely pay.

@HelloWorld-hb7yt 3 месяца назад

How do you convert to Roth?

@mikiowino 3 месяца назад

Roll over is one way but the best strategy is to diversify your retirement into different tax buckets. I’d say have a IRA especially if your employer is matching, then the excess contributions (pay tax on them) into a Roth or equivalent deferred annuity and I can definitely assist with that

@noahcash 3 месяца назад

but isnt there a limit on the roth contribution ?

@DiFinni 3 месяца назад

Yep

@noahcash 3 месяца назад

@@DiFinni so what is he on about?

@TheBeagle1956 2 месяца назад

Yes, but not on conversions. Also, Roth 401k has same contribution limit as regular 401k.

@Liledgy100 2 месяца назад

@@TheBeagle1956 the 457 has an “extra” catch up provision (unlike 401k). You can put $46k a year in it for 3 years if you’re over 50. The other years (over 50) you can contribute the $30500k like a 401k. Not to many people know about it and the experts don’t either.

@MrWaterbugdesign 2 месяца назад

I retired 22 years ago at 45. I never understood people worrying about the problem of having $4 million at 75 but owing taxes. I didn't have a pile of money. Investing doesn't interest me. I didn't retire so I could become a financial analyst. Stock market crashes, don't care. Stock market boom, don't care. So no IRA, Roth, stocks, bonds. I funded retirement doing things I liked doing. Invented a couple products. Wrote some software. Designed and created a few gardens. By mostly slow flipped my house. Buy a dump, slowly fix it up, sell after at least 2 years., repeat. Working on house #4 now. Planning to sell 2025 and move to SE Asia. $250k cap gain is tax free. Made my income $0 so no need to file income tax forms. Get free healthcare (Medicaid) and free smartphone (LifeLine).

@splitliving 2 месяца назад

And aren’t you just so special…

@edwardsmcintyre9014 2 месяца назад

Medicare doesn't work in se asia so get insurance . But the exchange rate is doubled for USD .

@johnhkent2796 2 месяца назад

How about after you retire. How does it work for you

@frankkeel8410 2 месяца назад

Can you deduct taxes on a ira to a roth conversion?

@RS-lw9cd 2 месяца назад

When you put money into a traditional IRA, you get a tax deduction and its growth is tax deferred. If you took the tax deduction, when withdrawn, it will be taxed as ordinary income. There is no tax deduction for a Roth conversion. Just the opposite, you will have to pay taxes to convert to a Roth IRA.

@MichaelAlex-bt1pn 2 месяца назад

The Roth is so much better than every other retirement account

@joelhawes7749 3 месяца назад

Im not so sure how legitimate we should consider Peter Thiel's $6B Roth IRA... That was still pretty scammy and nobody else could have done it

@dailstancill720 3 месяца назад

It's post tax savings...

@user-yb5bg8im5g Месяц назад

financial blah blah blah. so happy to be a WNK--widower, no kids. cashed out 5 years ago. realized i had more than enuf to see me to the end. ss will be government annuity gravy when i start it in 2 years. all insurances paid up and headed to off grid raw land in late summer. leaving colo after 35 years where the potholes are bigger than ever and my prop taxes are closing in on 4 k. this red state has gone blue and i am headed to 2A TN.

@stillhopeful7048 2 месяца назад

But the rothIRA only allows me to save 7k per year for my retirement. And i need to catch-up and my 401k allows me to putaway much more per year.

@Liledgy100 2 месяца назад

You do a Roth conversion on the regular 491k

@princesskaitlinhazelwood4703 3 месяца назад

They totally lied to us that we would be in alter tax rate. Or they really had no idea what would happen in the future.

@keithmachado-pp6fv Месяц назад

A Roth is tax free but not free. You give up significant tax breaks when you contribute to a Roth. As it relates to conversion, it does not benefit everyone. Unless your tax rate is higher when you (or your heirs) ultimately pay the tax there is no benefit to convert. Converting in the 35% or 37% bracket is just plain stupid. As far as being critical for investing in pre tax, some of us didn’t have a Roth IRA option and even if we did we were in high tax brackets when working so we are where we are. Thank goodness the market did well and we are lucky to have a high balance in the tax deferred account. It sure beats not saving at all which is an issue for many. It goes beyond the tax rate though. There are many risks/assumptions for the conversion argument, any of which don’t go as planned can change the equation, including: 1. State taxes. If you pay to convert to Roth in a high tax state but move to a zero tax state you need to take that into account. 2. Time Value of money. When you convert, you pay all the tax at once in your highest tax bracket with todays dollars compared to RMDs that are paid very slowly over many years with tomorrow’s inflation adjusted dollars not all in your highest bracket. 3. You may not live long enough or be healthy enough to enjoy your money. With RMDs not starting until 75 and only at 4% in year 1, your payback in a conversion could take years you don’t make it to. 4. Investment gains are assumed but not guaranteed. Had you converted $100k at the end of 2021 and paid $25k in tax and your account dropped 25% to $75k when the market and bonds both dropped in 2022, you would need a 33% increase just to get your account back to the balance you already paid tax on. 5. Tax Brackets and the standard deduction are adjusted for inflation. It will take much more income in the future to be in the same tax bracket as today. 6. If you don’t need the RMD, a brokerage account allows you to defer gains indefinitely, harvest losses , and your heirs get a step up in basis and don’t have to empty the account in 10 years. Bottom line is it is not one size fits all. Ultimately the tax gets paid by you or your heirs. Paying more or less tax is not the right way to measure success. I can show an example where you pay twice as much tax and come out ahead. It comes down to what gives you the largest after tax net worth, which cannot be quantified until 10 years after you die.

@briangasser973 3 месяца назад

I disagree with the statement that a brockerage account is better than a traditional 401K. My employer does not offer a roth 401k option. The traditional 401K can be rolled to an IRA at retirement, then converted to a roth account. You cant do that with a brockerage account. Would have been great if Ed offered strategies for people who dont have a roth option from their employer.

@gdb5843 3 месяца назад

I like regular brokerage account. I have freedom. Don’t need to wait till 59 1/2 and if I sell my winning stock, the LTCG is 15% for me. I can report losses if things are not doing well.

@53block92 2 месяца назад

Brokerage acct for the win! 1. There is no contribution limits, so fill it up as much as you can while you are bringing in money. 2. There is no age limit or RMD's for when you can take the money out so take it as you need it, at 50, at 95, it's YOUR money to take out. 3. You have the freedom to invest in pretty much whatever you want to without being limited to certain funds through your employer, like with a 401k. 4. While it isn't as "tax efficient" like a roth for cap gains, you only pay tax on capital gains when you sell stocks, not the total amount you pull from the account, and you can offset it with stock losses when it comes tax time too.

@HelloWorld-hb7yt 3 месяца назад

401k or Regular Brokage?

@frankkeel8410 2 месяца назад

What is considered rich today? Amount of savings?

@polly8844 Месяц назад

Im 67 can i get a roth or is it to late?

@BOBBY1006 3 месяца назад

Don't forget the Roth Ira 5-year rule if you are older

@Liledgy100 2 месяца назад

Doesn’t apply if your over 59 1/2

@BOBBY1006 2 месяца назад

@@Liledgy100 The Roth IRA five-year rule says you cannot withdraw earnings tax-free until at least five years since you first contributed to a Roth IRA account. This five-year rule applies to everyone who contributes to a Roth IRA, whether 59 ½ or 105 years old per Bankrate......

@wernermueller9004 3 месяца назад

Ed says, "Oh, that's a problem," when Jill provides an example of a 50-year old with a $2M IRA and it grows to $4M at Age 75. Sorry, but with that kind of money, taxes are not going to keep me up at night.

@markwalters7498 2 месяца назад

$3M is better than $2M

@markwalters7498 2 месяца назад

Math like Ed says: Keep IRA as is, using your $2M growing to $4M, is 2X current value. If tax rate goes to 50%, $4M - taxes = $2M. Covert to Roth at 25% effective tax rate leaves $1.5 M. $1.5M x 2X current value is $3M. Like he says, it’s all a bet on future tax rates. Do you think it’s unlikely that tax rates on the people with a multimillion dollar portfolio won’t go to 40-50-60%?

@JW-fh1en 3 месяца назад

What about the income max? A lot of us can’t even touch the Roth. Plus it has limits

@TheBigWanger 3 месяца назад

Yep. Seldom gets talked about. Discussions like this always ignore the limits and make it sound like anyone can do Roth. Heck, none of these three at that table can do Roth due to income limits.

@khanhpham9418 3 месяца назад

I did Roth 401k .. and make 400k salary.

@TheBeagle1956 2 месяца назад

Anyone can do a Roth IRA. If you’re over the income limit and don’t have an existing traditional IRA, open both traditional and Roth IRAs. Contribute to a traditional IRA and immediately move it into a Roth IRA. It’s called a Backdoor Roth Contribution. Perfectly legal. No deduction is taken for the traditional IRA contribution, so it’s converted to a Roth with no gain or taxes owed.

@dhangb7005 2 месяца назад

@@TheBeagle1956so it has to be new Traditional IRA, not an existing one? Thanks!

@calista1280 2 месяца назад

@TheBeagle1956 Aren't Roth contributions taxed upon entry, so when you withdraw, it is tax-free?

@noralee6085 2 месяца назад

Poor Max looks bored. There is no space for him to interject.

@kerrybyers257 2 месяца назад

If you inherit a Roth, plan a sabbatical for year 9/10 and have fun!

@TruthFreedom1776 2 месяца назад

Okay now I'm confused first you say Roth IRA is the best account ever to have then you say Roth IRA is a horrible idea because it's compounding debt? I'm lost

@drmitofit2673 13 дней назад

This guy would be 110 years old and STILL not withdraw from his ROTH to avoid paying taxes. Looks 95 already.

@ronloftis9080 2 месяца назад

So many fallacies. It's not the way math works! Invest 9k in a Roth with 10% returns per year after tax with a 10% tax bracket equals the the same as $10k invested in an IRA with 10% returns and 10% tax. The end result is the same. Let me repeat....IT"S THE SAME. Then the other host assumes that when you take money out of an IRA because of RMDs that you have to spend it....there is no such rule. It can be invested in a brokerage. Now, IRMAA - valid point. Tax Rates going up - valid point. Not mentioned that I remember exactly making the point is that having all or near all Roth accounts can make your SS tax free possibly. With that said...I am doing some Roth conversions along the way. I am 61 years old.

@michaelskyros8803 3 месяца назад

I don't share money with the government if I can help it either,.

@ExtraGuac007 3 месяца назад

I'm betting on RMDs to be 80 yrs old in 20 yrs. That way, my traditional IRA will be taxed free as part of my estate.

@TheBeagle1956 2 месяца назад

Your heirs will pay the tax.

@ExtraGuac007 2 месяца назад

@@TheBeagle1956 Sadly, my estate won't be over 13M.

@TheBeagle1956 2 месяца назад

Inherited Traditional IRAs still pay tax on withdrawals. There is no step up basis.

@ExtraGuac007 2 месяца назад

@@TheBeagle1956 Rollover funds from an inherited traditional into a new traditional IRA in their name and treat the inherited funds as their own. Then they have till age 80 to withdraw it tax free (standard deduction) yearly.

@TheBeagle1956 2 месяца назад

That’s incorrect. Inherited IRAs cannot be rolled into a traditional IRA. They have ten years to withdraw all funds from the inherited IRA and pay tax on the withdrawals. The funds can be withdrawn over the ten year period or all at once, but taxes have to be paid in the year of withdrawal.

@PJBHolden 3 месяца назад

One swipe of the pen by congress and it won’t be tax free

@malinallitekpatl1 2 месяца назад

Congress is full of greedy millionaires. They wouldn't vote in favor of something that compromises their own personal gain. And, to make a Roth no longer tax free would result in our savings being taxed twice. I'm pretty sure they'd make a lot of stupid mistakes before making this one.

@marblized2 3 месяца назад

I’m sorry… your argument is that if you are 75 and you have 4M and you have to pay tax on 160k worth of distributions? I feel like so much of Jill’s advice forgets the average life span of people.

@linmeathome 2 месяца назад

invest tax savings from IRA deduction to make math work

@SSModi852 3 месяца назад

Agree. But if the title of this video was greatest asset to own, it would be a house. If you have a paid up home, you won 80% of the financial battle. It also gives emotional security. Also renting is like being a slave. You earn for some one else.

@somchai9033 3 месяца назад

Home can be a money pit in the USA: property tax, HOA, insurance etc..

@gregorypeterson9 2 месяца назад

@@somchai9033Yes, but if it's paid for you save some of that money for future repairs, and yearly taxes, homeowners insurance can save you from major repairs as it did with my new sewer line 7k and stay away from crazy HOA'S mine is just 80.00 yearly .

@trudy6132 5 дней назад

@@somchai9033renting is a money pit as well. I own my home outright & my piece of mind is immeasurable.

@ChiIeboy 2 месяца назад

Sir, with all due respect (and none that's not), you are overestimating the 'danger' of the compounding interest that accrues to consumer credit cards. Allow me to introduce you to a little-known concept that has evidently escaped your notice: _the Bankruptcy Act of 1867_ You're welcome! 😁

@alrifr5786 2 месяца назад

Misleading information. Traditional IRAs also grows tax-free and the money is yours. Certainly there are tax consequences when you take it out. Roth's are not tax-free, you pay taxes up front. The taxes on long- term capitol gains are 0 to 20 percent, my marginal rate is currently 24%, so the Roth is a loser. A Roth has a place in retirement, but it is not nearly the slam dunk this makes it.

@RS-lw9cd 2 месяца назад

Traditional IRAs grow tax deferred, which means that you have tax liability on it. So, if not withdrawn, what is in the TIRA that is growing, is just creating a higher tax liability. What good is the TIRA if you cannot withdraw from it, eventually? Just because there is no tax on it now since the tax is being deferred, does not mean it is tax free. And, in a TIRA, its growth is not categorized as long term capital gains. It will be taxed as ordinary income when withdrawn.

@andichrist2000 2 месяца назад

All signs point to cap gains tax rates going up significantly. There has been talk of even doubling current rates

@craigwellons4634 3 месяца назад

Absolutely terrible video

@Gomez39905 2 месяца назад

total BS show

@alldaywhodie 3 месяца назад

If the govt limits your contribution (ROTH, I-bonds) you know it's legit ;)

@uglyone 2 месяца назад

Once most of baby boomers gone and no longer many with pretax ira/401k then no longer revenue raising advantage then Roth will be gone. Next trap will need to be set. Government needs money eventually.

@frankkeel8410 2 месяца назад

Can you deduct taxes on a ira to a roth conversion?

@RS-lw9cd 2 месяца назад

When you put money into an traditional IRA, you get a tax deduction and its growth is tax deferred. If you took the tax deduction, when withdrawn, it will be taxed as ordinary income. There is no tax deduction for a Roth conversion. Just the opposite, you will have to pay taxes to convert to a Roth IRA.