Roth vs Traditional IRA: Which Is Best For Tax Savings?
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- čas přidán 4. 07. 2024
- Roth vs. Traditional IRA Explained: Choosing the wrong account can cost you BIG money in taxes.
You should pick the best option based on your unique circumstances, like your current tax rate, your retirement tax-rate, and your financial goals.
And… that will be different for every person watching this video. But the information that I am about to provide you will help you determine which may be the best for you.
I personally use these accounts to reduce my own taxes. And I advise my clients on this exact topic all the time at mycpacoach.com to help them save tens of thousands in taxes.
So be sure to save this video, comment your feedback and questions below, and be sure you subscribe for more guidance to less stress and lower tax savings.
Roth vs Traditional?: (0:00)
Why Use Either?: (1:32)
Traditional IRA Benefits: (3:10)
Required Minimum Distributions: (4:45)
Roth IRA Benefits: (5:10)
Which is Best for YOU?: (6:55)
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Great breakdown👏👏
I have a traditional 401k and a Roth IRA in hopes of "splitting the difference."
Nice! And thank you
So comprehensive, yet so clear. Thank you.
My pleasure. Thank you!
Great informative video!
Thank you!
My partner/soon-to-be fiancé is in the 12% tax bracket whereas I'm in the 22-to-24% tax bracket. Would it be smarter to fund her IRA's at a lower tax bracket versus mine at 22-24%. Defiantly sounds like it could be illegal... Just looking for clarification! Appreciate your videos bro, been watching them all! 🍻
She should probably do a Roth since she is in a low tax bracket. You could benefit from Roth or. I can’t say prioritizing one person’s account over the other is more beneficial. It really comes down to the math between where you are today and where you’ll be in retirement. I’d suggest running some scenarios with some calculators online, or getting an advisor involved if it’s too complex.
If I put money into my 403b at work, before and after taxes. Can I open an Roth IRA account through like Fidelity too? Or only through my 403B?
Yes you should be able to as long as your income qualifies.
But doesn’t tax deduction in a Traditional IRA variable depending on income level + whether you have retirement plan through work. You could either have partial or no deduction at all.
Yes. People making above the income limits can still take advantage of the Traditional 401K tax deduction through their work retirement plan (or business). There are no income limits for Traditional 401Ks.
@@mycpacoachisn’t that unfair? Shouldn’t the limits be the same? I just can’t understand how an IRA is not as versatile as a 401k. It’s just not fair in my opinion.
@@mack-uv6gnyou can have a 401k and IRA. If your work place doesn’t offer a 401k/403b/tsp etc, then you are at a disadvantage if you wanted to contribute more than the Ira limit. It isn’t fair, not much you can do other than see if any politicians in your state are advocating for an increase in ira contribution limit and vote for them, maybe see if your employer is willing to create a 401k plan or search for a job that has 1.
@ *TheeBlackTaco* this YT video makes more sense if it referenced traditional 401(k) and Roth 401(k) instead of t-IRA and Roth IRA. At high income traditional IRA receives no tax deduction so it'd be better to just use back door Roth IRA. As practical matter it's better to contribute only to Roth IRA and not contribute to traditional IRA especially if no access to 401(k). If access to 401(k), use as default traditional 401(k) and Roth IRA. As mentioned in this YT, when in relatively low tax bracket favor contributing to Roth 401(k) and when in high tax bracket favor contributing to traditional 401(k).