Why Roth Investments Are Better Than Traditional

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[andbeyondd]

Increasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account.

[alexsteven.m]

Hello, I am due for retirement in two years, I'm a senior citizen but I'm curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around $50K per year but nothing to show for it yet.

[WilliamsJones-jxce]

I just retired, but I am uncertain that my 401k and IRA will ensure a stable future. I have $900k set aside, I am seeking an approach that matches my risk tolerance and financial objectives. Please I need advice, should I invest in stocks or real estate ?

[NicholasBall]

Investing in Roth IRA can be a good choice since they are funded with after tax dollars, your contributions can grow tax-free over time. When you withdraw money from your Roth IRA in retirement, you won’t have to pay tax on it, which will help you keep more of your hard-earned money. I retired with 5 million dollars

[BrewerVera]

I've kept much of my savings in cash for safety, but I'm unsure if it's right for retirement. Contemplating investing $400K in stocks, as I've heard investors can profit in tough times. Unsure about my next move.

[amaniejeremiah]

In the simplest sense, retirement planning is what one does to be prepared for life after paid work ends. This isn't just financially but in all aspects of life.

[FrankPatrick-nozo]

Indeed, that helps that it offers a window for mini-retirements and is also more flexible. I'm not waiting to be 60 and retire to some idyllic place. Knowing how to pay for the lifestyle is helpful. It's true that earning money while enjoying a pina colada on the beach is beneficial. If not, I could not have completed it.

[cloudyblaze]

Yes, it helps that it is more flexible too, so it provides a window for mini-retirements. I'm no longer waiting for some retirement paradise when I'm 65. It helps to know how to fund the lifestyle. You know, making money while you sip that pina colada by the beach does help. I wouldn't have been able to do it otherwise.

[_davidturner]

Increasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account.

[barttfisher]

Most Americans find it hard to retire comfortably amid economy downtrend. Some have close to nothing going into retirement, my question is, will you pay off mortgage as a near-retiree, or spread money for cashflow, to afford lifestyle after retirement?

[johnlennon]

I just 30 this year and have just under $40k in my own 401k and another $10k between my other retirement accounts. My wife has about $41k in her retirement accounts (she is not currently working). I currently make close to $63k a year. I only do 5% though to my 401k for the company match and another 10% of my income is split between an HSA and a ROTH IRA

[michaelmeinberg]

What Dave's example misses is that you have MORE money to invest with a tradional IRA rather then a ROTH. He said: "You have 90K to invest, it turns into 2.5 million, which is all taxable" - which is true. However, if you put your money into a ROTH, (assuming it's the same input), you would be taxed up front, so instead of 90K to invest, you would have maybe 70K to invest after you pay the taxes up front (standard IRAs you don't pay any taxes up front). So, assuming it's the same investments, instead of 2.5 million in the end, you probably would have 2 million, because you invested less to start, and have less to compound. He does not factor that in, and that is BIG. So yes, you pay more in taxes in the end, but you also earned a lot less, so it probably comes out more as a wash then as he states it.

[chaz]

I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Charlotte Miller.

[alisonwalker]

I have worked all my life without thinking about my retirement. Now my kids are growing fast, the way I am spending my savings, it has come to my attention that at my old age, I will have no jobs, no money left and no retirement funds to fall back to. So I am asking what do I need to do and how do I begin investing in my retirement. I just need professional advice. Thanks.

[hersdera]

I don’t know how but you’ve managed to package an unbiased analysis that is more entertaining than the sensationalized segment of economic and financial news. Thank you for your efforts to be the signal and not the noise. I understand that the economy is currently in a downturn and that we must wait for things to get better

[fredm]

Choosing a Roth IRA is advantageous as it uses after-tax funds and allows tax-free growth. When I retired, I had $3M million saved, and I won't be taxed on my withdrawals.

[Anthony-zwqb]

Been rothing 100% since 2017. I never regret it

[matturner]

With Roth IRA, the money you are contributing has already been taxed. At any time for any reason, you can withdraw your contributions tax-free and penalty-free. Additionally, any earnings on investments can also be withdrawn tax-free and penalty-free, Not sure how much to contribute, I'm still at a crossroads deciding if to liquidate my $338k stock portfolio.

[greekbarrios]

There is also no earned income requirement to convert to a Roth. As long as you have a balance in an IRA, in theory, you can keep converting to a Roth as long as you like. But how best can i compound at least $2m in retirement savings without holding cash?

[bradleyjones]

*The greater the passive income you can build, the freer you will become. Taking the first step is the hardest, but 7 house later living off passive income since June 6, 2021. You've got to start taking steps to achieve your goal.*