Should You Ever Do Pre-Tax Contributions?

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Mike Bernard, CFP® offers advisory services through KFG Wealth Management, LLC dba Korhorn Financial Group. This information is for general financial education and is not intended to provide specific investment advice or recommendations. All investing and investment strategies involve risk, including the potential loss of principal. Asset allocation & diversification do not ensure a profit or prevent a loss in a declining market. Past performance is not a guarantee of future results.
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.
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I switched to Roth contributions in 1998. I wasn't highly paid. I only used an IRA earlier because that was earmarked for retirement money. This is the best decision I ever made.

DaveSchmrdr
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I'm 39 years old, recently laid off, and in a new phase of my life. What are my best options for steady income given that I have 425K saved for retirement, 10K in an HSA, and a property that might bring in an additional 200K?

janicerhansenmx
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24% tax bracket or below = ROTH all day long. Above the 24% tax bracket is a good time to talk to a CFP and have them look at your specific situation. If you have a pension the ROTH funds come in very handy considering the tax ramifications on your pension and SS and no RMD ever. It does not need to be overly complicated. I doubt you will ever be upset if you end up with too much ROTH income in retirement.

breehartley
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Go Moo U. Haven’t been there in years, but it was a fun campus.

Phantom-
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I have extra money to contribute to after tax 401k. I am wondering if I should use the money to do roth conversion instead of contributing to after tax 401K. Can you do a video going over these two option, please?

datbio
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Most financial advisers back in 1998 didn’t really push the Roth. Only could put in 2000 per year. My wife and I maxed Roth from 1998 to present and 401k Roth when it became eligible.
Our current retirement balance is 65% Roth and 35% pretax. Will spend down pretax from 60 to 70 when retired and delay SS till 70.

andrewroth
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If your income goes up in retirement: roth. If you are like 90% of americans and your income goes down standrad tax deferred ira. Dont forget about RMDs nailing you.

Irs simple.

donh
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No, you shouldn't. The tax savings on the front-end won't come even close to the tax savings on the backend.

brucecranford
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