If you went all-in on a Roth 401(k) instead of maxing out your traditional 401(k), would you be better off?
► Announcing THE RETIREMENT ADVENTURE CLUB!
We've launched an online membership designed to help you plan for retirement and connect with others who are asking the same retirement questions you’re asking right now.
The Club will feature access to RightCapital financial planning software, a growing library of financial planning checklists, online courses, and regular access to me and the team during live-streamed office hours calls.
-- LINKS --
Want to run these numbers for yourself?
Download this spreadsheet:
► On Track for Retirement Spreadsheet
Timestamps
0:00 - Traditional vs. Roth 401(k)
1:23 - Beginnings of the Roth 401(k)
1:54 - Our assumptions
2:44 - Living expenses assumptions
3:38 - Current retirement savings
4:07 - Projected savings at retirement
4:56 - Expected income in retirement
6:47 - Tax rates make a difference
7:53 - Monte Carlo analysis results
8:29 - Traditional vs. Roth: deciding factors
*** FREE GUIDE ***
To learn more, visit our website:
#pranawealth #patrickking #howtoretire #retirement #retirementplanning
--- About Patrick King CFP® ---
Patrick King is a fee-only financial advisor in Atlanta and the Founder of Prana Wealth. Over his career, Patrick has helped CEOs, all-star athletes, Grammy-winning artists, and many others build their wealth, retire sooner, and create a legacy. Patrick enjoys yoga, mountain biking, golf, travel photography, and Clemson football.
Let’s connect:
LinkedIn – PatrickBKing
Facebook – @pranawealth
Instagram – @pranawealth
Twitter – @PranaWealth
----------
DISCLAIMER: This is a publication of Prana Wealth Management LLC. All opinions of the authors expressed herein are as of the date of publication and are subject to change. Any information presented herein is not an offer to buy or sell, nor a solicitation to buy or sell any securities or products mentioned. Any investment, tax, legal, or estate planning or information is to be considered general in nature and is not intended as personalized financial planning advice. Always consult a financial, legal, or tax professional regarding your specific situation. Different investments have varying degrees of risk and there is no assurance that they will be suitable for a particular person’s portfolio. Past performance is not indicative of future results. Prana Wealth Management LLC is a registered investment adviser in the state of Georgia and other states where it is excluded or exempted from registration requirements. Registration as an investment adviser does not constitute an endorsement from securities regulators. Prana Wealth Management LLC receives compensation from YouTube for the presence of advertising before, after, and during this video content. Prana Wealth Management LLC does not control the content or presence of any advertisements. The presence of any advertisement does not constitute an endorsement of the ad, company, entity, or product by Prana Wealth Management LLC.
----------
CONTENT DISCLAIMER: The views and opinions expressed through this media or in comments on this channel are those of the creators and do not necessarily reflect the views and opinions held by this channel's broadcaster.
Due to the social nature of this channel, these videos may contain content copyrighted by another person or entity. This channel's owner claims no copyright to said content. The broadcaster of this channel cannot be held accountable for the copyrighted content. The broadcaster shares and strives to verify information, but cannot warrant the accuracy of copyrights or completeness of the information on this channel.
Any copyrighted material shared on this channel is intended to be shared by Fair Use. If you have a complaint about the use of copyrighted material, please contact the broadcaster prior to making a copyright claim. Any infringement is unintentional and will be rectified to all parties' satisfaction....(read more)
LEARN MORE ABOUT: IRA Accounts INVESTING IN A GOLD IRA: Gold IRA Account INVESTING IN A SILVER IRA: Silver IRA Account REVEALED: Best Gold Backed IRA
When it comes to planning for retirement, one of the most important decisions individuals have to make is choosing the type of 401(k) account that best suits their needs. There are two main options to consider: traditional and Roth 401(k). Both have their own advantages and drawbacks, so it is crucial to understand the differences before making a decision. First, let's delve into how these plans work. Traditional 401(k) contributions are made with pre-tax dollars, meaning they reduce your taxable income for the year. The investment grows tax-deferred until withdrawal during retirement, at which point it is taxed as regular income. On the other hand, contributions made to a Roth 401(k) are after-tax, meaning taxes are paid upfront. However, the withdrawals during retirement are entirely tax-free. So, which is better? The answer largely depends on individual circumstances and future financial goals. Here are a few key factors to consider when making a decision: 1. Current and Future Tax Bracket: If you anticipate being in a higher tax bracket during retirement, a Roth 401(k) might be the better choice. By paying taxes upfront at a lower rate, you avoid higher taxes on the withdrawals in retirement. Conversely, if you are currently in a high tax bracket and expect to be in a lower one after retirement, a traditional 401(k) can potentially save you money by deferring taxes until withdrawal. 2. Available Income: Choosing between traditional and Roth 401(k) also depends on your current financial situation. If you need the tax deduction now to increase cash flow, a traditional 401(k) can provide an immediate benefit. On the other hand, if you have extra income and can afford to pay taxes upfront, a Roth 401(k) offers the advantage of tax-free withdrawals later. 3. Required Minimum Distributions (RMDs): It is important to consider your plans for retirement withdrawals when deciding between the two types of 401(k). Traditional 401(k)s require individuals to start taking RMDs at age 72, which can potentially push retirees into higher tax brackets. Roth 401(k)s, on the other hand, have no RMD requirements during the account holder's lifetime. This can provide flexibility and allow for tax planning strategies in retirement. 4. Estate Planning: If leaving a tax-free inheritance to beneficiaries is important to you, a Roth 401(k) account may be advantageous. By designating beneficiaries, they can receive the funds tax-free and continue to grow the account or take withdrawals based on their needs. Ultimately, the decision between traditional and Roth 401(k) boils down to personal preference and financial circumstances. Some individuals may even choose to hedge their bets by contributing to both types of accounts, ensuring a mix of pre-tax and tax-free retirement income. It is important to note that 401(k) rules and regulations can change over time, and individual tax situations differ from one person to another. Consulting a financial advisor or tax professional is always recommended before making any significant retirement planning decisions. They can provide personalized advice tailored to your specific needs and help create a retirement strategy that aligns with your goals. https://inflationprotection.org/deciding-between-traditional-vs-roth-401k-which-option-is-more-advantageous-for-retirement/?feed_id=130936&_unique_id=64e898be0632b #Inflation #Retirement #GoldIRA #Wealth #Investing #feeonlyfinancialadvisor #feeonlyfinancialplanner #financialadvisor #financialadvisorinatlanta #financialplanner #financialplannerinatlanta #FinancialPlanning #howtoretire #PatrickKing #personalfinance #PranaWealth #Retirement #retirementplanning #roth401kvstraditional401k #traditionalvsroth401k #TraditionalIRA #feeonlyfinancialadvisor #feeonlyfinancialplanner #financialadvisor #financialadvisorinatlanta #financialplanner #financialplannerinatlanta #FinancialPlanning #howtoretire #PatrickKing #personalfinance #PranaWealth #Retirement #retirementplanning #roth401kvstraditional401k #traditionalvsroth401k
Comments
Post a Comment