Roth Over a Traditional IRA? With Mark Biller

• Both Roth and Traditional are specific types of accounts that provide tax benefits, applicable to 401 K plans or IRAs.
• Roth is not an investment type; you can own stocks, bonds, etc., inside or outside of these accounts.
• Traditional accounts offer tax benefits now but tax liabilities upon withdrawal, whereas Roth accounts offer tax liabilities now but tax benefits upon withdrawal.

• Roth accounts are usually preferred by younger workers with lower income, expecting to be in a higher tax bracket during retirement.
• Traditional accounts are often chosen by higher income, older workers who might have lower income in retirement.

• Having both Roth and Traditional accounts provides diversified tax strategies.
• Uncertainties like future income, changing tax laws, and life events like the death of a spouse can impact tax outcomes.
• Roth accounts offer flexibility, such as not being subject to required minimum distributions.

• University of Arizona researchers suggest adding 20 to your age and putting that percentage into a traditional account, with the rest in a Roth.
• This approach considers the risk of changing tax rates in the future.
• Investing some into Roth can mitigate some tax rate increase risks.

• Diversification is beneficial, applying to both taxes and investments.

The principle of diversification is rooted in biblical teachings.

• How should I save the money I received from my divorce if I want to buy a property in about three to five years?
• I'm quitting my job to care for my mother full-time; where should I roll over my 401k since I won't be contributing to it anymore?
• We're selling our home and going overseas for a year; what should we do with the profit if we plan to buy another house when we return?

• Fidelity
• Schwab
• Sound Mind Investing