Roth Advice Gone Wrong and Mandatory Roth Catch-Up Contributions in 2026

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The Motley Fool

Business, Investing

4.3 • 3.1K Ratings

🗓️ 13 December 2025

⏱️ 22 minutes

🔗️ Recording | iTunes | RSS

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Summary

These days, we're hearing a lot about the many benefits of Roth accounts. However, they’re not the best choice for every investor. Host Robert Brokamp speaks with Megan Brinsfield, CFP, CPA, president of Motley Fool Wealth Management (a sister company of The Motley Fool), about when the advice to Roth goes wrong. Also in this episode:-The Fed lowers interest rates, sending value and small-cap stocks soaring-Request your required minimum distributions at least a few days before Dec. 31, including if you inherited a retirement account-Every year the Nasdaq 100 drops, it drops big-Starting next year, catch-up 401(k) contributions from higher-earning workers age 50 or older must go into a Roth account – who’s affected and how to prevent suboptimal consequences Host: Robert BrokampGuest: Megan BrinsfieldEngineer: Bart Shannon Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, "TMF") do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. We’re committed to transparency: All personal opinions in advertisements from Fools are their own. The product advertised in this episode was loaned to TMF and was returned after a test period or the product advertised in this episode was purchased by TMF. Advertiser has paid for the sponsorship of this episode Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Roth advice gone wrong and next year's mandatory Roth 401 contributions for higher earning workers over 50.
0:12.1	That and more on this Saturday personal finance edition of Motley Full Money.
0:19.1	I'm Robert Brokamb, and this week I have a conversation with my colleague, Megan Brinsfield,
0:23.3	about investors considering a Roth account when it may not be the best choice.
0:28.0	But first up, let's see what went on last week in Monday, starting with the Federal Reserve's third cut this year.
0:33.5	At the meeting that concluded this past Wednesday, the divided Fed reduced the target for the Fed funds rate by a quarter of a percentage point.
0:40.4	The vote was 9 to 3, with two votes for no change and one vote for a bigger cut.
0:45.4	It was the first time in six years that three officials dissented.
0:49.2	The market seemed pleased with the decision, as the S&P 500 ended the day up 0.7%, but value stocks and small cap
0:56.7	stocks did even better, and their combination was particularly powerful. Small cap value stocks gained
1:02.9	2.3% on Wednesday, as measured by the performance of the I shares S&P small cap value
1:08.5	ETF, ticker IJS, which is also up 6.2% since the start of November,
1:14.8	compared to just 0.8% for the S&P 500.
1:18.6	For our next item, we turn to a classic year-end tip, and that is to take your required
1:22.6	minimum distributions from your retirement accounts if you're 73 or older.
1:26.9	Otherwise, you may pay a penalty of up to 25% of the amount you should have taken.
1:32.3	But another group of investors might also need to take RMDs, and those are owners of
1:36.9	inherited retirement accounts.
1:39.0	The rules governing these accounts have changed quite a bit over the past few years and got
1:43.2	very complicated,
1:44.6	so complicated that it's taken the IRS a while to issue official clarifications.
1:49.1	So while they figured things out, the IRS gave some types of owners of inherited accounts
	...

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