The Best Way To Save Money on Taxes

Ramsey Everyday Millionaires

Ramsey Network

Business, Careers, Investing

4.8 • 3.6K Ratings

🗓️ 22 July 2024

⏱️ 10 minutes

🔗️ Recording | iTunes | RSS

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Summary

💰Need Help with your investments? Click here to connect with a SmartVestor Pro. Listen to how ordinary people built extraordinary wealth - and how you can, too. You’ll learn how millionaires live on less than they make, avoid debt, invest, and are disciplined and responsible! Next Steps: 💵 Sign up for EveryDollar today - Create a free Budget! 🏠To learn more about how to plan for Retirement, click here 🏦To learn more about Investing, click here 🎓Create a college savings plan for your child’s future. Click here to connect with a SmartVestor Pro. Listen to more from Ramsey Network 🎙️ The Ramsey Show 🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership 💸 The Ramsey Show Highlights Ramsey Solutions is a paid, non-client promoter of SmartVestor Pros. Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Transcript

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0:00.0	This episode is sponsored by SmartVester. Connect with an investing pro for free at Ramsey Solutions.
0:11.0	Com slash invest.
0:22.0	You're listening to Ramsey everyday millionaires where we talk investing, retirement, building wealth and outrageous generosity. James is in Fort Lauderdale.
0:24.0	Hi James, how are you?
0:25.0	Hey guys, thanks a lot for taking my call today.
0:28.0	Sure.
0:29.0	So my question is, I'm a W-2 employee.
0:32.0	I've been pretty bothered by the amount of income tax I pay
0:36.1	I've been investing into a Roth 401k because of your teaching my company does match
0:47.0	3% of the 6% of up to 6% up to 6% But I feel it makes sense to do a traditional 401k for the tax savings and invest the difference of the
0:55.2	savings into a backdoor Roth IRA but I wanted to see what your thoughts are on
0:59.6	that. Well the math doesn't hold up. Okay?
1:04.0	Let's just take a simple example, okay?
1:06.0	I'll just make up and I'm not you, but let's just use an example, okay?
1:10.0	If you save $100 a month from age 25 to age 65 in a decent series of growth stock mutual funds,
1:17.6	you'll have somewhere around a million dollars.
1:20.0	Okay?
1:21.0	If you do that in a Roth, a hundred percent of it is tax free if you do that in a
1:26.4	traditional you're gonna pay taxes on a hundred percent of a million dollars
1:31.5	which will be somewhere around 350,000 dollars.
1:35.0	So instead of having a million you'll have 650 after the government.
1:39.0	However, let's add that up, okay?
	...

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