The Ultimate Traditional vs. Roth 401(k) Strategy

The Money with Katie Show

Money with Katie

Self-improvement, Education, Business, Investing, How To

4.8 • 1.3K Ratings

🗓️ 24 May 2023

⏱️ 58 minutes

🔗️ Recording | iTunes | RSS

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Summary

Today, we're breaking down every. single. aspect. worth considering when you’re deciding between Traditional and Roth contributions in your 401(k), because making the “right choice” can mean a difference of hundreds of thousands of dollars in a few decades. So, what’s a Rich Girl to do when faced with a slew of retirement plan options and a dream? By the end of this episode, you’ll feel confident in your choice. Learn more about our sponsor, Vin Social: https://www.vinsocial.vip Learn more about our sponsor, Fidelity: https://fidelity.com/stocksbytheslice Learn more about the CFA Institute: https://www.cfainstitute.org/en/programs/cfa Learn more about Betterment: http://www.betterment.com/moneywithkatie Transcripts can be found at podcast.moneywithkatie.com. — Mentioned in the Episode How to Pay No Taxes in Early Retirement: https://link.chtbl.com/9nugZS3C Traditional vs. Roth breakdown: https://docs.google.com/spreadsheets/d/1pDXtuOBV5o_hyxVvlIzienhKbuE0ajGaj8mvPWGBOGM/edit#gid=0 — Follow Along at Money with Katie: https://moneywithkatie.com/ Watch on YouTube: https://www.youtube.com/@MoneywithKatie Follow Money with Katie! - Instagram: https://www.instagram.com/moneywithkatie/ - Twitter: https://twitter.com/moneywithkatie Subscribe to The Money with Katie Newsletter - Sign up for free today: https://www.morningbrew.com/money-with-katie/subscribe/2 Follow the Brew! - Instagram: https://www.instagram.com/morningbrew/ - Twitter: https://twitter.com/MorningBrew - TikTok: https://www.tiktok.com/@morningbrew Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome back to the Money with Katie Show, Rich Girls, and Boys, and oh boy, GERDRA LOINTS
0:13.2	because today we are diving deep.
0:15.4	This is the deep dive to end all deep dives.
0:17.9	Okay, I'll stop saying deep dives.
0:25.0	This is a topic that I've covered at least eight dozen times on the Money with Katie blog,
0:29.6	social media, YouTube channel, but I've never actually done an exhaustive deep dive on
0:34.7	the podcast before, so drum roll, please, it is the traditional versus Roth debate.
0:42.0	Now, this is a thick boy, I'm gonna warn you, so in order for you to not have to listen
0:47.8	to the droning sound of my voice for an hour straight, head is going to play our devil's
0:52.3	advocate today, and she's gonna pop in to push back on our various theses.
0:57.9	Every time I say theses, I feel like I'm sending my high school English teacher like
1:01.7	a telepathic bat signal, but anyway, without bearing the lead.
1:06.8	My overall perspective is that we sleep on traditional pre-tax accounts because we generally
1:12.7	misunderstand how we are going to be taxed on that money later, so I have a strategy
1:18.4	that I like to use that I think provides the best of both worlds, as well as the most
1:23.8	bang for your buck.
1:24.8	You gotta love that.
1:26.1	Now, any good financial professional, because reminder, I am not a financial professional,
1:31.4	will tell you the choice that makes more sense for you will be dependent on several different
1:36.8	important factors, like your income, how you earn, your spending, your retirement plan,
1:42.3	and more.
1:43.5	That said, my main concern today will be providing you with a framework to think through
	...

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