To Roth or Not to Roth

Motley Fool Answers

The Motley Fool

Taxes, Saving, Money, Investing, Planning, Retirement, Personalfinance, Finance, Education, Business

4.4 • 823 Ratings

🗓️ 10 November 2020

⏱️ 21 minutes

🔗️ Recording | iTunes | RSS

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Summary

Bro explains why many people who choose a traditional retirement account would be better off with a Roth.

Transcript

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0:00.0	This is Motley Full Answers. I'm Alison Southwick and I'm joined as always by Robert Brokamp,
0:08.8	personal finance expert here at the Motley Fool. Hey, bro.
0:12.2	Allison, hello.
0:13.2	Hello.
0:14.2	Hello. So in this week's episode, we're going to look at the crucial math behind the Roth
0:20.2	versus traditional IRA. If you
0:22.6	like wonky stuff, this episode is for you. You're going to love it. Absolutely love it.
0:28.5	The rest of you, maybe not so much. All that and more on this week's episode of Motleyful
0:34.2	Answers. So, Allison, what's up? Well, bro, as you may have heard, we're in the
0:41.1	middle of a global pandemic. And as a result, the government made a few decisions a while back to
0:46.7	help Americans cope financially with the fallout, such as stimulus checks and the opportunity
0:52.1	to take money out of your 401k. So what did Americans actually do?
0:57.4	A few recent surveys, studies, and articles tried to find out. So let's start with being able to access
1:03.8	your 401k. As you recall, and feel free to correct me if I get any of this wrong, the CARES Act allowed
1:09.9	savers to take coronavirus
1:11.2	related distributions, emergency withdrawals of up to $100,000 from their retirement plans and IRAs.
1:17.8	Those who are under 59.5 can access the money without the usual 10% early withdrawal penalty.
1:24.0	Initially, it just applied to people who had the coronavirus or their spouses or dependents who had the disease, as well as those who were laid off, furloughed, or had hours reduced, those unable to work due to lack of child care, entrepreneurs had to shutter their business.
1:37.4	But it was eventually expanded to people who also had a job start date delayed or an offer rescinded due to COVID-19.
1:45.5	So, did Americans take advantage of it?
1:48.5	For that, let's head to the Wall Street Journal and an article by Ann Turgesson and Corey Drybush.
1:54.7	The title, Americans were given the coronavirus option to raid their 401K.
	...

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