It took me 2 years of researching, to try and put all these numbers together (with no previous financial literacy education..... now taking classes), to understand the now and how it will turn out later...... and he made it so easy, explained it all in 30 minutes with demo's & visuals, nice! He's awesome!
Thank you for your video. As we all learning from our grandparents and parents, Many Seniors are also disabled, and can you be kind to make a video for Disabled Credit of up to $7500 per person when in Retirement 1040R (and many accountants don't bother asking about Disability with people not realizing their constantly going to doctors when they are much older is disability) on 401k vs ROTH 401k and if these people should be doing Rollover to ROTH Conversions (since they were deceived all their lives to contribute to 401k and not ROTH 401k, as Secure Act 2.0 took away the ability for adult children to inherit 401k with RMDs based on their own live expectancy factor and now they are forced to pay Taxes on inheritance of parent 401k within 10 years on the full 401k or full Traditional IRA or full Rollover IRA).
In a roth, you pay fed, state and local taxes...when you contribute. In traditional depending on where you live and where you plan to retire.. You can easily avoid state taxes by moving or if you live in a tax-friendly state you won't have to pay the state tax.. Ie: I live in New York.. and there is no state tax a traditional tsp for retirees.. so technically my taxes will be lower..
That would be great but unfortunately you're wrong on the withdrawal part. Of course you have to pay state tax on a traditional IRA or 401K distribution. You can move to a no tax state to avoid it. But you avoided paying it when you contributed so you have to pay it when you withdrawal if you live in a state with income tax
@CessnaPilot99 that's what I was talking about you can move... also many states are state tax friendly to retires.. I live in Nys. No state tax no Tsp..
@@Rshen11 oh I didn't know that's what you were talking about moving. Your comment still says you can avoid taxes when you withdraw with no reference to moving. You can understand the confusion If you're playing on retiring outside of New York State and are in a higher tax bracket Roth doesn't really make sense
@CessnaPilot99 yes I'm sorry I didn't explain it well.. I changed it.. also if live in a state with state taxes.. but you plan on retiring In a state with no state taxes.. the traditional is prob better.. It all depends where you want to live and where you want to retire..
Thank you for sharing this informative video. I have a brief question regarding the calculation of adjusted gross income for Roth IRA contributions. If my wife and I have adjusted gross income that is immediately below the maximum allowed for a Roth IRA ($230,000), does dividend income count towards that adjusted gross income, potentially exceeding the $230,000 limit? Alternatively, are dividends considered separate from the calculation of adjusted gross income? If so, would it necessitate the utilization of a backdoor Roth IRA strategy?
I live in Nys.. i do traditional tsp because i avoid state taxes when i contribute.. and because Nys is retiree friendly.. they dont state tax Tsp in withdrawal.. or i can move to a state with no state tax.. So my taxes will be lower in the future then it is now particularly becauawe i wont be payig state taxes..
Currently doing Non Roth... I have my Income tax withholding set single, no dependents, but am married with kids, so would I be "over taxed" if switching contributions to Roth? Or will that diffence come back on IRS Tax Return (like it does Currently)?
why not address the fact that to fund a roth 401k requires more money than a traditional 401k? The money spent on paying taxes now for a roth 401k could just be invested now, giving you more investable income now that will out grow a roth 401k.
Keep in mind you will pay more in taxes in the future on a traditional 401k vs a Roth that will have zero taxes after 59 because you are paying taxes up front.
@@Cr1mson_Ghost "to fund a roth 401k requires more money than a traditional 401k" If you mean to *_fully_* fund Roth 401(k) at $23,500 then that's correct. But devoting $23,500 pretax income to either traditional 401(k) or Roth 401(k) requires same amount of income. "The money spent on paying taxes now for a roth 401k could just be invested now, giving you more investable income now that will out grow a roth 401k." Unclear or ambiguous statement and likely incorrect. Are you comparing Roth 401(k) to traditional 401(k)?
Join my Private FIRE Community ➡ www.firepsychat.com/community
1-on-1 Consultation ➡ www.firepsychat.com/consultation
Free Financial Resources ➡ www.firepsychat.com/resources
It took me 2 years of researching, to try and put all these numbers together (with no previous financial literacy education..... now taking classes), to understand the now and how it will turn out later...... and he made it so easy, explained it all in 30 minutes with demo's & visuals, nice! He's awesome!
Great video!! Well done!! Thank you!!
No problem!
25:17 I love this example ( and it applies more to my situation and potential) Thank you so much.🎉
17:24 wow that was thorough! Excellent explanation- it helped- thank you!
Thank you for your video. As we all learning from our grandparents and parents, Many Seniors are also disabled, and can you be kind to make a video for Disabled Credit of up to $7500 per person when in Retirement 1040R (and many accountants don't bother asking about Disability with people not realizing their constantly going to doctors when they are much older is disability) on 401k vs ROTH 401k and if these people should be doing Rollover to ROTH Conversions (since they were deceived all their lives to contribute to 401k and not ROTH 401k, as Secure Act 2.0 took away the ability for adult children to inherit 401k with RMDs based on their own live expectancy factor and now they are forced to pay Taxes on inheritance of parent 401k within 10 years on the full 401k or full Traditional IRA or full Rollover IRA).
In a roth, you pay fed, state and local taxes...when you contribute.
In traditional depending on where you live and where you plan to retire..
You can easily avoid state taxes by moving or if you live in a tax-friendly state you won't have to pay the state tax..
Ie: I live in New York.. and there is no state tax a traditional tsp for retirees.. so technically my taxes will be lower..
That would be great but unfortunately you're wrong on the withdrawal part. Of course you have to pay state tax on a traditional IRA or 401K distribution. You can move to a no tax state to avoid it. But you avoided paying it when you contributed so you have to pay it when you withdrawal if you live in a state with income tax
@CessnaPilot99 that's what I was talking about you can move... also many states are state tax friendly to retires..
I live in Nys. No state tax no Tsp..
@@Rshen11 oh I didn't know that's what you were talking about moving. Your comment still says you can avoid taxes when you withdraw with no reference to moving. You can understand the confusion
If you're playing on retiring outside of New York State and are in a higher tax bracket Roth doesn't really make sense
@@CessnaPilot99 yes it all depends on what state you move to with no state tax.. or if your state is state tax friendly to retires...
@CessnaPilot99 yes I'm sorry I didn't explain it well.. I changed it.. also if live in a state with state taxes.. but you plan on retiring In a state with no state taxes.. the traditional is prob better..
It all depends where you want to live and where you want to retire..
Thank you for sharing this informative video. I have a brief question regarding the calculation of adjusted gross income for Roth IRA contributions. If my wife and I have adjusted gross income that is immediately below the maximum allowed for a Roth IRA ($230,000), does dividend income count towards that adjusted gross income, potentially exceeding the $230,000 limit? Alternatively, are dividends considered separate from the calculation of adjusted gross income? If so, would it necessitate the utilization of a backdoor Roth IRA strategy?
I live in Nys.. i do traditional tsp because i avoid state taxes when i contribute.. and because Nys is retiree friendly.. they dont state tax Tsp in withdrawal.. or i can move to a state with no state tax..
So my taxes will be lower in the future then it is now particularly becauawe i wont be payig state taxes..
Step one.
Become legally blind
Step two.
Retire.
Currently doing Non Roth... I have my Income tax withholding set single, no dependents, but am married with kids, so would I be "over taxed" if switching contributions to Roth? Or will that diffence come back on IRS Tax Return (like it does Currently)?
Your tax withholding doesn't mean much as you settle up at the end of year.
ROTH TSP is not subject to taxes on the capital gains if I withdrawal at the age limit?
Roth TSP withdrawals are not subject to tax at retirement.
My marginal tax rate just gets over to 24%. Should I convert roth to pay tax on 24% federal + 10% state?
why not address the fact that to fund a roth 401k requires more money than a traditional 401k? The money spent on paying taxes now for a roth 401k could just be invested now, giving you more investable income now that will out grow a roth 401k.
Yup. This point is never brought up. You lose cash flow potential today to fund a Roth.
Keep in mind you will pay more in taxes in the future on a traditional 401k vs a Roth that will have zero taxes after 59 because you are paying taxes up front.
@ only if i make more in retirement than I do now, which is doubtful
@@Cr1mson_Ghost "to fund a roth 401k requires more money than a traditional 401k" If you mean to *_fully_* fund Roth 401(k) at $23,500 then that's correct. But devoting $23,500 pretax income to either traditional 401(k) or Roth 401(k) requires same amount of income.
"The money spent on paying taxes now for a roth 401k could just be invested now, giving you more investable income now that will out grow a roth 401k." Unclear or ambiguous statement and likely incorrect. Are you comparing Roth 401(k) to traditional 401(k)?
@@alrocky its not unclear, its math. A roth requires more upfront to fund, due to taxes being paid now and not in the future.