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Money Meets Medicine Podcast

MMM #20: Pre-Tax or Roth: That’s the Question

It is a debate as old as time!  Pre-tax (standard) or Roth?  That is the question.  And in this episode, it is a question that we give thorough treatment toward as we walk you through the in’s and out’s & ups and downs of pre-tax versus Roth investments.  You might think that you know all that there is to know about this question, but I bet you will walk away learning something new by the end of this episode of Money Meets Medicine.

In this episode of Money Meets Medicine, “ Pre-Tax or Roth: That’s the Question?” you’re going to learn:

  • How the difference can save you thousands!
  • The advantages and disadvantages of each.
  • The true meaning of the word “Roth”
  • Why a hybrid of the two may be the best.
  • Why you need to anticipate the future!
  • And more!

Quotes to Remember:

“You want to pay the tax when the marginal tax rate when it’s at its absolute lowest.”

“I don’t want to pay Uncle Sam anymore than I have to!”

“Realistically, it’s gonna be some sort of hybrid model that is going to occur… having a mixture of these two things is almost always good.”

Resources from the Episode:

Historical Marginal Tax Rate for Highest and Lowest Income Earners

6.5 Ways to Overcome The Early Retirement Gap to Age 59.5 – Roth Ladder Conversion

This Episode’s Sponsor

This episode is brought to you by Doug Crouse at doctorloanexpert.com

Doug personally helped Ryan and Taylor get their loan and they were blown away by how amazing he was to work with. He had the best rates and the service puts him at the top of class.

He would be happy to answer any questions you have about your home loan.

Reach out to Doug at doctorloanexpert.com Or by phone, at 1-816-728-3631.

Listener Question of the Week:

Today’s listener question comes from Marc Booth,

“Have you explained the process of doing a Roth conversion ladder?”

Each episode, we are going to start including listener questions as they are provided to us.  So, if you have a specific question you’d like answered on the podcast reach out to us!  Email [email protected] or [email protected]

Subscribe in Your Podcast Player:

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TPP

3 Comments

  1. Steve

    Can someone max out their employer 401k, their self employed solo 401k, and still do ROTH conversions?
    Asked another way…are ROTH conversions limited or affected at all from the retirement contributions of the individual during that year?

    Reply
    • ThePhysicianPhilosopher

      Yes to the first. No to the second.

      6k Max contribution to traditional IRA for 2020. There is no Max on conversions to Roth.

      Both are unrelated to your retirement contributions elsewhere.

      My wife and I fill up my 403B and non-gvt 457 and my wife’s gvt 457 and 401k. We also do 6k backdoor Roth IRAs each year, too.

      Reply
      • Anonymous

        Excellent. Thank you!

        Reply

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