43 - Are You Giving Your Money Away? How to Choose Between a Roth and a Traditional IRA

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Don't give the government any more money than you have to! We know that choosing between a traditional or a Roth IRA can be confusing, with a number of variables. Here we talk you through it and show you how to calculate your tax rates so you can make the right decision for yourself.

Don’t give the government any more money than you have to! We know that choosing between a traditional or a Roth IRA can be confusing, with a number of variables. Here we talk you through it and show you how to calculate your tax rates so you can make the right decision for yourself. 

In this episode:

  • This is a tax planning decision, meaning, how do I pay less in taxes? [1:00]

  • How marginal rates work [3:00]

  • Why tax rates can be confusing when looking IRAs [8:30]

  • If tax rate is the same, there’s no difference in return in traditional versus Roth [11:00]

  • Is it better to pay taxes now or later? Here’s a rule of thumb [13:00]

  • Why moving to a different state adds a variable [14:30]


    Resources:

  • Marginal Tax Rate Worksheet

  • Roth or Traditional Calculations Worksheet

If you prefer to follow along on YouTube, watch here: