Today’s Smart Money Question:
(Click the featured times below to jump forward in the episode)
Here Are Just A Handful Of Things You’ll Learn:
Most of the time when people come in to work with a financial advisor, the majority of their assets are in their qualified retirement accounts. This could be a traditional 401(k), 403(b), 457, traditional IRA.
These were set up to be pre-tax accounts, which means you get a federal reduction on your taxes. But it also means it will be fully taxable when you go to take it out. What are the differences and benefits if you have a Roth IRA or Roth 401(k) instead?
Let’s say the tax rate gets raised on your IRA in the future. What happens to the value of your investments? It’s important to understand the exit strategy of where your money is. Know what the contribution limits are as well as what options you have when it comes to Roth conversions. Where is your money going to serve you best?
When it comes to inheritance, Matt answers Samantha’s question about how to communicate about it. Assuming all continues to go as planned, Samantha anticipates passing down a large inheritance and wants to know if it is something she should tell her children about or let it be a surprise. Matt gives a strategy for talking with the kids as well as what life could look like now. Instead of only thinking about a financial legacy, consider the living legacy you’re leaving.
Listen to the full episode or click on one of the timestamps below to begin.
0:30 – Philadelphia is moving into the next phase of reopening.
1:54 – “Suppose you were an idiot and suppose you were a member of Congress…”
5:05 – What is a qualified retirement account?
7:18 – What is a Roth IRA or Roth 401(k)?
9:34 – What happens if the tax rate gets raised?
11:36 – What are the contribution limits?
13:12 – What is a Roth conversion?
17:29 – Mailbag: Should the anticipated sum of an inheritance be talked about or a surprise?
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The host: Matt Hausman – Contact – Resources – Call: 610-719-3003
