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043R | Mega Backdoor Roth | Should I Ever Consider Using the Roth?

In this podcast we discuss our takeaways from Episode 43 with Fritz from the Retirement Manifesto plus an in-depth discussion of the Roth IRA conversion and Mega Backdoor Roth, and taxable income scenarios for retirement contributions.

 Podcast Episode Summary

  • Our big takeaways from Episode 43 with Fritz from Retirement Manifesto
  • Brad as a ‘Mystery Reader’ for his daughter’s class plus their trip to Natural Bridge State Park and a FI lesson for his daughters
  • How to tackle drawdown strategies and how that opened our eyes
  • The concept of balance that Fritz brought up in Episode 43
  • How we each have a different path to Financial Independence and we have to find what we each value and how much safety we require
  • How important the math is, but also how the personal side is an important part of the equation
  • Jonathan’s decision to pay off his student loans early and how this may not have been optimal mathematically, but was the “right” decision for him
  • Feedback from the audience on the episode, but specific points from Danny
  • Questions surrounding inflation on your safe withdrawal rate and early retirement
  • Feedback from the audience about delaying social security
  • The distinction between the Roth IRA conversion and the Mega Backdoor Roth IRA
  • The tax issues surrounding the Roth IRA conversion

Practical Application of the Mega Backdoor Roth

  • Vishal and Brad share the nuances of trying to navigate the Mega Backdoor Roth: They need to allow for after-tax contributions and in-service distributions/withdrawals
  • Explanation of the Mega Backdoor Roth
  • Email from Zac about the value of using pre-tax or post-tax retirement contributions when you’re already in a low tax bracket
  • Where is the line where we’d consider putting into a pre-tax or post-tax retirement account?
  • A scenario of someone with a $25,000 income and where they’d fall in the tax brackets and how to lower that
  • A scenario of an individual with a $60,000 gross income and what they should consider with their retirement contributions
  • How would Brad and Jonathan choose if they were in this situation?
  • Itunes reviews and book giveaways
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