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
Links from the show:
- Retirement Manifesto
- FI by 40
- Millionaire Educator
- Mega Backdoor Roth article by the Mad Fientist
- Post from Vishal from Everything about Education about Mega Backdoor Roth
- The Wealthy Accountant
Books Mentioned in the Show:
