How to Money
Ask HTM - Roth Emergency Funds, Buying Out A Lease, & Financial Advice For Graduates #814
Apr 15, 2024
Topics discussed include prioritizing student loans with potential forgiveness, financial advice for recent grads, Roth 401k vs traditional 401k, using Roth IRA as emergency fund, and buying out a car lease. The episode also covers subscription services, student loan payoff strategies, financial habits of young individuals, retirement savings, and exploring Roth IRAs for emergency funds.
52:57
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Quick takeaways
- Consider implications of Roth 401(k) for long-term tax benefits vs. current savings.
- Utilize Roth IRA as an emergency fund backup with caution for future benefits.
Deep dives
Optimizing Retirement Contributions
Eric from Eugene, Oregon is diligently maximizing traditional 401(k), Roth IRAs, and HSA contributions with his wife, investing over $60,000 annually. When he tested the tax implications of switching to Roth 401(k)s, he found an income increase of $45,000, resulting in a $19,300 tax difference. Despite this cost, the question arises whether shifting to Roth 401(k)s is still beneficial. While retaining traditional 401(k)s may seem prudent to preserve tax savings, Eric seeks insights on the implications of maintaining the current investment strategy.
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