Risk Parity Radio
Episode 420: Wrestling With Roths And 401ks, Assorted Shenanigans, And Portfolio Reviews As Of May 2, 2025
May 4, 2025
Explore the ins and outs of Roth conversions, especially for those in low tax brackets. Discover the quirks of a pricey 401k with limited options, all while the hosts reassure listeners they're working on site improvements with 'top men.' Dive into lively portfolio performance discussions, examining investment strategies amid shifting market conditions. The atmosphere is light-hearted, filled with humor and practical advice, making personal finance feel approachable and engaging. Tune in for insights and a few laughs!
37:31
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Quick takeaways
- Utilizing Roth conversions during low tax brackets is a strategic approach for maximizing long-term tax-free growth in retirement.
- A focus on reviewing sample portfolios revealed varied performances, reinforcing the importance of risk parity and informed investment strategies.
Deep dives
Roth Conversions and Tax Considerations
Engaging in Roth conversions while in a low tax bracket can be a strategic move for long-term tax-free growth. For example, one listener considering a portion of his retirement savings prompted the discussion about whether to convert some traditional 401(k) funds to Roth, especially as his taxable income is expected to rise in the coming years. The importance of taking advantage of low tax rates now was emphasized, as many may face higher taxes later in retirement despite common fears over potential future tax increases. The conversation reflects a broader misunderstanding regarding tax obligations in retirement, hinting that many retirees may face lower tax rates than during their working years.
