Motley Fool Money The New Retirement Savings Time Bomb
Mar 19, 2021
In this engaging discussion, Ed Slott, a leading retirement expert and author, shares insights on navigating the complexities of retirement savings. He emphasizes the importance of understanding taxes, particularly related to Required Minimum Distributions. Slott offers a five-step plan for transitioning funds to Roth IRAs, advocating for tax-free growth to secure a stable financial future. The conversation touches on various economic trends and strategic investment opportunities, ultimately highlighting the pressing need for financial control in retirement.
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Roth Conversion
- Minimize taxes on retirement accounts by utilizing Roth conversions.
- Move money from "forever tax" accounts to "never tax" accounts for maximum benefit.
Retirement Tax Brackets
- Most retirees won't be in a lower tax bracket due to RMDs.
- Consider the "widow's penalty": single filers face higher tax rates upon inheriting a spouse's assets.
Roth Benefits
- Roths offer a 0% tax rate, even if tax rates decrease in the future.
- Tax-free growth leads to greater accumulation over time, making Roths a strong long-term investment.
