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UBS On-Air: Market Moves

3-Levels Podcast: Considerations for Traditional v. Roth accounts

May 13, 2024
Justin Waring and Ainsley Carbone discuss the nuances of traditional and Roth accounts, covering contribution methods, tax implications, and retirement distribution strategies. They emphasize the importance of understanding account rules and individual financial circumstances for optimal decision-making.
14:40

Podcast summary created with Snipd AI

Quick takeaways

  • Traditional accounts have pre-tax contributions with taxes upon withdrawal, while Roth accounts involve after-tax contributions and tax-free distributions.
  • Deciding between Roth and traditional accounts depends on future tax rates, diversification needs, and optimizing tax benefits during retirement.

Deep dives

Difference Between Traditional and Roth Accounts

Traditional accounts involve pre-tax contributions with taxes paid upon withdrawal, while Roth accounts require after-tax contributions with tax-free distributions. Contributions can be made through employer plans like 401k or 403b, offering different tax advantages and eligibility rules. Additional accounts like traditional IRA and Roth IRA have varying income restrictions and deductibility factors, requiring careful consideration with a financial advisor.

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