The Long Game Answering Listener-Submitted Questions
Jul 25, 2025
Curious about retirement accounts? Dive into the differences between Roth and traditional IRAs and learn why solo 401(k)s might win over SEP IRAs for entrepreneurs. Discover savvy tax reduction strategies for W-2 employees and weigh the decision of paying off that mortgage versus investing. The conversation emphasizes a long-term view on finances, helping you balance emotional choices with logical financial strategies.
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Roth vs Traditional IRA Guidance
- Choose Roth IRA if you expect a higher tax bracket in the future to pay tax upfront and avoid future taxes.
- Defer taxes with traditional IRA if your current tax bracket is higher than expected retirement bracket, then convert at lower brackets.
Why Solo 401ks Outperform SEPs
- Solo 401ks allow higher contributions combining employee and employer portions compared to SEP IRAs.
- Solo 401ks also offer Roth, mega backdoor Roth options, and don't trigger pro rata rules, unlike SEP IRAs.
Tax Reduction for W-2 Employees
- W-2 employees should focus on both reducing current taxes and minimizing lifetime taxes through retirement plans, giving, and tax-efficient investing.
- Utilize mega backdoor Roth, backdoor Roth IRA, and strategic tax location of assets to lower overall tax burden.