Jill on Money with Jill Schlesinger High Earners, Still Do Roth?
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Jul 29, 2025 The discussion kicks off with the challenge of managing finances amidst job changes and how job satisfaction plays a role in financial health. High-income listeners share their reflections on tax strategies, especially regarding Roth versus traditional retirement accounts. Recent tax legislation impacts are examined, focusing on SALT deduction limits and the need for tailored advice. The importance of balancing immediate tax benefits with long-term savings is emphasized, along with the necessity to rethink financial strategies in light of potential future tax increases.
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Young Couple's Wealth Story
- William and his wife are young, high earners in New Jersey with two kids aged 2 and 3.
- They have amassed significant savings: $706,000 pre-tax, $516,000 in Roth, and $380,000 after-tax accounts.
Avoid More Pre-Tax Contributions
- High earners with large pre-tax balances should focus on Roth or brokerage accounts for new contributions.
- Avoid adding more to traditional pre-tax accounts to prevent a larger future tax bill.
The Ticking Tax Bomb
- Reducing taxable income now to qualify for credits may feel good short term but worsens long term tax exposure.
- Building a large traditional balance creates a "ticking tax bomb" due to future tax liabilities.